1) Which of the following measurement issues makes interpretation of U.S. poverty
rates difficult?
A.Poverty statistics measure consumption rather than income, and some families may
receive income that is above the official poverty line.
B.The high cost of living in urban areas tends to result in the understatement of poverty.
C.Most people below the poverty line have substantial unreported income.
D.The poverty rate is adjusted for every urban and rural area, so people’s poverty status
changes whenever they move.
2) Exclusive unionism has the economic effect of:
A.Strengthening the bargaining position of an industrial union
B.Weakening the bargaining position of a craft union
C.Decreasing the supply of labor
D.Increasing the demand for labor
3) “Economics is concerned with how individuals, institutions, and society make
optimal choices under conditions of scarcity.” This statement is:
A.positive but incorrect.
B.positive and correct.
C.normative but incorrect.
D.normative and correct.
4)
Refer to the above supply and demand graph. S1 and D1 represent the current market
supply and demand, respectively. S2 and D2 represent the socially optimal supply and
demand. The positions of the graphs indicate that there is (are):
A.External benefits from production and external costs from consumption of the
product
B.External costs from production and external benefits from consumption of the
product
C.External benefits from production and consumption of the product
D.External costs from production and consumption of the product
5) Aside from new taxes, the Patient Protection and Affordable Care Act (PPACA) aims
to generate revenue by enforcing a personal mandate that requires all individuals not
covered by employer- or government-provided health insurance to purchase insurance.
6) The table below lists the domestic supply, demand and price levels for sugar in Haiti
and the Dominican Republic. Use this information to answer the following questions.
(a)What is the domestic equilibrium level of quantity and price of sugar in each
country?
(b)Suppose the world price of sugar is currently $1.00. Will each country face a
shortage, surplus or neither for sugar?
(c)If the domestic markets for sugar of each country were combined, what would be the
equilibrium quantity and price of imports/exports? Which country will import sugar and
which will export? Support your answer graphically.
7) When the production of a good generates external costs, the firm’s supply curve will
be:
A.Below the true-cost supply curve
B.Above the true-cost supply curve
C.Vertical
D.Horizontal
8)
In the diagram:
A.the consumer is indifferent between points A and B, but neither point maximizes his
utility.
B.the consumer is indifferent between points A and B and either point will maximize
his utility.
C.any combination of X and Y entailing more of Y and less of X than shown at B would
be preferred.
D.any combination of X and Y entailing more of X and less of Y than shown at A would
be preferred.
9) Elasticity can be thought of as degree of relative:
A.video brightness.
B.price bounce.
C.audio volume.
D.quantity stretch.
10) The law of increasing opportunity costs states that:
A.if society wants to produce more of a particular good, it must sacrifice larger and
larger amounts of another good to do so.
B.the sum of the costs of producing a particular good cannot rise above the current
market price of that good.
C.if the sum of the costs of producing a particular good rises by a specified percent, the
price of that good must rise by a greater relative amount.
D.if the prices of all the resources used to produce goods increase, the cost of producing
any particular good will increase at the same rate.
11) The process of producing and accumulating capital goods is called:
A.money capital.
B.depreciation.
C.investment.
D.consumption.
12) Which characteristic is most typical of human resources in developing nations?
A.A small population base
B.Low unemployment in urban areas
C.Low unemployment in rural areas
D.High unemployment in urban areas
13) With a proportional tax, higher-income persons will pay:
A.The same amount of taxes as lower-income persons
B.A bigger amount in taxes compared to lower-income persons
C.A higher proportion of their income in taxes than lower-income persons
D.A higher marginal tax rate as their incomes rise
14) Which statement is true about supply?
A.There is an inverse relationship between price and quantity supplied
B.Supply refers to the amount of inventory that sellers have in their warehouses
C.As price decreases, producers are willing to put more of the good on the market for
sale
D.To entice producers to offer more of a good on the market for sale, price must rise
15) Consider the following data which describe the relationship between income and a
tax:
The tax may be best described as:
A.Regressive at lower income levels and progressive at higher income levels
B.Regressive at lower income levels and proportional at higher income levels
C.Proportional at lower income levels and regressive at higher income levels
D.Proportional at lower income levels and progressive at higher income levels
16) Answer the question on the basis of the following 2008 balance of payments
statement for Transylvania. All figures are in billions of dollars.
Refer to the given data. If Transylvania was on a system of freely floating exchange
rates, its balance of payments position would cause the international value of its
currency to depreciate.
17) Answer the question on the basis of the following cost data for a purely competitive
seller:
The data are for:
A.the long run.
B.the short run.
C.both the short run and the long run.
D.the intermediate market period only.