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1) Assume that a firm's interest-rate cost-of-funds curve for R&D is perfectly elastic.
Which of the following would increase a firm's optimal R&D expenditures and, in
equilibrium, reduce the expected rate of return on the last dollar of R&D?
A.A rightward shift of the expected-rate-of-return curve.
B.An upward shift of the interest-rate cost-of-funds curve.
C.A leftward shift of the expected-rate-of-return curve.
D.A downward shift of the interest-rate cost-of-funds curve.
2) Answer the question on the basis of the accompanying table that shows average total
costs (ATC) for a manufacturing firm whose total fixed costs are $10:
Refer to the data. The total cost of producing 4 units of output is:
A.$31.
B.$87.
C.$124.
D.$137.
3) A positive statement is one that is:
A.derived by induction.
B.derived by deduction.
C.subjective and is based on a value judgment.
D.objective and is based on facts.
4) The schedule shows various interest rates, the associated quantity demanded of
loanable funds, and the quantity supplied of loanable funds in billions of dollars at those
interest rates.
Refer to the above table and information. At an interest rate of 4 percent, there will be:
A.An excess supply of loanable funds of 140 billion
B.An excess supply of loanable funds of 360 billion
C.An excess demand for loanable funds of 140 billion
D.An excess demand for loanable funds of 500 billion
5) A nondiscriminating pure monopolist finds that it can sell its 50th unit of output for
$50. We can surmise that the marginal:
A.cost of the 50th unit is also $50.
B.revenue of the 50th unit is also $50.
C.revenue of the 50th unit is less than $50.
D.revenue of the 50th unit is greater than $50.
6) Assume a firm purchases resources a and b under purely competitive conditions and
combines these resources to produce X. Product X is sold in a purely competitive
market. The MPs of a and b are 6 and 3 respectively and the prices of a and b are $12
and $6 respectively. If equilibrium exists, the price of X will be:
A.$1.
B.$.50.
C.$2.
D.$5.
7)
Refer to the above graph. At output level H, the area:
A.0CGH represents the firm's total cost of production
B.ACGE represents the firm's economic profit
C.0AEH represents the firm's economic profit
D.BCGF represents the firm's fixed cost of production
8) Which would be an example of a negative side effect of pay for performance plans?
A.Profit sharing plans will tend to decrease the "free-ride" that some workers get by
being part of a team
B.Employers get greater effort from workers by paying them a relatively high,
above-equilibrium wage
C.Workers have to take additional schooling to learn skills that will enable them to keep
their jobs
D.An increase in production from piece work can result in a decline in product quality
9) One of the main differences between PPOs and HMOs is that:
A.HMO physicians charge on a traditional fee-for-service basis, while PPO physicians
do not.
B.HMOs are usually for-profit organizations, whereas PPOs are not.
C.PPOs employ their own doctors, whereas HMOs do not.
D.PPO physicians charge on a traditional fee-for-service basis, while HMOs do not.
10) Aggregate U.S. health care spending in 2011 was approximately:
A.6 percent of domestic output (GDP).
B.13 percent of domestic output (GDP).
C.18 percent of domestic output (GDP).
D.21 percent of domestic output (GDP).
11) All of the following would affect the position and shape of a nation's production
possibilities curve, except:
A.The amount of labor available
B.The level of unemployment
C.The amount of the capital resources
D.The rate of technological progress
12) Risk management in command economies:
A.is easy because there is no risk.
B.is easy because the government controls most activity and can eliminate risk.
C.tends to be done poorly because government officials do not understand risk.
D.tends to be done poorly because decision makers are insulated from the risk of
making a poor decision.
13)
Refer to the above graph. An increase in price, other factors constant, would cause a
change from:
A.Point 5 to point 1
B.Point 4 to point 5
C.Point 1 to point 6
D.Point 3 to point 4
14) In spending all his income on beer and pizza, Fred finds that the marginal utility of
the last pizza he consumed is 8, and the marginal utility of the last bottle of beer is 4.
The price of a bottle of beer is $1.50. If Fred has maximized his utility, the price of
pizza must be:
A.$0.75
B.$1.00
C.$3.00
D.$4.50
15)
Refer to the diagram. Other things equal, an increase of product price would be shown
as:
A.an increase in the steepness of curve (3), an upward shift in curve (2), and an upward
shift in curve (1).
B.a decrease in the steepness of curve (3), a downward shift in curve (2), and an upward
shift in curve (1).
C.a downward shift in curve (4) and an upward shift in curve (1), with no changes in
curves (2) and (3).
D.an upward shift in curve (2) only.
16) Real wages in the United States are:
A.the highest in the world.
B.relatively high, but not as high as in some other industrially advanced nations.
C.much higher than output per worker.
D.higher than nominal wages.
