What percent of all jobs in the United States are in manufacturing?
A. 10 percent.
B. 30 percent.
C. 50 percent.
D. 70 percent.
Answer:
The Industrial Revolution was important to the history of economic systems because it:
A. changed the way people exchanged goodsfrom barter to using money as a medium
of exchange.
B. concentrated wealth in the hands of a few noblemen who then controlled the land in
their region, creating a feudal system.
C. increased the wealth of merchants and artisans and eventually led to a change in
economic systems to mercantilism.
D. increased the power of capitalists and eventually led to a revolution instituting
capitalism as the dominant economic system.
Answer:
Refer to the graph shown. Area C represents:
A. the total loss of surplus by consumers resulting from a monopoly.
B. the cost to society of increasing output from Qm to Qc.
C. consumer surplus redistributed to the monopolist.
D. the loss of surplus by producers resulting from a monopoly.
Answer:
Using the supply and demand model, what is the best way to show the effects on the
plywood market of households preparing for a hurricane? (Note: people use plywood to
board up their homes to protect them from damage from a hurricane.)
A. Supply curve shifted to the right, demand curve did not shift.
B. Demand curve shifted to the right, supply curve did not shift.
C. Both supply and demand curves shifted to the right.
D. Supply curve moved right and demand curve shifted to the left.
Answer:
Refer to the graphs shown. The effect of increased consumer income and higher
production costs on a normal good is most likely shown in:
A. a.
B. b.
C. c.
D. d.
Answer:
When car makers began to cut the costs of producing cars by designing the chassis,
engine, and transmissions so that different models could be produced on the same
assembly line, production costs fell $240 per car. This idea best illustrates:
A. economies of scale.
B. diseconomies of scale.
C. constant returns to scale.
D. diminishing marginal product.
Answer:
Refer to the graph shown. If the firm’s total cost is $375, labor must cost:
A. $62.50 per unit.
B. $75 per unit.
C. $5 per unit.
D. $6 per unit.
Answer:
Given that price is constant, the lower the marginal utility of a good:
A. the less you are willing to buy of it.
B. the more you are willing to buy of it.
C. the lower the total utility of that good.
D. the more substitutes there are.
Answer:
If a natural monopoly faces a relatively inelastic consumer demand over the range of
the production, it will have an incentive to:
A. charge a low price.
B. charge a high price.
C. sell more.
D. advertise more.
Answer:
Price elasticity of demand is the:
A. change in the quantity of a good demanded divided by the change in the price of that
good.
B. change in the price of a good divided by the change in the quantity of that good
demanded.
C. percentage change in price of that good divided by the percentage change in the
quantity of that good demanded.
D. percentage change in quantity of a good demanded divided by the percentage change
in the price of that good.
Answer:
Assuming the standard assumptions, in a single-play ultimatum game, the second
player’s best strategy in the last round is to:
A. reject all but evenly split offers.
B. accept any offer greater than zero.
C. accept only those offers over 50 percent of the total.
D. reject all offers.
Answer:
If it takes you an hour to make a rational decision and the opportunity cost of that hour
is $100, you will:
A. always make rational decisions.
B. make rational decisions only if the benefit from doing so exceeds $100.
C. make rational decisions only if the benefit from doing so is less than $100.
D. never make rational decisions.
Answer:
The resource curse is:
A. the curse that countries that have an abundance of resources tend to have lower
economic growth compared to countries with fewer natural resources.
B. the curse that countries that have fewer resources tend to have lower economic
growth compared to countries with abundant natural resources.
C. the curse of many developing countriesthey have few natural resources and their
economies cannot grow.
D. an economic theory that has yet to be developed because there are no examples in
the real world.
Answer:
In a socialist economic system:
A. markets are relied upon to decide what to produce, but government intervenes when
necessary.
B. individuals tell government what to produce and the government decides how best to
achieve that goal.
C. government planning boards decide what to produce, but rely on markets to achieve
that goal.
D. government planning boards decide what to produce and then give individuals
directives how to achieve those goals.
Answer:
Refer to the graph shown. The output range in region a is associated with:
A. increasing marginal productivity.
B. constant returns to scale.
C. economies of scale.
D. diseconomies of scale.
Answer:
If supply is highly elastic and demand shifts to the left:
A. price will fall significantly; quantity hardly changes at all.
B. price will hardly change at all; quantity will fall significantly.
C. price will fall significantly as will quantity.
D. price and quantity will hardly change at all.
Answer:
A public good is a good that:
A. is owned by the public.
B. when consumed by one individual, can still be consumed by others.
C. when consumed by one individual, cannot be consumed by another.
D. is available only to those people who help to pay for it.
Answer:
Which of the following is not a question raised by critics of medical licensure?
