1)
Refer to the above table representing Kara’s bank account. Assuming that $2000 was
deposited into her account at the beginning of year 1, and no further deposits or
withdrawals were made, the value for cell D:
A.is $662.
B.is $242.
C.is $420
D.cannot be determined.
2)
(consider this) refer to the above diagram. suppose that point y represents the optimal
combination of civilian goods and defense goods. we can conclude that at y the
marginal benefit of defense goods:
a.exceeds the marginal cost of defense goods.
b.equals the marginal cost of defense goods.
c.is zero.
d.is negative.
3) “economics is concerned with how individuals, institutions, and society make
optimal choices under conditions of scarcity.” this statement is:
a.positive, but incorrect.
b.positive and correct.
c.normative, but incorrect.
d.normative and correct.
4) The entrance of large numbers of “baby boomers” into the labor force in the 1970s
and 1980s:
A.caused substantial reductions in permanent unemployment.
B.lessened income inequality.
C.increased income inequality.
D.had no impact on income inequality.
5)
refer to the above diagram. if actual production and consumption occur at q3:
a.efficiency is achieved.
b.an efficiency loss (or deadweight loss) of e + f occurs.
c.an efficiency loss (or deadweight loss) of a + b + c + d occurs.
d.an efficiency loss (or deadweight loss) of a + c occurs.
6) The following diagram is a flexible exchange market for foreign currency:
Refer to the above diagram. Other things equal, a leftward shift of the supply curve
would:
A.appreciate the euro.
B.cause a shortage of euros.
C.increase the equilibrium quantity of euros.
D.appreciate the dollar.
7) network effects are:
a.increases in the value of a product to each user, including existing users, as the total
number of users rises.
b.reductions in per unit production cost as firms learn by doing.
c.increases in demand resulting from products being mentioned positively in a
television program.
d.the change in real gdp resulting from a change in investment or government spending.
8) The voice mechanism is important because it may:
A.reduce worker turnover and increase productivity.
B.increase worker mobility.
C.increase the number of strikes.
D.conflict with the Taft-Hartley Act.
9) A monopsonist pays a wage rate that is:
A.less than the MRP of labor.
B.equal to the firm’s marginal resource (labor) cost.
C.equal to the MRP of labor.
D.greater than the MRP of labor.
10) what is the net effect of illegal immigration on total employment in the united
states?
a.the net effect is zero, as illegal immigrant workers displace domestic-born workers on
a one-for-one basis.
b.total employment increases, but with some substitution of illegal immigrants for
domestic-born workers.
c.total employment decreases.
d.total employment increases, with no displacement of or substitution for domestic-born
workers.
11)
Refer to the above balance sheets. If the reserve ratio is 25%, commercial banks have
excess reserves of:
A.$12.
B.$22.
C.$16.
D.$24.
12) a budget line shows the:
a.alternative combinations of two goods that a consumer can purchase with a given
money income.
b.alternative combinations of two goods that will yield the same level of total utility to
a consumer.
c.quantities of a particular good that a consumer will buy at various prices.
d.ratio of money income to product price.
13)
In the above diagram, a shift from AS1 to AS2might be caused by a(n):
A.stricter government regulations.
B.increase in the prices of imported resources.
C.decrease in the prices of domestic resources.
D.increase in business taxes.
14) a natural monopoly exists when:
a.unit costs are minimized by having one firm produce an industry’s entire output.
b.several formerly competing producers merge to become the only firm in an industry.
c.short-run average total cost curves are tangent to long-run average total cost curves.
d.minimum efficient scale is attained at a small level of output.
15)
Refer to the above table. For the open economy the equilibrium GDP and the multiplier
are:
A.$300 and 2.5.
B.$450 and 5.
C.$400 and 4.
D.$400 and 5.
16) the slope of a budget line reflects the:
a.elasticity of demand for the two products.
b.price ratio of the two products.
c.amount of the consumer’s income.
d.utility ratio of the two products.
17) Monetarist say:
A.that, because P is stable, a change in M will change Q proportionately in the opposite
direction.
B.a change in the money supply will change aggregate demand and therefore the
nominal GDP.
C.a change in the money supply will change velocity, which in turn will change
nominal GDP.
D.a change in the money supply will change the interest rate, which will change
investment spending and nominal GDP.
18) which of the following is a shortcoming of the market system?
a.it leads to firms that are too large to achieve productive efficiency.
b.certain goods will not be produced because there is no way of excluding nonpaying
(“free-rider”) individuals from the associated benefits.
c.the resulting distribution of personal incomes might be too equal to maintain
incentives.
d.it is controlled by a handful of multinational corporations.
19) If a firm is employing quantities of resources J and K so that MRPJ/PJ = MRPK/PK
= 1, then:
A.MPJ/PJ may either exceed or be less than MPK/PK.
B.MPJ/PJ will be less than MPK/PK.
C.MPJ/PJ will exceed MPK/PK.
D.MPJ/PJ = MPK/PK.
20)
Refer to the above table. The amount of investment that will be forthcoming in this
economy at equilibrium is:
A.$700.
B.$600.
C.$500.
D.$300.