1) Suppose the price of a product rises and the total revenue of sellers increases.
A.It can be concluded that the demand for the product is elastic.
B.It can be concluded that the supply of the product is elastic.
C.It can be concluded that the supply of the product is inelastic.
D.No conclusion can be reached with respect to the elasticity of supply.
2)
Refer to the diagram. Minimum efficient scale:
A.occurs at some output greater than Q3
B.is achieved at Q1
C.is achieved at Q3
D.cannot be identified in this diagram.
3) Suppose a consumer has an income of $16, the price of A is $2, and the price of B is
$1. Which of the following combinations is on the consumer’s budget line?
A.4A and 9B
B.5A and 6B
C.6A and 6B
D.3A and 8B
4) A “fast-second strategy” means that a dominant firm in an industry:
A.Uses just-in-time inventory control methods to speed production
B.Cuts the development time for the introduction of a new product
C.Lets smaller firms initiate new products and then quickly imitates the success
D.Merges with the second largest firm in the industry to gain a larger market share
5) For an imperfectly competitive firm:
A.total revenue is a straight, upsloping line because a firm’s sales are independent of
product price.
B.the marginal revenue curve lies above the demand curve because any reduction in
price applies to all units sold.
C.the marginal revenue curve lies below the demand curve because any reduction in
price applies to all units sold.
D.the marginal revenue curve lies below the demand curve because any reduction in
price applies only to the extra unit sold.
6) Because of unseasonably cold weather, the supply of oranges has substantially
decreased. This statement indicates the:
A.demand for oranges will necessarily rise.
B.equilibrium quantity of oranges will rise.
C.amount of oranges that will be available at various prices has declined.
D.price of oranges will fall.
7) Answer the question on the basis of the following information for a public good. Pa
and Pb are the prices that individuals A and B are willing to pay for the last unit of a
public good, rather than do without it. These people are the only two members of
society.
Refer to the data. Suppose government has already produced 4 units of this public good.
The amount individual B is willing voluntarily to pay for the 4th unit is:
A.$14.
B.$5.
C.$2.
D.$0.
8)
Refer to the diagram. Arrows (3) and (4) represent:
A.goods and services respectively.
B.incomes and consumer expenditures respectively.
C.resources and goods respectively.
D.consumer expenditures and income respectively.
9) Suppose the price elasticity coefficients of demand are 1.43, 0.67, 1.11, and 0.29 for
products W, X, Y, and Z respectively. A 1 percent decrease in price will increase total
revenue in the case(s) of:
A.W and Y
B.Y and Z
C.X and Z
D.Z and W
10) All firms have to incur costs because of:
A.The resources they use
B.Buyers they sell to
C.The profits they earn
D.Revenues they receive
11) Which situation would most likely cause a nation’s production possibilities curve to
shift inward?
A.An increase in unemployment
B.An increase in the amount of imports
C.An increase in the number of skilled immigrant workers
D.The destruction caused by bombing and warfare in a losing military conflict
12) Game theory:
A.is the analysis of how people (or firms) behave in strategic situations.
B.is best suited for analyzing purely competitive markets.
C.reveals that mergers between rival firms are self-defeating.
D.reveals that price-fixing among firms reduces profits.
13) The actual incidence of payroll taxes, in the consensus view, is:
A.Split evenly between the worker and the employer
B.More on the employer than on the worker
C.More on the worker than on the employer
D.All on the employer, who remits the tax to the government
14) In the 1990s:
A.direct private investment to the DVCs increased and government-provided foreign
aid decreased.
B.both direct private investment and government-provided foreign aid to the DVCs
increased.
C.both direct private investment and government-provided foreign aid to the DVCs
decreased.
D.direct private investment to the DVCs decreased and government-provided foreign
aid increased.