1) Which of the following claims is not made by defenders of lotteries?
A.Lotteries are a relatively painless way to fund important government services.
B.Lotteries help reduce organized crime by providing an alternative to illegal gambling.
C.Lotteries are preferable to taxes because they are voluntary.
D.Lotteries are progressive in nature, with higher income families playing more
frequently.
2) Monopsonist’s employment schedule.
Refer to the above table. What is the total labor cost for 11 workers?
A.$100
B.$150
C.$198
D.$220
3) Which of the following illustrates the basic idea of “parity” as a cornerstone of U.S.
agricultural policy?
A.The price of corn per bushel should be held constant
B.A bushel of corn should exchange for more of all goods today than previously
because farm incomes have declined
C.If a bushel of corn exchanged for a pair of pants at a previous time, the same rate of
exchange should prevail today
D.If a bushel of corn exchanged for a pair of pants at a previous time, the rate of
exchange today should be two bushels of corn for one pair of pants since productivity in
farming has increased faster than in pants manufacturing
4) Which of the following decreases in labor demand is due to a change in product
demand?
A.An increase in the price of paper increases the cost of making books, thus decreasing
the demand for bookbinders
B.The widespread availability of news on the Web reduces the demand for newspaper
workers
C.An increase in the price of steel increases the cost of producing cars and trucks, thus
decreasing the demand for automobile workers
D.A decline in productivity in retailing decreases the demand for retail sales workers
5)
Refer to the graph above, where Sd and Dd are the domestic supply and demand curves
for a product. The world price of the product is $6. If this market were closed to
international trade, the total revenue that would go to domestic producers would be:
A.$600, but only $240 if the domestic market were open to international trade
B.$600, but only $120 if the domestic market were open to international trade
C.$500, but only $240 if the domestic market were open to international trade
D.$240, but only $120 if the domestic market were open to international trade
6)
Refer to the graph above for an industry. If the industry were purely competitive, the
output quantity would be:
A.90
B.160
C.195
D.A level that is not labeled in the graph
7) Assume that a firm can produce product A, product B, or product C with the
resources it currently employs. These resources cost the firm a total of $100 per week.
Assume, for the purposes of this problem, that the firms costs cannot be changed. The
market prices and the quantities of A, B, and C these resources can produce are given
below.
(a)Compute the firms profit when it produces A, B, or C and enter these data in the
table.
(b)Which product will the firm produce?
(c)Suppose the quantity of product B the firm was able to produce with the same
amount of inputs now rose to 25. Which product will the firm now produce?
(d)As a result of the rise in quantity of product B to 25 that each firm can produce, what
will happen to the number of firms producing product B?
8) If the price elasticity of demand for orange juice is 0.8, then a reduction in the price
of orange juice will cause buyers to buy:
A.Fewer bottles of orange juice, and their total spending on orange juice will decrease
B.Fewer bottles of orange juice, but their total spending on orange juice will increase
C.More bottles of orange juice, and their total spending on orange juice will increase
D.More bottles of orange juice, but their total spending on orange juice will decrease
9) Employer-provided private health insurance in the United States has resulted in:
A.incentives that encourage the overuse of health care.
B.incentives that discourage the use of health care, and overall poorer health.
C.lower costs of health care as providers better achieve economies of scale.
D.comprehensive coverage of the U.S. population, with few lacking access to adequate
health care.
10) Government programs that pay benefits to those who are unable to earn income
because of permanent disabilities or to those who have very low incomes and dependent
children are called:
A.Public assistance programs
B.Social insurance programs
C.Affirmative action programs
D.Dependent programs
11) Assume that a firm’s interest-rate cost-of-funds curve for R&D is perfectly elastic.
Which of the following would decrease a firm’s optimal R&D expenditures and, in
equilibrium, increase the expected rate of return on the last dollar of R&D?
A.A rightward shift of the expected-rate-of-return curve.
B.An upward shift of the interest-rate cost-of-funds curve.
C.A leftward shift of the expected-rate-of-return curve.
D.A downward shift of the interest-rate cost-of-funds curve.
12) Country A limits other nation’s exports to Country A to 1,000 tons of coal annually.
This is an example of a(n):
A.protective tariff.
B.export subsidy.
C.import quota.
D.voluntary export restriction.
13) A non-discriminating monopolist will find that marginal revenue:
A.Exceeds average revenue or price
B.Is identical to price
C.Is sometimes greater and sometimes less than price
D.Is less than average revenue or price
14) Marginal product is:
A.the increase in total output attributable to the employment of one more worker.
B.the increase in total revenue attributable to the employment of one more worker.
C.the increase in total cost attributable to the employment of one more worker.
D.total product divided by the number of workers employed.
15) Most goods can be classified as normal goods rather than inferior goods. The
definition of a normal good suggests that:
A.The income elasticity of demand for the good is negative
B.The price elasticity of demand for the good is negative
C.The income elasticity for the good is greater than 0
D.The cross elasticity of demand for the good is positive
16) The principle that a firm should produce up to the point where the marginal revenue
from the sale of an extra unit of output is equal to the marginal cost of producing it is
known as the:
A.output-maximizing rule.
B.profit-maximizing rule.
C.shut-down rule.
D.break-even rule.