A developing country can be expected to rely more on:
A. tariffs than quotas since tariffs are an easy way to raise tax revenue.
B. tariffs than quotas because tariffs are more effective means of reducing imports.
C. quotas than tariffs since quotas provide better protection for infant industries.
D. quotas than tariffs since quotas are easier to enforce and give rise to less corruption
among officials.
Answer:
Nudges can be used by:
A. firms only.
B. firms, but only as a last resort.
C. firms and government.
D. government only.
Answer:
Refer to the graph shown. A movement from point E to point D is caused by:
A. an increase in the price of CDs from $12.00 to $16.00.
B. a decrease in the price of CDs from $16.00 to $12.00.
C. an increase in consumer income.
D. an increase in the price of DVDs.
Answer:
U.S. output represents about what percentage of total world output?
A. 5 percent
B. 10 percent
C. 20 percent
D. 50 percent
Answer:
What is true about the following payoff matrix?
A. Only player A has a dominant strategy.
B. Only player B has a dominant strategy.
C. Both player A and player B have dominant strategies.
D. Neither player A nor player B has a dominant strategy.
Answer:
The text mentions 10 sources of U.S. comparative advantage. Which of the following is
not one of them?
A. Wealth from past production
B. The fact that English is the international language of business
C. A high ratio of lawyers to the population
D. Extensive natural resources
Answer:
Union membership in the United States has declined recently because:
A. manufacturing has become increasingly important.
B. unions have failed to achieve their objectives.
C. unions have been successful in achieving their objectives.
D. membership in public sector unions has declined.
Answer:
Which of the following most likely correctly orders goods from most to least demand
elastic?
A. cars, motor transportation, transportation
B. transportation, bicycles, nonmotor transportation
C. brand-name Advil, pain-relieving medicine, aspirin
D. pain-relieving medicine, brand-name Advil, aspirin
Answer:
When computer manufacturers overcame the enormous 13,000 Chinese character
barrier by creating a workable keyboard through voice and handwriting recognition,
PCs became more accessible to the Chinese. What was the predicted effect of the events
on equilibrium price and quantity of PCs sold in China?
A. Price and quantity fell
B. Price fell and quantity rose
C. Price rose and quantity fell
D. Price and quantity rose
Answer:
Scarcity exists because:
A. individuals cannot solve the three central coordination problems.
B. governments cannot solve the three central coordination problems.
C. the supply of goods is always less than the demand.
D. new wants continue to develop and willingness to meet them is limited.
Answer:
Refer to the following graph.
The marginal utility curve associated with this total utility curve is:
A. a downward-sloping curve.
B. a flat line with a slope of zero.
C. an upward-sloping curve.
D. indeterminate.
Answer:
Refer to the table shown, which shows the demand schedule for a product sold by a
monopolist. Marginal revenue is positive:
A. when price is $10.
B. when price is above $10.
C. when price is below $10.
D. for every price.
Answer:
Refer to the graph below.
Suppose that the opportunity cost of producing 10 chickens is always 8 turkeys. Given
this, the relevant production possibility curve must be:
A. I.
B. II.
C. III.
D. IV.
Answer:
Suppose the demand for roses increases from 500 to 600 stems when income rises from
$10,000 to $20,000. Income elasticity for roses is:
A. 0.27.
B. 3.6.
C. 0.02.
D. 2.
Answer:
A nation’s comparative advantage in the production of an item is determined by:
A. which country has already specialized in the production of the item.
B. the total and marginal costs of producing the item.
C. the opportunity cost of producing the item relative to a trading partner’s opportunity
cost.
D. wage rates and other input costs.
Answer:
In the United States, lobbying is:
A. not important to most monopolies.
B. a way of protecting monopolies.
C. illegal.
D. important to firms in perfectly competitive markets.
Answer:
A surplus of a good could possibly be eliminated by:
A. the removal of a price floor.
B. the removal of a price ceiling.
C. a sufficient decrease in demand keeping price constant.
D. a sufficient increase in supply keeping price constant.
Answer:
Which of the following is an argument in favor of judging competitiveness by
performance rather than structure?
