1) The terms of trade reflect the:
A.rate at which gold exchanges internationally for any domestic currency.
B.ratio at which nations will exchange two goods.
C.fact that the gains from trade will be equally divided.
D.cost conditions embodied in a single country’s production possibilities curve.
2) If there was a conspiracy to fix prices, but the conspiracy did not succeed, the
government can still take the conspiring firm to court for improper conduct. This
situation would be an example of:
A.The rule of reason
B.A cease-and-desist order
C.A per se violation
D.Tying contracts
3)
Suppose that the total revenue curve is derived from a particular linear demand curve.
That demand curve must be:
A.inelastic for price declines that increase quantity demanded from 6 units to 7 units.
B.elastic for price declines that increase quantity demanded from 6 units to 7 units.
C.inelastic for price increases that reduce quantity demanded from 4 units to 3 units.
D.elastic for price increases that reduce quantity demanded from 8 units to 7 units.
4) It will be most likely that a firm would borrow funds to expand its capital facilities
when the:
A.Pure rate of interest is greater than the real rate of interest
B.Expected rate of return is greater than the interest rate
C.Demand for money is greater than the supply of money
D.Real rate of interest is greater than the nominal rate of interest
5) In which of the following cases has political corruption definitely occurred?
A.Political candidates accept campaign contributions from people
B.Government agencies impose fines for such things as traffic violations
C.A bureaucrat allows someone to look at confidential documents for an informal fee
D.A government agency receives donations for distribution to charity
6) In the standard model of pure competition, a profit-maximizing firm will shut down
in the short run if price is below:
A.Marginal cost
B.Average cost
C.Average fixed cost
D.Average variable cost
7) Which of the following factors has contributed to rising health care prices in the
United States?
A.The supply of physicians per 100,000 people has decreased since 1975.
B.Productivity growth in the health care industry has been negative in recent years.
C.Improvements in medical technology have significantly increased the number of
patients that can be treated each year.
D.The supply of physicians per 100,000 people has risen since 1975, but not as fast as
the increase in the demand for physicians’ services.
8) Effective usury laws cause:
A.a surplus in the market for loanable funds.
B.the quantity of loanable funds demanded to be brought into balance with the quantity
supplied.
C.the quantity of loanable funds demanded to exceed the quantity supplied.
9) Which of the following is the best example of a market failure that would lead a firm
to extract resources at a rate that is faster than the rate that would maximize its
long-term stream of profits?
A.The market price of the resource rises.
B.Weak property rights create fears that firms will not be allowed to extract in the
future.
C.An increase in market interest rates.
D.New information suggests that the demand for the resource will be greater in the
future.
10)
Refer to the diagram. Constant returns to scale:
A.occur over the 0Q1 range of output.
B.occur over the Q1Q3 range of output.
C.begin at output Q3
D.are in evidence at all output levels.
11) Answer the question on the basis of the following table showing market shares of
firms in hypothetical industries. Assume these are distinct industries with no
buyer-seller relationships or competition among them.
Refer to the table. A structuralist would most likely assert that there is a violation of
antitrust law in which industry?
A.Alpha.
B.Beta.
C.Cappa.
D.Delta.
12)
The budget line shift from ab to cd in the figure is consistent with:
A.decreases in the prices of both M and N.
B.an increase in the price of M and a decrease in the price of N.
C.a decrease in money income.
D.an increase in money income and decrease in the price of N.
13) Suppose there are only three labor markets (A, B, and C) in the economy and each
of these markets is purely competitive. The table below contains the demand (or
marginal-revenue-product) schedule for labor in each of these three markets. Assume
there are 24 million homogeneous workers in the economy and that one-half of these
workers are male and one-half are female
Refer to the above table. What would the wage rates be if the 12 million female workers
could work in labor market C only because of labor market discrimination, while half
the 12 million male workers are employed in labor market A and the other half in labor
market B?
A.$7.00 for females and $7.00 for males
B.$7.00 for females and $13.00 for males
C.$8.00 for females and $13.00 for males
D.$8.00 for females and $11.00 for males
14) If output is set at the kink of the kinked demand model, then there:
A.Is a strong incentive for rivals to decrease prices
B.Is a strong incentive for rivals to increase prices
C.Is one price at which marginal revenue equals marginal cost
D.Are several prices at which marginal revenue equals marginal cost
15) The price of old baseball cards rises rapidly with increases in demand because:
A.the supply of old baseball cards is price inelastic.
B.the supply of old baseball cards in price elastic.
C.the demand for old baseball cards is price inelastic.
D.the demand for old baseball cards is price elastic.
16)
Refer to the diagram, assuming that the firm represented is operating on curve TC0. A
change from TC0 to TC1 could be caused by:
A.a decrease in extraction costs.
B.an increase in user costs.
C.an increase in the price of the resource.
D.a decrease in the price of the resource.
17) Which of the following industries had the highest unionization rate in 2011?
A.Finance
B.Construction
C.Transportation
D.Manufacturing
18) Which of the following is incorrect?
A.The nominal interest rate is the rate of interest expressed in terms of current dollars.
B.The real interest rate is the rate of interest expressed in terms of dollars of constant or
inflation-adjusted value.
C.The nominal interest rate is the real interest rate less the rate of inflation.
D.During periods of inflation, the nominal interest rate will exceed the real interest rate.