1) which of the following statements is correct?
a.supply is more elastic in the short run than in the long run.
b.demand is more elastic in the short run than in the long run.
c.demand is more elastic when a large number of substitute goods are available.
d.supply is more elastic when there are a small number of producers in the industry.
2) the dilemma of regulation refers to the idea that:
a.the regulated price which achieves allocative efficiency is also likely to result in
persistent economic profits.
b.the regulated price which results in a “fair return” restricts output by more than would
unregulated monopoly.
c.regulated pricing always conflicts with the “due process” provision of the constitution.
d.the regulated price which achieves allocative efficiency is also likely to result in
losses.
3) How will the marginal and average cost curves of the typical pure competitor shift or
change as a result of the following events: (a) an increase in wages of all labor; (b) an
increase in the rental payments on office machinery; (c) a technological advance; (d) an
increase in sales taxes; (e) an increase in property taxes; and (f) a decline in the price of
a basic raw material?
4) What are the political and economic limitations upon (a) fiscal policy and (b)
monetary policy?
5) mexican imports of u.s. goods:
a.create a supply of pesos.
b.create a supply of dollars.
c.reduce the demand for dollars.
d.have no effect on the peso-dollar exchange rate.
6) the following demand schedule:
refer to the above data. the price elasticity of demand is unity:
a.throughout the entire price range because the slope of the demand curve is constant.
b.in the $4-$3 price range only.
c.over the entire $3-$1 price range.
d.over the entire $6-$4 price range.
7)
refer to the above diagram, in which s1 and d1 represent the original supply and
demand curves and s2 and d2 the new curves. in this market:
a.the equilibrium position has shifted from m to k.
b.an increase in demand has been more than offset by an increase in supply.
c.the new equilibrium price and quantity are both greater than originally.
d.point m shows the new equilibrium position.
8) if a price reduction reduces a firm’s total revenue:
a.the demand for the product is inelastic in this price range.
b.the product is an inferior good.
c.in this price range the elasticity coefficient of demand is greater than 1.
d.this price decline will increase the firm’s profits.
9) if the supply of a product is inelastic, the price elasticity coefficient of supply is:
a.zero.
b.greater than one.
c.equal to one.
d.less than one.
10)
refer to the above diagram for athletic shoes. if the current output of shoes is q1, then:
a.society would consider additional units of shoes to be more valuable than alternative
uses of those resources.
b.society would consider additional units of shoes to be less valuable than alternative
uses of those resources.
c.society would experience a net loss by producing more shoes.
d.resources are being allocated efficiently to the production of shoes.
11) Which of the following nations has a total fertility rate that would suggest a
declining population?
A.Hong Kong.
B.Japan.
C.Germany.
D.All of these nations.
12) compensating wage differentials:
a.refer to the wage premium given to domestic-born workers.
b.refer to the wage premium necessary to attract illegal immigrant workers.
c.discourage illegal immigrants from entering low wage labor markets.
d.will attract u.s. workers to undesirable jobs if the differential over less unpleasant
work is sufficiently high.