1) which of the following is not considered to fall under government’s function of
redistributing income?
a.transfer payments
b.taxation
c.antimonopoly laws
d.minimum wage laws
2) diminishing returns begin to occur with the hiring of the _________ unit of labor.
a.first
b.second
c.third
d.seventh
3) Checkable deposits are:
A.included in M1 but not in M2.
B.considered to be a near-money.
C.included in M1 and in M2.
D.also called time deposits.
4) an unusually large crop of coffee beans might:
a.increase the supply of coffee.
b.increase the price of coffee.
c.decrease the quantity of coffee consumed.
d.increase the price of tea.
5) The financing of a government deficit increases interest rates and, as a result, reduces
investment spending. This statement describes:
A.the supply-side effects of fiscal policy.
B.built-in stability.
C.the crowding-out effect.
D.the net export effect.
6) the following table applies to a purely competitive industry composed of 100
identical firms.
refer to the above table. if each of the 100 firms in the industry is maximizing its profit
and earning only a normal profit, each must have an average total cost of:
a.$2.
b.$3.
c.$4.
d.$5.
7) An increase in net exports will shift the AD curve to the:
A.left by a multiple of the change in investment.
B.left by the same amount as the change in investment.
C.right by the same amount as the change in investment.
D.right by a multiple of the change in investment.
8) Craft unions:
A.attempt to organize workers at all skill levels in a firm or industry.
B.have been declared illegal by Federal legislation.
C.only organize workers who have a particular skill.
D.attempt to increase the supply of their particular type of labor.
9) The following table shows government spending and tax revenue for a hypothetical
economy over a five-year period. All figures are in billions.
(a)In what years were there budget deficits and what were the amounts?
(b)In what year was there a budget surplus and what was the amount?
(c)What is the public debt in this economy over the five years?
(d)If the size of the economy (GDP) was $4000 billion, what would be the public debt
as a percentage of GDP?
10)
Refer to the above graph. An increase in the quantity of labor demanded is shown by
the:
A.shift from labor demand curve D1 to D2.
B.shift from labor demand curve D3 to D2.
C.move from a to b along labor demand curve D1.
D.move from b to a along labor demand curve D1.
11) a purely competitive firm’s short-run supply curve is:
a.the upward sloping portion of its marginal cost curve.
b.the upward sloping portion of its average variable cost curve.
c.its marginal cost curve above average variable cost.
d.its average total cost curve.
12) Marginal resource cost is:
A.the increase in total resource cost associated with the production of one more unit of
output.
B.the increase in total resource cost associated with the hire of one more unit of the
resource.
C.total resource cost divided by the number of inputs employed.
D.the change in total revenue associated with the employment of one more unit of the
resource.
13) U.S. firms collectively devote the largest portion of their total R&D spending to:
A.applied research (pursuing invention).
B.basic scientific research.
C.innovation and diffusion.
D.financing startup firms.
14) Why did the U.S. Congress establish the Federal Reserve as an independent
agency?
15) What are network effects? How do they contribute to economies of scale?
16) What is energy economics and what does it have to say about energy demand and
efficiency?
17) Explain the aspects of expansionary and contractionary fiscal policy. During which
phases of the business cycle would each be appropriate?
18) How effective have antitrust laws been in breaking up existing monopolies?
19) Differentiate between discretionary fiscal policy and nondiscretionary or built-in
stabilization policy.
20) What quantity should the purely competitive firm produce to maximize profits?
Analyze from a total revenue and total cost perspective and a marginal revenue and
marginal cost perspective.
21) (Consider This) What are some of the policies that have caused the natural rate of
unemployment (NRU) to be so high in Europe? Why hasnt anything been done to
change them?
22) Are economic growth and progress synonymous? How might they differ?