1) Many governments end up with chronic budget deficits because:
A.Many government programs are popular with voters, but hardly any voter likes
paying taxes
B.The nation simply cannot produce everything that it consumes, so it has to rely on
others
C.Some resources are not available from within, so they would have to be bought from
others
D.Businesses do not want to have “big government” around too much
2) Which industry would be best characterized as monopolistically competitive?
A.Smart-phone manufacturing
B.Internet-search sites
C.Web design consulting
D.Business cloud-computing services
3) According to behavioral economics, one major cause of self-control problems (such
as strictly following through on “new year’s resolutions”) is:
A.Time inconsistency
B.Mental accounting
C.Anchoring
D.Framing
4) Other things equal, in which of the following cases would economic profit be the
greatest?
A.An unregulated monopolist that is able to engage in price discrimination.
B.An unregulated, nondiscriminating monopolist.
C.A regulated monopolist charging a price equal to average total cost.
D.A regulated monopolist charging a price equal to marginal cost.
5) What effect would each of the following have on the short-run average and marginal
costs of an auto dealership: (a) auto mechanics receive a 10% wage increase; (b)
property taxes decrease; (c) auto dealers institute a one-time only promotional
campaign?
6) Which one of the following will not directly affect the U.S. balance on current
account?
A.An increase in U.S. goods imports.
B.A decrease in U.S. net investment income.
C.An increase in U.S. purchases of assets abroad.
D.An increase in U.S. imports of services.
7)
Curve (2) in the diagram is a purely competitive firm’s:
A.total cost curve.
B.total revenue curve.
C.marginal revenue curve.
D.total economic profit curve.
8) Participation in company retirement savings programs has increased dramatically
because:
A.participation was required by the company.
B.enrollment in these programs was set as the default option and workers had to request
to be unenrolled.
C.not being enrolled in these programs was set as the default options, and people’s
aversion to being told what to do prompted many to request enrollment.
D.endowment effects encourage greater saving.
9) According to international comparisons, which nation had the highest hourly pay in
U.S. dollar terms in 2011?
A.United States.
B.Germany.
C.Denmark.
D.Sweden.
10) The total revenue of a purely competitive firm from 8 units of output is $48. Based
on this information, total revenue for 9 units of output must be:
A.$52
B.$54
C.$58
D.$60
11) Answer the question on the basis of the following cost data:
Refer to the data. The marginal cost curve would intersect the average variable cost
curve at about:
A.2 units of output.
B.4 units of output.
C.6 units of output.
D.7 units of output.
12) The largest expenditure of the U.S. Federal government is for:
A.Education
B.National defense
C.Pensions and income security
D.Interest on public debt
13) As applied to agriculture, the special-interest effect suggests that:
A.urban legislators support farm legislation in exchange for rural legislators supporting
urban-oriented legislation.
B.a relatively small number of farmers receive large benefits at the expense of a much
larger group of taxpayers who individually suffer small losses.
C.politicians support farm subsidies because most of the associated costs are hidden
rather than explicit.
D.the size of farm subsidies should vary directly with a farmer’s earned income.