1) Total Allowable Catch policies and Individual Transferable Quotas both:
A.limit catch sizes and promote efficiency.
B.limit catch sizes, but TACs promote inefficiency.
C.promote efficiency, but only TACs limit catch sizes.
D.promote efficiency, but only ITQs limit catch sizes.
2) All else equal, a large decline in the real interest rate will shift the:
A.investment demand curve leftward.
B.investment demand curve rightward.
C.investment schedule upward.
D. investment schedule downward.
3) If the monetary authorities want to reduce the monetary multiplier, they should:
A.lower the legal reserve ratio.
B.raise the legal reserve ratio.
C.increase bank reserves.
D.lower interest rates.
4) The following consolidated balance sheet of the commercial banking system.
Assume that the reserve requirement is 20 percent. All figures are in billions and each
question should be answered independently of changes specified in all preceding ones.
Refer to the above data. The monetary multiplier for the commercial banking system is:
A.5.
B.10.
C.15.
D.20.
5) economic models:
a.are of limited use because they cannot be tested empirically.
b.are limited to variables that are directly related to one another.
c.emphasize basic economic relationships by purposefully simplifying the complexities
of the real world.
d.are unrealistic and therefore of no practical consequence.
6) the competitive market system:
a.encourages innovation because government provides tax breaks and subsidies to those
who develop new products or new productive techniques.
b.discourages innovation because it is difficult to acquire additional capital in the form
of new machinery and equipment.
c.discourages innovation because firms want to get all the profits possible from existing
machinery and equipment.
d.encourages innovation because successful innovators are rewarded with economic
profits.
7) patents:
a.give firms the exclusive right to produce or control a product for 100 years.
b.discourage research and innovation.
c.are a source of monopoly.
d.are also called trademarks.
8) because the monopolist’s demand curve is downsloping:
a.mr will equal price.
b.price must be lowered to sell more output.
c.the elasticity coefficient will increase as price is lowered.
d.its supply curve will also be downsloping.
9)
Refer to the above data. If the prices of labor and capital are $9 and $15 respectively, at
the profit-maximizing level of output the firm’s total revenue will be:
A.$114.
B.$180.
C.$129.
D.$192.
10) When the level of domestic output is $500 billion, the level of aggregate
expenditures:
A.may be greater than, less than, or equal to $500 billion.
B.must be greater than $500 billion, because investment will occur.
C.must be less than $500 billion, because saving will occur.
D.must also be $500 billion.