1)
Refer to the above graph. All of the following development would allow a movement
from point C to a point outside the production possibilities curve, except:
A.An increase in the supply of resource
B.An improvement in the quality of resources
C.A reduction in unemployment of resources
D.A technological advance
2) Many people believe that monopolies charge any price they want to without affecting
sales. Instead, the output level for a profit-maximizing monopoly is determined by:
A.Marginal cost = average revenue
B.Marginal revenue = average cost
C.Average total cost = average revenue
D.Marginal cost = marginal revenue
3) Most of the world’s population lives in:
A.North America.
B.the DVCs.
C.Western Europe.
D.the IACs.
4) The table below provides price, demand and supply information for soybeans. Use
this information to answer the following questions.
(a)Without government intervention, what is the equilibrium price and quantity for
soybeans? What is the producer surplus gained by the farmers?
(b)Suppose farmers produce a bumper crop this year, increasing quantity by 250
bushels at every price. What is the equilibrium price and quantity? What is the new
consumer surplus?
(c)Suppose the government decides to maintain the price at $4.40. What would be the
impact on the creation of a surplus or a shortage, the producer surplus, and the
consumer surplus?
5) A major feature of the “Freedom to Farm” Act of 1996 was the:
A.Elimination of price supports and acreage allotments for many agricultural crops
B.Expansion of government price supports for many agricultural crops
C.Bolstering of the foreign demand for U.S. agricultural products
D.Increased support for research on farm productivity to help expand the supply of
farm products
6)
Refer to the diagram. If farmers produce a normal crop of Qn, their gross income:
A.will be 0PpPNQn.
B.will be 0PnNQn.
C.will be Pp Qn.
D.cannot be determined.
7) A monopsonistic employer:
A.has a perfectly elastic labor supply curve.
B.is necessarily a monopolist in the product market.
C.confronts a marginal resource (labor) cost that is greater than the wage rate.
D.confronts a marginal resource (labor) cost that is less than the wage rate.
8) Microeconomics is concerned with:
A.the aggregate or total levels of income, employment, and output.
B.a detailed examination of specific economic units that make up the economic system.
C.positive economics, but not normative economics.
D.the establishing of an overall view of the operation of the economic system.
9) The main purpose of industrial regulation is to:
A.lower price to marginal cost.
B.lower price to average total cost such that the firm earns a fair return.
C.break monopolies into competing firms.
D.reduce X-inefficiency.
10) The demand schedules for such products as eggs, bread, and electricity tend to be:
A.perfectly price elastic.
B.of unit price elasticity.
C.relatively price inelastic.
D.relatively price elastic.
11) Neoclassical economic models make simplifying assumptions about people’s
rationality and preferences for the following reasons, except:
A.These assumptions make the models mathematically elegant
B.These assumptions allow the models to be conveniently solved mathematically
C.These assumptions allow the models to generate quite precise predictions of behavior
D.These assumptions allow the models to generate quite accurate predictions of
behavior
12) The Celler-Kefauver Act of 1950:
A.outlawed price-fixing.
B.amended the Sherman Act.
C.amended the Clayton Act.
D.created the Civil Aeronautics Board (CAB).
13) Which of the following gave the Federal Trade Commission and the U.S. Justice
Department the responsibility to enforce antitrust laws?
A.The Sherman Act
B.The Wheeler-Lea Act
C.The Clayton Act
D.The Federal Trade Commission Act