1)
Refer to the short-run production and cost data. The curves of Figures A and B suggest
that:
A.marginal product and marginal cost reach their maximum points at the same output.
B.marginal cost reaches a minimum where marginal product is at its maximum.
C.marginal cost and marginal product reach their minimum points at the same output.
D.AVC cuts MC at the latter’s minimum point.
2) A maximum limit set on the amount of a specific good that may be imported into a
country over a given period of time is called a:
A.Tariff
B.Quota
C.Nontariff barrier
D.Voluntary export restriction
3) The long-run average total cost curve:
A.displays declining unit costs so long as output is increasing.
B.indicates the lowest unit costs achievable when a firm has had sufficient time to alter
plant size.
C.has a shape that is the inverse of the law of diminishing returns.
D.can be derived by summing horizontally the average total cost curves of all firms in
an industry.
4) A Federal excise tax on tires for cars and trucks would be an example of the:
A.Benefits-received principle of taxation
B.Ability-to-pay principle of taxation
C.Proportional tax
D.Progressive tax
5) Marginal costs of a producer may be very small due to its product’s ability to satisfy
a large number of consumers at the same time. This characteristic of a product is called:
A.Economies of scale
B.Rent-seeking
C.Simultaneous consumption
D.Consumer sovereignty
6) Your firm has total sales revenue of $1,000,000 and total explicit costs of $600,000
and total implicit cost of $300,000. What will be the accounting profit for the firm?
What will be the economic profit for the firm? Explain the difference using the data.
7)
Refer to the diagram. At the profit-maximizing level of output, total revenue will be:
A.NM times 0M.
B.0AJE.
C.0EGC.
D.0EHB.
8) The crowding model of occupational discrimination suggests that occupational
segregation results in:
A.A lower domestic output than would otherwise be the case
B.Higher levels of total employment than would otherwise be the case
C.Higher interest rates in the private sector than would otherwise be the case
D.A higher rate of inflation than would otherwise be the case
9) A consumer who has a limited budget will maximize utility or satisfaction when the:
A.ratios of the marginal utility of each product purchased divided by its price are equal.
B.total utility derived from each product purchased is the same.
C.marginal utility of each product purchased is the same.
D.price of each product purchased is the same.
10) Studies of the minimum wage suggest that the price elasticity of demand for
teenage workers is relatively inelastic. This means that:
A.an increase in the minimum wage would increase the total incomes of teenage
workers as a group.
B.an increase in the minimum wage would decrease the total incomes of teenage
workers as a group.
C.the unemployment effect of an increase in the minimum wage would be relatively
large.
D.the cross elasticity of demand between teenage and adult workers is positive and very
large.
11) Answer the question on the basis of the following cost data for a firm that is selling
in a purely competitive market:
Refer to the data. If there were 1,000 identical firms in this industry and total or market
demand is as shown below, equilibrium price will be:
A.$32.
B.$42.
C.$36.
D.$20.
12) An explicit cost is:
A.omitted when accounting profits are calculated.
B.a money payment made for resources not owned by the firm itself.
C.an implicit cost to the resource owner who receives that payment.
D.always in excess of a resource’s opportunity cost.
13)
Refer to the table representing Darcy’s bank account. Assuming that $1,000 was
deposited into her account at the beginning of year 1, and no further deposits or
withdrawals were made, which cell(s) represents the future value of the initial deposit if
the money remains in the account for two years?
A.Cell B only.
B.Cell A only.
C.Cells A and D.
D.Cells B and C
14) In 2010, the top 1% of households in the U.S. owned about how many percent of
total wealth in the nation?
A.20%
B.10%
C.35%
D.50%
15) The administrative agency charged with enforcing the provisions of the Clayton Act
(1914) was established by additional legislation in the same year. This legislation was
the:
A.Celler-Kefauver Act
B.Wheeler-Lea Act
C.Sherman Act
D.Federal Trade Commission Act
16) A consumer has two basic choices in making a trip: rent a car for $30.00 a day and
spend two days of travel to the destination, or spend $400 for an airplane ticket and fly
to the destination in two hours. The marginal utilities of the car rental and the airline
ticket are the same. The consumer values time at $5 an hour. The rational consumer will
most likely:
A.Rent a car
B.Buy an airline ticket
C.Find the full cost of the two modes to be equal
D.Not make the trip
17) In the standard model of pure competition, a profit-maximizing firm will shut down
in the short run if:
A.Marginal cost is greater than average revenue
B.Average cost is greater than average revenue
C.Average fixed cost is greater than average revenue
D.Total revenue is less than total variable cost