1) In determining one’s personal income tax, taxable income is:
A.total income less deductions and exemptions.
B.all income.
C.all income other than wages and salaries.
D.wage and salary income only.
2)
Refer to the above graph. If this labor market were operating under a monopsony, the
equilibrium wage rate would be:
A.W1 and Q1 workers would be hired
B.W2 and Q2 workers would be hired
C.W2 and Q1 workers would be hired
D.W3 and Q1 workers would be hired
3) From 2010 to 2020, it is expected that there will be a fall in demand for:
A.Postal service workers
B.Biomedical engineers
C.Financial examiners
D.Masonry helpers
4) Suppose the G8 nations decide that the dollar is too strong (high in value) relative to
the yen. These nations might:
A.use official reserves of yen to buy dollars.
B.use official reserves of dollars to buy yen.
C.encourage Japan to print more yen.
D.encourage the United States to increase interest rates.
5) The opportunity cost of doing or getting something is best and fully defined as:
A.The difference between the marginal cost and benefit of doing something
B.The materials used in doing or getting something
C.The value of the best alternative that is given up in order to do or get something
D.The money spent in doing or getting something
6) Which of the following is a correct statement?
A.Economic concepts or laws that are valid during depression are necessarily valid
during prosperity.
B.Although they are generalizations, economic laws are useful because they allow us to
predict and therefore influence or adjust to events.
C.Economics is as scientific as are physics and chemistry because economic laws are as
quantitatively precise as the laws of physics or chemistry.
D.Because economics is concerned with questions of “ought,” it is a branch of applied
ethics and not scientific.
7) Purposeful behavior suggests that:
A.everyone will make identical choices.
B.resource availability exceeds economic wants.
C.individuals may make different choices because of different desired outcomes.
D.an individual’s economic goals cannot involve trade-offs.
8) The optimal point on a production possibilities curve is achieved where:
A.the smallest physical amounts of inputs are used to produce each good.
B.each good is produced at a level where marginal benefits equal marginal costs.
C.large amounts of capital goods are produced relative to consumer goods.
D.large amounts of consumer goods are produced relative to capital goods.
9) Which of the following is a typical example of a fixed cost of production in a
business firm?
A.Depreciation of capital
B.Wages paid to hourly workers
C.Electricity charges
D.Sales taxes due
10)
Refer to the above graph. The firm will earn maximum total profits if it produces and
sells quantity:
A.0A
B.0B
C.0C
D.0K
11) Answer the question based on the following payoff matrix for a duopoly in which
the numbers indicate the profit from following either an international strategy or a
national strategy.
Refer to the above table. Which of the following is true?
A.The international strategy is the dominant strategy for both firms
B.The national strategy is the dominant strategy for both firms
C.The international strategy is the dominant strategy for firm A and the national
strategy is the dominant strategy for firm B
D.The national strategy is the dominant strategy for firm A and the international
strategy is the dominant strategy for firm B
12) State right-to-work laws:
A.have been enacted by over one-half of the states in the nation.
B.make yellow dog contracts illegal.
C.allow for union shops while prohibiting closed shops.
D.make union and agency shops illegal.
13) The estimated value of the U.S. government’s unfunded liability to Social Security
is:
A.$4.6 trillion.
B.$4.8 trillion.
C.$15.6 trillion.
D.$20.5 trillion.
14) To get the U.S. Senate to pass a farm bill, a U.S. Senator from a farm state asks for
the support of a U.S. Senator from an urban state. The urban state Senator agrees to
support the bill, if in return the farm state Senator supports a bill for a mass transit
project. This situation is an example of:
A.The paradox of voting
B.Rent-seeking behavior
C.Political logrolling
D.The median voter model