1)
Refer to the diagram. Marginal utility:
A.increases at an increasing rate.
B.becomes negative after consuming 4 units of output.
C.is found by dividing total utility by the number of units purchased.
D.cannot be calculated from the total utility information.
2) The Sunshine Corporation finds that its costs are $40 when it produces no output. Its
total variable costs (TVC) change with output as shown in the accompanying table. Use
this information to answer the following question.
Refer to the information. The average total cost of 3 units of output is:
A.$65.
B.$21.67.
C.$40.
D.$35.
3) “Hydraulic fracking” has led to all of the following, except:
A.Strengthening the argument for subsidizing alternative energy sources
B.Making the U.S. a major producer of natural gas in the world
C.Making the U.S. a major oil or petroleum producer in the global market
D.Creating a heated debate over its environmental ramifications
4) Use the following demand schedule and possible supply schedules, A-D, to answer
the question.
Refer to the above schedules. Suppose that the supply of a resource is given by the
schedule that exhibits a zero price elasticity. If demand for the resource increases from
the original demand schedule by 20 units at each price, then the equilibrium economic
rent would be:
A.$4
B.$3
C.$2
D.$1
5)
Refer to the graph above. Which demand curve is perfectly inelastic?
A.D2
B.D3
C.D4
D.D5
6)
Assumptions: These two graphs show two sectors of the labor market for a particular
kind of labor. Relevant product markets are competitive. The two labor demand curves
are identical and initially the quantities of labor employed in the two sectors are L1 and
L’1 and the wage rate in each sector is Wn.
Refer to the diagrams and assumptions. If all the workers who lose their jobs in the
union sector because of a Wn to Wu union wage increase are reemployed in nonunion
sector 2, output in that sector will:
A.decrease by F + G
B.increase by F + G
C.increase by E + F
D.increase by E
7)
Refer to the figure above. In Venezuela, there is a very small number of extremely
wealthy households and an extremely large number of very poor households. If the
United States is represented by Lorenz curve c above, which curve would represent
Venezuela?
A.a
B.b
C.c
D.d
8) At the output level defining allocative efficiency:
A.the areas of consumer and producer surplus necessarily are equal.
B.marginal benefit exceeds marginal cost by the greatest amount.
C.consumer surplus exceeds producer surplus by the greatest amount.
D.the maximum willingness to pay for the last unit of output equals the minimum
acceptable price of that unit of output.
9) Consider the following situations related to a sports stadium in a city. Assume this is
the primary venue for sports games. Decide whether the city government is likely to
intervene to enforce antitrust law or not.
(a)In response to slow sales of memorabilia in its sport shop, the stadium management
decides to require patrons to buy one item of memorabilia over $5 along with their
ticket.
(b)The stadium management decides to charge different prices for students, regular
patrons and senior citizens.
(c)The stadium is purchased by a soft drink company, who will only provide their
products at games.
(d)A company is coming into the town wanting to build a new sports complex. The
stadium management decides to fund a smear campaign against the new development,
as well as threaten to pull funding from key city council members campaign funds.
10) The domestic opportunity cost of producing a television in the United States is 20
bushels of wheat. In Korea, the domestic opportunity cost of producing a television is
10 bushels of wheat. In this case:
A.Korea has a comparative advantage in the production of wheat
B.The United States has a comparative advantage in the production of televisions
C.Mutual gains from trade can be obtained if the United States imports televisions from
Korea and Korea imports wheat from the United States
D.Mutual gains from trade can be obtained if the United States imports wheat from
Korea and Korea imports televisions from the United States
11) Which of the following is a positive economic statement?
A.Government must maintain the current level of defense spending to keep the nation
safe
B.The minimum wage should be increased to give people a decent wage
C.Americans should buy American products in order to boost the national economy
D.Stock prices rose to a new record last month for the fourth month in a row
12) Suppose two nations are considering specializing in either calculators or personal
computers. If solely producing calculators, country A can produce 300 and country B
can produce 400. If solely producing personal computers, country A can produce 150
and country B can produce 100. Assume their labor forces are of equivalent size.
(a)Which country has the comparative advantage in calculators? In computers?
(b)It is predicted that current demand will yield an exchange of 3 calculators for every 1
computer. Will trade occur? If not, is it because both countries are against trade?
13)
In the figure above, if the price of the product increases from $5 to $6, then total
revenue would:
A.Increase by $300
B.Decrease by $100
C.Decrease by $300
D.Stay the same
14) In the market for loanable funds:
A.an increase in available bank lending will increase the interest rate.
B.a decrease in saving will reduce the interest rate.
C.an increase in borrowing for investment will increase the interest rate.
D.a decrease in government borrowing will increase the interest rate.
15) Answer the question using the following table with investment-demand in an
economy.
Refer to the above table. An increase in the interest rate from 15% to 19% percent
would:
A.Increase investment by $90 billion
B.Decrease investment by $90 billion
C.Decrease investment by $110 billion
D.Decrease investment by $140 billion
16)
Refer to the above graph. The relationship between the average tax rate and the tax base
in a proportional tax would be represented by:
A.Curve A
B.Curve B
C.Curve C
D.None of the graphs