1) Which of the following statements pertains to macroeconomics?
A.Because the minimum wage was raised, Mrs. Olsen decided to enter the labor force.
B.A decline in the price of soybeans caused farmer Wanek to plant more land in wheat.
C.National income grew by 2.7 percent last year.
D.The Pumpkin Center State Bank increased its interest rate on consumer loans by 1
percentage point.
2) Answer the question on the basis of the following balance of payments data for the
hypothetical nation of Econland. All figures are in billions of dollars.
(1) Goods exports +$220
(2) Goods imports -328
(3) Exports of services +54
(4) Imports of services -55
(5) Net investment income +18
(6) Net transfers -11
(7) Capital account -1
(8) Foreign purchases of Econland assets +124
(9) Econland purchases of foreign assets -21
Refer to the table above. Econland’s balance on the current account shows a:
A.Deficit of $91 billion
B.Deficit of $102 billion
C.Deficit of $109 billion
D.Surplus of $109 billion
3) The demand curve of a monopolistically competitive producer is:
A.less elastic than that of either a pure monopolist or a pure competitor.
B.less elastic than that of a pure monopolist, but more elastic than that of a pure
competitor.
C.more elastic than that of a pure monopolist, but less elastic than that of a pure
competitor.
D.more elastic than that of either a pure monopolist or a pure competitor.
4)
The indifference curve in the diagram yields Juan 100 units of utility. If Juan’s money
income were to increase by 20 percent, the indifference curve would:
A.shift leftward.
B.shift rightward.
C.become steeper.
D.not be affected.
5) In 2012, which of the following sources of energy contributed the smallest share in
U.S. electricity generation?
A.Petroleum
B.Nuclear
C.Hydropower
D.Natural gas
6) The negative slope of the production possibilities curve is a graphical way of
indicating that:
A.any economy “can have its cake and eat it too.”
B.to produce more of one product we must do with less of another.
C.the principle of increasing opportunity costs applies to only parts of the economy.
D.consumers buy more when prices are low than when prices are high.
7) In 2007, about what percentage of people with private health insurance in the U.S.
received it as an employer-provided benefit?
A.34%
B.51%
C.72%
D.88%
8) Fairness, according to behavioral economics:
A.is too subjective to be considered in the analysis of economic behavior.
B.can be objectively standardized across individuals.
C.varies from one individual to another but still affects economic behavior in important
ways.
D.matters to people, but because of self-interest fairness has little effect on their
economic decisions.
9) Even where imitation is possible, a firm may gain advantage from being the first to
introduce an innovative product because of:
A.long-lasting brand-name recognition.
B.a time lag between innovation and imitation by rivals.
C.trade secrets that limit the ability of rivals to exactly imitate the product.
D.all of these.
10) Assume that the market for soybeans is purely competitive. Currently, firms
growing soybeans are experiencing economic profits. In the long run, we can expect:
A.New firms to enter causing the market price of soybeans to fall
B.New firms to enter causing the market price of soybeans to rise
C.Some firms to exit causing the market price of soybeans to fall
D.Some firms to exit causing the market price of soybeans to rise
11)
Refer to the diagram. Which one of the following might shift the marginal cost curve
from MC1 to MC2?
A.Major new studies strongly linking cancer to pollution.
B.Improved technology for reducing pollution.
C.A change in consumer tastes from services to manufactured goods.
D.An increase in the price of recycled goods.
12) Suppose the price elasticity of supply for crude oil is 2.5. How much would price
have to rise to increase production by 20 percent?
A.8 percent
B.12.5 percent
C.20 percent
D.45 percent
13) What effect will each of the following have upon the supply of television sets in a
competitive market? Explain your reasoning in each case.
(a)an increase in the price of electronic equipment used in producing television sets
(b)a decline in the number of firms producing television sets
(c)a large new tariff on imported TV sets
(d)new inexpensive satellite dishes which make televisions more popular among
consumers
14)
In a competitive market illustrated by the diagram above, a price ceiling of $25 per unit
will result in:
A.The market stays at equilibrium price of $15
B.A surplus of 200 units
C.A shortage of 200 units
D.A shortage of 150 units
15) One feature of pure monopoly is that the demand curve:
A.Is vertical
B.Is horizontal
C.Slopes upward
D.Slopes downward
16) Define positive externality and give an example.
17) Think of a personal example similar to the one in the text where someone you know
can perform many tasks better than others, but still should specialize in what he/she
does best according to the principle of comparative advantage.
18) Describe how the government differs from private firms and individuals
participating in a market.
19) Graphically show the effect of price supports on the agricultural market.
20) State at least one economic benefit to increased international trade.
21) Do the costs of social regulation outweigh the benefits?