1)
Refer to the above graph with three demand curves. An “increase in quantity
demanded” would be illustrated by a change from:
A.Point 4 to point 6
B.Point 5 to point 1
C.Point 4 to point 1
D.Point 2 to point 5
2) A legal protection for taking the lead in innovation is:
A.Brand names
B.Trade secrets
C.Copyrights
D.Mergers
3) An energy company has recently discovered a natural gas reserve. The company can
tap this reserve at a cost of $350,000 and obtain a profit of $450,000 in three years. The
current market rate is 15 percent. Should the company make the investment?
A.Yes, the future value of the profit is greater than the present value of the cost
B.No, the future value of the profit is less than the present value of the cost
C.Yes, the present value of the profit is greater than the present value of the cost
D.No, the present value of the profit is less than the present value of the cost
4) If profits are maximized (or losses minimized), which of the following conditions is
common to both unregulated monopoly and pure competition?
A.MC = P.
B.MC = ATC.
C.MR = MC.
D.P = MR.
5) Defenders of social regulation point out that:
A.social regulation is a better alternative than unregulated natural monopoly.
B.critics who stress the high administrative and compliance costs of social regulation
underestimate the social benefits that the regulations produce.
C.the number of regulatory agencies has declined over the past two decades.
D.social regulations reduce product prices.
6) Use the following graph to answer question. It shows the extraction costs for TX Oil
Company in the first year in a situation where it will extract oil from a reserve over two
years.
Refer to the above graph. If the current market price is $60 and user costs are not
considered, the extraction quantity is:
A.10 units
B.20 units
C.30 units
D.40 units
7)
Refer to the data. The value for W is:
A.15
B.20
C.25
D.30
8) The table shows the total costs for a purely competitive firm.
Refer to the above table. If the firm shuts down in the short run, the total cost will be:
A.$1,350
B.$2,500
C.$2,700
D.$3,100
9) Average fixed costs for a given level of output can be determined graphically by:
A.summing the marginal costs of any number of units of output and dividing the sum
by that output.
B.the vertical distance between TC and TVC.
C.the vertical distance between AVC and MC.
D.the vertical distance between ATC and AVC.
10) Many economists believe that at the current level of consumption of health care in
the United States, the marginal cost of health care for society is:
A.Less than the marginal benefit
B.Greater than the marginal benefit
C.Equal to the marginal benefit
D.Zero
11)
When an immigrant sends a remittance from his host country to his family in his home
country, the benefits of immigration to the:
A.Home and host country are increased
B.Home and host country are decreased
C.Host country are increased, but decreased to the home country
D.Host country are decreased, but increased to the home country
12) Oligopolistic industries are characterized by:
A.a few dominant firms and substantial entry barriers.
B.a few dominant firms and no barriers to entry.
C.a large number of firms and low entry barriers.
D.a few dominant firms and low entry barriers.
13) A market system tends to restrict business risk to owners and investors. This results
in which of the following benefits?
A.A more stable macroeconomy with fewer recessions.
B.Firms are better able to attract inputs, as these inputs do not have to share the risk.
C.Government agencies are better prepared to help when businesses fail.
D.Consistently lower prices for consumers.