1) A fishery collapse happens when a fishery’s population grows faster than fish can be
harvested.
2)
The main driver of economic immigration is the opportunity to improve earnings and
living standards.
3) The future value of $3,000 deposited today at 5 percent interest is $3,646.52 four
years from now.
4) In the short run, a competitive firm will always choose to shut down if product price
is less than the lowest attainable average total cost.
5)
Refer to the diagram for a nondiscriminating monopolist. If the government regulates
the monopolist so that it charges the socially optimal price, the monopolist will produce
output Q.
6) The health care industry currently absorbs about 18 percent of U.S. gross domestic
product.
7) The recently enacted health-care reform package (or the Patient Protection and
Affordable Care Act) focuses solely on controlling health care costs.
8) The U.S. poverty rate was considerably lower in 2011 than in 1960.
9) If the dollar depreciates, U.S. exports will eventually rise and U.S. imports will
eventually fall.
10) When the government bails out large banks when the banks become unstable, it
could lead to a moral hazard problem.
11) Recent studies indicate that as the price of a barrel of oil rises to $80, the use of
biodiesel as an alternative fuel becomes economically viable.
12) Wage differentials are fully explained by differences in productivity and human
capital among various workers.
13) A nation will import a particular product if the world price is less than the domestic
price.
14) Diseconomies of scale stem primarily from the difficulties in managing and
coordinating a large-scale business enterprise.
15) Imagine an ideal scenario where world peace prevails and all nations are led by
peace-minded leaders. In such a world, the:
A.MB for defense goods would shift left
B.MB for defense goods would shift right
C.MC for defense goods would shift left
D.MC for defense goods would shift right
16) The crowding of certain ethnic or racial groups into specific occupations results in:
A.Lower wages, and a less efficient allocation of resources
B.Lower wages, but a more efficient allocation of resources
C.Lower wages, but no effect on the efficient allocation of resources
D.Higher wages and a more efficient allocation of labor resources
17) Which of the following is not an assumption of the theory of consumer behavior
described in this chapter?
A.The consumer has make decisions within a given budget constraint
B.The consumer experiences diminishing marginal utility from consuming goods
C.The consumer’s tastes and preferences continually change within the period studied
D.The consumer aims to get maximum total utility out of a given budget
18) When the marginal benefit of an output exceeds the marginal cost:
A.Production of that output should be increased, in order to achieve efficiency
B.Production of that output should be decreased, in order to achieve efficiency
C.Increasing the production of that output would increase the deadweight loss
D.Reducing the production of that output would reduce efficiency losses
19) Over-extraction of a resource in the present can occur because:
A.There is a user cost
B.There is an extraction cost
C.Users can benefit from conservation
D.Property rights are not clearly defined
20) The alternative combinations of two goods that a consumer can purchase with a
specific money income is shown by:
A.a production possibilities curve.
B.a demand curve.
C.a consumer expenditure line.
D.a budget line.
21)
Refer to the diagram. Flow 3 represents:
A.wage, rent, interest, and profit income.
B.land, labor, capital, and entrepreneurial ability.
C.goods and services.
D.consumer expenditures.
22) Rapidly rising U.S. health care costs have:
A.forced the growth of wages to keep pace.
B.encouraged outsourcing.
C.caused some employers to use more part-time and temporary workers.
D.done all of these.
23) Which of the following does not illustrate the use of heuristics?
A.Baseball players locking their eyes on the ball in order to have a good chance of
catching it
B.Scientists using the laws of physics and mathematics to predict where billiard balls
will roll
C.Companies spending a lot on advertising in order to make their brands better-known
D.Staying upright on a bicycle by steering in the direction of a fall when one begins to
happen
24) If a monopolist engages in price discrimination, it will:
A.realize a smaller profit.
B.charge a higher price where individual demand is inelastic and a lower price where
individual demand is elastic.
C.produce a smaller output than when it did not discriminate.
D.charge a competitive price to all its customers.
25) The first Pepsi yields Craig 18 units of utility and the second yields him an
additional 12 units of utility. His total utility from three Pepsis is 38 units of utility. The
marginal utility of the third Pepsi is:
A.26 units of utility.
B.6 units of utility.
C.8 units of utility.
D.38 units of utility.
26) Which case below best represents a case of price discrimination?
A.An insurance company offers discounts to safe drivers
B.A major airline sells tickets to senior citizens at lower prices than to other passengers
C.A professional baseball team pays two players with identical batting averages
different salaries
D.A utility company charges less for electricity used during “off-peak” hours, when it
does not have to operate its less-efficient generating plants
27) Minimum-wage legislation is less likely to have adverse effects on employment
when the:
A.affected labor market is monopsonistic.
B.economy has high unemployment.
C.derived demand for labor is shifting to the left.
D.affected labor market is perfectly competitive.
28) Which of the following statements about markets and prices is correct?
A.In a market system, buyers and sellers must be in face-to-face contact with each other
B.Prices affect the distribution of goods in a market system but not the allocation of
resources
C.In a market system, prices serve to ration goods and services to consumers
D.The operation of a market system has little, if any, effect on the distribution of
income in the economy
29) Answer the question on the basis of the following production possibilities tables for
two countries, North Cantina and South Cantina:
Refer to the tables. If South Cantina is producing at production alternative D, the
opportunity cost of the third unit of capital goods will be:
A.3 units of consumer goods.
B.4 units of consumer goods.
C.5 units of consumer goods.
D.6 units of consumer goods.
30) Discuss probable incidence of a local tax on business property.
31) If two countries are growing at the same rate, the income gap between the two
countries should remain the same. Evaluate this statement.
32) Can marginal utility be negative? Briefly explain with an example.
33) Draw a graph on the diagram below showing the long-run equilibrium position of a
competitive firm. Write a formula to express the equalities in the graph.
34) Define a sequential game.
35) What is the rationale for the slope of an indifference curve in a two-product (A and
B) case?