A. Why, if licensed medical treatment is so great, do we even need formal restrictions to
keep other types of medicine from being practiced?
B. Whom do these restrictions benefit: the general public or the doctors who practice
mainstream medicine?
C. What have the long-run effects of licensure been?
D. Why does the public need to have accurate information about a doctor’s
competency?
Answer:
Using the basic supply/demand framework, economic analysis of market structure leads
to the conclusion that:
A. perfect competition promotes efficient outcomes, whereas the other market
structures are associated with some deadweight loss.
B. monopoly promotes efficient outcomes, whereas the other market structures are
associated with some deadweight loss.
C. oligopoly promotes efficient outcomes, whereas the other market structures are
associated with some deadweight loss.
D. monopolistic competition promotes efficient outcomes, whereas the other market
structures are associated with some deadweight loss.
Answer:
Refer to the graph shown. If the quantity supplied increases from 2 to 4 when the price
of CDs increases from $2.00 to $5.00, the response by producers would be shown by:
A. a shift from S0 to S1.
B. a shift from S1 to S0.
C. a movement upward and to the right along S0.
D. a movement upward and to the right along S1.
Answer:
Refer to the graph shown. The line segment that represents average variable costs of
producing Q * is:
A. AQ *.
B. BQ *.
C. CQ *.
D. AB.
Answer:
Refer to the following graph.
In New York City, the rent on many apartments is set below market rates. As a result,
many people find that the only way to obtain an apartment is to make illegal payments
to landlords. If Pc is the controlled rent, a best estimate of such “key” money is shown
as:
A. Pf.
B. Pe.
C. Pe minus Pc.
D. Pf minus Pc.
Answer:
Refer to the following graph.
A price ceiling would be binding, resulting in a market shortage if it is set at:
A. $3.00.
B. $2.25.
C. $1.50.
D. either $3.00 or $1.50.
Answer:
The average total cost of producing electronic calculators in a factory is $20 at the
current output level of 100 units per week. If fixed cost is $1,000 per week:
A. average fixed cost is $20.
B. total cost is $3,000.
C. variable cost is $2,000.
D. average variable cost is $10.
Answer:
If an industry has exactly 20 firms with identical sales, the Herfindahl index must be:
A. less than 100.
B. greater than 100 but less than 200.
C. greater than 200 but less than 400.
D. greater than 400.
Answer:
Three hurricanes, combined with the already high real-estate prices, have made people
reconsider whether to retire to Florida. The cost of homeownership has increased due to
stricter building codes. The influx of retirees is not expected to change because the baby
boom generation is approaching retirement age and Florida has long attracted many
retirees. Which of the following factors is tending to move the demand curve for
Florida housing to the right?
A. The aging of the baby boomers, increasing the number of people who are retiring
B. The increase in the cost of insurance
C. The already high real-estate prices
D. The current high construction costs
Answer:
eBay.com is a vast auction site that is similar to a competitive market in some ways but
differs from it in others. In what way does eBay differ from what economists define as a
competitive market?
A. Sellers in competitive markets are usually large firms, but on eBay there are a large
number of sellers.
B. Sellers in competitive markets want to make a profit, but sellers on eBay are small
and hence are selling only for fun.
C. It is easy to start selling on eBay, but to enter a competitive market one must be
organized as a corporation.
D. The products offered for sale on eBay sometimes differ from those offered by sellers
on other websites or in physical stores, whereas in a competitive market firms’ products
are identical.
Answer:
The short-run elasticity of demand for gasoline sold at gasoline stations is 0.20. If
terrorism causes the supply of gasoline to fall, resulting in a 5 percent drop in quantity,
if other things remain the same, the price per gallon will increase by:
A. 4 percent.
B. 5 percent.
C. 20 percent.
D. 25 percent.
Answer:
Carbon dioxide emissions are thought to contribute to global warming, and there is
concern that changes in climate will be costly. Emitting carbon dioxide is an example
of:
A. a public good.
B. a negative externality.
C. an adverse selection problem.
D. an effluent fee.
Answer:
For complements:
A. cross-price elasticity of demand is negative.
B. cross-price elasticity of demand is positive.
C. price elasticity of income is negative.
D. price elasticity of income is positive.
Answer:
Implicit cost refers to:
A. the amount a firm receives for selling its product or service.
B. any increase in the value of the assets owned by the firm.
C. the opportunity cost of factors of production provided by the owners of the firm.
D. explicit payments to the factors of production.
Answer: