1)
refer to the above graphs. growth of production capacity is shown by the:
a.shift from ab to cd.
b.shift from cd to ab.
c.movement away from point a and toward point b.
d.movement away from point b and toward point a.
2) (consider this) the nuclear particle accelerators now used for cancer treatments:
a.considerably less expensive than more traditional cancer treatments on a per patient
basis.
b.considerably more expensive than more traditional cancer treatments on a per patient
basis.
c.an example of a cost-saving medical technology.
d.an example of the benefits of government tax subsidies for medical research.
3) The velocity of money is the:
A.relationship between the money supply and the price level.
B.number of times per year the average dollar is spent on final goods and services.
C.relationship between asset and transactions demands for money.
D.price level divided by aggregate supply.
4) According to the Taylor rule:
A.if real GDP rises by 1 percent above potential GDP, the Fed should raise the Federal
funds rate by one-half a percentage point.
B.when real GDP is equal to potential GDP and inflation is equal to its target of 2
percent, the Federal funds rate should be kept at 4 percent.
C.if inflation falls by 1 percentage point below its target of 2 percent, then the Fed
should lower the real Federal funds rate by one-half a percentage point.
D.all of these are appropriate Fed actions.
5) the french term “laissez-faire” means:
a.”there is no free lunch.”
b.”let it be.”
c.”circular flow.”
d.”public ownership.”
6) Underemployment occurs:
A.when workers do not have jobs.
B.when farm workers become more productive.
C.when workers are working fewer hours than they desire or when they are working
less productively than they are capable.
D.in IACs, but not in the DVCs.
7) Ward Planter exclusively grew soybeans in each of the past three years and currently
participates in the marketing loan program of the Food, Conservation, and Energy Act
of 2008. If the “crop price” of soybeans at harvest is less than the pre-harvest “loan
price,” Planter can:
A.sell his crop in the market and receive the difference between the crop price and loan
price as a direct payment from the Federal government.
B.take a “crop credit” based on the difference between the crop price and the loan price
and use the credit to reduce Federal income taxes owed.
C.receive an “emergency loan” that can be paid back over the following five years.
D.forfeit the harvest to the lender and be free of the loan, thus receiving a subsidy
because the proceeds from the loan exceed the revenues from the sale of the crop in the
market.
8) the following marginal utility data for products x and y. assume that the prices of x
and y are $4 and $2 respectively and that the consumer’s income is $18.
refer to the above data. what level of total utility will the utility-maximizing consumer
realize?
a.96 utils
b.108 utils
c.72 utils
d.142 utils
9)
Refer to the above data. If the firm is hiring workers under purely competitive
conditions at a wage rate of $22, it will employ:
A.1 worker.
B.2 workers.
C.3 workers.
D.4 workers.
10) if a market is competitive but externalities are present, the resulting equilibrium
output:
a.will also be the most efficient output.
b.will always be less than the most efficient output.
c.will always be greater than the most efficient output.
d.may be either larger or smaller than the most efficient output.
11)
Refer to the above information. The data suggest that:
A.the interest rate and the equilibrium GDP are directly related.
B.the interest rate and the equilibrium GDP are inversely related.
C.the interest rate and the equilibrium GDP are unrelated.
D. as the interest rate falls, investment also falls.
12)
the tax represented above is:
a.optimal.
b.proportional.
c.regressive.
d.progressive.
13) Answer the next five questions on the basis of the following hypothetical data for a
hypothetical nation Economia. All numbers are in billions of dollars.
(a)What is the balance of trade?
(b)What is the balance on goods and services?
(c)What is the balance on the current account?
(d)What is the balance on the financial account?
(e)What official reserves will be needed to settle the balance-of-payment accounts?
14)
Refer to the above diagrams. Assume that only wheat can be grown on the three grades
of land shown in Figures a, b, and c. Also assume that identical amounts of labor,
capital, and other needed inputs are used in farming each grade of land. On the basis of
these three figures we:
A.can say that the land in Figure a is most productive.
B.can say that the land in Figure b is most productive.
C.can say that the land in Figure c is most productive.
D.cannot compare the productivity of the three grades of land.
15) one of the problems involved in government attempting to set fixed fees for doctors
is that:
a.a surplus of health care services will result.
b.doctors might react by increasing the quantity of health care provided.
c.such fees are usually set above the equilibrium level.
d.doctors’ fees have not risen as rapidly as the general price level.
16) the law of diminishing returns describes the:
a.relationship between total costs and total revenues.
b.profit-maximizing position of a firm.
c.relationship between resource inputs and product outputs in the short run.
d.relationship between resource inputs and product outputs in the long run.
17) Process innovation causes an upward shift in a firm’s total product curve and:
A.a decrease in its average product.
B.a downward shift in its average total cost curve.
C.an upward shift in its average total cost curve.
D.an upward shift in its marginal revenue curve.
18)
refer to the above diagram. demand is relatively elastic:
a.in the p2p1 price range.
b.in the 0p1 price range.
c.in the p2p4 price range.
d.only at price p2.
19)
assumptions: 1) employers in this market are willing and able to ignore minimum wage
laws; 2) sd represents the supply of domestically-born (and legal immigrant) workers;
3) st represents the total supply of workers in this labor market (sd plus illegal
immigrants); and 4) unless otherwise stated, illegal immigration is not effectively
blocked by the government.
refer to the above figure. if the government effectively prevents illegal immigrants from
working in this labor market, the equilibrium wage and level of employment are,
respectively:
a.$4.00 and 50,000
b.$4.00 and 60,000
c.$6.50 and 60,000
d.$4.00 and 70,000
20) Entrepreneurs:
A.include everyone engaged in R&D work.
B.are located in small enterprises only.
C.try to anticipate the future.
D.work exclusively in government and university R&D laboratories.
21) If nominal GDP is $848 billion, and velocity of money is 4, how much is the money
supply? If the GDP price index is 200, what is real GDP here?
22) Explain the logic behind the demographic transition view.
23) A consumer makes purchases of an existing product A such that the marginal utility
is 40 and the price is $ The consumer also tries a new product B and at the current level
of consumption it has a marginal utility of 72 and a price of $24. What does the
utility-maximizing rule suggest that this consumer should do?
24) In the following table are five levels of taxable income and the amount that would
be paid at each of the five levels under three tax laws: X, Y, and Z. Compute for each of
the three tax laws the average rate of taxation at each of the four remaining income
levels and indicate whether the tax is regressive, proportional, or progressive.
25) If economic forecasting was a more exact science, the business cycle could be
entirely corrected by fiscal measures. Do you agree?
26) Describe the idea behind the cap-and-trade program for improving environmental
quality. Explain how supply and demand determine the price for pollution rights in this
case.
27) Why is a monopolist a price maker?