1) U.S. businesses are demanders of foreign currencies because they need them to:
A.Sell goods and services exported to foreign countries
B.Pay for goods and services imported from foreign countries
C.Receive interest payments from foreign governments
D.Receive interest payments from foreign businesses
2) Frederic Bastiat’s satire clearly illustrates that:
A.French candle makers would benefit from government restrictions on trade
B.French consumers would benefit from a tariff on U.S. candles
C.The arguments in favor of trade protectionism can sometimes be ridiculous
D.The arguments in favor of protectionism are sometimes well-founded
3) Answer the question on the basis of the following 2008 balance of payments
statement for Transylvania. All figures are in billions of dollars.
Refer to the given data. In 2008 Transylvania realized a $1 billion surplus on goods and
services.
4) The most efficient combination of resources in producing a given output is the
combination that:
A.comes closest to using the same quantities of land, labor, capital, and entrepreneurial
ability.
B.minimize the cost per unit of output.
C.uses the smallest total quantity of all resources.
D.conserves most on the use of labor.
5) Farm programs such as those of the United States and the European Union cause a
misallocation of international agricultural resources primarily because:
A.they distort domestic and world agricultural prices.
B.they inhibit technological progress in agriculture.
C.production and trade occur on the basis of comparative advantage.
D.price supports are set below market-clearing levels.
6) Individual accountability within the government bureaucracy:
A.tends to be greater than in private firms, making government more efficient than
private firms.
B.is not a problem because government bureaucrats are not affected by the self-interest
that affects private sector individuals.
C.is easy to monitor because of the small size and scope of government.
D.tends to be lacking because of civil service protections and the complexity of
government.
7)
Refer to the diagram, which is a rectangular hyperbola, that is, a curve such that each
rectangle drawn from any point on the curve will be of identical area. If this rectangular
hyperbola was a demand curve, we could say that it would be:
A.elastic at high prices and inelastic at low prices.
B.elastic at low prices and inelastic at high prices.
C.impossible to generalize about its elasticity.
D.of unit elasticity throughout.
8) The trading of votes by elected officials to secure favorable outcomes is called:
A.splitting the difference.
B.social engineering.
C.logrolling.
D.grandstanding.
9) In 2011, the largest portion of Federal employees were in which of the following
sectors?
A.Education and health care
B.Police and natural resources
C.Postal service and national defense
D.Judicial, police, and administration
10)
The graph above represents a(n):
A.Decreasing-cost industry: Firms may be paying lower prices for their inputs when the
industry expands
B.Increasing-cost industry: Firms may be paying higher prices for their inputs when the
industry expands
C.Competitive industry with diseconomies of scale: The short-run supply curves are
upward-sloping
D.Constant-cost industry: Prices of the inputs stay the same, and other production costs
are constant as the industry expands
11)
Refer to the diagram, where Sd and Dd are the domestic supply and demand for a
product and Pc is the world price of that product. Sd + Q is the product supply curve
after an import quota is imposed. A tariff of PcPt or an import quota of wy will have the
same effect on:
A.the volume of imports.
B.the domestic price.
C.the revenues of domestic producers.
D.all of these.
12) If the prices paid by farmers increase and the prices received by farmers decrease,
then the parity ratio:
A.will necessarily decrease.
B.will necessarily increase.
C.may either increase or decrease.
D.will be unaffected.
13) Subsidies for those required to purchase health insurance under the personal
mandate provision of the PPACA are:
A.limited to those whose income is less than 133 percent of the federal poverty line.
B.limited to those whose income is at or below the federal poverty line.
C.provided to some individuals in the upper half of the income distribution.
D.a fixed amount per person for those eligible to receive the subsidies.
14) It is observed that the person representing the middle position on an issue will most
likely determine the outcome of an election. This view is most closely associated with
the:
A.Fallacy of limited decisions
B.Special-interest effect
C.Paradox of voting
D.Median-voter model
15) We say that the demand for labor is a derived demand because:
A.labor is a necessary input in the production of every good or service.
B.we demand the product that labor helps produce rather than labor service per se.
C.the forces of supply and demand do not apply directly to labor markets.
D.labor is hired using the MRP = MRC rule.
16) The table shows the demand schedule facing Nina, a monopolist selling baskets.
Refer to the above table for Nina. What is the change in total revenue if she lowers the
price from $20 to $18?
A.$10
B.$20
C.$30
D.$40
17) Answer the question on the basis of the following Census data.
Which of the given distributions is closest to describing the United States?
A.A.
B.B.
C.C.
D.D.
18) The current monetary system for conducting international trade is usually described
as a system of:
A.Fixed exchange rates
B.Freely floating exchange rates
C.A managed gold standard
D.Managed floating exchange rates