1) If two nations have different per capita income levels and their rates of economic
growth are identical, then the absolute per capita income differential:
A.will remain constant.
B.may either widen or diminish.
C.will diminish.
D.will widen.
2) if at the mc = mr output, avc exceeds price:
a.new firms will enter this industry.
b.the firm should produce the mc = mr output and realize an economic profit.
c.the firm should shut down in the short run.
d.the firm should expand its plant.
3) In energy economics, “BTU” stands for:
A.Boiling Temperature Unit.
B.Base Tax Utility.
C.British Thermal Unit.
D.Base Technology Utility.
4)
Refer to the above table representing Kara’s bank account. Assuming that $2000 was
deposited into her account at the beginning of year 1, and no further deposits or
withdrawals were made, the value for cell D:
A.is $662.
B.is $242.
C.is $420
D.cannot be determined.
5) if the consumer price index rises from 300 to 333 in a particular year, the rate of
inflation in that year is:
a.11 percent.
b.33 percent.
c.91 percent.
d.10 percent.
6) If m equals the maximum number of new dollars that can be created for a single
dollar of excess reserves and R equals the required reserve ratio, then for the banking
system:
A.m = R-1.
B.R = m/1.
C.R = m-1.
D.m = 1/R.
7) in a competitive market the equilibrium price and quantity occur where:
a.the downsloping demand curve intersects the upsloping supply curve.
b.the upsloping demand curve intersects the downsloping supply curve.
c.consumers and suppliers bargain to a mutually acceptable price.
d.quantity demanded exceeds quantity supplied or vice versa.
8)
Refer to the above diagram for a private closed economy. Gross investment:
A.is positively related to the level of GDP.
B.is negatively related to the level of GDP.
C.is independent of the level of GDP.
D.must be subtracted from consumption to determine aggregate expenditures.
9)
Which of the above diagrams best portrays the effects of a decrease in the availability
of key natural resources?
A.A
B.B
C.C
D.D
10) A competitive employer should hire additional labor as long as:
A.the MRP exceeds the wage rate.
B.the wage rate is less than MP.
C.average product exceeds MP.
D.MC exceeds MR.
11) Three people on a city council have three different spending proposals for snow
removal. Mitchell wants to spend $2 million to purchase more trucks and equipment.
Williams wants to spend $1 million and purchase half the equipment. Symmes doesnt
want to purchase any new equipment, but prefers to spend $200,000 for additional
stocks of de-icing chemicals. What does the median-voter model suggest will happen in
this case? Explain the likely outcome.
12) Define fishery and describe the resource problem with fisheries.
13) What happens to bring the ADAS system back into equilibrium when prices are
below the equilibrium level? Above the equilibrium level?
14) What is the Herfindahl index and how is it calculated?
15) Identify the four major instruments of monetary policy.
16) Describe the characteristics of private capital flows to DVCs.