1) a tax is progressive if the average tax rate rises as income increases.
2) Economists agree that corporations always shift the corporate income tax to
consumers by raising product prices.
3) the optimal level of immigration occurs where marginal benefit is at its greatest.
4) because of the recent productivity acceleration, the business cycle is dead.
5) the u.s. census bureau estimates that more than one million illegal immigrants enter
the united states each year.
6) france, germany, and italy are all members of the euro zone.
7) The term auction facility is the most frequently used monetary policy tool.
8) price floors and ceiling prices:
a.both cause shortages.
b.both cause surpluses.
c.cause the supply and demand curves to shift until equilibrium is established.
d.interfere with the rationing function of prices.
9) which of the following will not cause the demand for product k to change?
a.a change in the price of close-substitute product j
b.an increase in consumer incomes
c.a change in the price of k
d.a change in consumer tastes
10) Suppose the price level is fixed, the MPC is .5, and the GDP gap is a negative $80
billion. To achieve full-employment output (exactly), government should:
A.increase government expenditures by $80 billion.
B.reduce government expenditures by $40 billion.
C.reduce taxes by $40 billion.
D.reduce taxes by $80 billion.
11)
refer to the above diagram. the firm will shut down at any price less than:
a.p1
b.p2
c.p3
d.p4
12)
Which of the following statements is correct?
A.If the profit-maximizing rule is fulfilled, it necessarily follows that the
cost-minimization rule is being fulfilled.
B.The profit-maximizing and the cost-minimizing rules are such that the fulfilling of
one has no bearing on the fulfilling of the other.
C.If the profit-maximizing rule is fulfilled, the cost-minimization rule may or may not
be fulfilled.
D.If the cost-minimization rule is fulfilled, it necessarily follows that the
profit-maximizing rule is being fulfilled.
13) Describe the effect of the following events would on the aggregate demand (AD)
curve.
(a)A boost in research and development by computer companies produces more
powerful and efficient computers and equipment.
(b)Income falls in several countries that trade heavily with the U.S.
(c)Prices fall across several industries.
(d)After a budget surplus, Congress moves to cut personal income taxes.
14)
Refer to the above diagrams. Other things equal, an interest rate increase will:
A.shift curve A to the right and shift curve B upward.
B.shift curve A to the left and shift curve B downward.
C.leave curve A in place but shift curve B downward.
D. leave curve A in place but shift curve B upward.
15) when the price of oil declines significantly, the price of gasoline also declines. the
latter occurs because of a(n):
a.increase in the demand for gasoline.
b.decrease in the demand for gasoline.
c.increase in the supply of gasoline.
d.decrease in the supply of gasoline.
16) Upon buying a car having airbags, Indy begins to drive recklessly. This is an
example of the:
A.principal-agent problem.
B.adverse selection problem.
C.moral hazard problem.
D.free-rider problem.
17) A BTU is the amount of energy needed to:
A.raise the temperature of one pound of water by one degree Fahrenheit.
B.boil one gallon of water for one minute.
C.raise the air temperature one degree Celsius for one hour.
D.raise the temperature of one pint of water by one degree Celsius.
18) which of the following economic regions has experienced the least growth in real
gdp per capita since 1820?
a.africa
b.asia excluding japan
c.latin america
d.western europe
19) when total product is increasing at an increasing rate, marginal product is:
a.positive and increasing.
b.positive and decreasing.
c.constant.
d.negative.
20) assume a purely competitive, increasing-cost industry is in long-run equilibrium. if
a decline in demand occurs, firms will:
a.leave the industry, price will decrease, and quantity produced will increase.
b.enter the industry and price and quantity will both increase.
c.leave the industry and price and output will both increase.
d.leave the industry and price and output will both decline.
21)
refer to the above data. the marginal cost of the fifth unit of output is:
a.$3.
b.$62.
c.$80.
d.$78.
22) A lump-sum tax causes the after-tax consumption schedule:
A.and the before-tax consumption schedule to coincide.
B.to be steeper than the before-tax consumption schedule.
C.to be flatter than the before-tax consumption schedule.
D.to be parallel to the before-tax consumption schedule.
23) The following domestic supply and demand schedules for a product. Suppose that
the world price of the product is $1.
Refer to the above data. With a $1 dollar per unit tariff, price and total quantity sold will
be:
A.$3 and 7 units.
B.$5 and 2 units.
C.$2 and 7 units.
D.$2 and 11 units.
24) State at least one economic benefit to increased international trade.
25) What are two criticisms of the unemployment rate? How do these criticisms relate
to the overstating or understating of the unemployment rate?
26) How are monopolistically competitive industries identified with concentration
ratios?
27) What is the discount rate and how does changing it affect the money supply?
28) Do you agree or disagree with the statement that: A monopolist always charges the
highest possible price. Explain.