1)
Refer to the table above for a certain product’s market in Econland. If the world price of
the product were $6 and a tariff of $1 per unit were applied to imports of the product,
then the total revenue (after tariff) going to domestic producers would be:
A.$11,200, and the total revenue (after tariff) going to foreign producers would be
$2,800
B.$11,200, and the total revenue (after tariff) going to foreign producers would be
$2,400
C.$8,400, and the total revenue (after tariff) going to foreign producers would be
$2,800
D.$13,200, and the total revenue (after tariff) going to foreign producers would be
$2,400
2) Many economists believe that the federal government:
A.spends far too much on basic scientific research, as this activity should be reserved
for the private sector.
B.should spend more on basic scientific research because scientific knowledge is a
public good with significant positive externalities.
C.should conduct all R&D activity in the economy, limiting firms’ ability to gain
monopoly power through product innovation.
D.should finance more consumption through Social Security and Medicare so that the
increased demand encourages greater R&D.
3)
Refer to the diagram. If actual production and consumption occur at Q3:
A.efficiency is achieved.
B.an efficiency loss (or deadweight loss) of e + f occurs.
C.an efficiency loss (or deadweight loss) of a + b + c + d occurs.
D.an efficiency loss (or deadweight loss) of a + c occurs.
4) The substitution effect:
A.Is generally so weak that its effect cannot be predicted
B.For an increase in the relative price of a good is sometimes positive, but sometimes
negative
C.Measures the change in the quantity demanded of a good from a change in its relative
price
D.Measures the change in the quantity of a good demanded brought about by a change
in real income associated with a change in the price of the good
5)
Refer to the above graph. A monopsonist will set the wage at:
A.Wc
B.Wu
C.Wm
D.Cannot be determined
6) Suppose there are only three labor markets (A, B, and C) in the economy and each of
these markets is purely competitive. The table below contains the demand (or
marginal-revenue-product) schedule for labor in each of these three markets. Assume
there are 24 million homogeneous workers in the economy and that one-half of these
workers are male and one-half are female
Refer to the above table. What would the wage rate be if all the workers could work in
all three labor markets, and they get spread out evenly?
A.$7.00 for females and $13.00 for males
B.$8.00 for females and $11.00 for males
C.$11.00 for females and $11.00 for males
D.$13.00 for females and $13.00 for males
7) Which of the following is a major obstacle to economic growth in DVCs?
A.A fall in population growth
B.A decline in demographic transition
C.The low demand for natural resources
D.The low supply of saving
8) Assume the Ajax Mining Company hires 80 percent of the nonunion labor force of
Mother Lode, New Mexico. Also, suppose that this labor force is highly immobile.
Economists would describe this employer as a:
A.monopolist.
B.oligopolist.
C.monopsonist.
D.monopolistic competitor.
9) If a technological advance reduces the amount of variable resources needed to
produce any level of output, then the:
A.AVC curve will shift upward.
B.MC curve will shift downward.
C.ATC curve will shift upward.
D.AFC curve will shift downward.
10) In deciding whether to study for an economics quiz or go to a movie, one is
confronted by the idea(s) of:
A.scarcity and opportunity costs.
B.money and real capital.
C.complementary economic goals.
D.full production.
11) The kinked-demand curve model of oligopoly is useful in explaining:
A.the way that collusion works.
B.why oligopolistic prices and outputs are extremely sensitive to changes in marginal
cost.
C.why oligopolistic prices might change only infrequently.
D.the process by which oligopolists merge with one another.
12) Suppose that MUx/Px exceeds MUy/Py. To maximize utility, the consumer who is
spending all her money income should buy:
A.less of X only if its price rises.
B.more of Y only if its price rises.
C.more of Y and less of X
D.more of X and less of Y
13) Independent unions:
A.have greater combined membership than the AFL-CIO.
B.are not affiliated with the AFL-CIO or Change to Win.
C.include the United Autoworkers and United Steelworkers.
D.have about the same combined membership as the AFL-CIO.
14) If some activity creates external benefits as well as private benefits, then economic
theory suggests that the activity ought to be:
A.Taxed
B.Prohibited
C.Subsidized
D.Left alone
15) Suppose you find that the price of your product is less than minimum AVC. You
should:
A.minimize your losses by producing where P = MC.
B.maximize your profits by producing where P = MC.
C.close down because, by producing, your losses will exceed your total fixed costs.
D.close down because total revenue exceeds total variable cost.
16)
Refer to the table. In a choice between public safety and parks:
A.the outcome would depend on which item was listed first on the ballot.
B.a majority of voters would favor public safety.
C.no voter decision is possible.
D.a majority of voters would favor parks.
17) In the United States, approximately how many doctors are there per 100,000 of
population?
A.162
B.275
C.580
D.5,800
18)
Refer to the diagram. From society’s perspective, if MB1 and MC2 are relevant:
A.Q2 represents too little pollution abatement.
B.Q1 represents too much pollution abatement.
C.Q2 represents an optimal amount of pollution abatement.
D.Q4 represents too little pollution abatement.
19) Which of the following IACs (industrially advanced countries) was the leading
provider of development assistance to DVCs (developing countries) in 2012, in terms of
absolute dollar amounts?
A.United States
B.Japan
C.Canada
D.Germany
20) Most economists who have studied the health care industry have concluded that
there is:
A.An underallocation of resources for health care in the United States
B.An overallocation of resources for health care in the United States
C.Insufficient technological progress in the medical industry
D.A need for government price controls for physicians’ fees