1) In 2001, a U.S. court of appeals tossed out an earlier U.S. district court order that
Microsoft:
A.license Windows for sale by competitors.
B.be split into two competing firms.
C.divest itself of its Word and PowerPoint software programs.
D.end its proposed acquisition of Sun Microsystems.
2) Josh will receive a salary of $300,000 next year. According to prospect theory:
A.Josh will be happy with that amount regardless of what he has made in the past.
B.Josh will only be happy with that salary if everyone else around him makes less than
he does.
C.Josh will only be happy with that salary if his cost of living has not increased.
D.Josh’s satisfaction with that salary depends on how much he made in the past.
3) The scientific method is:
A.not applicable to economics because economics deals with human beings.
B.also known as the economic perspective.
C.analysis that moves from broad generalizations called laws to theories and then to
hypotheses.
D.used by economists and other social scientists, as well as by physical scientists and
life scientists, to formulate and test hypotheses.
4) If there is a shortage of product X, and the price is free to change:
A.fewer resources will be allocated to the production of this good.
B.the price of the product will rise.
C.the price of the product will decline.
D.the supply curve will shift to the left and the demand curve to the right, eliminating
the shortage.
5) 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. Assuming that Alpha and Beta are the only two nations in the
world, the equilibrium world price of steel must be between:
A.$5 and $4.
B.$4 and $3.
C.$3 and $2.
D.$2 and $1.
6) The government’s ability to coerce can enhance economic efficiency by:
A.eliminating income inequality.
B.correcting market failures.
C.preventing resources from going to their most valued uses.
D.restraining self-interest.
7) Which of the following nations has implemented policies that pay women to have
additional children?
A.Italy.
B.United States.
C.China.
D.All of these nations.
8)
The graph above depicts long-run supply for:
A.A constant-cost industry
B.A decreasing-cost industry
C.An increasing-cost industry
D.None of these
9) The price elasticity of demand is generally:
A.negative, but the minus sign is ignored.
B.positive, but the plus sign is ignored.
C.positive for normal goods and negative for inferior goods.
D.positive because price and quantity demanded are inversely related.
10)
Which of the diagrams correctly portrays the demand (D) and marginal revenue (MR)
curves of a pure monopolist that is able to price discriminate by charging each customer
his or her maximum willingness to pay?
A.A.
B.B.
C.C.
D.D.
11) The financing of health care through insurance has:
A.Decreased absolute total expenditures on health care
B.Resulted in consumers directly paying less than the full price of health care
C.Increased the marginal utility of health care services
D.Made no change in health care consumption
12) The basic tax rate on taxable corporate income is:
A.15 percent.
B.22 percent.
C.35 percent.
D.52 percent.
13) Considering the price-elasticity of demand for wheat, we would expect that if the
supply of wheat increases, other factors constant, then wheat farmers’ total revenues
would:
A.Increase because the demand is price-inelastic
B.Decrease because the demand is price-inelastic
C.Increase because the demand is price-elastic
D.Decrease because the demand is price-elastic
14) Sue fishes for cod at a cost of $2 per ton, while Dave fishes at a cost of $4 per ton.
Both have one 1000 ITQ and the current market price is $5 per ton. If Dave sold his
ITQ to Sue for $2000, he and Sue would:
A.Make the sale because they’re both better off
B.Not make the sale because Sue is better off and Dave is not
C.Not make the sale because Dave is better of and Sue is not
D.Not make the sale because neither is better off
15)
Refer to the diagram. An improvement in technology will:
A.shift the production possibilities curve from PP1 to PP2.
B.shift the production possibilities curve from PP2 to PP1.
C.move the economy from A to C along PP1.
D.move the economy from A, B, or C on PP1 to D.
16)
In which of the given market situations will the largest portion of an excise tax of a
specified amount per unit of output be borne by producers?
A.4
B.3
C.1
D.2
17) A profit-maximizing firm should shut down in the short run if the average revenue it
receives is less than:
A.Average variable cost
B.Average total cost
C.Average fixed cost
D.Marginal cost
18) When a firm is maximizing profit, it will necessarily be:
A.maximizing profit per unit of output.
B.maximizing the difference between total revenue and total cost.
C.minimizing total cost.
D.maximizing total revenue.
19) For an increase in demand, the price effect is smallest and the quantity effect is
largest:
A.when supply is least elastic.
B.in the long run.
C.in the short run.
D.in the immediate market period.
20) A firm reaches a break-even point (normal profit position) where:
A.marginal revenue cuts the horizontal axis.
B.marginal cost intersects the average variable cost curve.
C.total revenue equals total variable cost.
D.total revenue and total cost are equal.