1) An increase in the dollar price of the British pounds will:
A.Increase the pound price of dollars
B.Decrease the pound price of dollars
C.Leave the pound price of dollars unchanged
D.Cause Britain’s terms of trade with the United States to deteriorate
2) We would expect the cross elasticity of demand between dress shirts and ties to be:
A.positive, indicating normal goods.
B.positive, indicating complementary goods.
C.negative, indicating substitute goods.
D.negative, indicating complementary goods.
3) Last month Laura saw the value of her stock portfolio rise by $20,000. This month
she saw the value of her portfolio decline by $20,000. According to behavioral
economics:
A.the positive utility Laura received from seeing her portfolio value rise was equal to
the disutility she felt when its value declined.
B.Laura should not invest in stocks unless the utility she receives from gains is at least
as great as the disutility she feels from losses.
C.the positive utility Laura received from seeing her portfolio value rise was greater
than the disutility she felt when its value declined.
D.the positive utility Laura received from seeing her portfolio value rise was less than
the disutility she felt when its value declined.
4) Price is constant to the individual firm selling in a purely competitive market
because:
A.the firm’s demand curve is downsloping.
B.of product differentiation reinforced by extensive advertising.
C.each seller supplies a negligible fraction of total supply.
D.there are no good substitutes for its product.
5)
What line in the above graph would best represent the supply curve for land?
A.1
B.2
C.3
D.4
6) Which of the following comprised the largest share of total health-care spending in
2011?
A.Physicians
B.Hospitals
C.Nursing homes
D.Prescription drugs
7) Which is most likely to be a long-run adjustment for a firm that manufactures cars on
an assembly line basis?
A.An increase in the amount of steel that the firm buys
B.A decrease in the number of production managers in the assembly line
C.A change in production to a redesigned and retooled facility
D.An increase in the number of shifts of workers from two to three
8) Factors that impede the attainment of economic efficiency in the public sector are
called:
A.market failures.
B.externalities.
C.government failures.
D.voting irregularities.
9)
Refer to the diagrams for two separate product markets. Assume that society’s optimal
level of output in each market is Q0 and that government purposely shifts the market
supply curve from S to S1 in diagram (a) on the left and from S to S2 in diagram (b) on
the right. We can conclude that the government is correcting for:
A.negative externalities in diagram (a) and positive externalities in diagram (b).
B.positive externalities in diagram (a) and negative externalities in diagram (b).
C.negative externalities in both diagrams.
D.positive externalities in both diagrams.
10) The “anchoring” phenomenon observed by behavioral economists refers to the fact
that people’s estimates of the value of things are affected by:
A.Recently considered information
B.Their childhood memories
C.Irrelevant data always
D.Relevant information solely
11) Answer the question using the following data, which show all available techniques
for producing 20 units of a particular commodity:
Refer to the data. In view of the indicated resource prices, the economically most
efficient production technique(s) is (are) technique(s):
A.#1.
B.#2 and #4.
C.#3.
D.#1 and #3.