1)
An increase in the mobility of labor across nations tends to decrease the world’s output of
goods and services.
2) If the real outputs per capita of a rich nation and a poor nation grow at the same
percentage rate, the absolute income gap between the two nations will shrink.
3) The incidence of poverty is very high among the elderly (65 years or older).
4) In the United States and parts of Western Europe, the amount of land covered by
forests is increasing.
5) For a monopolist maximum profits will occur when the gap between average revenue
(or price) and average cost is biggest.
6) A nation that imports more goods and services than it exports is necessarily realizing
an international balance of payments deficit.
7) Transfer payments are “exhaustive” in that they directly absorb resources, whereas
government purchases are “nonexhaustive”.
8) One consequence of the paradox of voting is that whoever sets the agenda of a vote
could practically predetermine the results of the vote.
9) The collective action problem is the reason why there are no lobbyists representing
the interest of general taxpayers or consumers in Washington, DC.
10) Advertising increases the costs of firms and could be manipulative, therefore it does
not really have a positive economic effect.
11) If the elasticity coefficient of supply is 0.7, supply is elastic.
12) Malthus’s theory states that living standards could only temporarily rise above
subsistence levels.
13) If the firm produces an output level below its break-even point, then the firm will
earn negative economic profits.
14) Mutual interdependence means that oligopolistic producers rely primarily on price
competition in determining their shares of the total market for their product.
15) The limited money income of consumers results in a so-called budget constraint.
16) Answer the question on the basis of the following five schedules, all of which
represent income tax schedules for an economy. All figures are in billions of dollars.
Which of the schedules represent(s) a proportional tax?
A.II and IV.
B.III and V.
C.IV only.
D.I only.
17) The basic role of the International Finance Corporation is to:
A.Make loans to governments in developing nations
B.Invest in private enterprises in developing nations
C.Finance exports from the United States to developing nations
D.Make loans to the World Bank which in turn makes loans to governments in
developing nations
18)
Refer to the figure. Suppose the graphs represent the demand for use of a local golf
course for which there is no significant competition (it has a local monopoly); P denotes
the price of a round of golf; Q is the quantity of rounds ‘sold” each day. If the left graph
represents the demand during weekdays and the right graph the weekend demand, this
profit-maximizing golf course will earn how much economic profit over the course of a
full seven-day week?
A.$4,200.
B.$3,700.
C.$3,400.
D.$2,700.
19) Pure or economic profit is:
A.the amount by which accounting profits exceed normal profits.
B.determined by subtracting explicit costs from total revenue.
C.the return required to retain entrepreneurial talent in some particular line of
production.
D.the return to any resource the supply of which is perfectly inelastic.
20) Long-run competitive equilibrium:
A.is realized only in constant-cost industries.
B.will never change once it is realized.
C.is not economically efficient.
D.results in zero economic profits.
21) If the tax on gasoline is increased, gas stations are most likely to pass most of this
increase to the consumer if the demand is:
A.Unitary elastic
B.Very inelastic
C.Slightly elastic
D.Perfectly elastic
22) The production possibilities curve shows:
A.the various combinations of two goods that can be produced when society employs
all of its scarce resources.
B.the minimum outputs of two goods that will sustain a society.
C.the various combinations of two goods that can be produced when some resources are
unemployed.
D.the ideal, but unattainable, combinations of two goods that would maximize
consumer satisfactions.
23) Compared to a purely competitive firm in long-run equilibrium, the monopolistic
competitor has a:
A.Lower price and lower output
B.Higher price and lower output
C.Higher price and higher output
D.Price and output that may be higher or lower
24) Relative to 1800, the living standard of the average person today in the United
States is about _____ times higher.
A.5
B.12
C.20
D.42
25)
In the destination country, who tends to lose from labor immigration?
A.The migrant workers
B.The labor unions
C.The consumers
D.The firms
26) Assume that the demand curve for product C is downsloping. If the price of C falls
from $2.00 to $1.75:
A.a smaller quantity of C will be demanded.
B.a larger quantity of C will be demanded.
C.the demand for C will increase.
D.the demand for C will decrease.
27) Answer the question on the basis of the following information:
Refer to the data. When two workers are employed:
A.total product is 20.
B.total product is 18.
C.average product is 10.
D.total product cannot be determined from the information given.
28)
On the basis of the information and assuming trade occurs between the three states, we
can expect:
A.Washington to exchange apples with Texas and receive money in return.
B.Washington to exchange apples with Michigan and receive money in return.
C.Texas to exchange lettuce with Michigan and receive autos in return.
D.Texas to trade lettuce directly for Washington apples.
29) The productivity table given below shows how many bushels of either wheat or rice
can be produced in India and Canada with 1 unit of input. To achieve gains from
specialization and trade:
A.India should export rice to Canada and import Canadian wheat
B.India should export wheat to Canada and import Canadian rice
C.Canada should produce both wheat and rice and not trade with India
D.India cannot offer any benefits to Canada from trading with her
30) Commercially-run forestry companies have the most profit incentive to harvest
trees from a forest:
A.Early in the forest growth cycle
B.In the middle of the forest growth cycle
C.Before the trees are fully mature
D.After the trees can no longer grow
31) Effective usury laws:
A.subsidize lenders.
B.penalize those who borrow at the below-market interest rate.
C.improve efficiency in investing.
D.keep some low-income people from obtaining credit and loans.
32) A caller to a radio talk show states that protesters against globalization are a
collection of “anarchist punks, nave college students, and trade union radicals.” This is
an example of:
A.the fallacy of composition.
B.the economic perspective.
C.loaded terminology.
D.marginal analysis.
33)
Refer to the diagram where D and S are the United States’ demand for and supply of
Swiss francs. At the equilibrium exchange rate, E, the United States’ balance of
payments is in equilibrium. Given a change in demand from D to D’, the United States
could maintain the dollar price of Swiss francs by:
A.shifting the S curve to the right through the use of domestic expansionary policies.
B.instituting exchange controls to ration Ed Swiss francs to U.S. importers who want
Ec francs.
C.using international monetary reserves to cover the Ec shortage of Swiss francs.
D.using international monetary reserves to cover the cd shortage of Swiss francs.
34)
Refer to the diagram. At the profit-maximizing output, total fixed cost is equal to:
A.0AHE.
B.0BGE.
C.0CFE.
D.BCFG.
35) The dictator game is a game in which two people interact anonymously. One of
them is designated the dictator. It is the dictators job to split a specified amount between
the participants. Discuss how the dictator behaves and how this relates to the
neoclassical assumption of purely self-interested individuals.
36) If a nations balance of payments is always in balance, why isnt it also always in
equilibrium?
37) Why are the prices received by farmers less stable than the prices paid by farmers?
38) Explain: An effectively regulated natural monopoly will have trouble attracting
capital to sustain and modernize its facilities.
39) Answer the question on the basis of the following information for a pure
monopolist:
How many units would the given profit-maximizing nondiscriminating monopolist
produce?
A.1
B.2
C.3
D.4
40) Describe how the income shares of national income are distributed to labor and to
capitalists. How has this distribution changed since 1900?
41) What effect does the increase of the price of corn have on the cost curves of a firm
producing items like corn-based cereal or tortillas?
42) How do most immigrants gain their legal status? What are the major categories of
legal admission into the United States?
43) Explain and evaluate this statement: No tax on income can be a just tax unless it
leaves individuals in the same relative condition in which it found them.