1)
Refer to the diagram. Which of the following is a normative statement?
A.Point C is superior to point B because it is important to enhance the future of society.
B.If society is initially at point C, it must sacrifice 6 units of bread to obtain one more
unit of tractors.
C.If society produces 2 units of tractors and 12 units of bread, it is not using its
available resources with maximum efficiency.
D.Other things equal, the combination of outputs represented by point D will result in
more rapid economic growth than will the combination represented by point C.
2) Since 1975, the distribution of household income in the United States has:
A.Moved toward greater inequality
B.Moved toward greater equality
C.Remained about the same
D.Fluctuated considerably
3) In their effort to provide disaster relief after Hurricane Katrina, the Federal
Emergency Management Agency (FEMA) made payouts on as many as 900,000 claims
with invalid Social Security numbers or false names and addresses. This example
illustrates:
A.the benefits-received principle.
B.logrolling.
C.bureaucratic inefficiency.
D.the problem of limited and bundled choices.
4) An export subsidy for a product will benefit:
A.Domestic consumers of the product
B.Foreign producers of the product
C.Foreign consumers of the product
D.The domestic taxpayers
5) Based on the determinants of elasticity as discussed in the text, explain what the
price elasticity of demand of the following products would be: (a) ballpoint pens; (b)
Crest toothpaste; (c) diamond rings; (d) sugar; and (e) refrigerators.
6) Plant sizes get larger as you move from ATC-1 to ATC-4.
Refer to the above table. Over what range of output are economies of scale experienced
by this firm?
A.1500 to 3000
B.1500 to 3500
C.2000 to 3500
D.2000 to 4000
7) The so-called collective action problem is the reason why:
A.Taxpayers are not able to effectively counter special interest groups
B.Corporations have board of directors
C.We have local and national elections
D.Majority voting can lead to economically inefficient outcomes
8) The greatest benefit to an economy from international trade is:
A.greater employment in the export sector of the economy.
B.the economic power it gives a nation over other countries.
C.full employment of its labor force.
D.consumption beyond domestic production possibilities.
9) According to the piece “Wannamaker’s Lament”:
A.price tags are inefficient signaling mechanisms.
B.money-back guarantees are costly to firms because they don’t increase sales but do
increase costs.
C.most marketing efforts have little impact on sales.
D.only 50 percent of new consumer products fail within the first year.
10) In deciding what to buy, the consumer will choose the good with the:
A.Highest marginal utility
B.Lowest price
C.Highest marginal utility-to-price ratio
D.Lowest marginal utility-to-price ratio
11)
Refer to the above graphs. A short-run equilibrium that would produce losses for a
monopolistically competitive firm would be represented by graph:
A.A
B.B
C.C
D.D
12) An economy’s infrastructure refers to its:
A.public capital goods, such as roads, schools, and power facilities.
B.financial and banking institutions.
C.land and natural resources.
D.surplus supplies of unskilled labor.
13) The following table shows marginal costs and benefits of the optimal quantity of
pollution abatement that will occur at a local factory.
(a)What is the optimal level of pollution abatement? Why?
(b)If the marginal benefit of pollution abatement were to increase by $150,000 at each
level because of the factorys desire to improve its image and environment, what would
the optimal level be? Why?
(c)What might cause the optimal level of pollution abatement to be 120 tons?
14) At the state and local levels of the U.S. government, a majority of government
employees work in which of the following areas?
A.Postal service.
B.Education.
C.Hospitals and other health care.
D.Police and corrections.
15)
The average fiscal burden on state and local government for each low-skilled immigrant
household may be as high as:
A.$5,500 per household per year
B.$9,200 per household per year
C.$19,500 per household per year
D.$31,600 per household per year