1) According to behavioral economists, people tend to put too much weight on the
future when they make decisions.
2) The present choice of position on the production possibilities curve will not influence
the future location of the curve.
3) According to behavioral economists, self-control problems generally result from poor
information.
4) At the time when a trade deficit is occurring, U.S. consumers benefit from having
more goods and services available.
5) Union workers have higher rates of job turnover than do nonunion workers.
6) About one-half of U.S. electricity is generated using petroleum.
7)
Refer to the supply and demand data for a certain elective surgical procedure. If
suppliers provide the quantity of health care demanded and insurance pays two-thirds of
the equilibrium price, the immediate price to the consumer and quantity of health care
demanded would be:
A.$4,000 and 10,000
B.$3,000 and 7,000
C.$2,000 and 11,000
D.$1,000 and 16,000
8) The Herfindahl index for a pure monopolist is:
A.100
B.10,000
C.100,000
D.10
9) Which of the following combinations is plausible, as it relates to a nation’s balance of
payments?
A.Current account = $+40 billion; capital account = $+20 billion; financial account =
$-50 billion.
B.Current account = $-50 billion; capital account = $+20 billion; financial account = $
+30 billion.
C.Current account = $+10 billion; capital account = $+40 billion; financial account = $
+50 billion.
D.Current account = $+30 billion; capital account = $-20 billion; financial account =
$-50 billion.
10) The principal-agent problem arises in labor markets because:
A.a firm may realize excessively large profits.
B.workers may provide less-than-expected work effort.
C.compensating wage differences do not pay for differences in the nonmonetary aspects
of jobs.
D.human capital investments vary among workers.
11) A major criticism of the marginal productivity theory of income distribution is that:
A.The demand for labor resources is price inelastic
B.Achieving equality in incomes will take time
C.Imperfectly competitive firms are only interested in profit maximization
D.Property resources like land are unevenly distributed which leads to income
inequality
12) Incentive pay plans that seek to tie worker compensation more closely to worker
performance includes the following, except:
A.Commissions or royalties
B.Seniority-based pay scale
C.Stock options and profit-sharing
D.Efficiency wages
13) An increase in the demand for corn is more than offset by an increase in its supply.
As a result the equilibrium price will:
A.Increase and the equilibrium quantity will decrease
B.Increase and the equilibrium quantity will increase
C.Decrease and the equilibrium quantity will decrease
D.Decrease and the equilibrium quantity will increase
14) If there are external benefits associated with the consumption of a good or service:
A.The private demand curve will overestimate the true demand curve
B.The private demand curve will underestimate the true demand curve
C.Consumers will be willing to pay for all these benefits in private markets
D.The market demand curve will be the vertical summation of the individual demand
costs
15) The poverty rate in the United States was:
A.12 percent in 2011
B.higher in 2011 than in 1960
C.about the same in 2011 as in 1993
D.nearly 20 percent in 2011
16)
Refer to the graph above. As the consumer equilibrium point to shifts from point a to
point b:
A.The consumer’s purchase of good 2 decreases even though its price stays constant
B.The slope of the budget line decreases because the price of good 1 increased
C.The marginal utility of good 1 increases and the marginal utility of good 2 decreases
D.The consumer’s total utility decreases
17) What is the relationship between businesses and households in the circular flow
diagram?
18) Explain briefly and concisely the meaning and significance of the following
equation:
19) You are given the following short-run information for an individual firm. Labor (L)
is the only variable input. The price of labor is $200/week. Fixed costs are $100/week.
Complete the rest of the table. Describe the relationship between the MP and MC. At
which output level does the law of diminishing returns set in?
20) The table below contains hypothetical international balance-of-payments data for
the United States. All figures are in billions. Compute with the appropriate sign (+ or -)
and enter in the table the six missing items. What was the condition of the balance of
payments in the United States?
21) What are the major expenditures of state governments? What are the major sources
of tax revenue?
22) What has been the rationale made over the years to justify government subsidies for
agriculture?
23) Draw a supply and demand graph on the below diagram that illustrates the market
for pollution rights. Label the axes and curves. Then show what happens to price and
quantity when the demand for pollution rights increases in the market.
24) What are the environmental costs of price support programs for farmers?
25) Explain four problems with the argument that trade protection is needed to protect
American jobs.