1)
Refer to the above graphs. The formation of an exclusive or craft union, with no change
in demand, is depicted by situation:
A.A
B.B
C.C
D.D
2)
Refer to the graph above. Suppose consumers do not fully appreciate the benefits of the
product whose market shown in the graph. If an external agency is able to provide full
information about the benefits of the product, then:
A.The supply curve will shift to the left
B.The demand curve will shift to the right
C.Both the new equilibrium price and quantity will be lower
D.The new equilibrium price will be higher but the equilibrium quantity will be either
higher or lower
3) The following table shows marginal costs and benefits of the optimal quantity of
pollution abatement that will occur at a local factory.
(a)What is the optimal level of pollution abatement? Why?
(b)If the marginal benefit of pollution abatement were to increase by $30,000 at each
level because of the factorys desire to improve its image and environment, what would
the optimal level be? Why?
(c)What might cause the optimal level of pollution abatement to be 400 tons?
4) The more inelastic the demand for a resource the:
A.Less elastic its marginal revenue product curve
B.More elastic its marginal revenue product curve
C.Greater the potential for resource substitution
D.Greater the productivity of the resource
5) When a firm does more of something, it gets better at it. This learning-by-doing is:
A.a source of diseconomies of scale.
B.a source of economies of scale.
C.called the principle of natural progression.
D.called ‘spreading the overhead.”
6) Assume a purely competitive decreasing-cost industry is initially in long-run
equilibrium but then there is a decrease in consumer demand. After all economic
adjustments to this new situation have taken place, product price will be:
A.Higher, but total output will be lower
B.Lower, and total output will be lower
C.Higher, and total output will be higher
D.Lower, but total output will be higher
7)
Refer to the diagram. Which line(s) show(s) a negative relationship between x and y?
A.A only.
B.Both A and D.
C.A, B, and D.
D.Both C and E.
8) To achieve economic efficiency in energy use, an economy:
A.often uses a variety of energy sources.
B.must use the single energy source in which it can achieve economies of scale.
C.should use all energy sources in equal proportion.
D.should only use domestically produced energy.
9) Mining of “conflict diamonds” tends to:
A.be more profitable as warring factions are willing to pay more for the diamonds.
B.occur at a slower pace than would maximize the long-term stream of profits because
war increases extraction costs.
C.occur at a pace slower than would maximize the long-term stream of profits since the
war disrupts production.
D.occur at a pace faster than would maximize the long-term stream of profits since
warring factions extract diamonds as quickly as possible due to fears that they may
soon lose control of the diamond mines.
10) In the 1911 Standard Oil case, the U.S. Supreme Court found Standard Oil:
A.Guilty of tax evasion for merger activity
B.Not guilty of tax evasion for merger activity
C.Guilty of monopolizing the petroleum industry
D.Not guilty of monopolizing the petroleum industry
11) In the 2000 decision on the Microsoft antitrust case, the eventual remedy involved
a:
A.Change in the business practices of Microsoft
B.Merging of Microsoft with another company
C.Breakup of Microsoft into smaller firms
D.Takeover of Microsoft by the government
12) Suppose that the price of peanuts falls from $3 to $2 per bushel and that, as a result,
the total revenue received by peanut farmers changes from $16 to $14 billion. Thus:
A.the demand for peanuts is elastic.
B.the demand for peanuts is inelastic.
C.the demand curve for peanuts has shifted to the right.
D.no inference can be made as to the elasticity of demand for peanuts.
13) Kara was out jogging and, despite being tired, decided to run one more mile. Based
on her actions, economists would conclude that Kara:
A.must be an avid runner.
B.decided that the marginal benefit of running one more mile would outweigh the cost
of the additional mile.
C.decided that the marginal cost of running one more mile would outweigh the benefit
of the additional mile.
D.was not very tired, so the marginal cost of the extra mile was very low.
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. Transylvania realized a financial and capital account deficit in
2008.
15)
Refer to the above graph, which shows the market for beef where demand shifted from
D1 and D2. The change in equilibrium from E1 to E2 is most likely to result from:
A.A decrease in consumer incomes
B.An increase in the cost of cattle feed
C.An increase in the price of pork
D.A decrease in the tax on beef products
16) U.S. immigrants (legal and illegal) have:
A.higher prison rates and crime rates than the native-born population.
B.lower prison rates and crime rates than the native-born population.
C.lower prison rates, but illegal immigrants have higher crime rates than the
native-born population.
D.higher prison rates, but lower crime rates, than the native-born population.
17) In the U.S. balance of payments, foreign purchases of assets in the United States are
a:
A.foreign currency outflow.
B.foreign currency inflow.
C.current account item.
D.debit, or outpayment.
18) The earnings of highly educated workers:
A.rise more slowly than those of less-educated workers.
B.rise more rapidly than those of less-educated workers.
C.rise at about the same rate as those of less-educated workers.
D.stagnate earlier than do those of less-educated workers.