1)
Refer to the supply and demand data for a certain elective surgical procedure. If
suppliers provide the quantity of health care demanded and insurance pays 50 percent
of the remaining equilibrium price after a $1,000 deductible is satisfied, the quantity of
health care demanded will be:
A.4,000
B.7,000
C.11,000
D.16,000
2) The capricious universe view indicates that:
A.in the long run, “acts of God” have contained population growth and thus contributed
to economic development.
B.DVCs will obtain biological and chemical weapons and force the redistribution of
world wealth.
C.there is little or no correlation between one’s efforts and the rewards he or she
receives.
D.international and civil wars have been the primary impediment to growth.
3) Suppose that government imposes a specific excise tax on product X of $2 per unit
and that the price elasticity of supply of X is unitary (coefficient = 1). If the incidence
of the tax is such that the producers of X pay $1.90 of the tax and the consumers pay
$.10, we can conclude that the:
A.supply of X is highly inelastic.
B.supply of X is highly elastic.
C.demand for X is highly inelastic.
D.demand for X is highly elastic.
4) Use the table below to answer the question. The table shows the hypothetical demand
and supply schedule for health care
Refer to the above table. Assume that health insurance pays two-thirds the cost of health
care. For the consumer, the price and quantity of health care consumed would then be:
A.$300 and 400 units
B.$300 and 600 units
C.$200 and 700 units
D.$200 and 300 units
5) Demand-side market failures occur when:
A.the demand and supply curves don’t reflect consumers’ full willingness to pay for a
good or service.
B.the demand and supply curves don’t reflect the full cost of producing a good or
service.
C.government imposes a tax on a good or service.
D.a good or service is not produced because no one demands it.
6) A Lorenz curve showing perfect equality in the distribution of income:
A.Coincides with the horizontal axis
B.Coincides with the vertical axis
C.Is a straight line with a 45-degree angle
D.Is a curve bowed to the southwest
7) Interlocking directorates are:
A.legal if the two firms have small market shares.
B.illegal under provisions of the Federal Trade Commission Act of 1914.
C.illegal under provisions of the Celler-Kefauver Act of 1950.
D.illegal under provisions of the Clayton Act of 1914.
8) Which of the following is most characteristic of most developing nations?
A.Roughly equal distribution of income among the population
B.High levels of labor productivity in agriculture
C.Low propensity to consume goods and services
D.Low levels of saving and investment
9) Economics involves marginal analysis because:
A.most decisions involve changes from the present situation.
B.marginal benefits always exceed marginal costs.
C.marginal costs always exceed marginal benefits.
D.much economic behavior is irrational.
10) A decrease in the price of digital cameras will:
A.cause the demand curve for memory cards to become vertical.
B.shift the demand curve for memory cards to the right.
C.shift the demand curve for memory cards to the left.
D.not affect the demand for memory cards.
11) Which of the following individuals received a Nobel Prize in economics for his
work in behavioral economics?
A.Daniel Kahneman.
B.Richard Thaler.
C.John Wannamaker.
D.Richard Easterlin.
12) What is most likely to happen when no logger owns the property rights to a forest
that is open to logging?
A.It will be over-logged by loggers
B.It will be under-logged by loggers
C.It will be preserved for future use by loggers
D.It will become the common property of the government
13) The table below shows the quantity of gold bars (Qb) in thousands, the extraction
cost for each thousand bars (in millions of dollars), and the user cost of each thousand
bars (in millions of dollars) facing the OZ Mining Company this year.
Refer to the data. Suppose that a new government regulation is going to shut down OZ’s
mining operation one year from now. Assuming that all gold extracted is sold in the
same year (cannot be stockpiled for later sale), how will the regulation affect the user
cost?
A.It will have no effect on the user cost.
B.The effect on the user cost cannot be determined.
C.The user cost will rise because the rate of extraction will rise.
D.The user cost will become zero because they will not be able to extract in the future.
14) Which statement best describes the overall tax and transfer systems of the United
States?
A.Our tax system makes the after-tax distribution of income much more equal than the
before-tax distribution
B.Our tax system does not by itself reallocate income; transfer payments help
redistribute income from rich to poor
C.Although some Federal taxes are progressive, this effect is more than offset by the
regressivity of state and local taxes which make the overall system extremely regressive
D.Recent changes in corporate income taxes and payroll taxes have made our overall
tax system more progressive