1)
Refer to the above graph for a purely competitive firm. When the firm is in equilibrium
in the short run, its average fixed cost is:
A.EH
B.DE
C.DH
D.DB
2) If you sum the squares of the market shares of each firm in an industry (as measured
by percent of industry sales), you are calculating the:
A.four-firm concentration ratio.
B.Herfindahl index.
C.degree of collusion.
D.Lerner index.
3) The table below shows the quantity of gold bars (Qb) in thousands, the extraction
cost for each thousand bars (in millions of dollars), and the user cost of each thousand
bars (in millions of dollars) facing the OZ Mining Company this year.
Refer to the data. If the current price of a bar of gold is $25,000, how many bars (in
thousands) should OZ extract and sell this year in order to maximize profits?
A.1
B.2
C.3
D.4
4) Innovation lagged in the centrally planned economies because:
A.there was too much domestic business competition.
B.there was too much competition from foreign firms.
C.enterprises resisted innovation in fear that their production targets would be raised.
D.exports had to equal imports for the plan to work.
5) Which of the following would call for outpayments from the United States?
A.The United States exports computer software.
B.The United States purchases assets abroad.
C.Foreigners purchase assets in the United States.
D.Foreign tourists spend money in the United States.
6) Which of the following would contribute to a U.S. balance of payments deficit?
A.Kawasaki builds a motorcycle manufacturing plant in Kansas City.
B.U.S. tourists travel in large numbers to Europe.
C.A wealthy Mexican citizen builds a mansion in Beverly Hills.
D.Zaire pays interest on its debt to the United States.
7) The location of the product supply curve depends on the:
A.production technology.
B.number of buyers in the market.
C.tastes of buyers.
D.location of the demand curve.
8) To curb the problem of voters wanting immediate benefits and deferred costs, many
state governments in the United States have:
A.made unfunded liabilities illegal.
B.resorted to greater use of monetary policy.
C.passed laws requiring balanced budgets.
D.stopped using fiscal policy.
9) If a U.S. importer can purchase 10,000 British pounds for $20,000, the rate of
exchange is:
A.$1 = 2 British pounds in the United States.
B.$2 = 1 British pound in the United States.
C.$1 = 2 British pounds in Great Britain.
D.$.5 = 1 British pound in Great Britain.
10)
Refer to the above table. What percentage should be reported in blank C of column 3?
A.6
B.11
C.35
D.51
11) In monopolistic competition, a firm has a limited degree of “price-making” ability.
This means that the firm will:
A.Always earn an economic profit
B.Set price equal to marginal cost
C.Set price above marginal cost
D.Produce at minimum average total cost
12)
Refer to the figure that shows the market for U.S. health care. Other things equal, which
of the following would shift the supply curve for medical care from S2 to S1?
A.An aging population.
B.Significant cost-increasing medical technology.
C.Expansion of the Medicare program to include prescription drugs.
D.Lower medical malpractice insurance premiums.
13) Answer the question on the basis of the following data confronting a firm:
Refer to the data. Assuming total fixed costs equal to zero, the firm’s:
A.economic profit is $12.
B.economic profit is $16.
C.loss is $14.
D.economic profit is $3.
14) The U.S. Federal expenditures for “pensions and income security” is dominated by:
A.Housing subsidies
B.Unemployment benefits
C.Food stamps
D.Social security payments
15)
Refer to the above table. If a technological advance lowers production costs such that
the quantity supplied increases by 60 units of this product at each price, the new
equilibrium price would be:
A.$11
B.$12
C.$13
D.$14
16) The view that the antitrust laws should be enforced relatively leniently because of
the tendency for monopoly power to erode over time is known as the:
A.structuralist view of antitrust.
B.behavioralist view of antitrust.
C.laissez-faire perspective on antitrust.
D.active antitrust perspective.
17) A point or combination that is on the production possibilities curve is:
A.Attainable and resources are fully employed
B.Attainable, but some resources are unemployed
C.Unattainable, but some resources are unemployed
D.Attainable only if we get additional resources
18) Other things equal, immigration has what effects on the destination nation?
A.Reduced average wage rate, increased domestic output, increased business income,
and lower total wage income of native-born workers.
B.Reduced average wage rate, increased domestic output, increased business income,
and greater total wage income of native-born workers.
C.Increased average wage rate, increased domestic output, increased business income,
and greater total wage income of native-born workers.
D.Increased average wage rate, reduced domestic output, reduced business income, and
lower total wage income of native-born workers.
19) U.S. imports:
A.Increase the foreign demand for foreign currencies
B.Increase the domestic demand for foreign currencies
C.Decrease the foreign supply of foreign currencies
D.Increase the domestic supply of foreign currencies