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1) "Impulse buying" is often the result of a:
A.Rational optimizing decision in response to incentives and prices
B.Precise estimation of one's marginal utilities and price comparisons
C.Systematic non-rational behavior that marketers can take advantage of
D.Random error in a consumer's behavior that is not predictable
2) To make up for a shortfall in its annual budget, the government must:
A.Issue government (Treasury) bonds
B.Buy government (Treasury) bonds
C.Reduce its total public debt
D.Sell government stocks
3)
Refer to the above graph for a pure monopoly. Which pricing model would the
monopolist ______ to earn positive economic profits?
A.Profit-maximizing price only
B.Both profit-maximizing price and fair-return price
C.Both fair-return price and the socially optimal price
D.All three: profit-maximizing, fair return, and socially optimal prices
4) The Federal court case against Microsoft, filed in 1998, was based on the:
A.Clayton Act
B.Sherman Act
C.Equal Employment Opportunities Act
D.Federal Trade Commission Act
5) Because there are costs to migration:
A.complete wage equalization is unlikely to occur, even if national governments impose
no restrictions on migration.
B.Migrants are more likely to move to countries far from their origin nation.
C.Migrant and domestic-born workers are unlikely to be substitute resources.
D.Wage equalization will only occur if migrant and domestic-born workers are
complementary resources.
6) The primary function of the International Finance Corporation (IFC) is to:
A.provide U.S. surplus food to low-income countries.
B.provide short-term loans to poor countries to finance international trade deficits.
C.make infrastructure loans, that is, loans for highways, schools, communication
facilities, and so forth.
D.make loans to private enterprises in the DVCs.
7) The problem with adopting a fair-return pricing policy for a natural monopoly is that:
A.Economic profits will be positive
B.Economic profits will be negative
C.It is not productively efficient
D.It is not allocatively efficient
8) Answer the question on the basis of the following information for a public good. Pa
and Pb are the prices that individuals A and B are willing to pay for the last unit of a
public good, rather than do without it. These people are the only two members of
society.
Refer to the data. If this good were a private good instead of a public one, the total
quantity demanded at a $3 market price would be:
A.2 units.
B.3 units.
C.6 units.
D.4 units.
9) Data from the registrar's office at Gigantic State University indicate that over the past
20 years tuition and enrollment have both increased. From this information we can
conclude that:
A.higher education is an exception to the law of demand.
B.the supply of education provided by GSU has also increased over the 20-year period.
C.school-age population, incomes, and preferences for education have changed over the
20-year period.
D.GSU's supply curve of education is downsloping.
10) Use the following graph of the demand for coffee:
Refer to the above diagram of three demand curves for coffee. Which of the following
would cause a shift in coffee demand from D1 to D2?
A.A decrease in the price of tea
B.An increase in consumer incomes
C.An increase in the prices of cream and sugar
D.A decrease in the price of coffee
11) Government regulation concerning the conditions under which goods are produced,
the impact of production on society, and the physical qualities of the goods is known as:
A.Industrial regulation
B.Social regulation
C.Economic regulation
D.Antitrust regulation
12) Which of the following tactics is most associated with the demand-enhancement
union model?
A.Reducing the price of inputs that are substitutes for union workers.
B.Lobbying for increases in public expenditures on the product it is producing.
C.Restricting the number of workers allowed to work in the industry.
D.Increasing the price of products that are complements for the one it is producing.
13)
Suppose the elasticity of labor demand is 0.6. Then a decrease in the wage rate will:
A.Decrease total wage income
B.Increase total wage income
C.Have no impact on total wage income
D.Have an indeterminate impact on total wage income
14) The goal of a rational consumer is to maximize:
A.The quantities of all goods consumed
B.The MU/P of all goods consumed
C.Marginal utility of all goods consumed
D.Total utility from all goods consumed
15) Assume that a tariff is imposed on an imported product. The difference between the
domestic price and the world price is captured by:
A.The government
B.Domestic consumers
C.Domestic producers
D.Foreign exporters
16) The following data are for a series of increasingly extensive flood control projects:
Refer to the data. On the basis of cost-benefit analysis, government should undertake:
A.Plan D
B.Plan C
C.Plan B
D.Plan A
17) Data on the income elasticity of demand for health care suggest that health care is
a(n):
A.Inelastic good
B.Private good
C.Public good
D.Normal good
18) In 2012, which of the following sources of energy contributed the largest share in
U.S. electricity generation?
A.Petroleum
B.Nuclear
C.Hydropower
D.Natural gas
19) Proponents of a value-added tax (VAT) claim that a VAT:
A.is progressive, leading to a more equitable distribution of income.
B.equalizes the tax burden between buyers and sellers of goods.
C.is proportional, so all income groups pay a fair share.
D.penalizes consumption and encourages savings and investment.
