1) The following 2008 balance of payments statement for Transylvania. All figures are
in billions of dollars.
Refer to the above data. Foreigners made a smaller volume of asset purchases in
Transylvania in 2008 than Transylvanians made asset purchases abroad.
2) one of the problems involved in government attempting to set fixed fees for doctors
is that:
a.a surplus of health care services will result.
b.doctors might react by increasing the quantity of health care provided.
c.such fees are usually set above the equilibrium level.
d.doctors’ fees have not risen as rapidly as the general price level.
3) if a firm in a purely competitive industry is confronted with an equilibrium price of
$5, its marginal revenue:
a.may be either greater or less than $5.
b.will also be $5.
c.will be less than $5.
d.will be greater than $5.
4) the following data confronting a firm:
refer to the above data. the firm’s:
a.economic profit is $12.
b.economic profit is $16.
c.loss is $14.
d.economic profit is $3.
5) if the total variable cost of 9 units of output is $90 and the total variable cost of 10
units of output is $120, then:
a.the average variable cost of 10 units is $10.
b.the average variable cost of 9 units is $10.
c.the marginal cost of the tenth unit is $90.
d.the firm is operating in the range of increasing marginal returns.
6) The U.S. Justice Department would most likely block a merger between:
A.Walt Disney and Coca Cola.
B.Sony and Home Depot.
C.Wal-Mart and Subway Sandwiches.
D.Boeing and Airbus.
7) The equilibrium interest rate equates:
A.nominal and real interest rates.
B.the quantities demanded and supplied of loanable funds.
C.consumption and saving.
D.taxes and government spending.
8) In the table below are data on five different industries and the market shares for each
of the firms in the industry. Assume that there is no foreign competition, entry into the
industry is difficult, and that no firm in each industry is on the verge of bankruptcy. In
the column to the right of the table, calculate the Herfindahl index.
(a)Which industry has the most monopoly power and which industry has the least
monopoly power?
(b)If the sixth firm in Industry Alpha sought to merge with the fifth firm in that
industry, would the government be likely to challenge the merger?
(c)Would a conglomerate merger between the fourth firm in Industry Beta and the sixth
firm in Industry Epsilon likely be challenged by the government?
9)
Refer to the above diagram for the Federal funds market. If the Fed wants the Federal
funds rate to fall from i1 to i2, it can use open market operations to:
A.increase the demand for Federal funds.
B.increase the supply of Federal funds.
C.decrease the supply of Federal funds.
D.decrease commercial bank reserves.
10) Craft unions:
A.attempt to organize workers at all skill levels in a firm or industry.
B.have been declared illegal by Federal legislation.
C.only organize workers who have a particular skill.
D.attempt to increase the supply of their particular type of labor.
11)
Refer to the above table. A decrease in government purchases of $5 would:
A.increase real GDP by $5.
B.increase real GDP by $10.
C.decrease real GDP by $5.
D.decrease real GDP by $15.
12) A cap-and-trade program causes the:
A.supply of pollution rights to be perfectly inelastic.
B.supply of pollution rights to be perfectly elastic.
C.demand for pollution rights to be perfectly inelastic.
D.demand for pollution rights to be perfectly elastic.
13) The creation of markets for pollution rights would provide:
A.neither an incentive not to pollute nor revenue for environmental improvement.
B.funds for environmental improvement, but would not provide an incentive to refrain
from polluting.
C.an incentive not to pollute, but would not provide funds for environmental
improvement.
D.both an incentive not to pollute and revenue which could be devoted to
environmental improvement.
14) In which of the following situations for a mixed open economy will the level of
GDP expand?
A.when Ig + X + G exceeds Sa + M + T
B.when Sa + T + M exceeds Ig + G + X
C.when GDP exceeds Ca + Ig + G + Xn
D.when Ig + M + T exceeds Ca + X + S
15) the equation for the supply curve in the below diagram is approximately:
a.p = 4 + 1/3q.
b.p = 4 + 2q.
c.p = 4 + 3q.
d.p = 4 – 3q.
16) Who is the most likely to be a union member in the United States?
A.A female retail trade worker
B.A male transportation worker
C.An African-American manager
D.A white agricultural worker
17) Which of the following is a market imperfection that might explain persistent wage
differentials within an occupation?
A.geographical immobility of workers
B.readily available information about job opportunities and pay
C.principal-agent problems
D.compensating wage differentials
18) which of the following has not been a facilitating factor in world trade?
a.dramatic improvements in communications technology
b.general declines in tariffs
c.import quotas
d.improvements in transportation technology