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1) The basic explanation for high real wages in the United States and other industrially
advanced economies is that the:
A.Labor supply has increased more rapidly than labor demand in these nations
B.Labor demand has increased more rapidly than labor supply in these nations
C.Unemployment in these nations has remained relatively stable over the years
D.Inflation rate in these nations has been higher than the rate of increase in nominal
wages
2)
If government set a minimum price of $50 in the market, a:
A.shortage of 21 units would occur.
B.shortage of 125 units would occur.
C.surplus of 21 units would occur.
D.surplus of 125 units would occur.
3)
Refer to the above graphs. They show the long-run average total cost (LRATC) for a
product. Which graph would most probably be applicable to a natural monopoly?
A.Graph A
B.Graph B
C.Graph C
D.Graph D
4)
The graph above represents the supply and demand for labor in a purely competitive
market. The price of labor that an individual firm in this market would take as given is:
A.0a
B.0c
C.Higher than 0a
D.Higher than 0c
5) The legal protection that gives the original innovators of products the exclusive right
to use a particular product name is a:
A.Patent
B.Copyright
C.Brand name
D.Trademark
6) Entrepreneurs:
A.include everyone engaged in R&D work.
B.are located in small enterprises only.
C.differ from other innovators because of the risks entrepreneurs must bear.
D.work exclusively in government and university R&D laboratories.
7)
The movement of the budget line from BB to bb in the figure suggests that income has:
A.increased and the price of X has decreased.
B.fallen and the price of Y has increased.
C.fallen and the price of Y has decreased.
D.decreased, but there have been no price changes.
8) Which one of the following is not a major factor that contributed to large trade
deficits in the United States in the period 2002-2007?
A.A declining saving rate coupled with a rising investment rate in the U.S.
B.A U.S. economy growing faster than its trading partners
C.Large trade deficits with OPEC economies
D.Flexible exchange rate between the U.S. dollar and the Chinese yuan
9) Which of the following exemplifies a microeconomic question?
A.What is the current national rate of unemployment?
B.Is the economy experiencing a decline in the rate of inflation?
C.Will a new type of electronic reader or tablet increase the number of buyers?
D.Is the aggregate output in the economy greater this year than last year?
10) In 2011, a household with an annual income of $75,000 would find itself in the:
A.second lowest quintile of the household income distribution.
B.third quintile of the household income distribution.
C.fourth quintile of the household income distribution.
D.fifth (highest) quintile of the household income distribution.
11) Which of the following statements is true? Other things equal, the demand for labor
will be less elastic the:
A.easier it is to substitute capital for labor.
B.greater the elasticity of resource supply.
C.greater the elasticity of product demand.
D.smaller the ratio of labor costs to total costs.
12)
Refer to the graph above, where Sd and Dd are the domestic supply and demand curves
for a product. The world price of the product is $6. If an import quota of 40 units were
imposed on the product, then the equilibrium price would be:
A.$6 and the quantity consumed 80 units
B.$8 and the quantity consumed 70 units
C.$10 and the quantity consumed 60 units
D.$12 and the quantity consumed 50 units
13) If real interest rates rise in the United Kingdom relative to the United States, then
this event is most likely to cause the British pound to:
A.Depreciate and the U.S. dollar to depreciate
B.Depreciate and the U.S. dollar to appreciate
C.Appreciate and the U.S. dollar to appreciate
D.Appreciate and the U.S. dollar to depreciate
14) According to economist Donald Boudreaux, the world's tens of billions of
individual resources get arranged productively:
A.because government has become highly effective at central planning.
B.because private property encourages people to consider the alternative uses of their
resources and select those that provide the most rewards.
C.because people tend to be creative and orderly.
D.through random trial and error.
15)
Refer to the diagrams, which pertain to a purely competitive firm producing output q
and the industry in which it operates. In the long run we should expect:
A.firms to enter the industry, market supply to rise, and product price to fall.
B.firms to leave the industry, market supply to rise, and product price to fall.
C.firms to leave the industry, market supply to fall, and product price to rise.
D.no change in the number of firms in this industry.
16)
Given the oligopolistic firm pictured above, what is the profit-maximizing price?
A.P1
B.P2
C.P4
D.0
17) Which of the following has tended to reduce the importance of antitrust law
according to some economists?
A.Industrial policy
B.Conglomerate mergers
C.The rule of reason decision
D.Rapidly changing technology
18) : Network effects on the Internet:
A.help firms like Google and Facebook dominate their respective markets.
B.allow many firms to operate, making Internet markets highly competitive.
C.cause economies of scale to be exhausted quickly.
D.create a level playing field for all types of media, communication, and commerce on
the Internet.
19) Which of the following is an explanation for the high labor-productivity in the
United States?
A.Plentiful capital resources
B.High total output in industries
C.High price of labor
D.Plentiful labor resources
20)
Refer to the diagram. If line (c) represents the pretax and transfer distribution of income
in the United States, we would expect the post-tax and transfer distribution to be:
A.line (a).
B.line (b).
C.line (c) because taxes and transfers have no effect on income distribution.
D.line (d).
