1) The purely competitive employer of resource A will maximize the profits from A by
equating the:
A.price of A with the MRP of A.
B.marginal productivity of A with the MRC of A.
C.marginal productivity of A with the price of A.
D.price of A with the MRC of A.
2) Assume that the owners of the only gambling casino in Wisconsin spend large sums
of money lobbying state government officials to protect their gambling monopoly.
Economists refer to these expenditures as:
A.Rent-seeking
B.Price discrimination
C.X-efficiency
D.Network effects
3)
Refer to the figure that shows the market for U.S. health care. Other things equal, which
of the following would shift the demand curve for medical care from D2 to D1?
A.An aging population.
B.Loss of medical insurance benefits by part-time workers and early retirees.
C.Expansion of the Medicaid program.
D.Higher medical malpractice premiums.
4) Restructuring of a major industry resulted from the:
A.U.S. Steel case.
B.AT&T case.
C.IBM case.
D.DuPont cellophane case.
5) If competing oligopolists completely ignore oligopolist X’s price changes, then X’s:
A.demand curve will be less elastic than if the other oligopolists matched X’s price
changes.
B.demand curve will be more elastic than if the other oligopolists matched X’s price
changes.
C.marginal revenue curve will have a vertical gap.
D.demand and marginal revenue curves will coincide.
6) If the interest rate is 5%, what is the present value of $10,000 received three years
from now?
A.$8,638
B.$9,000
C.$11,600
D.$11,000
7) When people make decisions that go against their own interests, neoclassical
economics explains this to be instances where people are:
A.Intentionally not maximizing their net benefit
B.Ignorant of what their best interests are
C.Simply incapable of making rational decisions
D.Behaving quite rationally
8) If the total variable cost of 9 units of output is $90 and the total variable cost of 10
units of output is $120, then:
A.the average variable cost of 10 units is $10.
B.the average variable cost of 9 units is $10.
C.the marginal cost of the tenth unit is $90.
D.the firm is operating in the range of increasing marginal returns.
9) Statistical discrimination refers to:
A.the crowding of women or minorities into low-paying occupations.
B.significant differences in average levels of earnings by gender, race, and ethnicity,
after accounting for nondiscriminatory factors.
C.making individual hiring decisions on the basis of the characteristics of the group to
which a person belongs, rather than on his or her personal characteristics and
productivity.
D.the 50-percent unexplained residual in studies that try to account for wage differences
by gender, race, and ethnic origin.
10) The following table shows cost data for a firm that is selling in a purely competitive
market.
Refer to the above table. Now assume there are 100 identical firms in this industry, each
of which has the same cost data as the single firm described above. Suppose too that the
demand curve for this industry is as shown below:
The equilibrium price will be:
A.$140
B.$180
C.$230
D.$290