1) Answer the question based on the table below showing the marginal utility schedules
for product X and product Y for a hypothetical consumer. The price of product X is $4
and the price of product Y is $2. The income of the consumer is $20.
Refer to the above table. When the consumer purchases the utility-maximizing
combination of product X and product Y, total utility will be:
A.72
B.84
C.136
D.156
2) From an economic perspective, studies of the costs of trade barriers show that they:
A.Are outweighed by the reduction in foreign competition provided by the barriers
B.Are much less than benefits for domestic producers and workers
C.Are about equal to the benefits from trade barriers
D.Far exceed their benefits for society
3) The following table shows the relationship between output and costs for two firms in
the short run.
Which of the following is correct?
A.B has lower fixed costs than A
B.A has higher unit costs than B at low levels of output
C.A has greater marginal costs than B at each level of output
D.B starts experiencing diminishing marginal returns with the second unit of output
4)
Immigrant entrepreneurs have founded what portion of public companies in the U.S.
backed by venture capital?
A.About 10%
B.About 33%
C.About 25%
D.About 50%
5) Which of the following would be an example of how pure luck contributes to income
inequality?
A.Approval to receive unemployment benefits
B.Receipt of a government grant for housing
C.Selection as winner of a state lottery
D.Admission to a state university
6) A decreasing-cost industry is one in which:
A.contraction of the industry will decrease unit costs.
B.input prices fall or technology improves as the industry expands.
C.the long-run supply curve is perfectly elastic.
D.the long-run supply curve is upsloping.
7) Under a system of freely floating exchange rates, an increase in the international
value of a nation’s currency will:
A.cause an international surplus of its currency.
B.contribute to disequilibrium in its balance of payments.
C.cause gold to flow into that country.
D.cause its imports to rise.
8) Which of the following statements about market failure is not true:
A.Market failure causes an inefficient allocation of resources, even in a competitive
market
B.Market failure can come from causes on the demand-side or the supply-side of a
market
C.Market failure always results from some government action or policy in a market
D.Market failure can result from the number of sellers in a market being too few to
ensure competition
9) The so-called “Lake Wobegon effect”, where everyone in a group claim to be above
average, illustrates the:
A.Confirmation bias
B.Framing effect
C.Overconfidence effect
D.Self-serving bias
10) If a nondiscriminating imperfectly competitive firm is selling its 100th unit of
output for $35, its marginal revenue:
A.may be either greater or less than $35.
B.will also be $35.
C.will be less than $35.
D.will be greater than $35.
11)
Refer to the diagram. This firm’s demand and marginal revenue curves are based on the
assumption that:
A.the firm has no immediate rivals.
B.rivals will match both a price increase and a price decrease.
C.rivals will match a price increase but ignore a price decrease.
D.rivals will ignore a price increase but match a price decrease.