1) Earnings received from wealth:
A.Contribute to income inequality
B.Are the major source of income for families
C.Are becoming more equal in the society
D.Are primarily the result of advanced education
2) Monopolistic competition means:
A.a market situation where competition is based entirely on product differentiation and
advertising.
B.a large number of firms producing a standardized or homogeneous product.
C.many firms producing differentiated products.
D.a few firms producing a standardized or homogeneous product.
3) Income mobility:
A.makes lifetime income inequality among income receivers in the United States less
than income inequality in any single year.
B.is less in the United States than in most developing nations.
C.refers to the movement of wage earners from one job to another.
D.reduces the total percentage of households in the lowest quintile of the income
distribution over time.
4) In the circular flow model of the market system, households:
A.Buy products and resources
B.Sell products and resources
C.Buy products and sell resources
D.Sell products and buy resources
5) A merger between an automobile manufacturer and a maker of automobile tires is an
example of a:
A.conglomerate merger.
B.horizontal merger.
C.vertical merger.
D.tying contract.
6)
Refer to the diagram. The equation that shows the relationship between Y and X is:
A.Y = 50 + 1/4X.
B.X = 1/4Y.
C.Y = .4X.
D.Y = 1/4X – 50.
7) Answer the question on the basis of the following information. The demand for
commodity X is represented by the equation P = 10 – 0.2Q and supply by the equation P
= 2 + 0.2Q.
Refer to the given information. The equilibrium price for X is:
A.$2.
B.$4.
C.$6.
D.$7.
8) Carlos and Darla are representative individuals playing the dictator game. Carlos is
assigned the role of dictator and given $20 to split between the two of them. Based on
previous experiments with this game by behavioral economists, about a third of the
time we would expect:
A.Carlos to keep all of the money for himself.
B.Carlos to give all of the money to Darla.
C.Carlos to split the money evenly with Darla.
D.Carlos to split the money, keeping a little more than half for himself.
9)
Refer to the diagrams. With the industry structures represented by diagram:
A.(A) there will be only a normal profit in the long run, while in (B) an economic profit
can persist.
B.(A) price exceeds marginal cost, resulting in allocative inefficiency.
C.(B) price equals marginal cost, resulting in allocative efficiency.
D.(B) equilibrium price and quantity will be e and h, respectively.
10) If the nominal wages of carpenters rose by 5 percent in 2013 and the price level
increased by 3 percent, then the real wages of carpenters:
A.decreased by 2 percent.
B.increased by 2 percent.
C.increased by 3 percent.
D.increased by 8 percent.
11) Which of the following guides sensible decisions regarding the management of
business risk in a market system?
A.The profit and loss system
B.The “invisible hand”
C.Taxes and subsidies
D.Consumer sovereignty
12) In long-run equilibrium under pure competition, all firms will produce at minimum:
A.Average total cost
B.Marginal cost
C.Total cost
D.Average variable cost