1) A competitive firm in the short run can determine the profit-maximizing (or
loss-minimizing) output by equating:
A.price and average total cost.
B.price and average fixed cost.
C.marginal revenue and marginal cost.
D.price and marginal revenue.
2) In fisheries management, ITQ stands for:
A.international transferable quota.
B.individual transferable quota.
C.international tuna quotas.
D.individual trolling quotas.
3)
The graph above shows the production possibilities curves for two hypothetical nations,
Orin and Pohl, which each make two hypothetical products, jaxs and keps. Which of the
following statements is correct?
A.Orin has a comparative advantage in both jaxs and keps
B.Pohl has a comparative advantage in jaxs
C.The opportunity cost of making jaxs is lower in Orin than in Pohl
D.Orin is more efficient than Pohl
4) Avenues for the government to foster economic growth and development include the
following, except:
A.Nationalization and protection of domestic industries
B.Establishing the rule of law and protection of property rights
C.Building infrastructure and technological support
D.Building human capital and entrepreneurship
5)
Refer to the diagrams. In diagram (B) the profit-maximizing quantity is:
A.g and the profit-maximizing price is e.
B.h and the profit-maximizing price is e.
C.g and the profit-maximizing price is f.
D.g and the profit-maximizing price is d.
6)
Refer to the above graph for a monopolist in short-run equilibrium. This monopolist has
total cost equal to area:
A.CADF
B.0ADQ
C.ADFC
D.0CFQ
7) Which of the following is an example of a capital-intensive commodity?
A.Clothing.
B.Wool.
C.Sunflower seeds.
D.Chemicals.
8) Why do skilled workers generally earn more than unskilled workers?
A.The demand for unskilled labor is more inelastic than the demand for skilled labor
B.Skilled labor has higher marginal revenue products than unskilled labor
C.The demand for unskilled labor is greater than the demand for skilled labor
D.The supply of skilled labor is greater than the supply of unskilled labor
9) The law of diminishing returns explains why:
A.Total cost eventually rises faster and faster
B.Total cost eventually falls
C.Total cost eventually rises more and more slowly
D.Total cost eventually reaches a maximum point
10) Assume that Abby, Ben, and Clara 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 $400 each to Abby, Ben, and Clara.
Based on economic analysis, the public good should:
A.Be produced, because the benefits are greater than the costs
B.Not be produced, because the costs are greater than the benefits
C.Be put to a vote, and produced only if voters approve it
D.Not be produced, even if voters vote in favor of it
11) Charlie is willing to pay $10 for a T-shirt that is priced at $9. If Charlie buys the
T-shirt, then his consumer surplus is
A.$19.
B.$0.90.
C.$90.
D.$1.
12) Suppose the domestic price (no-international-trade price) of wheat is $3.50 a bushel
in the United States while the world price is $4.00 a bushel. Assuming no transportation
costs, the United States will:
A.have a domestic shortage of wheat.
B.export wheat.
C.import wheat.
D.neither export nor import wheat.
13) The utility of a good or service:
A.is synonymous with usefulness.
B.is the satisfaction or pleasure one gets from consuming it.
C.is easy to quantify.
D.rarely varies from person to person.