1)
The movement from point A to point B on the graph shows a(n)
a.decrease in demand.
b.increase in demand.
c.decrease in quantity demanded.
d.increase in quantity demanded.
2) Assume that Nick and Faldo can switch between producing wheat and producing
cloth at a constant rate.
Assume that Nick and Faldo each has 2 hours available. If each person divides his time
equally between the production of wheat and cloth, then total production is
a.8 bushels of wheat and 15 yards of cloth.
b.14 bushels of wheat and 27 yards of cloth.
c.16 bushels of wheat and 30 yards of cloth.
d.28 bushels of wheat and 34 yards of cloth.
3) A possible outcome of the multilateral approach to free trade is that such an approach
can
a.win political support when a unilateral approach cannot.
b.result in more restricted trade than under a unilateral approach, when international
negotiations fail.
c.result in drastic reductions in tariffs for many countries.
d.All of the above are correct.
4) Relationship between Price and Restaurant Meals
The slope of the line containing points A and B is a. -1/2.
b.-2.
c.1/2.
5) What happens to the total surplus in a market when the government imposes a tax?
a.Total surplus increases by the amount of the tax.
b.Total surplus increases but by less than the amount of the tax.
c.Total surplus decreases.
d.Total surplus is unaffected by the tax.
6) Corporate profits distributed as dividends are
a.tax free.
b.taxed once.
c.taxed twice.
d.taxed three times.
7) The Environmental Protection Agency (EPA) requires that firms in a certain industry
adopt a particular technology to reduce the emission of pollutants. Is this requirement a
command- and-control policy or is it a market-based policy?
8)
Consider the production possibilities curve for a country that can produce sweaters,
apples (in bushels), or a combination of the two.
The opportunity cost of moving from point U to point R is
a.60 bushels of apples.
b.80 bushels of apples.
c.80 sweaters.
d.160 sweaters.
9) Which of the following areas of study typifies macroeconomics as opposed to
microeconomics?
a.the effects of rent control on the availability of housing in New York City
b.the economic impact of tornadoes on cities and towns in Oklahoma
c.how tariffs on shoes affects the shoe industry
d.the effect on the economy of changes in the nation’s unemployment rate
10) When a tax is imposed, the loss of consumer surplus and producer surplus as a
result of the tax exceeds the tax revenue collected by the government.
a.True
b.False
11) Figure 9-1
The figure illustrates the market for coffee in Guatemala.
When trade is allowed,
a.Guatemalan producers of coffee become better off and Guatemalan consumers of
coffee become worse off.
b.Guatemalan consumers of coffee become better off and Guatemalan producers of
coffee become worse off.
c.both Guatemalan producers and consumers of coffee become better off.
d.both Guatemalan producers and consumers of coffee become worse off.