1) Since 1990, U.S. immigrants have founded ____ of every _____ public companies
financed by venture capital.
A.1; 4
B.1; 3
C.1; 2
D.2; 5
2) Entrepreneurs:
A.work exclusively in government and university R&D laboratories.
B.often form small companies called start-ups.
C.are less likely to exist in service industries than in manufacturing industries.
D.are engaged mainly in basic scientific research.
3) Assume that Abby, Ben, Clara, Joe, and Matt are the only citizens in a community. A
proposed public good has a total cost of $1000. All five citizens will share an equal
portion of this cost in taxes. The benefit of the public good is $220 to Abby, $210 to
Ben, $210 to Clara, $180 to Joe, and $120 to Matt. Who are likely to vote in favor of
this proposal?
A.Abby, Ben, Clara, and Joe
B.Ben, Clara, Joe, and Matt
C.Ben, Clara, and Joe
D.Abby, Ben, and Clara
4)
Refer to the competitive market diagram for product Z. Assume that the current market
demand and supply curves for Z are D1 and S1. If there are substantial external benefits
associated with the production of Z, then:
A.government can improve the allocation of resources by subsidizing consumers of Z.
B.government can improve the allocation of resources by imposing a per-unit tax on Z.
C.a government subsidy for producers of Z would ensure that consumers are paying
directly for all of the benefits they receive from Z.
D.consumers are paying too much for the good.
5) In which of the following industries are economies of scale exhausted at relatively
low levels of output?
A.Aircraft production.
B.Automobile manufacturing.
C.Concrete mixing.
D.Newspaper printing.
6) In the marginal productivity theory of income distribution, when all markets are
purely competitive, the payment for each unit of a resource is equal to its:
A.Total product
B.Marginal product
C.Marginal revenue product
D.Total revenue product
7) In 2010, the bottom 90% of households in the U.S. owned about how many percent
of total wealth in the nation?
A.65%
B.52%
C.36%
D.23%
8)
Refer to the budget line shown in the diagram. If the consumer’s money income is $20,
the:
A.prices of C and D cannot be determined.
B.price of C is $2 and the price of D is $4.
C.consumer can obtain a combination of 5 units of both C and D.
9)
Refer to the diagram. Total utility is at a maximum at _____ units of X.
A.2
B.3
C.4
D.6
10) Consider the two graphs below. Graph A represents a typical firm in a purely
competitive industry. Graph B represents the supply and demand conditions in that
industry.
(a)Describe the price, output, and profit situation for the individual firm in the short run.
(b)Describe what will happen to the individual firm and the industry in the long run.
Show the changes on graphs A and B.
11) A value-added tax (VAT):
A.is another name for a retail sales tax but is otherwise the same.
B.is like a sales tax but is only imposed on the difference between a firm’s sales and its
purchases from other firms.
C.is like an income tax but is only imposed on the difference between a person’s income
and his or her consumption.
D.only applies to imported goods.
12) Alex and Ben are both loggers wanting to harvest timber from the same forest. Alex
prefers to harvest and replant at a sustainable rate; Ben wants to harvest as many trees
as possible to maximize short-run profit, and then move on. They face the same
production costs.
Refer to the information given. If property rights are poorly enforced or nonexistent:
A.Ben will choose to harvest as quickly as possible, but Alex will choose to harvest
more slowly and replant.
B.both will harvest trees as quickly as possible, before the other one does.
C.both now have an incentive to harvest and replant in a sustainable manner.
D.we would expect them to form an agreement on harvesting and replanting.