1) The demand curve for loanable funds represents the behavior of:
A.Lenders
B.Savers
C.Borrowers
D.Bankers
2) Which of the following policies has succeeded in reducing fishery catch sizes
without creating an “arms race” among fishers?
A.Limiting the length of the catch season.
B.Limiting the number of boats allowed in a given area.
C.Limiting catch size (TAC).
D.Issuing individual transferable quotas (ITQs).
3) An industry having a four-firm concentration ratio of 85 percent:
A.approximates pure competition.
B.is monopolistically competitive.
C.is a pure monopoly.
D.is an oligopoly.
4)
Refer to the diagram. At output level Q2:
A.resources are overallocated to this product and productive efficiency is not realized.
B.resources are underallocated to this product and productive efficiency is not realized.
C.productive efficiency is achieved, but resources are underallocated to this product.
D.productive efficiency is achieved, but resources are overallocated to this product.
5) The term governmentfailure refers to the:
A.Large losses suffered by publicly owned water, gas, and electric companies
B.Large number of bankruptcies that have occurred recently among local governments
C.Economically inefficient outcomes caused by voting problems or incentive structures
in government
D.Inability of government agencies to provide adequate police protection in
low-income neighborhoods
6) Attempts to alter incentives and contain health care costs include the following,
except:
A.Imposing a copayment or a deductible
B.Adopting managed-care systems, such as PPOs and HMOs
C.Universal coverage
D.Diagnosis-related-group (DRG) of Medicare
7) Allocative efficiency involves determining:
A.which output mix will result in the most rapid rate of economic growth.
B.which production possibilities curve reflects the lowest opportunity costs.
C.the mix of output that will maximize society’s satisfaction.
D.the optimal rate of technological progress.
8)
Refer to the above graph. If this labor market were operating under pure competition,
the equilibrium wage rate would be:
A.W1 and Q1 workers would be hired
B.W2 and Q2 workers would be hired
C.W2 and Q1 workers would be hired
D.W3 and Q1 workers would be hired
9)
Refer to the graph. Other things equal, an increase in labor productivity would cause a:
A.move from a to b on D1
B.shift from D2 to D3
C.shift from D3 to D2
D.move from b to a on D1
10) An increase in demand for oil along with a simultaneous increase in supply of oil
will:
A.Decrease price and increase quantity
B.Increase price and decrease quantity
C.Increase quantity, but whether it increases price depends on how much each curve
shifts
D.Increase price, but whether it increases quantity depends on how much each curve
shifts
11) Health insurance often pays 80 percent of health care cost. This situation will
encourage the rational consumer to:
A.Consume less health care because the cost is too expensive
B.Obtain health insurance that pays less than 80 percent of medical care costs
C.Use more medical services than they would if they had to paid the full price
D.Eliminate their health care coverage because it does not cover 100 percent of the cost
12) Answer the question on the basis of the following demand and cost data for a pure
monopolist:
Refer to the data. The profit-maximizing level of output will be:
A.4 units.
B.7 units.
C.6 units.
D.5 units.
13) Resource pricing is important because:
A.resource prices are a major determinant of money incomes.
B.resource prices allocate scarce resources among alternative uses.
C.resource prices, along with resource productivity, are important to firms in
minimizing their costs.
D.of all of these reasons.
14) To prevent monetary policy from becoming highly politicized, many countries
have:
A.Made their central banks be politically independent
B.Put their central banks under the full control of their law-making agencies
C.Allowed the heads of their central banks to serve for very short terms
D.Made elected officials be the heads of their central banks
15) A significant reason that increases in demand for agricultural products have been
relatively small is because increases in the:
A.Population of the United States have been greater than increases in the productivity
of agriculture
B.Population of the United States have been greater than decreases in the productivity
of agriculture
C.Incomes of U.S. consumers result in more than proportionate increases in their
spending on agricultural products
D.Incomes of U.S. consumers result in less than proportionate increases in their
spending on agricultural products
16) Which is a major criticism of a monopoly as a source of allocative inefficiency?
A.A monopolist fails to expand output to the level where the consumers’ valuation of an
additional unit is just equal to its opportunity cost
B.A monopolist has no incentive to produce efficiently, because even the inefficient
monopolist can be assured of economic profits
C.A monopolist will always earns profits and that means that prices are too high
D.A monopolist has an unfair advantage because it can purchase labor at a lower price
than competitive firms can
17) A purely monopolistic firm:
A.has no entry barriers.
B.faces a downsloping demand curve.
C.produces a product or service for which there are many close substitutes.
D.earns only a normal profit in the long run.
18) Monopolistic competition resembles pure competition because:
A.both industries emphasize nonprice competition.
B.in both instances firms will operate at the minimum point on their long-run average
total cost curves.
C.both industries entail the production of differentiated products.
D.barriers to entry are either weak or nonexistent.
19) The law of increasing opportunity costs states that:
A.Costs of production increase for one good, but costs decrease for the other good
B.Increases in wages and other resource costs is what the increasing opportunity costs
refer to
C.Increases in the production of one good require larger and larger sacrifices of the
other good
D.Increases in the production of one good make the production of that good and easier