1)
Refer to the figure. If more criminals are in the mix of potential immigrants, how will
this affect the optimal quantity of immigrants?
A.It will increase MC and reduce the optimal quantity.
B.It will increase MC and raise the optimal quantity.
C.It will lower MC and raise the optimal quantity.
D.It will lower MC and reduce the optimal quantity.
2) In 2012, the U.S. federal government legislation authorized:
A.152 earmarks totaling $3.3 trillion.
B.2,300 earmarks totaling $8.7 billion.
C.10,160 earmarks totaling $19.6 billion.
D.11,700 earmarks totaling $16.9 billion.
3) The following is a total-product schedule for a resource. Assume that the quantities
of other resources the firm employs remain constant.
Refer to the above table. If the firm can produce 24 units at a price of $1.00, 42 units at
a price of $0.80, and 54 units at a price of $0.60, then the firm is:
A.Selling in a purely competitive market
B.Selling in an imperfectly competitive market
C.Minimizing its costs at a product price of $1.00
D.Maximizing profits at a product price of $0.60
4) One major barrier to entry under pure monopoly arises from:
A.The availability of close substitutes for a product
B.Ownership of essential resources
C.The price taking ability of the firm
D.Diseconomies of scale
5) The tax revenues of local governments are typically:
A.More than their expenditures
B.Equal to their expenditures
C.Slightly less than their expenditures
D.Less than one-half of their expenditures
6) Economic data show a dramatic long-run decline in 25 important real commodity
prices from 1850 to 2011. This decline primarily occurred because the:
A.Demand for commodities decreased drastically
B.Supply of commodities grew faster than demand
C.Demand for commodities have remained stable over the years
D.Supply of commodities increased while demand increased even more
7) The fact that the slope of the production possibilities curve becomes steeper as we
move down along the curve indicates that:
A.the principle of increasing opportunity costs is relevant.
B.society’s resources are limited.
C.the opportunity cost of producing each product is constant.
D.resources are perfectly shiftable between alternative uses.
8) In a purely competitive industry, an optimal allocation of scarce resources occurs
when:
A.P = AC
B.P = MC
C.MR = MC
D.TR = TC
9) Use the table below to answer the question below. The table shows a schedule of the
import demand in Country A and the export supply in Country B at various dollar
prices. Column 1 is the price of the product. Column 2 is the quantity demanded for
imports (QdiA) in Country A. Column 3 is the quantity of exports supplied (QseB) by
Country B
Refer to the table above. The equilibrium world price in this two-nation model will be:
A.$4.00
B.$3.00
C.$2.00
D.$1.00
10) The long-run supply curve under pure competition is derived by observing what
happens to market price and quantity when market:
A.Demand changes, and all consequent long-run adjustments have occurred
B.Supply changes, and all consequent long-run adjustments have occurred
C.Technology changes, and all consequent long-run adjustments have occurred
D.Regulation changes, and all consequent long-run adjustments have occurred
11) Suppose that two firms in an industry that has a Herfindahl index of 1,000 announce
a merger. The U.S. Justice Department concludes the merger will boost the index to
1,050. The antitrust authorities will most likely:
A.ignore this merger because of the relatively small size of, and increase in, the
Herfindahl index.
B.prevent the merger, contending that it violates the Clayton Act.
C.allow the merger if foreign entry to the industry is possible.
D.allow the merger but watch the new firm carefully for future violations of the
antitrust laws.
12) (Last Word) Suppose you deposit $5,000 in a bank that pays 10 percent interest
compounded twice a year. The actual annual interest rate you receive is:
A.10 percent.
B.11 percent.
C.10.25 percent.
D.12 percent.
13) Which of the following is characteristic of a pure monopolist’s demand curve?
A.Average revenue is less than price.
B.Its elasticity coefficient is 1 at all levels of output.
C.Price and marginal revenue are equal at all levels of output.
D.It is the same as the market demand curve.
14) When the supplier, not the buyer, of the health care services makes most of the
decisions about the amount and type of health care to be provided, there is:
A.A moral hazard in the health care market
B.Asymmetric information in the health care market
C.A lack of medical ethics in the health care market
D.A need for Medicare in the health care market
15) In choosing between an old reliable product versus a new attractive product, the
consumer will:
A.Always buy the product with the lower price
B.Always buy the product with the higher MU
C.Buy the one with the higher MU-to-P ratio
D.Buy the one with the lower MU-to-P ratio
16) Henry George’s single-tax movement was based on the argument that:
A.the tax structure should consist solely of a highly progressive tax on nonwage
incomes.
B.interest is unearned income and should be taxed away by government.
C.in less developed countries the supply of and demand for land will be such that land
will be a free good and therefore capable of bearing sizable taxes.
D.a high tax on land rent is justified because land rent performs no incentive function.
17) Under pure monopoly, a profit-maximizing firm will produce:
A.In the inelastic range of its demand curve
B.In the elastic range of its demand curve
C.Only where marginal costs are decreasing
D.Only where marginal revenue is increasing
18) For a pure monopolist, marginal revenue is less than price because:
A.the monopolist’s demand curve is perfectly elastic.
B.the monopolist’s demand curve is perfectly inelastic.
C.when a monopolist lowers price to sell more output, the lower price applies to all
units sold.