1) One reason for the year-to-year instability of agricultural product demand is the:
A.High price-elasticity for agricultural products
B.Fluctuations in weather patterns
C.Declining role of technological progress in agriculture
D.Greater dependence on exports to foreign markets
2)
Which of the diagrams illustrate(s) the effect of a decline in the price of irrigation
equipment on the market for corn?
A.B only.
B.C only.
C.B and C.
D.D only.
3)
Refer to the profits-payoff table for a duopoly. If initially firms X and Y are charging $5
and $4 respectively:
A.the two firms will be maximizing joint profits.
B.Y will find it advantageous to raise its price if it was certain X would not alter its
price.
C.X will find it advantageous to raise its price if it was certain Y would not alter its
price.
D.both firms would find it advantageous to collude to raise their prices by $1 each.
4) A firm sells a product in a purely competitive market. The marginal cost of the
product at the current output is $4.00 and the market price is $4.50. What should the
firm do?
A.Shut down if the minimum possible average variable cost is below $4.50
B.Decrease output if the minimum possible average variable cost is below $4.50
C.Increase output if the minimum possible average variable cost is below $4.50
D.Decrease output if the minimum possible average variable cost is above $4.50
5) The difference between the actual price that a producer receives and the minimum
acceptable price the producer is willing to accept is called the producer:
A.Revenues
B.Surplus
C.Costs
D.Utility
6) If the price of capital declines, the consequent output effect would be:
A.greater, the more elastic the demand for the product.
B.greater, the less elastic the demand for the product.
C.negative.
D.of consequence only if capital and labor are used in fixed proportions.
7) Capital accumulation in a market system results from:
A.Increased purchases of consumers or households
B.The “invisible hand” that guides the market
C.Dollar votes by entrepreneurs and business owners
D.Consumer sovereignty that prevails in the market
8) Which of the following best explains the significant increases in the equilibrium
prices for higher education in the United States since the 1980s?
A.The demand for higher education is highly price inelastic and the supply has
decreased substantially.
B.The demand for higher education is highly price elastic and the supply has decreased
substantially.
C.The supply of higher education is highly price inelastic and demand has increased
substantially.
D.The supply of higher education is highly price elastic and demand has increased
substantially.
9) Suppose that you own a toy store and want to buy 100 talking robots. Your supplier
will sell you the robots if you also agree to buy 200 dolls. This is an illegal practice
called:
A.Monopolistic
B.A tying contract
C.A cartel
D.Discriminatory
10) A firm pays the same wage rate to all its workers. At present, 10 workers are
employed at $50 per day. Wages are subsequently raised to $55 per day in order to
attract an extra worker. Thus the marginal labor cost per day is:
A.$5
B.$10
C.$55
D.$105
11) Answer the question on the basis of the following information:
Refer to the information. Average fixed cost is:
A.
B.
C.
D.
12)
Refer to the diagram. This firm is selling its product in a(n):
A.purely competitive market.
B.oligopoly market.
C.monopolistically competitive market.
D.monopolistic market.
13) The price elasticity of demand for a textbook is estimated to be 1 no matter what the
price or quantity demanded. In this case:
A.A 10 percent increase in price will result in a 10 percent increase in total revenues
B.A 10 percent increase in price will result in a 10 percent decrease in the quantity
demanded
C.A 10 percent increase in price will result in a 10 percent decrease in total revenues
D.A 10 percent increase in price will result in a 10 percent increase in quantity
demanded
14) Answer the question on the basis of the following 2008 balance of payments
statement for Transylvania. All figures are in billions of dollars.
Refer to the given data. In 2008, Transylvania imported more products than it exported.