A. Judgment by performance requires that each action of a firm be analyzed on a
case-by-case basis, which is very time-consuming and expensive.
B. Under the judgment by structure criterion, a firm may be breaking the law if it does
what it’s supposed to be doing: producing the best product it can at the lowest cost.
C. Courts know little economic theory.
D. Structure can be a predictor of future performance.
Answer:
What distinguishes nudge policies from push policies?
A. Nudges are libertarian, whereas pushes are not.
B. Nudges affect choices, whereas pushes do not.
C. Nudges affect incentives, whereas pushes do not.
D. Nudges are implemented by the government; pushes are implemented by firms.
Answer:
One advantage of a partnership over a sole proprietorship is:
A. greater accountability.
B. limited liability.
C. ease of formation.
D. the ability to share the work and risks of business.
Answer:
Which of the following is not an economic institution?
A. Corporations
B. Government
C. Cultural norms
D. None of these options
Answer:
What is the glue that holds modern economics together?
A. The supply and demand model
B. The economic decision rule
C. Modeling
D. The invisible hand theorem
Answer:
In the Flint Hills area of Kansas, proposals to build wind turbines to generate electricity
have pitted environmentalist against environmentalist. Members of the Kansas Sierra
Club support the turbines as a way to reduce use of fossil fuel, but local chapters of the
Nature Conservancy say they will befoul the landscape. The Sierra Club argues that
wind turbines:
A. are a source of negative externalities.
B. reduce negative externalities elsewhere in the economy.
C. create a free rider problem.
D. are a way of solving a free rider problem.
Answer:
Refer to the graph shown. If price changes from $4.00 to $2.00 then:
A. market quantity supplied will increase by 7.
B. market quantity supplied will decrease by 12.
C. Charlie will stop supplying any of this product.
D. Charlie, Barry, and Ann will proportionally reduce the quantity that they each
supply.
Answer:
In the linear equation y = mx + b, m is the:
A. variable on the horizontal axis.
B. variable on the vertical axis.
C. slope.
D. vertical intercept.
Answer:
The quantity of goods and services available to society:
A. is fixed.
B. depends on human action.
C. is not of economic importance.
D. will always grow to meet individuals’ wants and desires.
Answer:
Loss aversion in behavioral economics refers to how people are averse to:
A. losses in a game of chance such as poker.
B. stock market losses.
C. losing something a person already has.
D. the loss of something of high value.
Answer:
In the market for bank credit a large bank sometimes announces a change in interest
rates. After the changes in interest rates are announced, other banks in the industry
usually react by changing their rates in the same way. This is an example of:
A. a cartel.
B. monopolistic competition.
C. implicit collusion.
D. the kinked demand curve model.
Answer:
Refer to the graph shown. Between points A and B, demand is:
A. inelastic.
B. elastic.
C. unit elastic.
D. perfectly elastic.
Answer:
Lazy monopolists are characterized by the tendency to:
A. maximize profits at the cost of losing market share.
B. pay too much to protect their monopoly positions.
C. earn enough profits to keep their shareholders happy without trying too hard to hold
costs down.
D. minimize losses so that the dividends of shareholders are maximized.
Answer:
Refer to the graph shown. Demand is unit elastic when revenue is:
A. $4,000.
B. $6,000.
C. $8,000.
D. $10,000.
Answer:
If the government imposes an excise tax on cars equal to $5,000 per automobile, the
supply of automobiles will shift to the:
A. left and the price of automobiles will increase by $5,000.
B. left and the price of automobiles will increase by an unknown amount.
C. right and the price of automobiles will decrease by $5,000.
D. right and the price of automobiles will decrease by an unknown amount.
Answer:
What kind of relationship exists between the price of gas and the quantity demanded for
gas if the quantity demanded for gas falls when the price of gas increases?
A. Direct.
B. Inverse.
C. Normal.
D. Perverse.
Answer: