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1) Answer the following question based on the data provided in the tables below for two
hypothetical nations, Wat and Xat. The nations have the production possibilities for rice
and corn given in the following table:
Refer to the data above. The mutually-beneficial terms of trade will be:
A.Less than 2 units of rice for 1 unit of corn
B.Greater than 4 units of rice for 1 unit of corn
C.Between 3 and 5 units of corn for 1 unit of rice
D.Between 3 and 5 units of rice for 1 unit of corn
2) The table below summarizes the marginal product data for labor in producing
personal computers. Assume the other quantities employed by the firm remain constant.
Compute the MPL, TR, and MRP and answer the following questions.
(a)What type of market is the one for personal computers?
Now look at the table below showing a different market situation for the demand for
personal computers. Fill in the table and answer the following questions.
(b)What type of market does the firm face for personal computers?
3) The wage rate increases in a purely competitive industry. This change will result in
a(n):
A.Decrease in average total cost for a firm in the industry
B.Decrease in average variable cost for a firm in the industry
C.Increase in the marginal cost curve for a firm in the industry
D.Increase in short-run supply curve for a firm in the industry
4) An antidrug policy that reduces the supply of heroin might:
A.increase street crime because the addict's demand for heroin is highly inelastic.
B.reduce street crime because the addict's demand for heroin is highly elastic.
C.reduce street crime because the addict's demand for heroin is highly inelastic.
D.increase street crime because the addict's demand for heroin is highly elastic.
5) Entrepreneurs and innovative firms with past successes in developing products:
A.Have less access to resources for further innovation
B.Have more access to resources for further innovation
C.Will often turn to the government to fund the next venture
D.Will often turn to international investors to fund the next venture
6)
Refer to the above graph. At what price will the firm make just a normal profit?
A.$2
B.$5
C.$7
D.$10
7) A common way by which governments encourage invention is by providing the
inventor with a:
A.Patent
B.Copyright
C.Trade secret
D.Trademark
8) Other things equal, the monopsonistic employer will pay a:
A.lower wage rate and hire fewer workers than will a purely competitive employer.
B.higher wage rate but hire fewer workers than will a purely competitive employer.
C.lower wage rate but hire a larger number of workers than will a purely competitive
employer.
D.higher wage rate and hire a larger number of workers than will a purely competitive
employer.
9)
Refer to the diagram for athletic shoes. If the current output of shoes is Q1, then:
A.society would consider additional units of shoes to be more valuable than alternative
uses of those resources.
B.society would consider additional units of shoes to be less valuable than alternative
uses of those resources.
C.society would experience a net loss by producing more shoes.
D.resources are being allocated efficiently to the production of shoes.
10) The field of economics that analyzes government decision making, politics, and
elections is called:
A.public finance.
B.public choice theory.
C.collective economics.
D.political economy.
11) Data on total water use in the United States since 1950 show that it has:
A.Continually increased
B.Continually decreased
C.Increased and then leveled off
D.Decreased and then leveled off
