1)
Refer to the above graph of the market for wheat. The government adopts a price
support program for wheat, and supports the wheat price at P2. The triangular area
defined by points B and C and the intersection of the supply and demand curve
represents the:
A.Parity ratio
B.Taxpayers’ burden
C.Efficiency gain
D.Efficiency loss
2) Which of the following is a key difference between the economic activities of
government and those of private firms?
A.Private firms face the constraint of scarcity; government does not.
B.Government focuses primarily on equity; private firms focus only on efficiency.
C.Private economic activities create externalities; government activities do not.
D.Government has the legal right to force people to do things; private firms do not.
3)
Refer to the diagram. An increase in extraction costs could be shown by:
A.an increase in the first year quantity extracted.
B.a shift from TC1 to TC0.
C.a shift from TC0 to TC1.
D.an upward shift of the price line.
4)
According to the World Bank, remittances from its workers abroad accounted for what
portion of Mexico’s GDP in 2011?
A.1%
B.3%
C.10%
D.20%
5) In response to a cost-reducing technological breakthrough in the production of its
product, a profit-maximizing monopolist will normally:
A.Increase price and decrease production
B.Not change its level of output or price
C.Decrease the price it charges for its product
D.Increase its output and practice price discrimination
6) Answer the question on the basis of the following demand and cost data for a specific
firm:
Refer to the data. With the demand schedule shown by columns (2) and (3), in long-run
equilibrium:
A.price will equal average total cost.
B.total cost will exceed total revenue.
C.marginal cost will exceed price.
D.price will equal marginal revenue.
7) Barriers to entering an industry:
A.encourage allocative efficiency.
B.encourage productive efficiency.
C.are the basis for monopoly.
D.apply only to purely monopolistic industries.
8) The economist who advocated a single tax on land was:
A.Adam Smith.
B.John Maynard Keynes.
C.Henry George.
D.Milton Friedman.
9) Narrow, specifically designated expenditures that are included in more
comprehensive legislation are known as:
A.earmarks.
B.logrolls.
C.benefits-received allocations.
D.progressive expenditures.
10)
Refer to the diagram. If an inclusive union seeks to maximize the number of jobs
available for its members, what wage rate will it seek to impose on the monopsonist?
A.D minus A
B.F
C.C
D.B
11) In the long run an oligopoly:
A.Will produce less than a monopoly
B.May be able to earn positive economic profits
C.Will always produce in the range of decreasing returns to scale
D.Will produce on the portion of the demand curve where demand is price-inelastic
12) In 2012, U.S. exports of services ______ U.S. imports of services by about _____.
A.exceeded; $19B
B.fell short of; $19B
C.exceeded; $196 B
D.fell short of; $196B
13) Use the following graph to answer question. It shows the extraction costs for TX
Oil Company in the first year in a situation where it will extract oil from a reserve over
two years.
Refer to the above graph. If total costs increase and the price of oil stays at $60, then
the firm will extract:
A.More oil the current year
B.Less oil the current year
C.Less oil in the next year
D.Make no change in oil production from one year to the next
14) Industries X and Y both have four-firm concentration ratios of 65 percent, but the
Herfindahl index for X is 1,500 while that for Y is 2,000. These data suggest:
A.greater market power in X than in Y
B.greater market power in Y than in X
C.that X is more technologically progressive than Y
D.that price competition is stronger in Y than in X
15) Which of the following is most likely to be a fixed cost?
A.Shipping charges.
B.Property insurance premiums.
C.Wages for unskilled labor.
D.Expenditures for raw materials.
16) A firm operating in purely competitive product and resource markets uses three
resources, A, B, and C, whose prices and productivities at current output levels are
given below.
To achieve an optimal factor mix for its current output the firm should employ more:
A.A and B and less C
B.A and B and C
C.A and C and less B
D.B and less A and C
17) A competitive employer will hire inputs up to the point where the:
A.Marginal product of the input reaches a maximum
B.Price of the input equals the price of the output
C.Price of the input equals the marginal product of the input
D.Price of the input equals the marginal revenue product of the input
18) A lower equilibrium interest rate:
A.increases saving, reduces total spending, and increases total output.
B.decreases saving, increases total spending, and decreases total output.
C.increases investment, increases total spending, and increases total output.
D.decreases investment, decreases total spending, and increases total output.
19) The price parity concept, which is a cornerstone of U.S. agricultural policy, was
established by the:
A.Agricultural Income Act of 1914
B.Agricultural Adjustment Act of 1933
C.Obama administration
D.Reagan administration