1)
Refer to the diagram. If this labor market is monopsonistic, the wage rate and level of
employment respectively will be:
A.D and E.
B.C and F.
C.B and F.
D.A and F.
2) The sales tax is a regressive tax because the:
A.percentage of income paid as taxes falls as income rises.
B.administrative costs associated with the collection of the tax are relatively high.
C.percentage of income paid as taxes is constant as income rises.
D.tax tends to reduce the total volume of consumption expenditures.
3)
Refer to the graphs above. A price increase from $20 to $40 causes quantity demanded
to decrease from 100 units to 50 units. Which graph best illustrates the demand for this
good?
A.Graph A
B.Graph B
C.Graph C
D.Graph D
4) The following graph shows a total revenue curve for a monopolist.
Refer to the above graph. The profit-maximizing firm will produce in that output level
where total revenue is:
A.Rising
B.Falling
C.Rising and falling
D.Zero
5) Which union status provides the weakest form of union security?
A.Open shop
B.Agency shop
C.Union shop
D.Closed shop
6) A decrease in supply, holding demand constant, will cause:
A.Higher prices and a larger quantity sold
B.Higher prices and a smaller quantity sold
C.Lower prices and a smaller quantity sold
D.Lower prices and a larger quantity sold
7) Answer the question on the basis of the following information. Suppose the members
of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes
of $5,000, $2,500, $1,250, $750, and $500, respectively.
Refer to the given information and this information as well. The members of population
B, consisting of Fred, George, Holly, Irma, and Joan, receive incomes of $4,000,
$3,000, $1,250, $950, and $800, respectively. We:
A.can say that the income of population B is less equally distributed than that of
population A.
B.can say that the income of population B is more equally distributed than that of
population A.
C.cannot make a meaningful comparison of the income distributions of populations A
and B.
D.can say that the poorest quintile of population B receives 12 percent of total income.
8) Economists would describe the U.S. automobile industry as:
A.purely competitive.
B.an oligopoly.
C.monopolistically competitive.
D.a pure monopoly.
9) The “brain drain” problem in the DVCs refers to the fact the best-educated workers:
A.are reluctant to become entrepreneurs.
B.are concentrated in rural areas where their skills are underutilized.
C.often immigrate to industrialized countries.
D.are reluctant to work in the public sector.
10)
Refer to the total revenue graph above. If the quantity of product X demanded falls
from 14,000 to 10,000 units, then it suggests that the price of X was:
A.Reduced and the demand is elastic
B.Increased and the demand is elastic
C.Reduced and the demand is inelastic
D.Increased and the demand is inelastic
11) Which would make it easier to maintain an effective collusive agreement in a
cartel?
A.The emergence of a number of potential entrant firms
B.A decrease in the elasticity of demand for the cartel’s product
C.An increase in the number of substitutes for products produced by the cartel
D.A new method of pricing that makes it more difficult for firms in the cartel to
determine the prices at which other cartel members are selling their product
12) In 2004, approximately what percent of household income was transferred from the
top two quintiles to the lowest three quintiles?
A.Zero
B.10
C.15
D.22
13) Use the table below that shows the rate of return and R&D spending for a
hypothetical firm. Assume the interest-rate cost of funds is 6%.
(a)Graph the marginal cost and marginal benefit curves of R&D spending in the graph
below. Be sure to label the axes. What is the optimal level of R&D spending?
(b)Now assume that the interest-rate cost of funds is 9%. Show on the graph what
happens to the interest-rate cost of funds curve. What is the optimal level of R&D
spending?
14) What is the most likely effect of the development of DVDs, rental movies, and
online movie streaming on the movie theater industry?
A.Decreased costs of producing movies
B.Increased demand for movie theater tickets
C.Movie theater tickets become an inferior good
D.Increased price elasticity of demand for movie theater tickets
15) Government can use its ability to coerce towards improving economic efficiency
by:
A.Reducing the production of output with external benefits
B.Reducing the production of output with public-goods characteristics
C.Increasing the production of output with external benefits
D.Increasing the production of output with external costs