1) The table below shows the weekly demand for hamburger in a market where there
are just three buyers.
Refer to the above table. If the price of hamburger falls from $5 to $3, then the weekly
market quantity demanded will:
A.Increase from 24 to 52
B.Decrease from 52 to 24
C.Increase from 120 to 156
D.Increase from 29 to 55
2) A decrease in the demand for recreational fishing boats might be caused by an
increase in the:
A.income of sports fishers.
B.price of outboard motors.
C.size and number of fish available.
D.price of sailing boats.
3) When an economy is operating under conditions of full employment, the production
of more of commodity A will mean the production of less of commodity B because:
A.of the law of increasing opportunity costs.
B.economic wants are insatiable.
C.resources are limited.
D.resources are specialized and only imperfectly substitutable.
4) Government can play a major positive role in the early stage of economic
development by:
A.Providing an adequate infrastructure
B.Establishing price controls for products
C.Promoting exports by subsidizing them
D.Creating marketing boards for export products
5)
Refer to the above graphs. (Assume that the pre-migration labor force in Country A is 100
and that it is 150 in country B.) The migration of labor will:
A.Increase wages in country A and decrease wages in country B
B.Decrease wages in country A and decrease wages in country B
C.Decrease wages in country A and increase wages in country B
D.Increase wages in country A and increase wages in country B
6) Answer the question on the basis of the following demand and cost data for a specific
firm:
Refer to the data. If columns (1) and (3) of the demand data shown are this firm’s
demand schedule, the profit-maximizing price will be:
A.$9.
B.$7.
C.$11.
D.$6.
7) A major reason that firms form a cartel is to:
A.Reduce the elasticity of demand for the product
B.Enlarge the market share for each producer
C.Minimize the costs of production
D.Maximize joint profits
8) Critics of minimum-wage legislation argue that it:
A.keeps inefficient producers in business.
B.reduces employment.
C.undermines incentives to work.
D.is deflationary.
9) The invisible hand concept suggests that:
A.market failures imply the need for a national economic plan.
B.big businesses are inherently more efficient than small businesses.
C.the competitiveness of a capitalistic market economy invariably diminishes over
time.
D.assuming competition, private and public interests will coincide.
10) Under monopolistic competition, entry to the industry is:
A.completely free of barriers.
B.more difficult than under pure competition but not nearly as difficult as under pure
monopoly.
C.more difficult than under pure monopoly.
D.blocked.
11) The monopolistically competitive seller’s demand curve will become more elastic
the:
A.more significant the barriers to entering the industry.
B.greater the degree of product differentiation.
C.larger the number of competitors.
D.smaller the number of competitors.
12) The following diagram is a flexible exchange market for foreign currency:
Refer to the diagram. Other things equal, a rightward shift of the supply curve would:
A.appreciate the euro.
B.cause a surplus of euros.
C.decrease the equilibrium quantity of euros.
D.appreciate the dollar.
13)
Refer to the diagram. Flow 1 represents:
A.wage, rent, interest, and profit income.
B.land, labor, capital, and entrepreneurial ability.
C.goods and services.
D.consumer expenditures.
14) Complete the following table, where L is the units of labor, TPL is the total product
of labor, MPL is the marginal product of labor, P is product price, TR is total revenue,
and MRPL is the marginal revenue product of labor.
(a)In what type of market is the firm selling its product? How do you know?
(b)Why does the MRP schedule decrease as labor increases?
(c)Complete the following table.
