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1) The individual firm which hires labor under competitive conditions faces a labor
supply curve which:
A.Slopes downward to the right
B.Is perfectly elastic
C.Is perfectly inelastic
D.Is of unit elasticity
2) "For whom is a given mix of goods and services to be produced? How, in other
words, are the society's outputs to be distributed among its members?" In a market
economy, this question is resolved primarily in the:
A.Public sector through the mechanism of central planning
B.Business sector through the mechanism of advertising
C.Private sector through the earning and spending of income
D.Money market through borrowing and saving by households and businesses
3) Examples of precommitments, to deal with people's time inconsistency problems,
include the following except:
A.Automatic payroll deductions
B.Debit card accounts
C.Early withdrawal penalties
D.Salary smoothing
4) The table shows three short-run cost schedules for three plants of different sizes that
a firm might build in the long run.
Refer to the above table. Suppose that the three plant sizes shown are the only ones
possible, then there are economies of scale in producing:
A.Up to 10 units of output, and diseconomies of scale after that
B.Up to 20 units of output, and diseconomies of scale after that
C.Up to 30 units of output, and diseconomies of scale after that
D.Up to 40 units of output, and diseconomies of scale after that
5) Answer the question on the basis of the data given in the following production
possibilities table:
Refer to the table. A total output of 3 units of capital goods and 4 units of consumer
goods:
A.is irrelevant because the economy is capable of producing a larger total output.
B.will result in the maximum rate of growth available to this economy.
C.would involve an inefficient use of the economy's scarce resources.
D.is unobtainable in this economy.
6)
The diagram portrays:
A.a competitive firm that should shut down in the short run.
B.the equilibrium position of a competitive firm in the long run.
C.a competitive firm that is realizing an economic profit.
D.the loss-minimizing position of a competitive firm in the short run.
7) It takes a considerable amount of time to increase the production of pork. This
implies that:
A.a change in the demand for pork will not affect its price in the short run.
B.the short-run supply curve for pork is less elastic than the long-run supply curve for
pork.
C.an increase in the demand for pork will elicit a larger supply response in the short run
than in the long run.
D.the long-run supply curve for pork is less elastic than the short-run supply curve for
pork.
8) The Organization of Petroleum Exporting Countries (OPEC) is an international
cartel. If the cartel were to hire a consulting firm to monitor the production rates of
member countries, the economic reason for this monitoring is to:
A.Make sure that each member country is producing at an output level at which price
equals marginal cost
B.Make sure all the member countries produce at least their quotas so that there will be
no oil shortage
C.Detect those member countries which are depressing prices by producing more than
their assigned quotas
D.Make sure that the marginal revenue for the last barrel of oil sold by each member
country is less than its price
9) Entrepreneurs normally do all of the following except:
A.Take the initiative in combining other resources to produce goods or services
B.Make the basic, nonroutine policy decisions for their organization
C.Bear the risks involved in introducing new products or production innovations
D.Get hired as a top executive in established corporations
10)
Refer to the cost table above. Diminishing marginal returns begins to set in with the
production of which unit of output?
A.2
B.3
C.4
D.5
11) Assume a household would consume $100 worth of goods and services per week if
its weekly income were zero and would spend an additional $80 per week for each $100
of additional income. Letting C represent consumption and Y represent income, the
equation that summarizes this relationship is:
A.C = 80 + 100Y.
B.C = 100 + .8Y.
C.C = 100 + 80Y.
D.C = 80 + .1Y.
12) Which of the following gadgets is hoped to deliver a Third Industrial Revolution?
A.Tablet computers or iPads
B.GPS and iPhones
C.3-D printers
D.Drones or unmanned aerial vehicles
13) For each dollar paid in taxes, approximately how much do households in the top
quintile receive back in the form of government expenditures?
A.12 cents.
B.28 cents.
C.41 cents.
D.73 cents.
