1) over half of the legal immigrants to the united states in 2007 were family-sponsored.
2) government assumes some responsibility for providing a minimum standard of living
for all citizens to compensate for the increase in income inequality caused by
government tax revenues and expenditures.
3) In locating a particular aggregate demand curve it is assumed that the money supply
is fixed.
4) The Wheeler-Lea Act prohibits corporations from purchasing the stock of competing
firms.
5) The following information. Assume that by devoting all its resources to the
production of X, nation Alpha can produce 40 units of X. By devoting all its resources
to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y.
Refer to the above information. The terms of trade will be at or within the 1X = 11/2Y
to 1X = 2/3Y range.
6) The MRP of labor curve is the labor demand curve.
7) an increase in total spending generates economic growth by shifting the production
possibilities curve farther from the origin.
8) The process by which new firms and new products destroy existing dominant firms
and their products is called creative destruction.
9) Given demand, the more inelastic the supply of a product, the larger the portion of an
excise tax that is borne by producers.
10) suppose that in the clothing market, production costs have fallen, but the
equilibrium price and quantity purchased have both increased. based on this
information we can conclude that:
a.the supply of clothing has grown faster than the demand for clothing.
b.demand for clothing has grown faster than the supply of clothing.
c.the supply of and demand for clothing have grown by the same proportion.
d.there is no way to determine what has happened to supply and demand with this
information.
11)
refer to the above diagram. which of the following is a normative statement?
a.point c is superior to point b because it is important to enhance the future of society.
b.if society is initially at point c, it must sacrifice 6 units of bread to obtain one more
unit of tractors.
c.if society produces 2 units of tractors and 12 units of bread, it is not using its available
resources with maximum efficiency.
d.other things equal, the combination of outputs represented by point d will result in
more rapid economic growth than will the combination represented by point c.
12)
Refer to the above diagram for a private closed economy. At the equilibrium level of
GDP, investment and saving are both:
A.$50.
B.$100.
C.$20.
D.$40.
13) Which of the following made monopoly and restraints of trade criminal offenses
against the Federal government?
A.Celler-Kefauver Act of 1950
B.Wheeler-Lea Act of 1938
C.Clayton Act of 1914
D.Sherman Act of 1890
14) The market supply curve for labor is upsloping because:
A.of diminishing returns.
B.of the opportunity cost of labor in housekeeping, leisure, or alternative employments.
C.of declining MRC.
D.each employer is a “wage taker.”
15) (consider this) capital is a:
a.flow, whereas gross investment and depreciation are stocks.
b.flow, as are gross investment and depreciation.
c.stock, as are gross investment and depreciation.
d.stock , whereas gross investment and depreciation are flows.
16)
(Advanced analysis) Refer to the above diagram, in which C1 is the before-tax
consumption schedule. The consumption schedule represented by C4 reflects:
A.a progressive tax system.
B.a proportional tax system.
C.a regressive tax system.
D.a higher MPC than is embodied in C1.
17) for an increase in demand the price effect is smallest and the quantity effect is
largest:
a.when supply is least elastic.
b.in the long run.
c.in the short run.
d.in the immediate market period.
18) Suppose a firm hires both labor (L) and capital (C) under purely competitive
conditions. The price of labor is PL and that of capital is PC. The marginal product of
labor is MPL and that of capital is MPC. The firm sells its product competitively at a
price of PX.
Refer to the above information. Which of the following must pertain if the firm is to
minimize the cost of producing any output?
A.MPC = MPL = PX
B.MPC = PC and MPL = PL
C.MPC/PC = MPL/PL
D.MPC/PX = MPL/PX
19) Suppose Ron is considering developing an asset portfolio. He expects to receive a
return of 15% and is willing to take on a maximum risk premium of 8%.
(a)What is if?
(b)If the Fed engages in open market operations that cause the risk-free interest rate to
change to 9%, how will Rons expected return change?
(c)How will Rons expected return change if they lower it to 5%?
20) of the following countries, the one that best exhibits the characteristics of a market
economy is:
a.canada.
b.cuba.
c.north korea.
d.china.
21) which of the following statements is incorrect?
a.a monopolist’s 100 percent market share ensures economic profits.
b.the monopolist’s marginal revenue is less than price for any given output greater than
1.
c.a monopolistic firm produces a product having no close substitutes.
d.a pure monopolist’s demand curve is the industry demand curve.
22) college students living off-campus frequently consume large amounts of ramen
noodles and boxed macaroni and cheese. when they finish school and start their careers,
their consumption of both goods frequently declines. this suggests that ramen noodles
and boxed macaroni and cheese are:
a.inferior goods.
b.normal goods.
c.complementary goods.
d.substitute goods.
23)
refer to the above diagram. for output level q, per unit costs of c are:
a.unattainable and imply the inefficient use of resources.
b.unattainable, given resource prices and the current state of technology.
c.attainable, but imply the inefficient use of resources.
d.attainable and imply that resources are being combined efficiently.
24) which of the following statements is most accurate about the prospects for poorer
(“follower”) countries “catching up” with richer (“leader”) countries?
a.catching up is unlikely to occur because their growth rates are the same on average.
b.catching up is unlikely to occur because richer countries tend to grow at a faster rate.
c.catching up is possible, but only if growth rates in leader countries fall to zero or
become negative.
d.catching up is possible as “follower countries” tend to grow faster than “leader
countries.”
25) The following data for the hypothetical nations of Alpha and Beta. Qs is domestic
quantity supplied and Qd is domestic quantity demanded.
Refer to the above data. The equilibrium world price must be higher than $1 because at
$1:
A.Beta wants to import more than Alpha.
B.Alpha wants to export more than Beta.
C.both nations want to export steel.
D.both nations want to import steel.
26) Make the case that the United States is not running out of oil or energy.
27) The long-run industry supply curve in a constant-cost industry graphs as a
horizontal line. Explain.
28) Explain why even small changes in the rate of productivity are significant. Use the
rule of 70 to demonstrate the point.
29) Can you imagine graphically a case where the efficiency loss from a tax would
equal zero? Explain.
30) Is the tax structure of the United States progressive at the Federal level, the state
and local level, and combined? How do transfer payments affect the distribution of
income?
31) Give an equation that shows the relationship between actual, required, and excess
reserves.
32) What is the history behind the idea of a fractional reserve banking system?
33) Summarize the antigrowth view of economic growth.
34) Why do developing nations often have low labor productivity? Are the workers just
lazy?