1)
refer to the above graphs. assume that pizza is measured in slices and beer in pints. in
which of the graphs is the opportunity cost of a pint of beer equal to one slice of pizza?
a.graph a
b.graph b
c.graph c
d.graph d
2) Stagflation refers to:
A.an increase in inflation accompanied by decreases in real output and employment.
B.a decline in the price level accompanied by increases in real output and employment.
C.a simultaneous increase in real output and the price level.
D.a simultaneous reduction in real output and the price level.
3) (consider this) at fast-food restaurants:
a.consumers enjoy complete and accurate information.
b.decisions are usually made by trial and error.
c.decisions entail comparisons of marginal costs and marginal benefits.
d.benefits always exceed costs.
4)
Refer to the above graph. Which of the lines in the above diagram represent(s) a
proportional tax?
A.both A and B.
B.D only.
C.C only.
D.B only.
5)
assumptions: (1) the demand for labor in alphania and betania are as shown by da and
db, respectively; (2) alphania’s native labor force is f and that of betania is g; (3) wage l
in alphania is equal to wage m in betania; and (4) full employment exists in both
countries.
refer to the above diagram and assumptions. if migration is costless and unimpeded, the
average level of wages will:
a.decrease in betania, but remain unchanged in alphania.
b.increase in alphania, but remain unchanged in betania.
c.increase in alphania and decrease in betania.
d.increase in betania and decrease in alphania.
6) if an effective ceiling price is placed on hamburgers then:
a.the quantity demanded will exceed the quantity supplied.
b.a black market for hamburger may evolve.
c.consumers may want government to ration hamburger.
d.all of these are likely outcomes.
7) A craft union attempts to increase wage rates by:
A.equating the MRP and the MRC curves.
B.shifting the labor supply curve to the left.
C.shifting the labor supply curve to the right.
D.shifting the MRP curve to the right.
8) a firm is defined as a(n):
a.physical establishment that performs one or more functions in fabricating and
distributing goods and services.
b.organization that employs resources to produce goods and services for profit and
operates one or more plants.
c.a group of companies that produce the same, or similar, products.
d.any company that is vertically or horizontally integrated.
9) The following information: The Fed is going to auction $30 billion in reserves using
the term auction facility. It receives the following bids:
Refer to the above information. Which of the following banks will only be allowed to
borrow a fraction of the reserves it bid for at this auction?
A.Epsilon.
B.Alpha.
C.Gamma.
D.All of the banks will only be allowed to borrow a fraction, as reserves are allocated
proportionally to the amount of reserves desired.
10) Which of the following arguments for farm subsidies is most closely associated
with the parity concept?
A.Although farmers produce necessities for the rest of us, they receive low incomes that
are declining in real terms, and should therefore receive price and income support.
B.Farmers sell their output in purely competitive markets, but must buy inputs from
imperfectly competitive firms.
C.Farmers cannot fully insure themselves against the risks unusual to farming, such as
floods, droughts, and pests.
D.The “family farm” is an American institution that should be protected and nurtured.
11) 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. In competitive labor markets, the marginal cost of an
additional unit of labor:
A.is equal to PL MPL.
B.is equal to MPL/PL.
C.is equal to PL.
D.cannot be determined from the information given.
12) microsoft charges a substantially lower price for a software upgrade than for the
initial purchase of the software. this implies that microsoft views the demand curve for
the software upgrade to be:
a.more elastic than the demand for the original software.
b.upsloping rather than downsloping.
c.less elastic than the demand for the original software.
d.of less value than the original software.
13) The determinants of aggregate supply:
A.are consumption, investment, government, and net export spending.
B.explain why real domestic output and the price level are directly related.
C.explain the three distinct ranges of the aggregate supply curve.
D.include resource prices and resource productivity.
14) Suppose that it takes a minimum of 10 units of food to keep a person alive for a
year, that the population can double every 20 years, and that the food supply can
increase every 20 years by an amount equal to what it was in the beginning (year 0).
(a)Assume that both the population and the food supply grow at these rates. Complete
the following table by computing the size of the population and the food supply in years
20 through 100.
(b)What happens to the relationship between the food supply and the population in the
60th year?
(c)What would actually prevent the population from growing at this rate following the
60th year?
(d)Assuming that the actual population growth in the years following the 60th does not
outrun the food supply, what would be the size of the population in year 80 and year
100?
(e)Explain why the standard of living failed to increase in the years following the 60th
even though the food supply increased by 75% between years 60 and 100.
15) (Last Word) Say’s law and classical macroeconomics were disputed by:
A.Adam Smith.
B.Jeremy Bentham.
C.John Stuart Mill.
D.John Maynard Keynes.
16) the above data illustrate the:
a.law of comparative advantage.
b.utility-maximizing rule.
c.law of diminishing marginal utility.
d.law of increasing opportunity costs.