1) What does “there is no such thing as a free lunch” mean in economics?
A.That scarce resources are used up to provide “freebies” and giveaways
B.That sometimes people may take friends out to lunch and pay for them
C.That all items in the lunch menu have specific prices
D.That products only have value because people are willing to pay for them
2) Monetary policy refers to the government’s attempt at smoothing business cycles
through the use of changes in:
A.Tax rates
B.Interest rates
C.Wage rates
D.Government spending
3) Which of the following Gini ratios indicates the highest degree of income inequality?
A.0.78
B.0.65
C.0.29
D.0.42
4) If the wage rate increases:
A.a purely competitive producer will hire less labor, but an imperfectly competitive
producer will not.
B.an imperfectly competitive producer will hire less labor, but a purely competitive
producer will not.
C.a purely competitive producer and an imperfectly competitive producer will both hire
less labor.
D.an imperfectly competitive producer may find it profitable to hire either more or less
labor.
5) The percentage of the U.S. federal budget spent on R&D has:
A.risen significantly over the past 50 years.
B.remained stable over the past 50 years.
C.declined substantially over the past 50 years.
D.risen dramatically in the past few years after a steady decline starting in 1980.
6) Which would be a good example of a successful introduction of a new product?
A.McDonald’s McLean burger
B.Microsoft Windows
C.Kodak disc cameras
D.New Coke by Coca-Cola
7) The primary focus of natural resource economics is to develop policies for harvesting
or extracting natural resources that:
A.Minimize the net costs
B.Maximize the net benefits
C.Minimize the negative externalities
D.Maximize the positive externalities
8) Oftentimes, the socially optimal quantity for a product that imposes external costs on
the society is not zero, but something greater than zero. This is because completely
eliminating the externality would involve:
A.A much greater marginal benefit than marginal cost
B.A much greater marginal cost than marginal benefit
C.Having shortages in the market
D.Having surpluses in the market
9) According to the Council of Economic Advisers:
A.skilled immigrants regularly displace domestic-born workers.
B.skilled immigrants pay more in taxes than they receive in services from the
government.
C.immigration is a net drain on the U.S. economy and should be more tightly restricted.
D.children of immigrants frequently lack the skills to perform well academically,
particularly in math and science.
10) The money income of households consists of all the following, except:
A.Wages
B.Profits
C.Interest
D.Revenues
11)
Refer to the figure in which S is the before-tax supply curve and St is the supply curve
after an excise tax is imposed. The total tax collection from this excise tax will be area:
A.ABCE + ECF.
B.ABCE.
C.ECF.
D.0BCG.
12)
Refer to the figure. A weaker economy, characterized by higher unemployment rates,
will:
A.reduce MB and increase MC, lowering the optimal quantity of immigrants.
B.increase MB and reduce MC, raising the optimal quantity of immigrants.
C.increase both MB and MC, and the effect on the optimal quantity is uncertain.
D.reduce both MB and MC, and the effect on the optimal quantity is uncertain.
13) The average life expectancy of a U.S. business is approximately:
A.2 years.
B.5.5 years.
C.10.2 years.
D.22 years.