1) A voluntary export restraint (VER) is similar to an import quota; except that the
former benefits the foreign producers while the latter benefits the domestic producers.
2) Monopolistically competitive firms have some control over the price of their
products.
3) Framing effects may cause the same person to view the same new situation
differently depending on whether that new situation makes him or her better or worse
off.
4) Currently over 90 percent of all workers in the United States are covered by Social
Security.
5) One good example of a government agency involved mainly in social regulation is
the Food and Drug Administration.
6) “Heuristics” used by the human brain are one of the reasons why:
A.Our preferences are quite stable and consistent
B.Neoclassical economic models accurately predict human behavior
C.Human perception is susceptible to context and prone to error
D.The utility-maximizing model of decision-making is precise
7) The spread of an innovation to other products through imitation is called:
A.Invention
B.Development
C.Diffusion
D.Applied research
8)
In the above graph, unemployment created by the minimum wage is:
A.B – A
B.B – 0
C.B – E
D.0
9) Which of the following is a significant difference in the outcomes between the
dictator game and the ultimatum game?
A.There is little difference, as fairness considerations lead to similar splits of the money
in both games.
B.The dictator game tends to result in a more even split of the money.
C.The ultimatum game tends to result in a more even split of the money.
D.Self-interest is revealed more strongly in the ultimatum game than in the dictator
game.
10) About ________ of recent annual labor force growth in the United States is the
result of immigration.
A.one-tenth
B.one-fifth
C.one-third
D.one-half
11) The MR = MC rule:
A.applies only to pure competition.
B.applies only to pure monopoly.
C.does not apply to pure monopoly because price exceeds marginal revenue.
D.applies both to pure monopoly and pure competition.
12) Monopolistic competition is characterized by firms:
A.Producing differentiated products
B.Making economic profits in the long run
C.Producing at optimal productive efficiency
D.Producing where price equals marginal cost
13) Successful foreign aid programs:
A.enhance a DVC’s resources and therefore shift its production possibilities curve to the
left.
B.enhance a DVC’s resources and therefore shift its production possibilities curve to the
right.
C.move the DVC from a high-investment-low-consumption position to a
low-investment-high-consumption position on its stable production possibilities curve.
D.cause a DVC’s exchange rate to depreciate.
14) In a monopsonistic labor market, the employer will maximize profits by employing
workers up to that point at which:
A.the difference between the wage rate and marginal resource (labor) cost is at a
maximum.
B.marginal revenue product equals marginal resource (labor) cost.
C.the wage rate equals marginal revenue product.
D.the wage rate equals marginal resource (labor) cost.
15) Which of the following would we expect to have the highest poverty rate?
A.White households headed by males.
B.Elderly white households.
C.White households headed by females.
D.African-American households headed by females.
16) An economic system in which money is not used is a:
A.Planned economy
B.Market economy
C.Mixed economy
D.Barter economy
17) A recommended policy for DVCs to implement that promotes economic growth is:
A.Establishing realistic policies for exchange rates
B.Obtaining more low-interest loans from the U.S. government
C.Encouraging more tariffs and quotas to protect DVC businesses
D.Discouraging direct foreign investment to make DVCs more self-sufficient
18)
Refer to the above graph for a profit-maximizing monopolist. The firm will set its price
at:
A.0J
B.0G
C.0K
D.0H
19) Property taxes are:
A.Collected primarily at the Federal level
B.The largest source of tax revenue for local governments
C.The primary source of Federal revenue sharing funds
D.Used primarily by states to finance state welfare programs
20) A natural-resource abundant nation would be expected to export a land-intensive
commodity such as:
A.Tractors
B.DVD players
C.Meat
D.Chemicals
21) If the parity ratio goes from 0.8 to 0.7, it means that the prices received by farmers
had:
A.Fallen by 12.5% relative to the prices they paid
B.Fallen by 10% relative to the prices they paid
C.Risen by 12.5% relative to the prices they paid
D.Risen by 10% relative to the prices they paid
22) International transactions fall into what two broad categories?
A.Manufacturing trade and services trade.
B.International trade and international asset transactions.
C.Currency transactions and services trade.
D.Newly created assets and preexisting assets.
23) A major criticism of industrial regulation is that:
A.it has been applied to virtually all major U.S. corporations in the post-Second World
War period.
B.marginal cost pricing has created an underallocation of resources.
C.by allowing a fair return price, it gives natural monopolists little incentive to contain
costs.
D.regulatory commissions have frequently caused natural monopolies to go bankrupt.
24) Define earmarks and give an example.
25) Draw a graph of the cost curves for a monopolistically competitive firm that clearly
illustrates the excess capacity that arises in the long run. Explain why this excess
capacity arises.
26) What is the pure rate of interest?
27) What is the difference between a change in resource demand and a change in the
quantity of a resource demanded? What factors contribute to a change in resource
demand or a change in the quantity of a resource demanded?
28) The circular flow diagram below includes business, household, and government
sectors. Also shown are the product and resource markets. Supply a label or an
explanation for each of the twelve flows in the model.
