1) Use the resource demand data shown on the left and the resource supply data on the
right in answering the following question:
Refer to the given data. How many workers will this profit-maximizing firm choose to
employ?
A.6
B.5
C.4
D.3
2) Marginal utility is the:
A.sensitivity of consumer purchases of a good to changes in the price of that good.
B.change in total utility obtained by consuming one more unit of a good.
C.change in total utility obtained by consuming another unit of a good divided by the
change in the price of that good.
D.total utility associated with the consumption of a certain number of units of a good
divided by the number of units consumed.
3) The table below shows the marginal utility schedules for old product X and new
product Y for a hypothetical consumer. The price of X is $2 and the price of good Y is
$1. The budget of the consumer is $10.
Refer to the above table. When the consumer purchases the utility-maximizing
combination of old product X and new product Y, total utility will be:
A.62
B.70
C.78
D.82
4) The development of the digital video and camera which replaced film cameras is an
example of:
A.Roundabout production
B.Derived demand
C.Creative destruction
D.Specialization
5)
Refer to the diagrams. With the industry structures represented by diagram:
A.(B) there will be allocative efficiency.
B.(A) economic profit can persist in the long run.
C.(B) output will be less than in diagram (A).
D.(B) output will be the same as in diagram (A).
6)
Refer to the diagram for a pure monopolist. Monopoly profit:
A.cannot be determined from the information given.
B.will be ae per unit sold.
C.will be bc per unit sold.
D.will be ac per unit sold.
7) The plus items below are “export-type” entries and the minus items are “import-type”
entries in the balance of payments for the hypothetical country of Zippo.
Refer to the given information. Zippo has a:
A.current account surplus.
B.financial account deficit.
C.financial account surplus.
D.surplus on goods and services.
8) Conspiracies to fix prices are:
A.illegal under the Clayton Act.
B.illegal under the Celler-Kefauver Act.
C.per se violations of the antitrust laws.
D.more tolerated by government today than two or three decades ago.
9)
Refer to the diagram. Physicians likely would argue that health care should be provided
to patients in:
A.some amount less than Q1
B.amount Q1
C.some amount between Q1 and Q2
D.amount Q2
10) Price discrimination is more common in service industries because:
A.Low price buyers will find it virtually impossible to resell the products of such
industries to high price buyers
B.The costs of providing such industries’ products to different groups of buyers vary
dramatically
C.The price elasticity of demand is the same for all groups of buyers in these industries
D.All firms in these industries have significant monopoly power over price
11) Another way of saying “ceteris paribus” is:
A.Other things equal
B.In general
C.In reality
D.Because of this
12) The following is cost information for the Creamy Crisp Donut Company:
Entrepreneur’s potential earnings as a salaried worker = $50,000
Annual lease on building = $22,000
Annual revenue from operations = $380,000
Payments to workers = $120,000
Utilities (electricity, water, disposal) costs = $8,000
Value of entrepreneur’s talent in the next best entrepreneurial activity = $80,000
Entrepreneur’s forgone interest on personal funds used to finance the business = $6,000
Refer to the data. Creamy Crisp’s total revenues exceed its total costs, including a
normal profit, by:
A.$150,000.
B.$94,000.
C.$80,000.
D.$230,000.
13) A special-interest issue is one whose passage yields:
A.private benefits equal to external benefits.
B.large external benefits compared to private benefits.
C.small economic losses to a small number of people and large economic losses to a
large number of people.
D.large economic gains to a small number of people and small economic losses to a
large number of people.
14) Which of the following would be evidence of an increase in income inequality over
time in the United States?
A.An increase in the percentage of total household income received by the lowest
quintile
B.An increase in the percentage of total household income received by the highest
quintile
C.An increase in the percentage of total household income received by the four lowest
quintiles
D.A decrease in the percentage of total household income received by the highest
quintile