1) Which of the following would shift a market labor supply curve to the left?
a.a decrease in the price of output
b.an increase in the price of output
c.a labor-augmenting technological change
d.better employment opportunities in a closely-related job
2) Consider the market for land. Suppose the value of the marginal product of land
decreases. Holding all else constant, the equilibrium rental price for land will
a.increase.
b.decrease.
c.not change.
d.It is not possible to determine what will happen to the equilibrium rental rate.
3) Refer to Figure 9-25. Suppose the government imposes a tariff of $5 per unit. The
deadweight loss caused by the tariff is
a.$25.
b.$50.
c.$75.
d. $100.
4) Which of the following firms is likely to have the greatest market power?
a.an electric company
b.a farmer
c.a grocery store
d.a local electronics retailer
5) Figure 7-19
If the government imposes a price ceiling of $55 in this market, then total surplus will
be
a. $187.50.
b. $125.00.
c. $250.00.
d. $266.67.
6) Which of the following would likely be studied by a microeconomist rather than a
macroeconomist?
a.the effect of foreign direct investment on economic growth
b.the effect of a sales tax on the cigarette industry
c.the effect of an investment tax credit on the economy’s capital stock
d.the effect of a war on government spending
7) Which of the following is an example of a normative – as opposed to a positive –
statement?
a.The discount rate is the interest rate the Federal Reserve charges banks to borrow
funds.
b.The US income tax rate increases with the amount of income earned.
c.The government should increase the tax on gasoline.
d.The US unemployment rate increased to 10 percent in 2009.
8) Figure 20-3
Refer to Figure 20-3. In 2011, the percent of adults between ages 18 and 64 in poverty
is
a.higher than both the percentage of children under age 18 and the percentage of elderly
aged 65 and over in poverty.
b.higher than the percentage of children under age 18 but is lower than the percentage
of elderly aged 65 and over in poverty.
c.is lower than the percentage of children under age 18 but is higher than the percentage
of elderly aged 65 and over in poverty.
d.is lower than the percentage of children under age 18 and is equal to the percentage of
elderly aged 65 and over in poverty.
9) Figure 7-16
If the price of the good is $300, then producer surplus amounts to
a. $100.
b. $200.
c. $300.
d. $400.
10) Figure 16-14
The deadweight loss from production for this firm is represented by which of the
following areas?
a.ABC
b.IJK
c.BHJ
d.BCIJ
11) When the price of a good or service changes,
a.the demand curve shifts in the opposite direction.
b.the supply curve shifts in the opposite direction.
c.the supply curve shifts in the same direction.
d.there is a movement along a given supply curve.
12) If Dave and Jesse are the only two fishermen in town and neither is bothered by the
other’s fishing, the lake they fish in is not a common resource.
a.True
b.False
13) Suppose that you have $100 today and expect to receive $100 one year from today.
Your money market account pays an annual interest rate of 25%, and you may borrow
money at that interest rate. If you save all your money, how much money will you have
one year from today?
a.$100
b.$125
c.$200
d.$225
14) Assume, for Mexico, that the domestic price of oranges without international trade
is lower than the world price of oranges. This suggests that, in the production of
oranges,
a.Mexico has a comparative advantage over other countries and Mexico will export
oranges.
b.Mexico has a comparative advantage over other countries and Mexico will import
oranges.
c.other countries have a comparative advantage over Mexico and Mexico will export
oranges.
d.other countries have a comparative advantage over Mexico and Mexico will import
oranges.