1) If producers must obtain higher prices than before to produce a given level of output,
then the following has occurred:
A.A decrease in demand.
B.An increase in demand.
C.A decrease in supply.
D.An increase in supply.
2) Based on the fertility-rate calculations for major industrialized countries, their
populations are expected to decline significantly in the coming years because the:
A.Total fertility rate is higher than the replacement rate
B.Total fertility rate is below the replacement rate
C.Fertility rate and the replacement rate are about equal
D.Fertility rate divided by the replacement rate is greater than one
3) The vertical distance between the total cost and the total variable cost curves differs
by an amount that:
A.initially increases, but then decreases, as output increases.
B.is constant as output changes.
C.decreases as output increases.
D.increases as output increases.
4) Process innovation will shift a firm’s:
A.Total product curve upward
B.Total product curve downward
C.Marginal product curve downward
D.Marginal cost curve upward
5) A major objection to creating a legal market for human organs is that such a market
would:
A.create a substantial surplus of unused organs.
B.increase the present shortage of organs.
C.commercialize human body parts and thus diminish the special nature of human life.
D.encourage healthier lifestyles to maintain saleable organs.
6) Alex and Ben are both loggers wanting to harvest timber from the same forest. Alex
prefers to harvest and replant at a sustainable rate; Ben wants to harvest as many trees
as possible to maximize short-run profit, and then move on. They face the same
production costs.
Refer to the information given. If no explicit property right is given over the forest land,
then:
A.a property right will be established when trees are cut down and brought to market.
B.there is no property right over the harvested timber.
C.Alex and Ben will likely work out an agreement on harvesting and replanting the
land.
D.that implies that government owns and regulates its use.
7) Medicare and Medicaid set their payment rates for medical services above marginal
cost, but below average total cost. One major consequence of doing this is that hospitals
and other providers are then:
A.Reducing the amount of health-care services they provide
B.Passing the uncovered costs on to patients with private health insurance
C.Denying services to many Medicare and Medicaid patients
D.Filing for bankruptcy regularly
8) Which factor will tend to increase the demand for health care?
A.An improvement in medical technology
B.A reduction in subsidies for Medicare
C.An increase in the productivity of physicians
D.An increase in the average age of the population
9) “Beaten paths” from one country to another:
A.discourage migration to that country because of a perception that all of the good jobs
have already been taken.
B.discourage migration by increasing the cost of moving.
C.encourage migration by providing employment contacts and job information.
D.are more prevalent the greater the distance between the two countries.
10)
Refer to the diagram for a nondiscriminating monopolist. The profit-seeking monopolist
will:
A.always produce at output q2.
B.always produce more than q2.
C.never produce an output larger than q2.
D.never produce an output larger than q1.
11) Graphically, if the supply and demand curves are linear, consumer surplus is
measured as the triangle:
A.under the demand curve and below the actual price.
B.under the demand curve and above the actual price.
C.above the supply curve and above the actual price.
D.above the supply curve and below the actual price.
12) The marginal revenue product of an input in a competitive market decreases as a
firm increases the quantity of the input employed because of the:
A.Law of diminishing returns
B.Law of diminishing marginal utility
C.Homogeneity of the product
D.Free mobility of resources