1)
Assumptions: These two graphs show two sectors of the labor market for a particular
kind of labor. Relevant product markets are competitive. The two labor demand curves
are identical and initially the quantities of labor employed in the two sectors are L1and
L’1and the wage rate in each sector is Wn.
Refer to the above diagrams and assumptions. The change in employment in sector 1 to
which a Wn to Wu union wage increase gives rise will cause output in that sector to:
A.decrease by A + B.
B.decrease by B + C + D.
C.decrease by C + D.
D.increase by A + B.
2) The XYZ Corporation’s collective bargaining agreement indicates that it may hire
either union or nonunion workers and that the latter are under no obligation to join the
union. This agreement embodies:
A.an open shop.
B.a closed shop.
C.a union shop.
D.an agency shop.
3)
refer to the above diagram for a nondiscriminating monopolist. demand is elastic:
a.in the q1q3 output range.
b.only for outputs greater than q4.
c.for all levels of output less than q2.
d.for all levels of output greater than q2.
4) (consider this) in terms of a reservoir analogy, the:
a.outflow below the dam is gross investment.
b.inflow from the river is the stock of capital.
c.level of water in the reservoir is the stock of capital.
d.level of water in the reservoir is net investment.
5) Use the figures in the table below to answer the following questions.
(a)What is the value of M1?
(b)What is the value of M2?
6) u.s. immigrants (legal and illegal) have:
a.higher prison rates and crime rates than the native-born population.
b.lower prison rates and crime rates than the native-born population.
c.lower prison rates, but illegal immigrants have higher crime rates than the native-born
population.
d.higher prison rates, but lower crime rates, than the native-born population.
7)
Refer to the above diagram. If the full-employment level of GDP is B and aggregate
expenditures are at AE1, the:
A.inflationary expenditure gap is BC.
B.recessionary expenditure gap is BC.
C.inflationary expenditure gap is zero.
D.inflationary expenditure gap is ei.
8) what do wages paid to blue-collar workers, interest paid on a bank loan, forgone
interest, and the purchase of component parts have in common?
a.none are either implicit or explicit costs.
b.all are opportunity costs.
c.all are implicit costs.
d.all are explicit costs.
9) Suppose a firm is hiring resources l and m under purely competitive conditions to
produce product Y that sells for $2 in a purely competitive market. The prices of l and
m are $10 and $4 respectively. In equilibrium the MPs of l and m, respectively, are:
A.1 and 1
B.2 and 5
C.10 and 4
D.5 and 2
10) the largest component of national income is:
a.compensation of employees.
b.rents.
c.interest.
d.corporate profits.
11)
Which aggregate expenditure schedule(s) AE in the above diagram for a private closed
economy represent the highest level of investment, assuming investment is the same at
each level of income and the level of consumption at zero income for each schedule?
A.AE4 only
B.AE2 and AE3
C.AE1 and AE4
D.AE3 and AE4
12) Other things equal, the monopsonistic employer will pay a:
A.lower wage rate and hire fewer workers than will a purely competitive employer.
B.higher wage rate but hire fewer workers than will a purely competitive employer.
C.lower wage rate but hire a larger number of workers than will a purely competitive
employer.
D.higher wage rate and hire a larger number of workers than will a purely competitive
employer.
13) The average tax rate required to service the public debt is roughly measured by:
A.the absolute size of the debt.
B.the debt as a fraction of the GDP.
C.interest on the debt as a percentage of the GDP.
D.the ratio of government spending to the GDP.
14) The following production possibilities data for Gamma and Sigma. All data are in
tons.
Gamma production possibilities:
Sigma production possibilities:
On the basis of the above information:
A.Gamma should export both tea and pots to Sigma.
B.Sigma should export tea to Gamma and Gamma should export pots to Sigma.
C.Gamma should export tea to Sigma and Sigma should export pots to Gamma.
D.Gamma should export tea to Sigma, but it will not be profitable for the two nations to
exchange pots.
15) the value added of a firm is the market value of:
a.a firm’s output plus the value of the inputs bought from others.
b.a firm’s output less the value of the inputs bought from others.
c.of the firm’s output.
d.of the firm’s inputs bought from others.
16)
Refer to the diagram above, assuming that the firm represented is operating on curve
TC0. If the user cost increases by $20 at the beginning of the year, the quantity
extracted in the first year will:
A.remain unchanged
B.decline by 250
C.decline by 500
D.decline by 1,000
17) suppose that when your income increases from $28,000 to $30,000 per year, your
purchases of x increase from 4 to 5 units because of that income increase. thus:
a.x is an inferior good.
b.x is a substitute good.
c.the income effect exceeds the substitution effect.
d.the demand for x is elastic with respect to income.