1) The tragedy of the commons occurs primarily:
A.where government subsidies are present.
B.when incentives to preserve are strongest.
C.where property rights are lacking.
D.on privately held lands.
2) The results of running the dictator game experiments thousands of times have
revealed to behavioral economists that:
A.people’s sense of fairness is fairly uniform across the population.
B.most people have little concern for others when it comes to financial matters.
C.individual feelings about fairness and generosity vary widely across the population.
D.most people are willing to give more than they will keep for themselves.
3) A pure monopolist’s short-run profit-maximizing or loss-minimizing position is such
that price:
A.equals marginal revenue.
B.will vertically intersect demand where MR = MC.
C.will always equal ATC.
D.always exceeds ATC.
4)
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 given 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
5) Basic differences between Medicare and Medicaid include the following, except:
A.Medicare is financed by a payroll tax, while Medicaid is financed by general tax
revenues
B.Medicare is a Federal program while Medicaid is a state-government program
C.Medicare is mostly based on age, while Medicaid is mostly based on income
D.Medicare is a social insurance program, while Medicaid is a public assistance
program
6) Answer the question using the following table with investment-demand in an
economy.
Refer to the above table. Assume that investment demand decreased by $100 billion in
the investment-demand schedule. What expected rate of return and interest rate would
create $430 billion of investment?
A.13 percent
B.15 percent
C.17 percent
D.19 percent
7) Private-sector strikes and lockouts typically end because:
A.the federal government intervenes with a “back-to-work” order.
B.the parties eventually tire of bickering.
C.they are costly in terms of lost profits and lost wage income.
D.the parties rely heavily on outside arbitration.
8) A nation’s current account balance is equal to its exports less its imports of:
A.Goods and services
B.Goods and services, minus U.S. purchases of assets abroad
C.Goods and services, plus net investment income and net transfers
D.Goods and services, plus foreign purchases of assets in the United States
9)
Refer to the payoff matrix. Bob’s Burgers and Sam’s Sandwiches are competing
restaurants in a small town. Both are considering adding pizza to their line of products.
If this is a sequential game and Bob’s moves first, which cell represents the final
outcome?
A.A
B.B
C.C
D.D
10) The following is cost information for the Creamy Crisp Donut Company:
Entrepreneur’s potential earnings as a salaried worker = $50,000
Annual lease on building = $22,000
Annual revenue from operations = $380,000
Payments to workers = $120,000
Utilities (electricity, water, disposal) costs = $8,000
Value of entrepreneur’s talent in the next best entrepreneurial activity = $80,000
Entrepreneur’s forgone interest on personal funds used to finance the business = $6,000
Refer to the data. Creamy Crisp’s explicit costs are:
A.$286,000.
B.$150,000.
C.$94,000.
D.$156,000.