1) (last word) the fallacy of composition is essentially the error of:
a.omitting relevant variables in constructing a model.
b.reasoning from the general to the particular.
c.confusing cause and effect in economic relationships.
d.generalizing from the particular to the general.
2)
the above diagram suggests that:
a.when marginal product is zero, total product is at a minimum.
b.when marginal product lies above average product, average product is rising.
c.when marginal product lies below average product, average product is rising.
d.when total product is at a maximum, so is marginal product and average product.
3) According to new classical economists, the:
A.short-run demand for labor curve is vertical.
B.short-run aggregate demand curve is vertical.
C.long-run aggregate supply curve is horizontal.
D.long-run aggregate supply curve is vertical.
4) the following is cost information for the creamy crisp donut company:
entrepreneur’s potential earnings as a salaried worker = $50,000
annual lease on building = $22,000
annual revenue from operations = $380,000
payments to workers = $120,000
utilities (electricity, water, disposal) costs = $8,000
value of entrepreneur’s talent in the next best entrepreneurial activity = $80,000
entrepreneur’s forgone interest on personal funds used to finance the business = $6,000
refer to the above data. creamy crisp’s accounting profit is:
a.$150,000.
b.$380,000.
c.$230,000.
d.$294,000.
5) Why have commodity prices fallen over the past 150 years?
A.The demand for productive resources has fallen faster than the supply of those
resources.
B.The demand for productive resources has grown faster than the supply of those
resources.
C.The supply of productive resources has increased, while the demand has fallen.
D.The supply of productive resources has grown faster than the demand for those
resources.
6) if the demand for steak (a normal good) shifts to the left, the most likely reason is
that:
a.consumer incomes have fallen.
b.cattle production has declined.
c.the price of steak has risen.
d.the price of cattle feed has gone up.
7) In a labor dispute in which the existing contract has expired, a:
A.firm can legally lock up unruly workers.
B.firm can legally lock out union workers.
C.union can legally restrict customer access to the firm.
D.union can legally restrict physical access by management to the firm.
8)
refer to the above graph. which of the following schedules correctly reflects ‘supply”?
a.choice a
b.choice b
c.choice c
d.choice d
9) Entry fees at national parks and monuments are an example of:
A.the ability-to-pay principle of taxation.
B.the benefits-received principle of taxation.
C.government bureaucracy and inefficiency.
D.the principle of limited and bundled choice.
10) 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.
11) Which one of the following is true about the U.S. Federal Reserve System?
A.The head of the U.S. Treasury also chairs the Federal Reserve Board.
B.There are 10 regional Federal Reserve Banks.
C.There are 14 members of the Federal Reserve Board.
D. The Federal Open Market Committee (FOMC) has more members than does the
Federal Reserve Board of Governors.
12) The optimal amount of social regulation occurs where the marginal benefit of such
regulation:
A.equals the marginal cost.
B.exceeds the marginal cost by the greatest amount.
C.is zero.
D.is at its maximum.