1) The law of increasing opportunity costs:
A.applies to land-intensive commodities but not to labor-intensive or capital-intensive
commodities.
B.results in straight-line production possibilities curves rather than curves that are
bowed outward from the origin.
C.refutes the principle of comparative advantage.
D.may limit the extent to which a nation specializes in producing a particular product.
2) The question is based on the following table showing the expected rate of return,
R&D spending, and interest-rate cost-of-funds for a hypothetical firm.
Refer to the above data. The optimal amount of R&D expenditure of the firm would be:
A.$45 million
B.$55 million
C.$65 million
D.$75 million
3) Suppose the United States sets a limit on the number of tons of sugar that can be
imported each year. This is an example of a(n):
A.protective tariff.
B.revenue tariff.
C.voluntary export restriction.
D.import quota.
4) Allocative efficiency occurs only at that output where:
A.marginal benefit exceeds marginal cost by the greatest amount.
B.consumer surplus exceeds producer surplus by the greatest amount.
C.the combined amounts of consumer surplus and producer surplus are maximized.
D.the areas of consumer and producer surplus are equal.
5) Through specialization and international trade, a nation:
A.can attain some combination of goods lying outside its production possibilities curve.
B.can move from a high consumption-low investment to a high investment-low
consumption point on its production possibilities curve.
C.will only attain some combination of goods lying within its production possibilities
curve.
D.will cause its production possibilities curve to shift leftward.
6) The total allowable catch (TAC) system differs from the individual transferable quota
(ITQ) system in that:
A.TAC limits the total harvest of fish while ITQ does not
B.ITQ limits an individual fishery’s harvest, but TAC does not
C.TAC prevents an “individual arms race” among fisheries, whereas ITQ does not
D.ITQ does not offer significant cost-saving benefits, but TAC does
7) Use the following graph to answer question about the labor resource market faced by
producers of good X:
Refer to the above graph. What will shift D2 to D1?
A.A decrease in productivity of labor
B.A decrease in the price of labor
C.A decrease in the price of complementary input
D.A decrease in the price of a substitute input (if the output effect > substitution effect)
8) Capital flight is a problem facing DVCs that involves the:
A.Difficulty of sustaining skilled workers in the government sector of the DVC
economies
B.Transfer of private savings from DVCs to IACs
C.Flight of agricultural workers from rural to urban areas, especially capital cities, to
take advantage of better job opportunities
D.Movement of capital goods from IACs to DVCs to avoid taxes
9) When compared with the purely competitive industry with identical costs of
production, a monopolist will produce:
A.More output and charge the same price
B.More output and charge a higher price
C.Less output and charge a higher price
D.Less output and charge the same price
10) Which of the following is not correct?
A.Where marginal product is greater than average product, average product is rising.
B.Where total product is at a maximum, average product is also at a maximum.
C.Where marginal product is zero, total product is at a maximum.
D.Marginal product becomes negative before average product becomes negative.
11) Use the following table for Country X to answer the question below. Column 1 of
the table is the price of a product. Column 2 is the quantity demanded domestically
(Qdd) and Column 3 is the quantity supplied domestically (Qsd).
Refer to the table above. At what price will Country X import 100 units of the product?
A.$4.00
B.$3.00
C.$2.00
D.$1.00
12)
Immigration can either benefit or harm a nation, depending on the following factors,
except the:
A.Number of immigrants
B.Education, skills, and work ethic of the immigrants
C.Rate at which the immigrants can be absorbed by the society
D.Blank