1) Which of the following cases established that the mere possession of monopoly
power violated antitrust laws?
A.IBM case of 1982
B.Microsoft case of 1998
C.Alcoa case of 1945
D.AT&T case of 1982
2) According to behavioral economics:
A.gains are felt more intensely than losses.
B.each successive unit of loss is equal in its marginal disutility.
C.each successive unit of loss hurts, but less than the previous unit.
D.each successive unit of loss hurts, and more than the previous unit.
3) Government loan guarantees tend to have the effect of:
A.socializing losses and privatizing gains.
B.socializing gains and privatizing losses.
C.socializing both gains and losses.
D.privatizing both gains and losses.
4) The fertility ratesthe number of children per woman’s lifetimein many DVC
(developing countries) are:
A.Rising slowly
B.Rising fast
C.Staying constant
D.Declining
5) What concept is associated with the notion that employers can get greater effort from
workers by paying them a relatively high, above-equilibrium wage?
A.Profit sharing
B.Efficiency wages
C.Piece rate wages
D.Bonus or commissions
6) If the marginal tax rate is 20 percent, by how much must income have increased if
your tax bill increases by $300?
A.$300
B.$1,000
C.$1,500
D.Cannot be determined
7) Answer the question on the basis of the following information. Assume that if the
interest rate that businesses must pay to borrow funds were 20 percent, it would be
unprofitable for businesses to invest in new machinery and equipment, so investment
would be zero. But if the interest rate were 16 percent, businesses would find it
profitable to invest $10 billion. If the interest rate were 12 percent, $20 billion would be
invested. Assume that total investment continues to increase by $10 billion for each
successive 4 percentage point decline in the interest rate.
Refer to the information. Using i and I to indicate the interest rate and investment (in
billions of dollars) respectively, which of the following is the correct tabular
presentation of the described relationship?
A.Option A
B.Option B
C.Option C
D.Option D
8) Homogeneous oligopoly exists where a small number of firms are:
A.producing virtually identical products.
B.setting price and output independently.
C.setting price and output collusively.
D.producing differentiated products.
9) “Backflows” occur when:
A.two countries send immigrants to each other in approximately equal numbers.
B.physical capital flows into a country that has lost labor due to migration.
C.immigrants send financial payments back to family in their country of origin.
D.migrants return to their home country.
10) The U.S. tax and transfer study done by economists Chamberlain and Prante of the
Tax Foundation note that households in the top income quintile received about:
A.75 cents in government spending for every dollar they paid in taxes
B.60 cents in government spending for every dollar they paid in taxes
C.40 cents in government spending for every dollar they paid in taxes
D.20 cents in government spending for every dollar they paid in taxes
11) A government is considering undertaking one or more construction projects. The
estimated marginal costs and benefits of each project are given in the table.
Refer to the above table and information. What is the net benefit of project 2?
A.$2 million
B.$3 million
C.$4 million
D.$5 million
12) If the demand curve faced by an individual firm is downward-sloping, the firm
cannot be a:
A.A monopoly firm
B.A purely competitive firm
C.An oligopolistic firm
D.A monopolistically competitive firm
13) In moving along a given budget line:
A.the prices of both products and money income are assumed to be constant.
B.each point on the line will be equally satisfactory to consumers.
C.money income varies, but the prices of the two goods are constant.
D.the prices of both products are assumed to vary, but money income is constant.
14) In the United States:
A.African Americans have higher unionization rates than whites.
B.women have higher unionization rates than men.
C.managers have higher unionization rates than transportation workers.
D.workers in mining have higher unionization rates than workers in government.
15) A 3 percent increase in the price of tea causes a 6 percent increase in the demand for
coffee. The cross elasticity of demand for coffee with respect to the price of tea is:
A.-0.5
B.+0.5
C.-2.0
D.+2.0