1) In interpreting the Ed value as either elastic or inelastic, we look at the:
A.Ed coefficient with its negative sign
B.Absolute value of the Ed coefficient
C.Percent change in price
D.Percent change in quantity
2)
In the labor market shown above, if the demand for labor increases so that the
equilibrium wage rate goes above the minimum wage Wm, then the minimum-wage
law will:
A.Cause higher unemployment
B.Cause lower unemployment
C.Labor supply to decrease
D.Become ineffective in the market
3) The optimal allocation of resources is found:
A.where MB = MC.
B.at every point along a production possibilities curve.
C.where the marginal benefit is at its greatest.
D.where the marginal cost is at its lowest.
4) Carlos and Darla are playing the dictator game. Carlos is assigned the role of dictator
and given $20 to split between the two of them. Based on previous experiments with
this game by behavioral economists, which is the least likely outcome?
A.Carlos will keep all of the money for himself.
B.Carlos will give all of the money to Darla.
C.Carlos will split the money evenly with Darla.
D.Carlos will split the money, keeping a little more than half for himself.
5) Which of the following individuals is most likely to migrate to Switzerland,
assuming that all face equally good prospects of securing a good job after arrival?
A.Ricardo is 25 years old, single, and currently lives in Italy.
B.Ivan is 50 years old, married, and currently lives in Russia.
C.Maria is 40 years old, married with three children, and currently lives in Mexico.
D.Tran is 35 years old, single, speaks only Vietnamese and a little English, and
currently lives in Vietnam.
6) Assume a purely competitive firm is selling 200 units of output at $3 each. At this
output, its total fixed cost is $100 and its total variable cost is $350. This firm:
A.is maximizing its profit.
B.is making a profit, but not necessarily the maximum profit.
C.is incurring losses.
D.should shut down in the short run.
7) According to behavioral economics, the difficulty among many people to sufficiently
save for their retirement is partly explained by:
A.Myopia
B.Mental accounting
C.Anchoring
D.Framing
8) In which of the following countries did exports account for the biggest percent of
GDP in 2011?
A.Japan
B.United States
C.Netherlands
D.Germany
9)
If all monopolistically competitive firms in the industry have profit circumstances
similar to the firm shown:
A.new firms will enter the industry.
B.some firms will exit the industry.
C.all firms will exit the industry.
D.no firms will exit the industry.
10)
Refer to the diagrams in which figures (a) and (b) show demand curves reflecting the
prices Alvin and Elmer are willing to pay for a public good, rather than do without it.
The collective willingness to pay for the first unit of this public good is:
A.$18.
B.$14.
C.$10.
D.$6.
11)
Refer to the above graphs for a competitive market in the short run. Which of the
following statements is true?
A.The firm will increase production
B.The firm is experiencing economic losses
C.The firm is breaking even
D.The firm is making economic profits
12) Suppose the world economy is composed of just two countries: Italy and Greece.
Each can produce steel or chemicals, but at different levels of economic efficiency. The
production possibilities curves for the two countries are shown in the graphs below.
Refer to the graphs and information above. If Italy and Greece should open up trade
with each other, which of the following terms of trade is mutually beneficial?
A.1 ton of chemicals = 1 ton of steel
B.2 tons of chemicals = 1 ton of steel
C.5 tons of chemicals = 2 tons of steel
D.9 tons of chemicals = 5 tons of steel
13)
Refer to the graph. Which of the lines in the diagram represent(s) a regressive tax?
A.Both A and B.
B.D only.
C.C only.
D.B only.
14)
Refer to the above supply and demand graph of Product X. If there are positive
externalities from the consumption of Product X, then the socially optimal demand
curve would be:
A.To the left of line D on the graph
B.To the right of line D on the graph
C.At the position of line D on the graph
D.An upward-sloping line
15) According to some economists, the private sector is more efficient than the public
sector mainly because:
A.the private sector has a clear test of performance: profit and loss.
B.wages, salaries, and fringe benefits are higher in the private sector.
C.worker turnover is higher in the public sector.
D.of extensive negative externalities in the public sector.