1)
Refer to the above graph for a purely competitive firm operating at a loss in the short
run. Which area in the graph represents the portion of total costs that the firm can
recoup by continuing to produce rather than shutting down?
A.0beg
B.0cdg
C.acdf
D.abef
2) Which is correct?
A.Wealth is less equally distributed than income and therefore increases income
inequality.
B.Wealth is more equally distributed than income and therefore increases income
inequality.
C.Wealth is less equally distributed than income and therefore decreases income
inequality.
D.Wealth is more equally distributed than income and therefore decreases income
inequality.
3) The schedule shows various interest rates, the associated quantity demanded of
loanable funds, and the quantity supplied of loanable funds in billions of dollars at those
interest rates.
Refer to the above table and information. At an interest rate of 8 percent, there will be:
A.An excess supply of loanable funds of 440 billion
B.An excess supply of loanable funds of 140 billion
C.An excess demand for loanable funds of 140 billion
D.An excess demand for loanable funds of 294 billion
4) The primary motivation for economic immigration is:
A.the prospect of paying lower prices for goods and services.
B.to flee political oppression.
C.the opportunity to increase earnings and standard of living.
D.to reunite with family members.
5) The Food, Conservation, and Energy Act of 2008:
A.ended 60 years of U.S. price supports for American grain crops.
B.restored the U.S. price support system (for currently grown crops) that was ended in
the Freedom to Farm Act of 1996.
C.ended the “freedom to plant” approach of the Freedom to Farm Act of 1996 and
restored acreage allotments.
D.maintained the “freedom to plant” and “direct-payment” features of the Freedom to
Farm Act of 1996, and also provides countercyclical payments and marketing loans to
assist farmers.
6) Given: MRP = marginal revenue product; MRC = marginal resource cost;W = wage
rate. A firm that sells its product in a purely competitive market, but is a monopsonist in
its labor market, would hire the quantity of labor where:
A.MRP = MRC = W
B.MRP > MRC = W
C.MRP > MRC >W
D.MRP = MRC >W
7) Answer the question on the basis of this table showing the marginal benefit a
particular public project will provide to each of the three members of a community. No
vote trading is allowed.
If the tax cost of this proposed project is $600 per person, a majority vote will:
A.defeat this project and resources will be underallocated to it.
B.pass this project and resources will be allocated efficiently.
C.pass this project and resources will be overallocated to it.
D.pass this project and resources will be underallocated to it.
8)
Refer to the labor market diagram where D is the labor demand curve, S is the labor
supply curve, and MRC is the marginal resource (labor) cost curve. If this were a
monopsonistic labor market, the equilibrium wage rate and level of employment would
be:
A.$5 and 3 respectively.
B.$6 and 4 respectively.
C.$7 and 5 respectively.
D.$8 and 3 respectively.
9)
Refer to the diagram above. If box E represents government, box D the resource
market, and box B the product market, then flows (5) and (7) represent:
A.Goods and services
B.Government expenditures
C.Resources
D.Net taxes
10)
Who tends to lose from labor migration?
A.The firms in the country of origin
B.The migrant workers
C.The firms in the destination country
D.The workers in the country of origin who did not migrate
11) Answer the question on the basis of the given supply and demand data for wheat:
Refer to the data. Equilibrium price will be:
A.$4.
B.$3.
C.$2.
D.$1.
12)
Refer to the diagram. The initial demand for and supply of pesos are shown by D1 and
S1. The exchange rate will be:
A.M dollars for one peso.
B.B pesos for one dollar.
C.A dollars for one peso.
D.C dollars for one peso.
13) The use of money contributes to economic efficiency because:
A.governmental direction of the production and distribution of output can be avoided
by using money.
B.roundabout production could not occur without the availability of money.
C.it is necessary for the creation of capital goods.
D.it promotes specialization by overcoming the problems with barter.
14) Which of the following is considered to be an entrepreneur?
A.A self-employed person
B.An MBA graduate hired by a firm to be its CEO
C.A production-line worker
D.A customer of a firm
15) Data on education and earnings reveal:
A.negative age-earnings profiles for male workers.
B.no relationship between the two.
C.a positive relationship between the two.
D.a negative relationship between the two.
16) In pure competition, the demand for the product of a single firm is perfectly:
A.Elastic because the firm produces a unique product
B.Inelastic because the firm produces a unique product
C.Elastic because many other firms produce the same product
D.Inelastic because many other firms produce the same product