1) The Arrow impossibility theorem shows that
a.democracy should be abandoned as a form of government.
b.it is impossible to improve upon democratic voting methods as a mechanism for
social choice.
c.all voting systems are flawed as a mechanism for social choice.
d.the median voter’s preferences will always win in a twoway vote.
2) Which of the following statements about comparative advantage is not true?
a.Comparative advantage is determined by which person or group of persons can
produce a given quantity of a good using the fewest resources.
b.The principle of comparative advantage applies to countries as well as to individuals.
c.Economists use the principle of comparative advantage to emphasize the potential
benefits of free trade.
d.A country may have a comparative advantage in producing a good, even though it
lacks an absolute advantage in producing that good.
3) In 2011, the poverty rate in the United States was 15 percent. This means that 15
percent
a.of the population had a total family income that fell below the poverty line.
b.of the population had a total family income that was above the poverty line.
c.of the population had a total family income below $10,000.
d.of the population had a total family income above $50,000.
4) The slope of the curve between points A
and B is
a.-5
b.-1/5
c.1/5
d.5
5) With a lump-sum tax,the average tax rate for high income taxpayers will be
a.the same as the average tax rate for low income taxpayers.
b.lower than the average tax rate for low income taxpayers.
c.higher than the average tax rate for high income taxpayers.
d.Any of the above could be true under a regressive tax system.
6) What will happen to the equilibrium price and quantity of new cars if the price of
gasoline rises, the price of steel rises, public transportation becomes cheaper and more
comfortable, and auto-workers negotiate higher wages?
a.Price will fall, and the effect on quantity is ambiguous.
b.Price will rise, and the effect on quantity is ambiguous.
c.Quantity will fall, and the effect on price is ambiguous.
d.Quantity will rise, and the effect on price is ambiguous.
7) Figure 15-6
What price will the monopolist charge?
a.A
b.C
c.K
d.L
8) Bintu’s Production Possibilities FrontierJuba’s Production Possibilities Frontier
If Bintu
must work 2 hours to make each cup, then her production possibilities frontier is based
on how many hours of work?
a.2 hours
b.4 hours
c.8 hours
d.16 hours
9) Several related measures of cost can be derived from a firm’s total cost.
a.True
b.False
10) When economists make
a.positive statements, they are speaking not as policy advisers but as scientists.
b.positive statements, they are speaking not as scientists but as forecasters.
c.normative statements, they are speaking not as policy advisers but as scientists.
d.normative statements, they are speaking not as policy advisers but as model-builders.
11) Among arguments for and against advertising, both sides agree that advertising
leads to
a.higher prices and less competitive markets.
b.higher prices and more competitive markets.
c.lower prices and more competitive markets.
d.None of the above is correct. The debate fails to resolve the question of advertising’s
effect on prices and competition.
12) If Christopher earns $80,000 in taxable income and pays $20,000 in taxes, his
average tax rate is 20 percent.
a.True
b.False