1) Majority voting may produce economically inefficient outcomes because it:
A.Does not always lead to fair results
B.Requires everyone to vote and bear the costs
C.Does not consider the strength of individual voters’ preferences
D.Does not provide benefits to everyone
2) One essential factor for economic growth is:
A.Increasing population growth
B.Expanding the role of government
C.Using existing resources more efficiently
D.Expanding tax-credits for business investment
3) Assume that Japan and South Korea have flexible exchange rates. Other things equal,
if economic growth is more rapid in Japan than in South Korea:
A.gold bullion will flow out of Japan.
B.the Japanese yen will depreciate.
C.the South Korean won will depreciate.
D.the yen and won exchange rate will stay constant.
4)
Assumptions: (1) the labor force is comprised of 9 million men and 9 million women
workers; (2) the economy has 3 occupations, X, Y, and Z, each having identical demand
curves for labor; (3) men and women workers are homogeneous with respect to their
labor-market capabilities; (4) women are discriminated against by being excluded from
occupations X and Y and are confined to Z; and (5) aside from discrimination, the
economy is competitive, and workers seek to maximize their earnings.
Refer to the diagram and list of assumptions. With women confined to occupation Z and
men free to choose occupations, how will this affect the wages paid?
A.Men and women will both be paid $5.
B.Men will be paid $5 and women $4.
C.Men will be paid $6.50 and women $3.
D.Women and men will both be paid $6.50.
5) Which of the following would be considered part of income?
A.Wages and salaries
B.The value of a house
C.Corporate stock holdings
D.Money in a bank account
6) A negative externality or spillover cost occurs when:
A.firms fail to achieve allocative efficiency.
B.firms fail to achieve productive efficiency.
C.the price of the good exceeds the marginal cost of producing it.
D.the total cost of producing a good exceeds the costs borne by the producer.
7) Farm groups spend considerable amounts of money to maintain and enlarge political
support for farm subsidies. This illustrates:
A.coalitions.
B.rent-seeking activity.
C.the special-interest effect.
D.the voting paradox.
8) Statistical discrimination:
A.can persist in the long run if differences in average characteristics among groups
continue.
B.will tend to diminish in the long run because nondiscriminating firms will drive out
discriminating firms.
C.requires that employers have discrimination coefficients greater than zero.
D.is also known as occupational segregation.
9) “Patent trolls:”
A.block firms from acquiring patents on intellectual property.
B.buy up patents in order to collect royalties and sue other companies.
C.legally challenge new patent applications in an effort to extract rents.
D.promote innovation by keeping firms from having a stranglehold on intellectual
property.
10) According to the “endowment effect:”
A.people are willing to pay more for things they don’t own than they would have to
receive to give up something they already have.
B.people feel gains and losses with equal intensity.
C.people assign higher values to things they own than things they don’t.
D.the intensity of feelings from gains and losses depends on how much wealth one
possesses.
11)
Refer to the diagram. The slope of curve ZZ at point A is approximately:
A.+2.
B.+21/2.
C.-21/2.
D.+4.
12) Which of the following is considered a renewable natural resource?
A.Natural gas.
B.Copper.
C.Solar power.
D.Coal.
13) The productivity and real wages of workers in industrially advanced economies
have risen historically partly because:
A.workers have acquired less education and training over time.
B.workers have been able to use larger quantities of capital equipment.
C.over time the capital equipment used by workers has deteriorated in quality.
D.the supply of labor has increased.
14) In the long run, a pure monopolist will maximize profits by producing that output at
which marginal cost is equal to:
A.average total cost.
B.marginal revenue.
C.average variable cost.
D.average cost.
15)
Refer to the diagram. Assume that an inclusive union is formed to bargain with the
monopsonistic employer of the question. To what level can this union increase the wage
rate without causing the number of jobs to decline below that which the monopsonist
would otherwise have provided?
A.D minus A
B.D
C.C
D.B
16) A perfectly inelastic demand curve:
A.has a price elasticity coefficient greater than unity.
B.has a price elasticity coefficient of unity throughout.
C.graphs as a line parallel to the vertical axis.
D.graphs as a line parallel to the horizontal axis.
17) There must always be a balance of a nation’s:
A.goods exports and gold imports.
B.total international payments.
C.imports and exports of goods and services.
D.net transfers and net investment income.
18) The theory of regulation developed to deal with “natural monopolies” is called:
A.Legal cartel theory
B.Public interest theory
C.Potential competition theory
D.Social regulation theory