1) What activity traditionally receives the largest share of total business spending on
R&D (research and development) in the U.S.?
A.Invention
B.Development
C.Basic research
D.Applied research
2)
Between 2002 and 2011, legal immigration into the U.S. averaged about:
A.500,000 per year
B.1 million per year
C.1.5 million per year
D.2.5 million per year
3) Suppose Rita obtains 10 units of utility from the last dollar of income received by
her, and Joseph obtains 6 units of utility from the last dollar of his income. Assume both
Joseph and Rita have the same capacity to derive utility from income. Those who favor
an equal distribution of income would:
A.Advocate redistributing income from Joseph to Rita
B.Advocate redistributing income from Rita to Joseph
C.Be content with this distribution of income between Rita and Joseph
D.Argue that any redistribution of income between them would increase total utility
4)
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 S1 to S2?
A.Greater reliance on skilled nurses rather than physicians.
B.Higher insurance copayments and deductibles.
C.Higher physician fees.
D.Higher medical malpractice insurance premiums.
5) If the price of product Y is $25 and its marginal cost is $18:
A.Y is being produced with the least-cost combination of resources.
B.society will realize a net gain if less of Y is produced.
C.resources are being underallocated to Y.
D.resources are being overallocated to Y.
6) In a command system:
A.Self-interest motivates and commands each business firm’s decisions and actions
B.The head of each family decides what to do with the family’s resources
C.The government makes production and allocation decisions
D.Market traders command what outputs are produced and how they are allocated
7) Susie knows that too many sugary treats, while delicious when eaten, have long-term
adverse effects on weight and health. Based on this information, a neoclassic economist
would expect Susie to:
A.carefully weigh the short-term benefits against the long-term costs and make a
rational decision about how many treats to eat.
B.eat more sugary treats than is optimal, as she likely gives more weight to present
events and outcomes than to ones in the future.
C.give away most of her sugary treats in an effort to resist temptation.
D.determine her fair share of the sugary treats available, and only eat those.
8) After graduating from high school, Adam is thinking about going to college. The
college tuition is $15,000 a year. Instead of going to college, Adam could take a
full-time job that pays $25,000. What is Adam’s opportunity cost of attending college
for one year?
A.$10,000
B.$15,000
C.$25,000
D.$40,000
9) Economists have difficulty applying the scientific method because:
A.Economics has a short history
B.The scientific method does not really apply to economics
C.People are the focus of economics, and their behavior is highly predictable
D.Controlled laboratory experiments in economics are often not feasible
10) In a monopolistic market, the following results occur, except:
A.The monopolist will maximize profits by setting a price that’s higher than marginal
cost
B.The price will be higher than what would prevail in a competitive market
C.In monopoly pricing, income is in effect transferred from consumers to the
monopolist
D.The output level will be higher than in a competitive market
11) Marginal resource cost is:
A.The increase in variable costs resulting from producing one more unit of output
B.The increase in fixed costs resulting from producing one more unit of output
C.The same as the marginal cost of the product
D.The same as the resource price when a firm is acquiring the resource in a purely
competitive market
12) An otherwise unprofitable motel located on a largely abandoned roadway might be
able to stay open for several years by:
A.increasing its nightly room rates.
B.reducing or eliminating its annual maintenance expenses.
C.charging room rates that exceed marginal revenue.
D.eliminating its fixed costs, including its opportunity costs.
13) An increasing-cost industry is the result of:
A.higher resource prices that occur as the industry expands.
B.a change in the industry’s minimum efficient scale.
C.X-inefficiency.
D.the law of diminishing returns.
14)
Refer to the diagram, which shows demand and supply conditions in the competitive
market for product X. If supply is S1 and demand D0, then
A.at any price above 0G a shortage would occur.
B.0F represents a price that would result in a surplus of AC.
C.a surplus of GH would occur.
D.0F represents a price that would result in a shortage of AC.
15) For the list of products below explain which of the four different market structures
best describes the market.
(a)Tennis Shoes
(b)Wheat
(c)Cable Television
(d)Video Gaming Consoles
16) In which of the following sets of antitrust cases did the government gain
convictions?
A.The U.S. Steel case and the Microsoft case.
B.The Alcoa case and the Microsoft case.
C.The DuPont cellophane case and the AT&T case.
D.The U.S. Steel case and the Alcoa case.