1) a constant-cost industry is one in which:
a.resource prices fall as output is increased.
b.resource prices rise as output is increased.
c.resource prices remain unchanged as output is increased.
d.small and large levels of output entail the same total costs.
2) The following economic data for a hypothetical economy:
Refer to the above data. It would be appropriate stabilization policy to raise interest
rates, raise taxes, and reduce government expenditures.
3) Shifts in the aggregate supply curve are caused by changes in:
A.consumption spending.
B.the quantity of real output demanded.
C.the quantity of real output supplied.
D. one or more of the determinants of aggregate supply.
4)
refer to the above diagram. minimum efficient scale:
a.occurs at some output greater than q3.
b.is achieved at q1.
c.is achieved at q3.
d.cannot be identified in this diagram.
5) the short-run supply curve of a purely competitive producer is based primarily on its:
a.avc curve.
b.atc curve.
c.afc curve.
d.mc curve.
6) which of the following statements is not correct?
a.if the relative change in price is greater than the relative change in the quantity
demanded associated with it, demand is inelastic.
b.in the range of prices in which demand is elastic, total revenue will diminish as price
decreases.
c.total revenue will not change if price varies within a range where the elasticity
coefficient is unity.
d.demand tends to be elastic at high prices and inelastic at low prices.
7) Which one of the following is not a shortcoming of the aggregate expenditures
model?
A.failure to show price level changes
B.failure to allow for ‘self-correction” of the economy
C.failure to account for cost-push inflation
D.failure to account for cyclical unemployment
8)
refer to the above two diagrams for individual firms. figure 1 pertains to:
a.an imperfectly competitive firm.
b.a purely competitive firm.
c.an oligopolist.
d.a pure monopolist.
9) the following production possibilities data for landia and scandia:
refer to the above data. on the basis of the production possibilities data shown:
a.landia has a comparative advantage in chips while scandia has a comparative
advantage in fish.
b.landia has a comparative advantage in fish while scandia has a comparative advantage
in chips.
c.both landia and scandia have a comparative advantage in fish.
d.both landia and scandia have a comparative advantage in chips.
10) in 1975 mcdonald’s introduced its egg mcmuffin breakfast sandwich, which remains
popular and profitable today. this longevity illustrates the idea of:
a.opportunity cost.
b.upsloping supply.
c.consumer sovereignty.
d.specialization.
11)
the above diagram concerns supply adjustments to an increase in demand (d1to d2) in
the immediate market period, the short run, and the long run. on the basis of this
illustration we can conclude that:
a.short-run adjustments are more economically efficient than are long-run adjustments.
b.the amount of time producers have to adjust to a change in demand is not a
determinant of supply elasticity.
c.supply is more elastic the greater the amount of time producers have to adjust to a
change in demand.
d.supply is less elastic the greater the amount of time producers have to adjust to a
change in demand.
12) If a bank has liabilities that exceed its net worth it:
A.will not be able to meet the legal reserve ratio.
B.is considered to be insolvent.
C.most likely is a heavy borrower from its district Federal Reserve Bank.
D.may or may not be a profitable firm.
13)
Refer to the above labor market diagrams. The tactics of inclusive unionism are shown
in Figure(s):
A.5 only
B.3 only
C.4 and 5
D.1 and 2
14) The determinants of aggregate demand:
A.explain why the aggregate demand curve is downsloping.
B.explain shifts in the aggregate demand curve.
C.demonstrate why real output and the price level are inversely related.
D. include input prices and resource productivity.
15) according to most experts, which of the following factors is most important in
causing health care costs to rise?
a.the aging of the population
b.rising incomes
c.malpractice suits
d.fee-for-service health insurance and cost-increasing technology.
16) it takes a considerable amount of time to increase the production of pork. this
implies that:
a.a change in the demand for pork will not affect its price in the short run.
b.the short-run supply curve for pork is less elastic than the long-run supply curve for
pork.
c.an increase in the demand for pork will elicit a larger supply response in the short run
than in the long run.
d.the long-run supply curve for pork is less elastic than the short-run supply curve for
pork.
17) What resource problem is created by negative externalities and what methods are
suggested for dealing with this problem?
18) The following is a monopsonists employment schedule. What is the firms marginal
resource cost when it hires the eleventh worker?
19) Use aggregate supply and demand analysis to explain real business cycle theory.
20) Explain how the below graph illustrates
the built-in stability of a progressive tax structure.
21) At the present time Social Security beneficiaries are limited in the amount of
income they can earn and still receive full benefits. Should this limitation be abolished?
Justify your answer.