1) Shirking refers to the behavior of workers who provide less-than-expected effort on
the job.
2) Economic models of illegal immigration suggest that domestic-born workers avoid
certain types of work more because the inflow of immigrants has reduced wages, rather
than because the work is unpleasant.
3) Commodity prices are relatively stable from year to year.
4) If MPx> MPy, a firm should hire more x and less y.
5) The licensing and regulation of financial advisers is one way by which the
government tries to deal with the problem of inadequate information that financial firms
about their customers.
6) In 2011, some 49 million Americans did not have health insurance.
7) Health savings accounts enable individuals who have high deductible private
insurance to place tax-free dollars into special accounts that can be used to pay for
medical expenses.
8) Fisheries have been overexploited relative to forests primarily because people care
more about trees than fish.
9) Large minimum efficient scale of plant combined with limited market demand may
lead to:
A.natural monopoly.
B.patent monopoly.
C.government franchise monopoly.
D.shared monopoly.
10) In the long run a monopolistically competitive firm:
A.earns an economic profit.
B.produces where P = ATC.
C.produces where MR exceeds MC.
D.achieves allocative efficiency.
11) Whose An Essay on the Principle of Population argued that human living standards
could only temporarily rise above subsistence?
A.Adam Smith.
B.Thomas Malthus.
C.John Maynard Keynes.
D.Alfred Marshall.
12)
The diagram concerns supply adjustments to an increase in demand (D1 to D2) in the
immediate market period, the short run, and the long run. In the long run, the increase
in demand will:
A.have no effect on either equilibrium price or quantity.
B.increase equilibrium price but not equilibrium quantity.
C.increase equilibrium quantity but not equilibrium price.
D.increase both equilibrium price and quantity.
13) Which is the most valid criticism of the regulation of natural monopolies and other
firms subject to regulation by regulatory commissions?
A.It is difficult to find enough honest people to serve on regulatory commissions
B.Such regulation is unnecessary and amounts to creeping socialism
C.Many members of such commissions are appointed rather than being elected
D.Regulated firms may have little incentive to contain costs since they are assured a
“fair” return above costs
14) If the long-run supply curve of a purely competitive industry slopes upward, this
implies that the prices of relevant resources:
A.will fall as the industry expands.
B.are constant as the industry expands.
C.rise as the industry contracts.
D.rise as the industry expands.
15) A BTU is the amount of energy needed to:
A.raise the temperature of one pound of water by one degree Fahrenheit.
B.boil one gallon of water for one minute.
C.raise the air temperature one degree Celsius for one hour.
D.raise the temperature of one pint of water by one degree Celsius.
16) Assume that a consumer purchases a combination of products Y and Z and that the
MUy/Py = 25 and MUz/Pz = 20. To maximize utility, without spending more money,
the consumer should:
A.Purchase less of Y and more of Z
B.Purchase more of Y and less of Z
C.Purchase more of both Y and Z
D.Make no change in Y and Z
17) Which of the following involves the creation of human capital?
A.The XYZ Corporation upgrades the machinery on its assembly line.
B.Jones receives apprenticeship training as a carpenter.
C.Smith buys 30 shares of common stock.
D.A retired person decides to reenter the labor force.
18) The highest quintile of households in the income distribution:
A.receives about 51 percent of the total income.
B.is comprised of 10 percent of all households.
C.is comprised of 5 percent of all households.
D.receives about 43 percent of the total income.
19) Most economists agree that, overall, U.S. antitrust policy has been most successful
in:
A.Promoting competition and efficiency
B.Remedying existing anticompetitive behavior
C.Deterring price-fixing and anticompetitive mergers
D.Breaking up monopolies
20) The following graph shows a total revenue curve for a monopolist.
Refer to the above graph. When total revenue falls as output expands, marginal revenue
is:
A.Positive
B.Negative
C.Zero
D.Greater than demand at that output level
21) Complete the following table of the distribution of personal income by households
in a recent year. What does the data indicate about the equality of income distribution in
the United States?
22) What are the so-called Five Fundamental Questions that every economy must
answer?
23) The graph below shows a change in the demand for Swiss francs from D1 to D2.
What would happen when D1 shifted to D2 under a flexible exchange rate system
compared to a fixed exchange rate system?
24) What are the economic effects of a depreciation of the dollar on foreign exchange
markets?
25) What are two real-world complications with the long-run conclusion about the
representative firm in the model of monopolistic competition?
26) What is NAFTA? What have critics and defenders said about it?
27) Define remittances.
28) What are the major government policies that restrict trade?
29) What is the relationship between the long-run supply curve in a constant-cost
industry and elasticity?
30) Explain the two types of market failure and given an example of each one.