1) Use the following data to answer the question:
Refer to the data. Diminishing returns begin to occur with the hiring of the _________
unit of labor.
A.first
B.second
C.third
D.seventh
2) A firm will be hiring labor and capital in profit-maximizing amounts when:
A.MRP capital/price of capital equals MRP labor/price of labor
B.MRP capital/MRP labor equals price of labor/price of capital
C.MRP capital/price of capital equals MRP labor/price of labor equals 1
D.The MRP of the last unit hired of both labor and capital are the same
3) The average per capita income in 2010 for low-income developing nations was:
A.$580
B.$2,100
C.$1,240
D.$4,600
4) Over time, the equilibrium price of a gigabyte of computer memory has fallen while
the equilibrium quantity purchased has increased. Based on this we can conclude that:
A.decreases in the demand for computer memory have exceeded increases in supply.
B.decreases in the supply of computer memory have exceeded increases in demand.
C.increases in the demand for computer memory have exceeded increases in supply.
D.increases in the supply of computer memory have exceeded increases in demand.
5)
In a competitive market illustrated by the diagram above, for a price floor to be
effective and alter the market situation, it must be set:
A.At $15
B.Below $15
C.Above $15
D.At $10
6) Answer the question on the basis of 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 given data. Assuming that Alpha and Beta are the only two nations in the
world, 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.
7) Import quotas on products will reduce the quantity of the imported products and:
A.Decrease the price to the consumers
B.Increase the price to the consumers
C.Will not affect the price to the consumers
D.Increase the total quantity of the product consumed
8) Diseconomies of scale occur mainly because:
A.Of the law of diminishing returns
B.Firms in an industry must be relatively large in order to use the most efficient
production techniques
C.Of the inherent difficulties involved in managing and coordinating a large business
enterprise
D.The short-run average total cost curve rises when marginal product is greater than
average total cost
9)
Refer to the diagram. If a firm produces output Q1 at a unit cost of b, then the:
A.firm is not fulfilling the least-cost rule in employing resources.
B.firm may or may not be maximizing profits.
C.marginal product per dollar’s worth of each resource employed is not the same.
D.firm has achieved minimum efficient scale.
10) If marginal cost exceeds average total cost in the short run, then which is likely to
be true?
A.Average total cost is increasing
B.Average variable cost is decreasing
C.Average total cost is less than average variable cost
D.Marginal cost is less than average variable cost
11)
Refer to the diagram. A price of $60 in this market will result in:
A.equilibrium.
B.a shortage of 50 units.
C.a surplus of 50 units.
D.a surplus of 100 units.
12) Differences in production efficiencies among nations in producing a particular good
result from:
A.different endowments of fertile soil.
B.different amounts of skilled labor.
C.different levels of technological knowledge.
D.all of these.
13) The reason the marginal cost curve eventually increases as output increases for the
typical firm is because of:
A.Diseconomies of scale
B.Diminishing marginal utility
C.Diminishing marginal returns
D.Increasing opportunity cost