1) “in the corn market, demand often exceeds supply and supply sometimes exceeds
demand.” “the price of corn rises and falls in response to changes in supply and
demand.” in which of these two statements are the terms demand and supply being used
correctly?
a.in neither statement.
b.in the second statement.
c.in the first statement.
d.in both statements.
2) Assume that the price level is flexible both upward and downward and that the Fed’s
policy is to keep the price level from either rising or falling. If aggregate supply
increases in the economy, the Fed:
A.will have to increase interest rates to keep the price level from falling.
B.will have to reduce the money supply to keep the price level from rising.
C.will have to increase the money supply to keep the price level from falling.
D.can keep the price level stable without altering the money supply or interest rate.
3) The MRP curve is the resource demand curve for:
A.neither the purely competitive nor the imperfectly competitive seller.
B.the imperfectly competitive seller, but not the purely competitive seller.
C.the purely competitive seller, but not the imperfectly competitive seller.
D.both the purely competitive and imperfectly competitive seller.
4) Assume that a single commercial bank has no excess reserves and that the reserve
ratio is 20 percent. If this bank sells a bond for $1,000 to a Federal Reserve Bank, it can
expand its loans by a maximum of:
A.$1,000.
B.$2,000.
C.$800.
D.$5,000.
5) if net foreign factor income is zero and there are no statistical discrepancies, the sum
of national income and the consumption of fixed capital equals:
a.disposable income.
b.personal income.
c.net domestic product.
d.gross domestic product.
6)
symbols: q = number of workers demanded; w = wage rate; and vtp = value of the
cumulative total product (output) of the particular number of workers.
assumptions: (1) the current wage in zinnia is $20 and the current wage in marigold is
$12; (2) full employment exists in both countries.
refer to the above data, symbols, and assumptions. if migration is costless and
unimpeded, the combined value of total product in the two countries will:
a.decline from $62 to $36.
b.decline from $120 to $70.
c.increase from $36 to $62.
d.increase from $62 to $70.
7) assume that a decline in consumer demand occurs in a purely competitive industry
which is initially in long-run equilibrium. we can:
a.predict that the new price will be greater than the original price.
b.predict that the new price will be less than the original price.
c.predict that the new price will be the same as the original price.
d.not compare the original and the new price without knowing about cost conditions in
the industry.
8) Refer to the above
data. If the prices of labor and capital are $9 and $15 respectively, the
profit-maximizing firm will hire:
A.5 units of labor and 3 of capital.
B.5 units of labor and 2 of capital.
C.4 units of labor and 4 of capital.
D.3 units of labor and 4 of capital.
9) Which of the following generalizations is false? Other things equal:
A.interest rates are higher if lenders are imperfectly, rather than purely, competitive.
B.the interest rate is less on small loans than on larger loans.
C.long-term loans normally command higher interest rates than short-term loans.
D.the greater the risk on a loan, the greater the interest rate.
10) in economics, an organization that employs resources to produce goods and services
for profit and operates one or more plants is called a(n):
a.industry.
b.shop.
c.conglomerate.
d.firm.