1) Most economists agree that government efforts in economic development must be:
A.Employed to substitute for private efforts
B.Designed to support private efforts
C.The sole driver of economic development
D.Kept at a minimum because we can always rely on markets
2) Many of the major projects of the World Bank have been for:
A.Making loans to private citizens
B.Building infrastructure in a nation
C.Supervising the banking system in DVCs
D.Establishing new tax systems for governments in DVCs
3) The incidence of a tax pertains to:
A.the degree to which it alters the distribution of income.
B.how easy it is to evade the tax.
C.who actually bears the burden of a tax.
D.the progressiveness or regressiveness of tax rates.
4) Which one of the following, other things equal, will directly alter the U.S. balance of
trade?
A.An increase in the balance on capital account.
B.A decrease in U.S. goods exports.
C.An increase in net transfers.
D.A decrease in U.S. purchases of assets abroad.
5)
Refer to the above graphs. They show the long-run average total cost (LRATC) for cars.
For which graph are there economies of scale throughout the entire range of output of
cars?
A.Graph A
B.Graph B
C.Graph C
D.Graph D
6) Answer the question on the basis of the following information for Manfred’s Shoe
Shine Parlor. Assume Manfred hires labor, its only variable input, under purely
competitive conditions. Shoe shines are also sold competitively.
Refer to the given data. What is the marginal product of the sixth worker?
A.2 units.
B.3 units.
C.4 units.
D.5 units.
7) Social Security payments are primarily made to assist:
A.Families with dependent children
B.Families affected by natural disasters
C.Retired and disabled workers
D.Unemployed workers
8) If the prices of agricultural products fall, then the quantities demanded usually:
A.Do not increase by much because the price-changes are often small
B.Do not increase by much because there are no close substitutes
C.Increase significantly because the products satisfy basic needs
D.Increase significantly because the products have no close substitutes and are
necessities
9)
Refer to the payoff matrix. Bob’s Burgers and Sam’s Sandwiches are competing
restaurants in a small town. Both are considering adding pizza to their line of products.
If this is a sequential game:
A.whoever moves first to add pizza will discourage the other from adding pizza.
B.neither firm will add pizza, regardless of who moves first.
C.both firms will add pizza, regardless of who moves first.
D.there is only one possible Nash equilibrium for this game.
10) The table below shows the marginal-utility schedules for goods A and B for a
hypothetical consumer. The price of good A is $1 and the price of good B is $2. The
income of the consumer is $8.
Refer to the above table. If the price of A decreases, while the price of B and the
consumer’s income stay the same, we would expect:
A.MU/P of A to increase, and the consumers will thus buy less of B
B.MU/P of A to increase, and the consumers will thus buy less of A
C.MU/P of A to decrease, and the consumers will thus buy less of B
D.MU/P of A to decrease, and the consumers will thus buy less of A
11) The table below shows the marginal-utility schedules for goods A and B for a
hypothetical consumer. The price of good A is $1 and the price of good B is $2. The
income of the consumer is $8.
Refer to the above table. If the price of B falls to $1, while the price of A and the
consumer’s income stay the same, what would be the utility-maximizing combination of
goods A and B?
A.5 A and 3 B
B.4 A and 4 B
C.3 A and 5 B
D.2 A and 6 B
12) Use the table below that shows the rate of return and R&D spending for a
hypothetical firm. Assume the interest-rate cost of funds is 8%.
(a)What is the optimal amount of R&D expenditures? At this amount, what will be the
marginal cost and what will be the marginal benefit of R&D spending?
(b)Now assume that the interest-rate cost of funds rises to 12%. What will be the
optimal amount of R&D spending? For this amount of R&D spending, what will be the
marginal cost and what will be the marginal benefit (expected rate of return)?
(c)Now assume that the interest-rate cost of funds falls to 6%. What will be the optimal
amount of R&D spending? For this amount of R&D spending, what will be the
marginal cost and what will be the marginal benefit (expected rate of return)?
13) If everyone pays a fixed dollar amount of tax, then the tax is a:
A.Proportional tax
B.Regressive tax
C.Personal tax
D.Marginal tax
14) The basic issue in the DuPont cellophane case was:
A.whether trade crossed state lines.
B.defining the relevant market.
C.structure versus behavior.
D.the rule of reason.
15)
Which of the given nations would be low-income developing countries (DVCs),
according to the World Bank?
A.Country A only.
B.Countries A, D, and E.
C.Countries A and E.
D.Countries A, B, D, and E.