1)
Refer to the above graph. A 3-percent general sales tax would have a structure that is
illustrated by:
A.Curve A
B.Curve B
C.Curve C
D.None of the graphs
2) If the price of A is $12 and the price of B is $3, the budget line tells us that a
consumer in effect can trade:
A.12 units of A for 3 of B.
B.1 unit of A for 4 of B.
C.1 unit of A for 3 of B.
D.1 unit of B for 4 of A.
3) An effective price floor on wheat will:
A.force otherwise profitable farmers out of business.
B.result in a shortage of wheat.
C.result in a surplus of wheat.
D.clear the market for wheat.
4) In the 1982 AT&T antitrust case, the resolution was an out-of-court settlement
involving a:
A.Change in the business practices of AT&T
B.Cease-and-desist order
C.Breakup of AT&T into several smaller firms
D.Takeover of AT&T by another company
5) Matt observes that “there is a high correlation between educational attainment and
the level of income.” Jean concurs and adds that “high school graduates should all
proceed to college.”
A.Both Matt’s and Jean’s statements are positive
B.Both Matt’s and Jean’s statements are normative
C.Matt’s statement is normative while Jean’s statement is positive
D.Matt’s statement is positive while Jean’s statement is normative
6) Which of the following would represent a systematic error?
A.Eddie regularly overspends, but friends and family bail him out so he always ends up
with what he wants.
B.Ellen paid good money for a used car that is in constant need of repair.
C.Sparky determines that he has to reduce donut consumption to lose weight but always
ends up eating the ones provided in the break room at work.
D.Clark makes regular math errors at work, sometimes coming out with figures too
high, other times too low.
7)
Refer to the diagram. If price falls from P1 to P2, total revenue will become area(s):
A.B + D
B.C + D
C.A + C
D.C
8) One of the major causes of income inequality is differences in:
A.Unemployment benefits
B.Transportation
C.Education
D.Housing
9) The budget line shows:
A.the amount of product A that a consumer is willing to give up to obtain one more unit
of product B.
B.all possible combinations of two goods that can be purchased, given money income
and the prices of the goods.
C.all equilibrium points on an indifference map.
D.all possible combinations of two goods that yield the same level of utility to the
consumer.
10) The utility from a specific product is:
A.Determined by a consumer’s income
B.Determined by the price of the product
C.A measure of one’s preference or taste for it
D.Constant as one consumes more units of it
11) An increase in the excise tax on cigarettes raises the price of cigarettes by shifting
the:
A.demand curve for cigarettes rightward.
B.demand curve for cigarettes leftward.
C.supply curve for cigarettes rightward.
D.supply curve for cigarettes leftward.
12) Answer the question on the basis of the following data for the hypothetical nations
of Alpha and Beta. Qs is domestic quantity supplied and Qd is domestic quantity
demanded.
Refer to the given data. Alpha’s export supply is represented by:
A.
B.
C.
D.
13) Those who advocate the marginal productivity theory of income distribution argue
that:
A.Government policy should be used to redistribute income based on need
B.Family income should be based on a family’s demand for products
C.Resource markets will set incomes based on workers’ contributions to the output of
scarce goods and services
D.Monopoly and monopsony power do not affect resource payments of the overall
distribution of income