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1) 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 and the
world-market price of the product is $3, then Country X will:
A.Neither export nor import the product
B.Export some units of the product
C.Import some units of the product
D.Not produce the product
2) The Patient Protection and Affordable Care Act (PPACA) includes the following
elements, except:
A.Insurance companies can no longer deny coverage to anyone on the basis of a
preexisting condition
B.To contain costs, insurance companies may impose annual or lifetime expenditure
caps on those that they insure
C.An employer mandate that requires all firms with 50 or more employees to purchase
insurance for their workers or pay a fine
D.A personal mandate requiring individuals who are not covered by either government-
or employer-provided insurance to purchase health insurance for themselves and their
dependents
3) Social, as distinct from industrial, regulation is the major focus of the:
A.Federal Trade Commission.
B.Federal Energy Regulatory Commission.
C.Federal Communications Commission.
D.Consumer Product Safety Commission.
4) Suppose a consumer has a daily income of $100 and purchases just two goods A and
B. The price of good A is $5 and the price of good B is $4.
(a)What is the slope of the budget line?
(b)Suppose the consumers income decreases to $80. What is the new slope?
(c)Suppose the price of product B decreases to $2. What is the new slope?
5) In which of the following instances will total revenue decline?
A.Price rises and supply is elastic.
B.Price falls and demand is elastic.
C.Price rises and demand is inelastic.
D.Price rises and demand is elastic.
6) When people believe murder is a more common cause of death than stomach cancer
is, it illustrates the:
A.Confirmation bias
B.Framing effect
C.Hindsight bias
D.Availability heuristic
7) The spread of innovation through imitation refers to:
A.invention.
B.diffusion.
C.duplication.
D.diversification.
8) Which of the following nations has a total fertility rate that would suggest that its
next generation will only be half the size of the current generation?
A.Hong Kong.
B.Australia.
C.Sweden.
D.All of these nations.
9) Since their introduction, prices of Blu-ray players have fallen and the quantity
purchased has increased. This statement:
A.suggests that the supply of Blu-ray players has increased.
B.suggests that the demand for Blu-ray players has increased.
C.constitutes an exception to the law of demand in that they suggest an upward-sloping
demand curve.
D.constitutes an exception to the law of supply in that they suggest a downward-sloping
supply curve.
10) The government was successful in gaining an antitrust conviction in the:
A.U.S. Steel case.
B.IBM case.
C.Alcoa case.
D.DuPont cellophane case.
11) Assume that a 6 percent increase in income in the economy produces a 3 percent
increase in the quantity demanded of good X. The coefficient of income elasticity of
demand is:
A.negative and therefore X is an inferior good.
B.positive but less than one; therefore X is an inferior good.
C.positive and therefore X is an inferior good.
D.positive and therefore X is a normal good.
12) Chief executive officers (CEOs) of large American corporations:
A.have higher average salaries than CEOs of similar-size firms in other industrial
nations.
B.have similar salaries, on average, to CEOs of similar-size firms in other industrial
nations.
C.are, on average, older than CEOs of similar-size firms in other industrial nations.
D.are, on average, younger than CEOs of similar-size firms in other industrial nations.
13) Speculation in foreign exchange markets could be:
A.Negative because it reduces the fluctuations in exchange rates
B.Positive because it reduces the fluctuations in exchange rates
C.Negative because it relies on the supply and demand for gold
D.Positive because it relies on the supply and demand for gold
14) A fall in the price of milk, used in the production of ice cream, will:
A.Decrease the supply of ice cream
B.Increase the supply of ice cream
C.Cause a movement along the supply curve of ice cream
D.Have no effect on the supply of ice cream
15)
Which diagram best represents the problem faced by farms in the short run?
A.A
B.B
C.C
D.D
16) A leftward shift in the supply curve of product X will increase equilibrium price to a
greater extent the:
A.more elastic the supply curve.
B.larger the elasticity of demand coefficient.
C.more elastic the demand for the product.
D.more inelastic the demand for the product.
