1) The entrance of large numbers of “baby boomers” into the labor force in the 1970s
and 1980s:
A.caused substantial reductions in permanent unemployment.
B.lessened income inequality.
C.increased income inequality.
D.had no impact on income inequality.
2) Which of the following IACs (industrially advanced countries) gave the smallest
share of its GDP to foreign aid or development assistance to DVCs (developing
countries) in 2012?
A.United States
B.Japan
C.Canada
D.Germany
3) Renewable resources:
A.can never be exhausted permanently.
B.can be exhausted if harvest rates exceed replenishment rates for an extended period.
C.can be exhausted if replenishment rates exceed harvest rates for an extended period.
4) The long-run supply curve under pure competition will be:
A.Downward-sloping in a decreasing-cost industry and upward-sloping in an
increasing-cost industry
B.Horizontal in a constant-cost industry and downward-sloping in an increasing-cost
industry
C.Vertical in a constant-cost industry and upward-sloping in a decreasing-cost industry
D.Upward-sloping in an increasing-cost industry and vertical in a constant-cost industry
5) What is the meaning of the phrase “dilemma of regulation”?
A.Natural monopolies achieve economies of scale, but charge high prices when there is
no government regulation; government regulation reduces prices, but results in
diseconomies of scale
B.Natural monopolies are profitable, but only if the government permits price
discrimination; government regulation to restrict price discrimination reduces
monopoly prices, but the regulation also reduces monopoly output
C.The fair return price achieves allocative efficiency, but may produce economic losses;
the socially optimal price yields a normal profit but may not be allocatively efficient
D.The socially optimal price achieves allocative efficiency, but may produce economic
losses; the fair return price yields a normal profit but may not be allocatively efficient
6) When total utility reaches a maximum, then marginal utility is:
A.Increasing
B.Decreasing
C.At a minimum
D.Equal to zero
7) Ticket scalping:
A.imposes economic losses on both buyers and sellers.
B.creates economic gains for both buyers and sellers.
C.imposes losses on buyers but creates gains for sellers.
D.imposes losses on sellers but creates gains for buyers.
8) Which of the following is associated with macroeconomics?
A.An examination of the incomes of Harvard Business School graduates.
B.An empirical investigation of the general price level and unemployment rates since
1990.
C.A study of the trend of pecan prices since the Second World War.
D.A case study of pricing and production in the textbook industry.
9) The largest efficiency gains from deregulation have occurred in the:
A.natural gas and cable television industries.
B.cable television and railroad industries.
C.communications and stock-brokering industries.
D.airlines, trucking, and railroad industries.
10) Which is true of a price discriminating pure monopolist?
A.P > MR for the last unit sold
B.Profit will be higher than in the nondiscriminating case
C.The average price will be higher than in the nondiscriminating case
D.Allocative inefficiency will be greater than in the nondiscriminating case
11) The difference between the actual price that a producer receives and the minimum
acceptable price a producer is willing to accept is:
A.The consumer surplus
B.The producer surplus
C.Allocative efficiency
D.Productive efficiency
12) When economists view technological change as internal to the economy, they mean
that it:
A.occurs randomly.
B.occurs accidentally.
C.arises deliberately from the profit motive and competition.
D.arises mainly from government subsidies.
13) In recent years, total compensation to workers has risen faster than the take-home
pay of average workers. This implies that:
A.Something is wrong with the statistics on either compensation or take-home pay
B.Fringe benefits have become a larger share of total worker compensation
C.Direct payments have become a larger share of total worker compensation
D.Workers’ pay has been declining slightly in recent years
14) When total product is increasing at a decreasing rate, marginal product is:
A.positive and increasing.
B.positive and decreasing.
C.constant.
D.negative.
15) An efficiency loss (or deadweight loss) declines in size when a unit of output is
produced for which:
A.marginal cost exceeds marginal benefit.
B.maximum willingness to pay exceeds minimum acceptable price.
C.consumer surplus exceeds producer surplus.
D.producer surplus exceeds consumer surplus.
16) Which of the following is not a typical characteristic of a market system?
A.Private property.
B.Freedom of enterprise.
C.Government ownership of most property resources.
D.Competition in product and resource markets.
17) Cross elasticity of demand measures how sensitive purchases of a specific product
are to changes in:
A.the price of some other product.
B.the price of that same product.
C.income.
D.the general price level.
18) Tariffs and quotas are costly to consumers because:
A.The price of the imported good falls
B.The supply of the imported good increases
C.Import competition increases for domestic goods
D.Consumers have to switch to higher-priced domestic goods
19) The plusses and minuses of the patent system include the following, except:
A.It could give inventors an incentive to bear the research and development costs of
new products
B.It could allow stodgy old firms to survive longer than they should against innovative
rivals
C.It would prevent the existence of “patent trolls” or firms whose main purpose is to sue
companies
D.It may hinder creative destruction especially in complex products that encompass
several patents