1) The pizza analogy of income distribution would be most closely associated with
which one of the following questions?
A.If resources are used to make pizza, what other goods and services must be given up
to do this?
B.If cutting a pizza in more equal slices shrinks the pizza, how much shrinkage will
society tolerate?
C.If pizza workers were paid more money, would they become more productive
workers for society?
D.If pizza sales increase, would pizza companies redistribute the profits to their
employees?
2) Which of the following statements about self-interest in a market system is false?
A.Self-interest usually motivates an individual to deliver something of value to others
B.Self-interest of entrepreneurs implies seeking maximum profits or minimum losses
C.Self-interest applies only to capitalists and entrepreneurs, not to workers employed by
others
D.In a market system, consumers are just like firms: self-interest is what motivates
them
3) Collusive agreements between two firms are most likely to be honored when the
game:
A.is a one-time game with the opportunity for a prisoner’s dilemma.
B.has a Nash equilibrium that differs from the outcome that maximizes the payoffs to
the two firms.
C.is a zero-sum game.
D.is repeated and both firms offer credible threats if the other violates the agreement.
4) In 2012, “Tax-Freedom Day” (the day average workers have earned enough to pay
their tax bills) was:
A.April 9
B.April 15
C.April 17
D.July 4
5) Answer the question on the basis of the following table showing the demand
schedule facing a nondiscriminating monopolist:
Refer to the table. The profit-maximizing monopolist will sell at a price:
A.of $10.
B.of $7.
C.of $5.
D.that cannot be determined with the information provided.
6) All but which one of the following are cash transfer programs?
A.TANF.
B.Supplemental Security Income (SSI).
C.Low-rent public housing.
D.Social Security.
7) Consumer’s income = $12
Refer to the data for a utility-maximizing consumer. Assume that new product Z doesn’t
exist. How many units of X and Y will this consumer buy, given his or her $12 budget?
A.5 of X and 7 of Y.
B.7 of X and 5 of Y.
C.6 of X and 6 of Y.
D.5 of X and 6 of Y.
8) An increase in the price of tickets to a popular sporting event will increase total
revenue if:
A.There are many substitutes for this form of entertainment
B.The ticket is considered to be a luxury
C.The buyers of the tickets are fanatic about the event
D.The fans are price-conscious
9) Generally speaking, if a firm faces decreasing average total costs of production
throughout its entire range of output, then:
A.More firms will enter the market
B.It will be unable to remain in business
C.The firm is a natural monopoly
D.The firm is able to earn only a normal profit
10)
Refer to the diagram where the numerical data show profits in millions of dollars. Beta’s
profits are shown in the northeast corner and Alpha’s profits in the southwest corner of
each cell. If Beta commits to a high-price policy, Alpha will gain the largest profit by:
A.also adopting a high-price policy.
B.adopting a low-price policy.
C.adopting a low-price policy, but only if Beta agrees to do the same.
D.engaging in nonprice competition only.
11) The following schedule gives the cost data for a firm:
Diseconomies of scale start between:
A.0 and 10 units of output
B.40 and 50 units of output
C.20 and 30 units of output
D.30 and 40 units of output
12) In the context of labor markets, shirking refers to:
A.the nonmonetary disadvantages of certain jobs.
B.the neglecting or evading of work.
C.the elimination of monitoring costs.
D.any scheme where pay is directly related to worker output.
13)
Refer to the graph. Which one of the following would cause a move from point d to
point e along short-run average total cost curve ATC2?
A.Diminishing marginal returns.
B.An increase in the wage rate.
C.A decrease in the wage rate.
D.Increasing marginal returns.
14) The economic function of profits and losses is to:
A.bring about a more equal distribution of income.
B.signal that resources should be reallocated.
C.eliminate small firms and reduce competition.
D.tell government which industries need to be subsidized.
15) The Group of Eight (G8) nations which periodically have jointly intervened to
influence the value of the dollar include:
A.Canada, United States, France, Great Britain, Russia, Mexico, Germany, and Brazil.
B.Canada, United States, France, Japan, Italy, Germany, Russia, and Great Britain.
C.Canada, United States, Mexico, Brazil, Argentina, Peru, Uruguay, and Chile.
D.Italy, France, Great Britain, Germany, Netherlands, Norway, Russia, and Sweden.
16) If your income increases from $10,000 per year to $14,000 per year and your tax
payment increases from $2,000 to $2,840, the marginal tax rate:
A.Is 20 percent
B.Is 21 percent
C.Is 25 percent
D.Cannot be determined from the given data
17) Use the resource demand data shown on the left and the resource supply data on the
right in answering the following question:
Refer to the given data. We can conclude that:
A.both the product and resource markets are imperfectly competitive.
B.the resource market is imperfectly competitive, but the product market is purely
competitive.
C.both the resource and product markets are purely competitive.
D.the resource market is purely competitive, but the product market is imperfectly
competitive.