1) If taxes are $2,000 when income is $15,000 and they are $3,000 when income is
$19,000, then the marginal tax rate is:
A.20 percent
B.25 percent
C.30 percent
D.40 percent
2) Which statement is correct?
A.The percentage change in the nominal wage plus the percentage change in the price
level equals the percentage change in the real wage
B.The percentage change in the real wage minus the percentage change in the price
level equals the percentage change in the nominal wage
C.The percentage change in the price level minus the percentage change in the nominal
wage equals the percentage change in the real wage
D.The percentage change in the nominal wage minus the percentage change in the price
level equals the percentage change in real wage
3) The misallocation of resources associated with price supports:
A.affects both domestic and foreign economies.
B.affects only foreign economies.
C.affects only the domestic economy.
D.is fully offset by reductions in food prices.
4)
Refer to the above diagram illustrating the market for corn. If the price in this market is
fixed at $2 per bushel, then:
A.Sellers will not be able to sell all the corn that they intended to sell
B.Sellers will quickly run out of corn that they bring to market
C.Buyers will find too much corn in the market
D.Buyers will be able to get as much corn as they wish to buy
5) Answer the question using the following table. Figures are in billions of dollars.
Refer to the above table. If the government passes a usury law that sets the interest rate
2 percent below the market equilibrium, the interest rate will be:
A.6 percent
B.8 percent
C.10 percent
D.12 percent
6) The Occupational Safety and Health Administration is mainly involved in:
A.Industrial regulation
B.Social regulation
C.Antitrust regulation
D.Public utility regulation
7)
Refer to the above graph of the market for low-skilled labor. Sd is the supply of domestic
resident workers, and St is the total supply of labor including undocumented workers.
Suppose the government cuts off the flow of illegal immigrants to this market. By how
much will the employment of legal residents be increased?
A.15M
B.120M
C.135M
D.22M
8) When ordinarily-neat people tend to litter in areas that are covered with graffiti, they
illustrate the:
A.Planning fallacy
B.Framing effect
C.Confirmation bias
D.Availability heuristic
9) The law of diminishing returns in a manufacturing plant of a fixed capacity implies
that, eventually, employing one:
A.More worker will increase the average amount of output per worker5
B.More worker will decrease the average amount of output per worker
C.Less worker will decrease the average amount of output per worker
D.Less worker will not affect the average amount of output per worker
10) The idea that freely floating exchange rates equate the buying power of national
currencies is called:
A.the equation of exchange.
B.the balance of payments.
C.Say’s Law.
D.the purchasing power parity theory.
11) If price is above the equilibrium level, competition among sellers to reduce the
resulting:
A.surplus will increase quantity demanded and decrease quantity supplied.
B.shortage will decrease quantity demanded and increase quantity supplied.
C.surplus will decrease quantity demanded and increase quantity supplied.
D.shortage will increase quantity demanded and decrease quantity supplied.