1)
Refer to the graph above. Suppose that it is shows the market for an insurance product.
If something happens to heighten the adverse selection problem in this market, then:
A.The supply curve will shift to the left
B.The supply curve will shift to the right
C.The demand curve will shift to the left
D.The supply curve will not be affected
2) Median wealth in the United States in 2010:
A.was about the same as in 1995
B.had grown by about 8 percent since 1995
C.was nearly 8 percent lower than in 1995
D.was about $84,000
3) Answer the next three questions on the basis of the following data:
(a)What type of tax is represented by the tax schedule?
(b)What will your average tax rate be if your taxable income is $25,000?
(c)If your taxable income increases from $15,000 to $20,000, what will your marginal
tax rate be?
4) Statistical discrimination:
A.is malicious.
B.is profitable but not malicious.
C.cannot persist because of competition.
D.explains all occupational discrimination.
5) The more inelastic is demand and supply, the:
A.larger is the efficiency loss of an excise tax.
B.smaller is the efficiency loss of an excise tax.
C.higher is the proportion of an excise tax paid by consumers.
D.smaller is the proportion of an excise tax paid by producers.
6) 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. What will be the profit-maximizing selling price of the product?
A.$1.40.
B.$1.60.
C.$1.80.
D.$2.00.
7) The Sunshine Corporation finds that its costs are $40 when it produces no output. Its
total variable costs (TVC) change with output as shown in the accompanying table. Use
this information to answer the following question.
Refer to the information. The average fixed cost of 3 units of output is:
A.$13.33.
B.$12.50.
C.$40.
D.$18.50.
8) Which of the following statements is inconsistent with an elastic demand curve?
A.The price-elasticity coefficient is less than 1
B.Total revenues fall when prices rise
C.Buyers are relatively sensitive to price changes
D.The relative change in quantity exceeds the relative change in price
9)
Refer to the above graph of the supply and demand for loanable funds. A limit of 10%
on the interest rate that banks can charge for loans will:
A.Have an equal effect on borrowers and lenders
B.Save borrowers 5 percent and cost lenders 5 percent on the amount loaned
C.Give lenders a premium of 5 percent and cost borrowers 5 percent on the amount
loaned
D.Save borrowers 10 percent and cost lenders 10 percent on the amount loaned
10) If you would have to pay $5,000 in taxes on a $25,000 taxable income and $7,000
on a $30,000 taxable income, then the marginal tax rate on the additional $5,000 of
income is:
A.40 percent and the average tax rate is about 23 percent at the $30,000 income level.
B.50 percent and the average tax rate is 40 percent at the $30,000 income level.
C.40 percent and the average tax rate is 25 percent at the $25,000 income level.
D.30 percent, but average tax rates cannot be determined from the information given.
11)
Refer to the diagram, in which S1 and D1 represent the original supply and demand
curves and S2 and D2 the new curves. In this market:
A.supply has decreased and equilibrium price has increased.
B.demand has increased and equilibrium price has decreased.
C.demand has decreased and equilibrium price has decreased.
D.demand has increased and equilibrium price has increased.
12) Assume that Matt, Joe, and Teresa are the only citizens in a community. A proposed
public good has a total cost of $1000. All three citizens will share an equal portion of
this cost in taxes. The benefit of the public good is $500 for Matt, $280 for Joe, and
$260 for Teresa. In a majority vote, this proposal will most likely be:
A.Accepted; the public good is produced even though it is economically inefficient
B.Defeated; the public good is not produced even though it would have been efficient to
do so
C.Accepted; the public good is produced which is economically efficient
D.Defeated; the public good is not produced, which is the proper outcome
13) A reduction in the level of unemployment would have which effect with respect to
the nation’s production possibilities curve?
A.It would shift the curve to the right
B.It would shift the curve to the left
C.It would not shift the curve; it would be represented by a movement from a point
inside the curve toward a point on the curve
D.It would not shift the curve; it would be represented by a movement from a point on
the curve to a point outside the curve
14)
Refer to the data. Suppose that firms in this industry split up such that there were 100
firms, each with a one percent market share. The four-firm concentration ratio and the
Herfindahl index respectively would be:
A.100 percent and 10,000
B.4 percent and 4
C.100 percent and 16
D.4 percent and 100
15) Purposeful behavior means that:
A.people are selfish in their decision making.
B.people weigh costs and benefits to make decisions.
C.people are immune from emotions affecting their decisions.
D.decision makers do not make mistakes when weighing costs and benefits.
16) Taking into account infant and child mortality, the total fertility rate that is
necessary to keep a country’s population from falling over time is:
A.Less than 1 birth per woman per lifetime
B.Equal to about 1 birth per woman per lifetime
C.Equal to about 1.5 births per woman per lifetime
D.Slightly more than 2 births per woman per lifetime