1) some agricultural sub-saharan nations of africa have overfarmed and overgrazed their
land to the extent that significant portions of it have turned into desert. this suggests
that:
a.the concavity of the production possibilities curves of such nations has increased.
b.the production possibilities curves of such nations have shifted inward.
c.the production possibilities curves of such nations have shifted outward.
d.these nations are operating at some point outside of their production possibilities
curves.
2)
Refer to the above diagram, in which Qf is the full-employment output. If aggregate
demand curve AD3describes the current situation, appropriate fiscal policy would be to:
A.do nothing since the economy appears to be achieving full-employment real output.
B.increase taxes and reduce government spending to shift the aggregate demand curve
leftward from AD3 to AD2, assuming downward price flexibility.
C.increase taxes on businesses to shift the aggregate supply curve rightward to reduce
the price level.
D.increase taxes and reduce government spending to shift the aggregate demand curve
from AD3 to AD1.
3) which of the following is the largest contributor to the growth of labor productivity
in the united states?
a.technological advance
b.education and training of labor
c.economies of scale
d.improved resource allocation
4) if total utility is increasing, marginal utility:
a.is positive, but may be either increasing or decreasing.
b.must also be increasing.
c.may be either positive or negative.
d.will be increasing at an increasing rate.
5) (Advanced analysis) Answer the next question(s) on the basis of the following
information for a mixed open economy. The letters Y, Ca, Ig, Xn, G, and T stand for
GDP, consumption, gross investment, net exports, government purchases, and net taxes
respectively. Figures are in billions of dollars.
Refer to the above information. If the economy’s tax schedule was T = 0.2Y rather than
T = T0 = 30, the equilibrium GDP would be:
A.$387.5.
B.$518.5.
C.$316.
D.$412.
6) Capital flight is a problem to DVCs because it:
A.causes the value of an DVCs currency to appreciate.
B.reduces the volume of DVC investment.
C.reduces the flow of foreign aid from the IACs.
D.causes inflation in the DVCs.
7) Harry owns a barber shop and charges $6 per haircut. By hiring one barber at $10 per
hour the shop can provide 24 haircuts per 8-hour day. By hiring a second barber at the
same wage rate the shop can now provide a total of 42 haircuts per day.
Refer to the above information. Harry should:
A.hire the second barber because he will add $28 to profits.
B.hire the second barber because he will add $108 to profits.
C.not hire the second barber because he is less productive than the first barber.
D.not hire the second barber because he will diminish profits.
8)
Assume that a firm’s interest-rate-cost of funds curve for R&D is perfectly elastic.
Which of the following would decrease a firm’s optimal R&D expenditures and, in
equilibrium, increase the expected rate of return on the last dollar of R&D?
A.a rightward shift of the expected-rate-of-return curve
B.an upward shift of the interest-rate-cost of funds curve
C.a leftward shift of the expected-rate-of-return curve
D.a downward shift of the interest-rate-cost of funds curve
9)
Refer to the above data. We can conclude that:
A.both the product and resource markets are imperfectly competitive.
B.the resource market is imperfectly competitive but the product market is purely
competitive.
C.both the resource and product markets are purely competitive.
D.the resource market is purely competitive but the product market is imperfectly
competitive.
10) An example of direct foreign investment is:
A.a U.S. bank granting a loan to a Guatemalan firm.
B.General Motors building an auto production facility in China.
C.a U.S. government foreign aid grant to Bangladesh.
D.the purchase of debt issued by the Panamanian government.
11) (Last Word) Relative to previous decades, the U.S. economy is less affected by
changes in the price of oil partly because:
A.the composition of GDP has changed from larger, heavier items such as earth movers
and steel products toward smaller, lighter items such as software and microchips.
B.The United States is now more reliant on domestic oil and less reliant on imported
oil.
C.The United States has vastly expanded its hydroelectric capacity (dams and
reservoirs).
D.The ratio of passenger cars to passenger trucks has increased.
12) As it relates to Federal Reserve activities, the acronym FOMC describes the:
A.Federal Open Market Committee.
B.Federal Options Market Committee.
C.Federal Organization for Monetary Control.
D.Federal Organization for Money Creation.
13) (last word) over the past twenty-five years, china has averaged annual growth rates
of nearly:
a.5 percent.
b.9 percent.
c.12 percent.
d.15 percent.
14) Individual Transferable Quotas (ITQs):
A.promote efficiency and limit catches.
B.promote efficiency in production but still lead to overfishing.
C.limit catches but encourage production cost increases that are inefficient.
D.have failed to limit catches or promote efficiency.
15) the letters a, b, and c designate three successively larger plant sizes.
refer to the above data. at what level of output is minimum efficient scale realized?
a.30
b.40
c.50
d.60
16) Suppose there are only three labor markets (A, B, and C) in the economy and each
of these markets is purely competitive. The table below contains the demand (or
marginal-revenue-product) schedule for labor in each of these three markets. Assume
there are 24 million homogeneous workers in the economy and that one-half of these
workers are male and one-half are female.
(a)What would the wage rates be if the 12 million female workers could only work in
labor market C because of labor market discrimination, while half the 12 million male
workers are employed in labor market A and the other half in labor market B?
(b)Now what would happen to wage rates in each market if discrimination was
eliminated and the amounts of labor were equal in each market?
(c)What would happen to domestic output in each market and for society?
17) when economists say that people act rationally in their self interest, they mean that
individuals:
a.look for and pursue opportunities to increase their utility.
b.generally disregard the interests of others.
c.are mainly creatures of habit.
d.are unpredictable.
18) the coefficient of price elasticity is 0.2. demand is thus:
a.perfectly inelastic.
b.perfectly elastic.
c.relatively inelastic.
d.relatively elastic.
19) The benchmark interest rate that banks use as a reference point for a variety of
consumer and business loans is the:
A.Federal funds rate.
B.prime interest rate.
C.discount rate.
D.Treasury bill rate.