1) The table below shows the supply and demand schedules for the European euro.
Refer to the table above. If European governments decided to fix the price of a euro at
$0.80, they would have to:
A.Buy 286 euros
B.Buy 114 euros
C.Sell 114 euros
D.Sell 286 euros
2) Prospect theory explains the status-quo bias as a combination of loss aversion and
the:
A.Anchoring effect
B.Mental accounting effect
C.Endowment effect
D.Confirmation bias
3)
The payoff matrix represents:
A.a zero-sum game.
B.a negative-sum game.
C.a positive-sum game.
D.a game that can only be played in a single time period.
4) Critics of the marginal productivity theory of income distribution claim that the
theory is flawed due to:
A.The law of diminishing returns
B.The existence of imperfect competition, such as of monopoly and monopsony, in
output and resource markets
C.The problem of comparing different kinds of resources, such as capital and labor
D.Government policies which redistribute income
5)
Refer to the above table. Which product would be an inferior good?
A.Product W
B.Product X
C.Product Y
D.Product Z
6)
Refer to the diagram. The profit-maximizing level of output for this firm:
A.is at point a
B.is at point b
C.is at point c
D.cannot be determined from the information given.
7)
Refer to the above graph. At which point is marginal product (MP) at its maximum?
A.Point A
B.Point B
C.Point C
D.Point D
8)
Refer to the graph above representing the purely competitive market for a product.
When the market is at equilibrium, the value of the total benefits derived by consumers
from this product would be represented by the area:
A.a + b + c + d
B.a + b + c
C.a
D.b + c
9) Politicians who have to go through elections tend to focus on the short-term net
benefits of projects because of:
A.Voters’ tendency to more easily see short term benefits rather than long-term ones
B.The special-interest effect of specific groups among the electorate
C.The ability of government to coerce people to do things involuntarily
D.”Pork-barrel” politics and the principal-agent problem
10) Federal tax policy:
A.treats employer health insurance premiums as taxable income.
B.subsidizes health insurance and thereby increases the demand for health care.
C.subsidizes health insurance and thereby decreases the demand for health care.
D.corrects the overallocation of resources to the health care industry that would
otherwise exist.
11)
Refer to the figure above, which shows three supply curves for corn. Which of the
following would cause the supply of corn to shift from S1 to S2?
A.An increase in the price of fertilizer
B.A change in consumer tastes away from cornbread
C.A decrease in consumer incomes, assuming corn is a normal good
D.The development of a more effective insecticide against corn rootworm
12)
Refer to the diagram. The MRC curve lies above the labor supply curve because:
A.any number of workers can be hired at the going equilibrium wage rate.
B.the firm must lower product price to increase its sales.
C.the higher wage needed to attract additional workers must also be paid to the workers
already employed.
D.there is an inverse relationship between wage rate and the amount of labor employed.
13) In response to the terrorist attacks of September 11, 2001, the government decided
to allocate more resources toward defense goods. The government’s decision reflects
their assessment that:
A.the marginal benefits of additional defense goods outweighed the marginal cost.
B.the marginal cost of additional defense goods outweighed the marginal benefit.
C.there cannot be too many defense goods.
D.civilian goods are not worth producing.