1) Which country has the largest share of total world exports?
A.Japan.
B.Germany.
C.United States.
D.China.
2) In considering euros and dollars, the rates of exchange for the euro and the dollar:
A.are directly related.
B.are inversely related.
C.are unrelated.
3)
Given the information and assuming trade occurs between the three states, we can
expect:
A.that there is no means by which Michigan can obtain lettuce while specializing in the
production of autos.
B.that money will not be needed to accomplish the desired exchanges.
C.money to flow counterclockwise from Michigan to Texas to Washington.
D.money to flow clockwise from Michigan to Washington to Texas.
4)
Refer to the graph above. If U.S. citizens flock to Canada for summer vacations and
buy more Canadian goods and services, then the:
A.The supply curve will shift left
B.The demand curve will shift right
C.The price of U.S. dollars in Canadian dollars will rise
D.The price of U.S. dollars in Canadian dollars will fall
5) Assume that an appliance manufacturer is employing variable resources X and Y in
such amounts that the MRPs of the last units of X and Y employed are $100 and $60
respectively. Resource X can be hired at $50 per unit and resource Y at $20 per unit.
The firm:
A.should hire more of both X and Y.
B.should hire more of Y and less of X.
C.is producing with the least-costly combination of X and Y but could increase its
profits by employing more of X and less of Y.
D.is using the least-cost combination of X and Y but could increase its profits by
employing less of both X and Y.
6)
Refer to the diagram. Between prices of $5.70 and $6.30:
A.D1 is more elastic than D2.
B.D2 is an inferior good and D1 is a normal good.
C.D1 and D2 have identical elasticities.
D.D2 is more elastic than D1.
7) Which of the following statements is most consistent with the benefits-received
principle of taxation?
A.A childless couple should not be required to pay taxes for the support of public
schools.
B.Prosperous corporations should pay substantial taxes even if they use few
government goods and services.
C.The best tax is the income tax.
D.People with high incomes should pay more taxes than people with low incomes.
8) For which market model can we not assume a homogeneous product?
A.Pure competition
B.Pure monopoly
C.Monopolistic competition
D.Oligopoly
9) Which of the following best approximates a pure monopoly?
A.The foreign exchange market.
B.The Kansas City wheat market.
C.The only bank in a small town.
D.The soft drink market.
10) We would expect the cross elasticity of demand between Pepsi and Coke to be:
A.positive, indicating normal goods.
B.positive, indicating inferior goods.
C.positive, indicating substitute goods.
D.negative, indicating substitute goods.
11) The kinked-demand curve model of oligopoly:
A.assumes a firm’s rivals will ignore a price cut but match a price increase.
B.embodies the possibility that changes in unit costs will have no effect on equilibrium
price and output.
C.assumes a firm’s rivals will match any price change it may initiate.
D.assumes a firm’s rivals will ignore any price change it may initiate.
12) Which of the following have substantially equivalent effects on a nation’s volume of
exports and imports?
A.Exchange rate appreciation and a decrease in the domestic supply of money.
B.Exchange rate appreciation and domestic deflation.
C.Exchange rate depreciation and domestic deflation.
D.Exchange rate depreciation and domestic inflation.
13) Answer the question on the basis of the following output data for a firm. Assume
that the amounts of all nonlabor resources are fixed.
Refer to the data. Average product is at a maximum when:
A.five workers are hired.
B.four workers are hired.
C.three workers are hired.
D.two workers are hired.
14)
Because the applications for “diversity immigration” into the U.S. far exceed the quota
every year, the slots are filled through:
A.An annual lottery
B.A first-come-first-served system
C.A bidding system, allocation through prices
D.Political connections
15)
Consider the supply and demand curves depicted in the diagram above. If the
government imposed a price ceiling of $15, then sellers will be willing to sell ___, and
a black market could develop where the price would be:
A.24 units; below $15
B.36 units; above $15
C.24 units; above $15
D.36 units; below $15
16) When marginal cost is increasing:
A.Total cost must be increasing
B.Average total cost must be increasing
C.Average total cost must be decreasing
D.Average fixed cost might be increasing or decreasing
17) Which of the following is an example of a price ceiling?
A.Limits on interest rates charged by credit card companies
B.Subsidies for apartment rent in major cities
C.Minimum-wage laws for unskilled workers
D.Price supports for agricultural products
18)
Symbols: Q = number of workers demanded; W = wage rate; and VTP = value of the
cumulative total product (output) of the particular number of workers.
Assumptions: (1) The current wage in Zinnia is $20 and the current wage in Marigold is
$12; (2) full employment exists in both countries.
Refer to the given data, symbols, and assumptions. If migration is costless and
unimpeded:
A.no migration will occur.
B.migration will cause the wage in Marigold to fall.
C.2 workers will move from Marigold to Zinnia.
D.4 workers will move from Marigold to Zinnia.
19) The idea of government failure includes all of the following except:
A.special-interest effect.
B.bureaucratic inefficiency.
C.pressure by special-interest groups.
D.extensive positive externalities from public and quasi-public goods.