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1)
Refer to the diagram, in which solid arrows reflect real flows; broken arrows are
monetary flows. Flow (5) might represent:
A.personal income tax revenues.
B.the provision of public schools by local governments.
C.the purchase of laptop computers by the state of Iowa.
D.transfer payments to unemployed workers.
2) Collective bargaining occurs under a framework of rules established in the:
A.Sherman Act.
B.Clayton Act.
C.National Labor Relations Act.
D.Employer-Employee Dispute Act.
3) Answer the question on the basis of the following demand and cost data for a pure
monopolist:
Refer to the data. The profit-maximizing price for the monopolist will be:
A.$5.00.
B.$2.90.
C.$3.35.
D.$4.50.
4) Assume that Matt, Joe, and Teresa are the only citizens in a community. A proposed
public good has a total cost of $1000. All three citizens will share an equal portion of
this cost in taxes. The benefit of the public good is $500 for Matt, $280 for Joe, and
$260 for Teresa. In a majority vote, this proposal will most likely be:
A.Accepted; two in favor and one against
B.Defeated; two against and one in favor
C.Accepted; three in favor and none against
D.Defeated; none in favor and three against
5)
Refer to the diagram. The area that identifies the maximum sum of consumer surplus
and producer surplus is:
A.a + b + c + d + e + f.
B.c + d + f.
C.a + b + e.
D.a + b + c + d.
6)
Refer to the diagram. At output level Q total variable cost is:
A.0BEQ.
B.BCDE.
C.0CDQ.
D.0AFQ.
7) Answer the question on the basis of the following production possibilities data for
two countries, Alpha and Beta, which have populations of equal size.
Refer to the given data. The domestic opportunity cost of:
A.producing a ton of chips in Alpha is 1/5 of a ton of fish.
B.producing a ton of chips in Beta is 6 tons of fish.
C.catching a ton of fish in Alpha is 5 tons of chips.
D.catching a ton of fish in Beta is 6 tons of chips.
8) Demographers predict that declines in birthrates are in part due to:
A.More strict adherent to religious beliefs and practices regarding human reproduction
B.Fewer career opportunities for women in many societies
C.The increased expense of raising a child in modern societies
D.Falling standards of living in many countries around the world
9)
Refer to the diagram, assuming that the firm represented is operating on curve TC0.
How much will the firm extract this year?
A.500
B.750
C.1,000
D.It cannot be determined with the information given.
10) If it is cheaper in the long-run to use a new metal plow that lasts a long time than an
inferior wooden plow that needs to be replaced often, then this is an example of:
A.A capital-using technology
B.A capital-saving technology
C.Capital consumption
D.Private capital flows
11) If the dollar price of yen rises, then:
A.the yen price of dollars also rises.
B.the dollar depreciates relative to the yen.
C.the yen depreciates relative to the dollar.
D.the dollar will buy fewer U.S. goods.
12) In a labor dispute in which the existing contract has expired, a:
A.firm can legally lock up unruly workers.
B.firm can legally lock out union workers.
C.union can legally restrict customer access to the firm.
D.union can legally restrict physical access by management to the firm.
13) Based on population and economic development trends, the world population is
expected to ____ in the last part of this century.
A.Explode
B.Increase mildly
C.Become stable and constant
D.Decline
14)
Refer to the table. The inconsistency illustrated by the table is that, while a majority of
voters prefer the:
A.highway to the lighthouse and the submarine to the highway, they also prefer the
lighthouse to the submarine.
B.lighthouse to the highway and the lighthouse to the submarine, they also prefer the
submarine to the highway.
C.highway to the lighthouse and the submarine to the lighthouse, they also prefer the
submarine to the highway.
D.lighthouse to the submarine and the highway to the submarine, they also prefer the
highway to the lighthouse.
