1) If the total costs of producing 1,500 units of output is $15,000 and this output sold to
consumers for a total of $16,500, then the firm would earn profits of:
A.$1,000
B.$16,500
C.$1,500
D.$15,000
2) In which market model are the conditions of entry the most difficult?
A.Monopolistic competition
B.Pure competition
C.Pure monopoly
D.Oligopoly
3) A firm combines two resources, A and B, to produce an output Q. Their respective
marginal revenue products are $30 and $21. A costs $15 a unit and B $7 a unit. To
reduce the cost of Q:
A.More B and less A should be used
B.More A and less B should be used
C.More of both resources should be used
D.Less of both resources should be used
4) The former food-stamp program is now the Supplemental Nutrition Assistance
Program (SNAP) and eligible households now receive:
A.Vouchers for food purchases
B.Specialized debit cards that get monthly deposits of electronic money from the
government
C.Credit cards and they forward the monthly bills to the government
D.Cash payments
5) A market in which the entire demand for a good or service can be satisfied at the
least cost by a single firm is a:
A.horizontal market.
B.natural monopoly.
C.contestable market.
D.perfect market.
6) When total product is increasing at an increasing rate, marginal product is:
A.positive and increasing.
B.positive and decreasing.
C.constant.
D.negative.
7)
Refer to the data. The four-firm concentration ratio for this industry is:
A.90 percent.
B.95 percent.
C.100 percent.
D.indeterminate because we don’t know which four firms are included.
8) The international agency that lends money to DVCs for economic development
projects is the:
A.World Bank.
B.International Monetary Fund (IMF).
C.World Trade Organization (WTO).
D.World Credit Union.
9) A change in a factor’s price will have a greater effect on the quantity of the factor
demanded the:
A.Smaller the change in the factor’s price
B.Smaller the factor’s share of total cost of production
C.More elastic is the demand for the product the factor helps to make
D.More inelastic is the demand for the product the factor helps to make
10)
Refer to the diagram, where Sd and Dd are the domestic supply and demand for a
product and Pc is the world price of that product. With free trade, that is, assuming no
tariff, the outputs produced by domestic and foreign producers respectively would be:
A.v and vz.
B.w and wy.
C.w and wz.
D.vx and xz.
11)
Assumptions: (1) Employers in this market are willing and able to ignore minimum
wage laws; (2) Sd represents the supply of domestic-born (and legal immigrant)
workers; (3) St represents the total supply of workers in this labor market (Sd plus
illegal immigrants); and (4) unless otherwise stated, illegal immigration is not
effectively blocked by the government.
Refer to the given figure and assumptions. It suggests that:
A.illegal immigrant workers are in this market because these are jobs that
domestic-born workers are unwilling to do.
B.employment of domestic-born workers could be increased by 20,000 if illegal
immigration were blocked.
C.the presence of illegal immigrants in this labor market reduces wages, making these
jobs less attractive to domestic-born workers.
D.firms hiring from this labor market would be forced to shut down if illegal
immigration were blocked.
12) A pure monopolist:
A.will realize an economic profit if price exceeds ATC at the
profit-maximizing/loss-minimizing level of output.
B.will realize an economic profit if ATC exceeds MR at the
profit-maximizing/loss-minimizing level of output.
C.will realize an economic loss if MC intersects the downsloping portion of MR.
D.always realizes an economic profit.
13) The crowding model of discrimination suggests that:
A.women and selected minorities are systematically excluded from high-paying
occupations and crowded into low-paying occupations, decreasing their wages and
reducing domestic output.
B.employers having high discrimination coefficients will be crowded out by
nondiscriminating employers in the long run.
C.firms will base hiring decisions on group averages, rather than on individual
characteristics and productivity.
D.occupational segregation is largely the result of freely made rational choices of
women and minorities.
14) Voter failure describes the situation where:
A.an insufficient number of voters turn out to express their preferences.
B.voter preferences cannot be adequately captured because of a voting paradox.
C.voters support policies that would reduce productive and allocative efficiency.
D.government officials make poor decisions that contradict voter preferences.
15)
Refer to the data. Suppose quantity supplied declined by 23 units at each price,
changing the equilibrium price in a direction and amount for you to determine. Over
that price range, demand is:
A.elastic.
B.inelastic.
C.perfectly elastic.
D.perfectly inelastic.
16) Which of the following would not be classified as an economic resource by
economists?
A.A professional soccer player.
B.Water in a town’s reservoir.
C.Money in a business checking account.
D.The manager of the local hamburger restaurant.
17) The demand for a luxury good whose purchase would exhaust a big portion of one’s
income is:
A.perfectly price inelastic.
B.perfectly price elastic.
C.relatively price inelastic.
D.relatively price elastic.
18) Implicit and explicit costs are different in that:
A.explicit costs are opportunity costs; implicit costs are not.
B.implicit costs are opportunity costs; explicit costs are not.
C.the latter refer to nonexpenditure costs and the former to monetary payments.
D.the former refer to nonexpenditure costs and the latter to monetary payments.