1) In the short run, a purely competitive firm will always make an economic profit if:
A.P = ATC.
B.P > AVC.
C.P = MC.
D.P > ATC.
2)
Scholarly estimates of the impact of immigration on the average American wage rate are in
the range of:
A.-3% to +2%
B.-3% to -2%
C.-1% to +3%
D.-5% to +1%
3) Unless a tariff is prohibitive, it does not inhibit competition as much as a quota.
Evaluate.
4) When a purely competitive industry is in long-run equilibrium, which statement is
true?
A.Average total cost is less than marginal cost
B.Price and average total cost are equal
C.Marginal cost is at its maximum level
D.Marginal revenue is greater than price
5) As interest rates decrease, the:
A.Cost of current relative to future consumption increases
B.Cost of current relative to future consumption decreases
C.Cost of current consumption relative to future consumption remains the same
D.Desire of many individuals to save increases
6) Because gun violence is portrayed frequently on television and in movies, people
mistakenly assign too high of a probability that they will fall victim to gun violence,
and too low of a probability to more likely but less publicized events. This phenomenon
illustrates:
A.the effect of the availability heuristic.
B.that people suffer from hindsight bias.
C.that events are poorly framed by the media.
D.the self-serving bias at work.
7) What was the primary goal of the proponents of the Patient Protection and
Affordable Care Act?
A.Improve the quality of care by reducing medical malpractice.
B.Reduce health care costs in the United States by 50 percent.
C.Make all U.S. health care publically (government) provided.
D.Extend health insurance coverage to all Americans.
8) Differences in the amounts and quality of education and training:
A.combine with differences in mental, physical, and aesthetic talents to produce income
inequality.
B.explain none of the income inequality in the United States.
C.explain nearly all the income inequality in the United States.
D.have lessened in the United States in the past decade, sharply reducing income
inequality.
9) The inelastic demand for agricultural products means that a(n):
A.Decrease in price will increase farm incomes
B.Increase in price will decrease farm incomes
C.Decrease in price will decrease farm incomes
D.Increase in price will not change farm incomes
10)
Refer to the data in the table above. Which of the following statements is correct?
A.The distribution of income was the same in 2008 as in 1970
B.In 2008, the top 20 percent of households earned about half of the nation’s total
income
C.In 1970, the poorest 60 percent of the population earned 17.4 percent of the nation’s
total income
D.The income levels of the lower 60% of households have fallen from 1970 to 2008
11) A market system tends to restrict business risk to owners and investors. This results
in which of the following benefits?
A.It encourages more people to become entrepreneurs.
B.Firms have to pay more to attract inputs, as these inputs have to share the risk.
C.Firms focus attention on prudent risk management, as it is profitable to manage risk.
D.Income becomes more equally distributed.
12)
Refer to the above graphs. They show the long-run average total cost (LRATC) for a
product. For which graph would a firm experience first economies and then
diseconomies of scale over its range of output?
A.Graph A
B.Graph B
C.Graph C
D.Graph D
13) Other things being equal, the burden of a sales tax on a product will be borne
entirely by the producer if:
A.Demand is perfectly elastic
B.Supply is perfectly elastic
C.Supply and demand have the same price elasticity
D.Demand is perfectly inelastic
14)
Refer to the two diagrams for individual firms. Figure 1 pertains to:
A.an imperfectly competitive firm.
B.a purely competitive firm.
C.an oligopolist.
D.a pure monopolist.
15) In the Internet search market:
A.Yahoo, Bing, and Google have roughly equal market shares.
B.the Herfindahl index value is 10,000.
C.Google holds about 70 percent of the market, while Bing and Yahoo together
comprise about 28 percent.
D.government subsidies ensure that search engines are provided at no cost to all
Internet users.
16)
In which of the given market situations will the efficiency loss of an excise tax be the
greatest?
A.4
B.3
C.1
D.2