1) the following information for a pure monopolist:
if the above profit-maximizing monopolist is able to price discriminate, charging each
customer the price associated with each given level of output, how many units will the
firm produce?
a.2
b.3
c.4
d.5
2) Suppose that government imposes a specific excise tax on product X of $2 per unit
and that the price elasticity of supply of X is unitary (coefficient = 1). If the incidence
of the tax is such that the consumers of X pay $1.85 of the tax and the consumers pay
$.15, we can conclude that the:
A.supply of X is highly inelastic.
B.supply of X is highly elastic.
C.demand for X is highly inelastic.
D.demand for X is highly elastic.
3) use the following table for a hypothetical single-product economy.
refer to the above data. nominal gdp in year 3 is:
a.$100.
b.$450.
c.$225.
d.$150.
4) The following balance sheet for the ABC National Bank in answering the next
question(s). Assume the required reserve ratio is 20 percent.
Refer to the above data. If the original balance sheet was for the commercial banking
system, rather than a single bank, loans and checkable deposits could have been
expanded by a maximum of:
A.$8,000.
B.$15,000.
C.$48,000.
D.$25,000.
5) a major implication of asymmetric information is that:
a.health care suppliers may reduce the supply of health care.
b.health care suppliers may increase the demand for health care.
c.collusion between health care suppliers and purchasers may accelerate the rise in
costs.
d.resources may be underallocated to the health care industry.
6)
Refer to the above data. If the market wage rate is $8, this firm will employ:
A.2 workers.
B.3 workers.
C.4 workers.
D.5 workers.
7) which of the following is a positive statement?
a.the humidity is too high today.
b.it is too hot to jog today.
c.the temperature is 92 degrees today.
d.summer evenings are nice when it cools off.
8) Broadly defined, technological advance:
A.can occur in the short run, long run, or very long run.
B.comprises new and improved goods and services and new and improved ways of
producing or distributing them.
C.includes invention, but not innovation or diffusion.
D.includes product innovation, but not process innovation.
9) which of the following is an exhaustive governmental outlay?
a.a federal $5,000 subsidy check to an illinois farmer
b.a temporary assistance to needy families payment made by the state of new york
c.a nasa payment to boeing corporation for space hardware
d.a federal old age insurance payment to a retired coal miner
10) the growth of gdp may understate changes in the economy’s economic well-being
over time if the:
a.distribution of income becomes increasingly unequal.
b.quality of products and services improves.
c.environment deteriorates because of pollution.
d.amount of leisure decreases.
11) The ABC Company can hire either union or nonunion workers. But any nonunion
workers who are hired must join the union in thirty days or forfeit their jobs. The ABC
Company has a(n):
A.preferential hiring agreement.
B.union shop.
C.closed shop.
D.open shop.
12) Sellers will opt out of markets in which:
A.there are significant negative externalities.
B.standardized products exist.
C.there are only foreign buyers.
D.information about buyers is inadequate, and some buyers can impose high costs on
the sellers.
13) Funds lent to startup firms in return for shares of the profit if the firms succeed are
called:
A.retained earnings.
B.time deposits.
C.venture capital.
D.transfer payments.
14) For the past 150 years, the:
A.supply and demand for productive resources have grown at the same rate.
B.supply of productive resources has grown faster than the demand for those resources.
C.demand for productive resources has grown faster than the supply of those resources.
D.supply of productive resources has increased, while the demand has fallen.
15) suppose that corn prices rise significantly. if farmers expect the price of corn to
continue rising relative to other crops, then we would expect:
a.the supply of ethanol, a corn-based product, to increase.
b.consumer demand for wheat to fall.
c.the supply to increase as farmers plant more corn.
d.the supply to fall as farmers plant more of other crops.
16) Monetarists believe the private economy is inherently:
A.unstable and the public sector should be small.
B.unstable and the public sector should be large.
C.stable, but that the public sector should be large.
D.stable and that the government sector should be small.
17)
Refer to the above diagram pertaining to two nations and a specific product. The
equilibrium level of exports and imports occurs at:
A.H, where GB and FC intersect
B.J, where the vertical distance between A and B just equals the vertical distance
between C and D
C.world price level F
D.world price level G
18) A negative externality or spillover cost occurs when:
A.firms fail to achieve allocative efficiency.
B.firms fail to achieve productive efficiency.
C.price exceeds marginal cost.
D.the total cost of producing a good exceeds the costs borne by the producer.
19) an unregulated pure monopolist will maximize profits by producing that output at
which:
a.p = mc.
b.p = atc.
c.mr = mc.
d.mc = ac.
20) if the production possibilities curve were a straight downsloping line, this would
suggest that:
a.resources are perfectly shiftable between the production of these two goods.
b.it is possible to produce more of both products.
c.both products are equally capable of satisfying consumer wants.
d.the two products have identical prices.
21) Explain the concept of statistical discrimination and give an example of it. How can
it lead to discrimination even in the absence of prejudice?
22) Explain the economic rationale for Henry Georges proposal for a single tax on land.
23) Provide three reasons why Mexico generally opposes stronger border enforcement
by the United States.
24) What is the main cause of the uneven distribution of economic growth seen around
the world?
25) Why is there a need for an aggregate demand and aggregate supply model of the
economy? Why cant the supply and demand model for a single product explain
developments in the economy?
26) If nominal GDP is $848 billion, and velocity of money is 4, how much is the money
supply? If the GDP price index is 200, what is real GDP here?
27) Is saying that there is growing income inequality just another way of saying that the
rich are getting richer, and the poor are getting poorer? Explain your answer.