The situation where a country can produce a good at a lower opportunity cost than
another country is called a(n) __________ advantage.
a. permanent
b. transitory
c. absolute
d. comparative
e. natural
A simultaneous decrease in the demand and the supply of good X always leads to a
decrease in the price of good X.
a. True
b. False
Critics of government frequently assert that special interest groups favor transfer
policies rather than economic growth policies.
a. True
b. False
What is the present value of a future income stream of three $12,000 payments to be
received one, two, and three years from today if the interest rate is 2.8 percent?
a. $32,799
b. $34,074
c. $28,134
d. $11,046
The headline in the newspaper reads “County Supervisors Debate Building New
Schools.” The headline relates closest to which economic concept?
a. goods and bads
b. utility
c. choice
d. efficiency
If a single-price monopolist has to lower price to sell an additional unit of its good, and
it charges the same price for all units of its good, it follows that
a. its demand curve will be its marginal revenue curve.
b. it will maximize profits by maximizing revenue.
c. it will sell its good for a price above average total cost.
d. b and c
e. none of the above
An increase in productivity in the agricultural sector in conjunction with an income
inelastic demand for farm products
a. causes prices to fall.
b. causes prices to rise.
c. causes prices to remain constant.
d. may cause prices to rise, fall, or remain the same, depending upon the relative shifts
in the supply and demand curves.
Public choice theorists insist that when a person goes from public to private
employment, his or her motivations __________ while the institutional arrangements
shaping his or her actions __________.
a. remain the same; change
b. remain the same; also remain the same
c. change; also change
d. change; remain the same
Suppose an industry is made up of four firms, all with equal sales. The four-firm
concentration ratio of that industry is
a. 0.125.
b. 0.50.
c. 1.00.
d. This cannot be determined without more information.
Which of the following is true about the relationship between price and quantity
supplied?
a. There is always a direct relationship between price and quantity supplied.
b. There is always an inverse relationship between price and quantity supplied.
c. There is usually a direct relationship between price and quantity supplied.
d. There is usually an inverse relationship between price and quantity supplied.