1) Which of the following would not be considered a capital resource by economists?
A.A van used by a mother to transport the family around
B.An office computer used by an accountant
C.A crane used by a building contractor
D.A camera used by a professional photographer
2) Which of the following is an example of a public good?
A.A weather warning system.
B.A television set.
C.A sofa.
D.A bottle of soda.
3) Which of the following statements is correct?
A.The long-run supply curve for a purely competitive increasing-cost industry will be
upsloping.
B.The long-run supply curve for a purely competitive increasing-cost industry will be
perfectly elastic.
C.The long-run supply curve for a purely competitive industry will be less elastic than
the industry’s short-run supply curve.
D.The long-run supply curve for a purely competitive decreasing-cost industry will be
upsloping.
4) Which of the following has not been a major factor contributing to the high
productivity of labor in the United States?
A.High wage rates
B.Technological advancement
C.Education and training of workers
D.High levels of capital investment
5) An increase in the price of digital cameras will result in a(n):
A.Shift of the demand curve for digital cameras to the left
B.Decrease in the demand for digital cameras
C.Shift of the demand curve for digital cameras to the right
D.Movement up and to the left along the demand curve for digital cameras
6) By reducing labor turnover, unions may increase productivity because a lower
turnover rate:
A.results in a less-experienced workforce.
B.increases the incentive for firms to provide training to their workers.
C.allows firms to employ a greater number of younger, more energetic workers.
D.increases the incentive for firms to substitute labor for capital in the production
process.
7)
Which of the following best describes the impact of immigration on complementary
resources?
A.The lower wage rate resulting from immigration reduces production costs, creating a
business-income effect that increases the demand for complementary resources
B.The lower wage rate resulting from immigration reduces production costs, creating an
output effect that decreases the demand for complementary resources
C.The higher wage rate resulting from immigration increases production costs, creating an
output effect that increases the demand for complementary resources
D.The lower wage rate resulting from immigration reduces production costs, creating an
output effect that increases the demand for complementary resources
8)
Refer to the diagram. The quantitative difference between areas Q1bcQ2 and P1P2ba in
the diagram measures:
A.marginal cost.
B.total revenue.
C.marginal revenue.
D.average revenue.
9) A firm decides to make a $15 million expenditure on research and development that
will create a new product. This product is expected to increase the firms revenues by a
total of $20 million in the next year. The firm also estimates that the production cost of
the new product will be $18 million.
(a)What is the expected rate of return on this research and development expenditure?
(b)If the firm has to take out a loan to finance the project, what is the highest interest
rate they will pay and still do the project? Explain.
10) If a purely competitive firm is producing at some level less than the
profit-maximizing output, then:
A.price is necessarily greater than average total cost.
B.fixed costs are large relative to variable costs.
C.price exceeds marginal revenue.
D.marginal revenue exceeds marginal cost.
11)
Refer to the graph above. For a given change in supply, which demand curve is going to
yield the smallest changes in price?
A.D1
B.D3
C.D4
D.D5
12) In long-run equilibrium, a profit-maximizing firm in a monopolistically competitive
industry will produce the quantity of output where:
A.ATC = P, MR = MC = P
B.ATC <P, MR = MC = P
C.ATC <P, MR + MC <P
D.ATC = P, MR = MC <P
13) When studying human behavior, economists assume rational self-interest. This
means that:
A.People make decisions based on some desired outcome
B.People are quite selfish, and are not concerned about others
C.People always make the right decisions
D.People have all the information they need to make a decision
14)
Suppose the total revenue curve is derived from a particular linear demand curve. That
demand curve must be:
A.inelastic for price declines that increase quantity demanded from 2 units to 3 units.
B.elastic for price declines that increase quantity demanded from 5 units to 6 units.
C.unit elastic for price increases that reduce quantity demanded from 5 units to 4 units.
D.inelastic for price increases that reduce quantity demanded from 4 units to 3 units.
15) Larry’s Lizards and Ronaldo’s Reptiles are competing pet store franchises. Both are
considering opening a store in the small town of Turtleville. If Ronaldo’s opens a
profitable store in Turtleville and Larry’s management determines that it is not
profitable to also open a store, then:
A.this is a simultaneous game.
B.a Nash equilibrium is not possible in this game.
C.Ronaldo’s had a first-mover advantage in this game.
D.this is a zero-sum game.
16) The imposition of a tariff on a product is least likely to result in a(n):
A.Increase in the efficiency in the domestic industry producing the product
B.Increase in the price of the product
C.Decrease in the quantity of imports
D.Decrease in the real incomes of workers in other industries