1) Ignoring international trade, in a mixed economy aggregate expenditures are
comprised of:
A.Ca + S + G.
B.Ca + Ig + G.
C.Ca + S + Ig.
D.Ca + T + Ig.
2) as it relates to economic growth, the term long-run trend refers to:
a.the long-run increase in the relative importance of durable goods in the u.s. economy.
b.the long-term expansion or contraction of business activity that occurs over 50 or 100
years.
c.fluctuations in business activity that average 40 months in duration.
d.fluctuations in business activity that occur around christmas, easter, and so forth.
3) jennifer buys a piece of costume jewelry for $33 for which she was willing to pay
$42. the minimum acceptable price to the seller, nathan, was $30. jennifer experiences:
a.a consumer surplus of $12 and nathan experiences a producer surplus of $3.
b.a producer surplus of $9 and nathan experiences a consumer surplus of $3.
c.a consumer surplus of $9 and nathan experiences a producer surplus of $3.
d.a producer surplus of $9 and nathan experiences a producer surplus of $12.
4) (Consider This) Which of the following methods is commonly used by farmers to
‘smooth” income over time?
A.Producing only one crop to benefit from specialization.
B.Renting land from other farmers to increase production.
C.Entering contracts with buyers of their farm output to assume themselves of a fixed
price.
D.All of these risk-management techniques are used to hedge against short-run price
and output fluctuations.
5) suppose the production of a certain good creates substantial positive externalities. if
government adopts a policy that adjusts demand to take these benefits into account,
then:
a.firms in this industry will go out of business.
b.the output of the product will increase.
c.the output of the product will decrease.
d.the price of the product will decrease.
6)
refer to the above diagrams. in which case would the coefficient of cross elasticity of
demand be positive?
a.a
b.b
c.c
d.d
7) As it relates to R&D, the expected-rate-of-return curve, r:
A.usually slopes upward.
B.shows the cost of financing various levels of R&D.
C.varies in location depending on the location of the interest-rate-cost-of-funds curve, i.
D.represents the marginal benefit element in the MB = MC decision framework.
8) The Laffer Curve is a central concept in:
A.monetarism.
B.Keynesianism.
C.welfare economics.
D.supply-side economics.
9) Economic or pure rent is:
A.a payment made for the use of housing, factory buildings, or capital goods.
B.a payment for resources used in the production of “free goods.”
C.a payment for the use of those resources whose supply is perfectly elastic.
D.the price paid for the use of land and other nonreproducible resources.
10) Depreciation of the dollar will:
A.decrease the prices of both U.S. imports and exports.
B.increase the prices of both U.S. imports and exports.
C.decrease the prices of U.S. imports, but increase the prices to foreigners of U.S.
exports.
D.increase the prices of U.S. imports, but decrease the prices to foreigners of U.S.
exports.