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1) Firms are motivated to minimize production costs because:
A.it is the most environmentally friendly way to produce goods.
B.least-cost production techniques use the smallest total quantity of resources.
C.competitive pressures in the market will drive out higher-cost producers.
D.the government provides tax credits and subsidies to low-cost producers.
2) There would be some control over price within rather narrow limits in which market
model?
A.Monopolistic competition
B.Pure competition
C.Pure monopoly
D.Oligopoly
3) Answer the question on the basis of the following data:
Refer to the given data. If the prices of labor and capital are $9 and $15 respectively, at
the profit-maximizing level, the firm's total output will be:
A.38 units.
B.60 units.
C.64 units.
D.27 units.
4) The farm employment in the United States amounted to about what percentage of the
total employment in 2009?
A.Less than 2 percent
B.About 8 percent
C.About 15 percent
D.Close to 20 percent
5)
Refer to the data for a nondiscriminating monopolist. At its profit-maximizing output,
this firm will be operating in the:
A.perfectly elastic portion of its demand curve.
B.perfectly inelastic portion of its demand curve.
C.elastic portion of its demand curve.
D.inelastic portion of its demand curve.
6) The table below shows the weekly demand for hamburger in a market where there
are just three buyers.
Refer to the above table. If there were 200 buyers in the market, each with a demand
schedule identical to Buyer 2 in the table above, then the weekly quantity of hamburger
demanded in the market at a price of $4 would be:
A.8,000
B.2,000
C.7,400
D.4,000
7) The long run is a period of time, or a time-frame, in which:
A.All resources are fixed
B.The level of output is fixed
C.The amount of all resources can be varied
D.The capacity of the production plant is fixed
8) The fact that people prefer present consumption to future consumption results in:
A.an upsloping supply of loanable funds curve.
B.a downsloping demand for loanable funds curve.
C.a downsloping supply of loanable funds curve.
D.an upsloping demand for loanable funds curve.
9) The use of tariffs and quotas for trade protection results in:
A.Lower prices for domestic consumers
B.Less revenue for government
C.Less efficiency in the economy
D.Less rent-seeking activity
10) An increasing share of the private capital flows to DVCs in recent years has been in
the form of:
A.interest-free government loans.
B.educational and training assistance.
C.direct foreign investment.
D.bank loans.
11) Critics of large pay packages for CEOs argue that they:
A.Are based on a faulty calculation of piece rate
B.Are an ineffective form of an efficiency wage
C.Bear little relation to marginal revenue product
D.Would be better if they were determined by royalty payments
12) Suppose that Steve and Susie each perceives $200 of marginal benefit from a
proposed new park, whereas Elizabeth perceives $800. If the proposed tax levied on
each for the park would be $300, a majority vote will:
A.defeat this project and resources will be underallocated to it.
B.defeat this project and resources will be efficiently allocated.
C.pass this project and resources will be underallocated to it.
D.pass this project and resources will be overallocated to it.
13) The scarcity problem:
A.persists only because countries have failed to achieve continuous full employment.
B.persists because economic wants exceed available productive resources.
C.has been solved in all industrialized nations.
D.has been eliminated in affluent societies such as the United States and Canada.
14) Answer the question based on the following table which shows a demand schedule.
Refer to the table above. Total revenues will decrease if price rises from:
A.$1 to $2
B.$2 to $3
C.$3 to $4
D.$4 to $5
