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1) A balance-of-payments deficit occurs:
A.when a nation must make an inpayment of official reserves to its capital and financial
account.
B.whenever a nation has a goods and services deficit.
C.whenever a nation has a goods and services surplus.
D.when a nation must make an outpayment of official reserves from its capital and
financial account.
2)
The movement from line A to line A' represents a change in:
A.the slope only.
B.the intercept only.
C.both the slope and the intercept.
D.neither the slope nor the intercept.
3) We would expect the cross elasticity of demand for Pepsi to be greater in relation to
other soft drinks than that for soft drinks in general because:
A.soft drinks are normal goods.
B.the income effect always exceeds the substitution effect.
C.there are fewer good substitutes for soft drinks as a whole than for Pepsi specifically.
D.there are more good substitutes for soft drinks as a whole than for Pepsi specifically.
4) In 2011, which of the following nations ranked highest in total R&D expenditures as
a percent of GDP?
A.The United States
B.The United Kingdom
C.Sweden
D.China
5)
Refer to the payoff matrix. Which cell represents the outcome of this game?
A.A
B.B
C.C
D.D
6) Which of the following will generate a demand for country X's currency in the
foreign exchange market?
A.Travel by citizens of country X in other countries.
B.The desire of foreigners to buy stocks and bonds of firms in country X.
C.The imports of country X.
D.Charitable contributions by country X's citizens to citizens of developing nations.
7) Critics of social regulation argue that it:
A.causes deflation.
B.violates the due process clause of the U.S. Constitution.
C.is a relatively greater burden for small firms than for large firms.
D.improves allocative efficiency.
8) A new fertilizer that is better suited to a nation's topography and climate is an
example of a technological advance that is:
A.Capital-using
B.Capital-saving
C.Capital-intensive
D.An in-kind investment
9) The U.S. tax-transfer system (as distinct from the tax system alone) is:
A.progressive.
B.proportional.
C.bimodal.
D.regressive.
10) Use the following table for Country X to answer the question below. Column 1 of
the table is the price of a product. Column 2 is the quantity demanded domestically
(Qdd) and Column 3 is the quantity supplied domestically (Qsd).
Refer to the table above. If Country X opens itself up to international trade, at what
world price will it begin importing some units of the product?
A.Any price below $5.00
B.Any price above $5.00
C.Any price below $3.00
D.Any price above $3.00
11) The "after this, therefore because of this" fallacy states that:
A.because event A precedes event B, A is necessarily the cause of B.
B.the very attempt to accomplish a certain objective may create conditions that prohibit
the achievement of that objective.
C.events may drastically alter plans; one's intentions and actual accomplishments may
differ considerably.
D.generalizations that are accurate at the level of microeconomics may be inaccurate at
the level of macroeconomics.
12) Assume that a consumer has a given budget or income of $12, and that she can buy
only two goods, apples or bananas. The price of an apple is $1.50 and the price of a
banana is $0.75.
Refer to the information given above. For this consumer, the opportunity cost of buying
two bananas is
A.1 apple.
B.1.5 apples.
C.0.5 apple.
D.0.75 apple.
13) In the spaces below each of the following, indicate the [increase (+), decrease (-),
or indeterminant (?)] on equilibrium price (P) and equilibrium quantity (Q) of each of
these changes in demand and/or supply.
P Q
(a) Increase in demand, increase in supply ________ ________
(b) Increase in demand, decrease in supply ________ ________
(c) Decrease in demand, decrease in supply ________ ________
(d) Decrease in demand, increase in supply ________ ________
14)
Refer to the above graph. All data are for the short run. The firm represented in this
diagram is selling under conditions of:
A.Pure monopoly
B.Pure competition
C.Monopolistic competition
D.Oligopoly
15) Development economists suggest that the best strategy for the poorest DVCs to
break out of their poverty is to implement policies that boost their:
A.Population growth for a greater labor supply
B.Output and slow down their population growth
C.Birth rates to expand their available resources
D.Mortality rates to slow down their population growth
