1) The persistence of some “urban legends” and some myths is a reflection of the:
A.Framing effect
B.Confirmation bias
C.Hindsight bias
D.Availability heuristic
2) Most economists agree that deregulation in the 1970s and 1980s greatly benefited
consumers in the following industries, except:
A.Automotive
B.Railroads
C.Airlines
D.Trucking
3) A 4 percent reduction in the price of a product has zero effect on the dollar amount of
consumer expenditure on the product. The price elasticity of demand is:
A.Zero
B.Greater than zero
C.Greater than zero but less than 1
D.Equal to 1
4) The change in a firm’s total revenue that results from hiring an additional worker is
measured by:
A.the marginal product.
B.the marginal revenue.
C.the marginal revenue product.
D.the average revenue product.
5)
“Brain-drain” refers to the:
A.Relatively low levels of human capital in low-income countries
B.Impact of migration on human capital levels in high-income countries
C.Emigration of highly educated workers to higher income countries
D.Inability of workers in low-income countries to achieve the levels of human capital
possessed by workers in high-income countries.
6) Which of the following illustrates a macroeconomic question?
A.Should the salaries of financial executives be regulated by the government?
B.Are increasing wage demands by workers contributing to price inflation?
C.What is the least costly way to produce automobiles and trucks in the United States?
D.Will the introduction of a new computer chip change the demand for computers?
7) For economists, the word “utility” means:
A.versatility and flexibility.
B.rationality.
C.pleasure or satisfaction.
D.purposefulness.
8) “NAFTA” stands for:
A.North African Free Trade Area.
B.North American Free Trade Agreement.
C.North Asian Free Trade Agreement.
D.New Zealand-Australia Free Trade Agreement.
9) In which market model is there mutual interdependence?
A.Monopolistic competition
B.Pure competition
C.Pure monopoly
D.Oligopoly
10) The “time-value of money” refers to the fact that:
A.a given amount of money becomes more valuable over time.
B.a given amount of money is more valuable the sooner it is obtained.
C.people expect monetary compensation for their labor time.
D.a given amount of money today is equivalent to a smaller amount of money in the
future.
11) Answer the question on the basis of the following marginal product data for
resources a and b. The output of these independent resources sells in a purely
competitive market at $1 per unit.
Refer to the given data. Assuming the prices of resources a and b are $5 and $8
respectively, what is the profit-maximizing combination of resources?
A.7 of a and 7 of b.
B.6 of a and 4 of b.
C.5 of a and 7 of b.
D.4 of a and 4 of b.
12) Capitalism gets its name from the fact that capital resources are mostly:
A.Owned by the state or government
B.Given the highest priority in the economy’s income distribution
C.Treated as private property
D.In the form of money and financial resources
13)
Refer to the diagram for a noncollusive oligopolist. Suppose that the firm is initially in
equilibrium at point E, where the equilibrium price and quantity are P and Q. If the
firm’s rivals will ignore any price increase but match any price reduction, then the firm’s
demand curve will be (moving from left to right):
A.D1ED2.
B.D2ED1.
C.D1ED1.
D.D2ED2.
14) Answer the question on the basis of the information given in the following table:
Refer to the given data. If the firm is hiring workers under purely competitive
conditions at a wage rate of $10, it will employ:
A.2 workers.
B.3 workers.
C.4 workers.
D.5 workers.