1)
Refer to the market for loanable funds, as shown in the above graph. A decline in the
interest rate is likely to:
A.Lower capital investment
B.Increase the quantity of loanable funds demanded
C.Come about when there is a shortage of loanable funds
D.Result from an increase in the desire of firms to borrow funds
2) In 2011, a household with an annual income of $23,000 would find itself in the:
A.highest quintile of the household income distribution.
B.lowest quintile of the household income distribution.
C.second lowest quintile of the household income distribution.
D.second highest quintile of the household income distribution.
3) To economists, the main difference between the short run and the long run is that:
A.the law of diminishing returns applies in the long run, but not in the short run.
B.in the long run all resources are variable, while in the short run at least one resource
is fixed.
C.fixed costs are more important to decision making in the long run than they are in the
short run.
D.in the short run all resources are fixed, while in the long run all resources are
variable.
4) The U.S. sugar price support program has:
A.cost U.S. consumers much more than it has benefited U.S. sugar producers.
B.cost U.S. consumers much less than it has benefited U.S. sugar producers.
C.reduced the price of sugar to U.S. consumers.
D.increased sugar imports as a percentage of U.S. sugar consumption.
5) If firms enter a purely competitive industry, then in the long run this change will shift
the industry:
A.Demand curve to the left, and the individual firm’s demand curve will shift down
B.Demand curve to the right, and the individual firm’s demand curve will shift up
C.Supply curve to the right, and the individual firm’s demand curve will shift down
D.Supply curve to the left, and the individual firm’s demand curve will shift up
6) The graphs below illustrate the market for a product on which an excise tax has been
imposed by government.
Refer to the above graph. How much is the efficiency (or deadweight) loss due to the
excise tax?
A.$6
B.$9
C.$18
D.$21
7) Legal protections against competitors producing and selling a product identical to the
one you invented are called _________; legal protections against competitors using
your product’s name are called __________.
A.patents; trademarks
B.trademarks; copyrights
C.copyrights; patents
D.trademarks; patents
8) Suppose that the corn market is purely competitive. If the corn farmers are currently
earning negative economic profits, then we would expect that in the long run the
market’s:
A.Supply curve will shift to the left
B.Supply curve will shift to the right
C.Demand curve will shift to the left
D.Demand curve will shift to the right
9) In the short run, the price charged by a monopolistically competitive firm attempting
to maximize profits:
A.must be less than ATC.
B.must be more than ATC.
C.may be either equal to ATC, less than ATC, or more than ATC.
D.must be equal to ATC.
10)
The simple immigration model assumes that the capital stock is constant in each country. If
this assumption is relaxed, then the:
A.Rise in business income in the low-wage country will increase the return on capital,
which will increase the demand for labor
B.Fall in business income in the low-wage country will decrease the return on capital,
which will decrease the demand for labor
C.Rise in business income in the low-wage country will decrease the return on capital,
which will decrease the demand for labor
D.Fall in business income in the low-wage country will increase the return on capital,
which will increase the demand for labor
11) Which of the following pairs of nations received the most remittances from their
emigrants in 2011?
A.Mexico and Egypt.
B.China and India.
C.Pakistan and Iran.
D.Vietnam and Thailand.
12) When a pure monopolist is producing its profit-maximizing output, price will:
A.be less than MR.
B.equal neither MC nor MR.
C.equal MR.
D.equal MC.
13) What effect should each of the following have upon the demand for DVDs in a
competitive market? Explain your reasoning in each case.
(a)the development of Blue-Ray Discs that compete with DVDs
(b)an increase in population and incomes
(c)a substantial increase in the number and quality of DVD players
(d)consumer expectations of substantial price increases in DVDs
14) Which of the following is correct for a monopolistically competitive firm in
long-run equilibrium?
A.MC = ATC.
B.MC exceeds MR.
C.P exceeds minimum ATC.
D.P = MC.
15) Traveling sales representative Harold Hill only calls on clients four days a week
rather than the five days expected by his employer. This is an example of:
A.equalizing differences.
B.a nonmonetary job disadvantage.
C.shirking.
D.the free-rider problem.
16) Which of the following factors is not relevant in explaining the persistence of wage
differentials?
A.Labor immobility.
B.Compensating differences.
C.Free public education.
D.Noncompeting groups.
17)
Refer to the four graphs above. Select the graph above that best shows the changes in
demand and supply in the market specified in the following situation: In the market for
corn, if gasoline producers use more ethanol from corn, and good weather during the
growing season yields a bumper harvest.
A.Graph A
B.Graph B
C.Graph C
D.Graph D
18) Proponents of the Patient Protection and Affordable Care Act (PPACA) had one
major goal, which is:
A.To expand the range of illnesses covered by insurance
B.To nationalize health care in the country
C.To extend health insurance coverage to all Americans
D.To set prices for all health-care procedures and services