1) In a nation’s balance of payments, which one of the following items is always
recorded as a positive entry?
A.Goods imports.
B.Changes in foreign currency reserves.
C.U.S. purchases of assets abroad.
D.Exports of services.
2) DASH Airlines is considering the addition of a flight from Red Cloud to David City.
The total cost of the flight would be $1,100, of which $800 are fixed costs already
incurred. Expected revenues from the flight are $600. DASH should:
A.not add this flight because only flights that cover their full costs are profitable.
B.not add this flight because it is not profitable at the margin.
C.add this flight because marginal revenue exceeds marginal costs and total revenue
exceeds total variable cost.
D.not add this flight because total costs exceed total revenue.
3) The health care industry encompasses the following sectors, except:
A.Medical laboratories
B.Nursing homes
C.Nonprescription drugs
D.Health clubs
4) What effect should each of the following have on the demand for gasoline in a
competitive market? State what happens to demand. Explain your reasoning in each
case and relate it to a demand determinant.
(a)an increase in the number of cars
(b)the economy moves into a recession
(c)an increase in the price of car insurance, taxes, maintenance
(d)consumer expectations of substantial price increases in gasoline
5) Which of the following is not a factor that automatically pushes firms in pure
competition to earn only normal profits in the long run?
A.Entry of new firms
B.Exit of some firms
C.Changes in the firms’ plant size
D.Changes in the market demand
6)
Refer to the above table. If demand decreased by 4 units at each price, what would the
new equilibrium price and quantity be?
A.$3 and 5 units
B.$4 and 6 units
C.$5 and 7 units
D.$6 and 8 units
7)
Refer to the graph above representing the purely competitive market for a product.
When the market is at equilibrium, the producer surplus would be represented by the
area:
A.b + c
B.b
C.c
D.b + c + d
8) The idea that a person’s productive efforts and his or her economic rewards are
unrelated:
A.is the neocolonialism view of economic development.
B.describes the vicious circle of poverty.
C.is the surplus labor theory of economic development.
D.is the capricious universe view.
9) In understanding and analyzing “demand,” we focus on how much of a product the
buyers are:
A.Willing and wanting to buy
B.Actually buying now and in the recent past
C.Able to buy with their given income
D.Willing and able to buy
10) In 2011, U.S. governments (local, state, and federal) employed approximately how
many million workers?
A.16.0
B.19.4
C.21.9
D.23.5
11) At the point where diminishing marginal returns of an input sets in, the:
A.Average product starts to decrease
B.Marginal product starts to decrease
C.Total product starts to decrease
D.Average product exceeds the marginal product
12) Overall, the U.S. tax system (combined federal, state, and local) is:
A.highly progressive.
B.slightly progressive.
C.slightly regressive.
D.highly regressive.
13) The total revenue received by sellers of a good is computed by:
A.Multiplying the price times the quantity sold
B.Adding the price and the quantity sold
C.Multiplying the %-change in price times the %-change in quantity
D.Dividing the %-change in quantity by the %-change in price