1) Which of the following best describes the typical growth pattern of trees for logging?
A.Trees grow slowly at first, then grow exponentially until cut down.
B.Trees grow quickly at first, then continue to grow at a declining rate.
C.Trees grow quickly at first, then plateau for a time before resuming an exponential
growth pattern.
D.Trees grow slowly at first, quickly in the middle years, and then at a diminishing rate
into old age.
2) Many people have turned to the Internet to get the news. This has caused the
circulation numbers of newspapers to fall drastically, which in turn caused their:
A.Average fixed costs to increase
B.Average total costs to decrease
C.Average fixed costs to decrease
D.Marginal costs to increase
3)
As the firm in the diagram expands from plant size #1 to plant size #3, it experiences:
A.diminishing returns.
B.economies of scale.
C.diseconomies of scale.
D.constant costs.
4) The special-interest effect is significant because:
A.It corrects instances of spillover costs and benefits
B.It can contribute to economic inefficiency in the public sector
C.Capitalistic economies are based upon the pursuit of self-interest
D.It causes quantity demanded to equal quantity supplied in competitive markets
5) When sellers are unable to distinguish “good” buyers from “bad” ones, they face the
problem of:
A.Moral hazard
B.Adverse selection
C.Externalities
D.Diminishing utility
6) Which system would be accompanied by occasional currency interventions by
central banks to stabilize or alter rates to avoid persistent balance of payments deficits
or surpluses?
A.The gold standard
B.Fixed exchange rates
C.Flexible exchange rates
D.Managed floating exchange rates
7) The profit-maximizing rule for a firm hiring both labor (L) and capital (C) under
conditions of imperfect competition is:
A.MPL/PL = MPC/PC
B.MPL/MPC = MRCC/MRPL
C.MRPL/MRCL = MRPC/MRCC = 1
D.MRCL/MPL = MRCC/MPC = 1
8) Answer the question on the basis of the following information. The demand for
commodity X is represented by the equation P = 100 – 2Q and supply by the equation P
= 10 + 4Q.
Refer to the given information. The equilibrium quantity is:
A.10
B.20
C.15
D.30
9) 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. The domestic equilibrium prices of steel in Alpha and Beta are:
A.$5 and $4, respectively.
B.$2 and $4, respectively.
C.$3 and $2, respectively.
D.$1 and $2, respectively.
10) The demand schedule for agricultural product A is given in columns 1 and 2 of the
following table.
(a)What would happen to the income of farmers if farmers were persuaded by the
government to reduce the size of their crop from 22,000 to 20,000 bales?
(b)If the crop production remained constant at 22,000 bales and the demand for A
increased to that shown in columns 1 and 3, what would the income of farmers be?
11) Answer the question using the following table. Figures are in billions of dollars.
Refer to the above table. The equilibrium interest rate and quantity of loanable funds
demanded and supplied in this market will be:
A.8 percent and $14 billion
B.10 percent and $18 billion
C.12 percent and $22 billion
D.14 percent and $26 billion
12) Use the following table to answer the question below for Country Y. Column 1 is
the price of a product. Column 2 is the quantity demanded domestically (Qdd) and
Column 3 is the quantity supplied domestically (Qsd).
Refer to the table above. At what price will Country Y export 100 units of the product?
A.$9.00
B.$8.00
C.$7.00
D.$6.00
13) Which of the following would cause the present optimal extraction level of a
nonrenewable resource to rise?
A.A decrease in the price of the resource.
B.An increase in the extraction cost of the resource.
C.A decrease in the user cost of the resource.
D.A decrease in interest rates.
14) Cost-benefit analysis attempts to:
A.compare the real worth, rather than the market values, of various goods and services.
B.compare the relative desirability of alternative distributions of income.
C.determine whether it is better to cut government expenditures or reduce taxes.
D.compare the benefits and costs associated with any economic project or activity.