1) If the law of diminishing returns applies to study time:
A.the tenth hour of study will likely be less productive than the third.
B.this implies that longer lectures are less productive than shorter ones.
C.there is no benefit to studying a subject more than five hours in any given day.
D.people with less intelligence necessarily experience diminishing returns sooner than
those with greater intelligence.
2) A recurring theme in economics is that people:
A.Have unlimited resources, but limited economic wants
B.Can increase resources by limiting their economic wants
C.Have limited economic wants and limited resources
D.Have unlimited economic wants, but limited resources
3) Which market structure has a strong incentive for product development and
differentiation?
A.Monopolistic competition
B.Pure competition
C.Pure monopoly
D.Oligopoly
4)
The largest category of legal immigrants into the U.S. in 2011 was:
A.Family-sponsored immigrants
B.Refugees
C.Employment-based preferences
D.Diversity immigrants
5) The market for agricultural products such as wheat or corn would best be described
by which market model?
A.Monopolistic competition
B.Pure competition
C.Pure monopoly
D.Oligopoly
6) A fishery collapse:
A.necessarily happens when harvesting rates increase.
B.necessarily happens when reproduction rates fall.
C.occurs when harvesting outpaces reproduction for an extended period.
D.is irreversible.
7) Other things equal, the interest rate on a loan will be smaller:
A.The greater the risk involved
B.The smaller the amount of the loan
C.The longer the length of the loan
D.If the loan interest is exempt from taxation
8) Use the table below to answer the question. The table shows the hypothetical demand
and supply schedule for health care
Refer to the above table. The efficiency loss caused by the availability of health
insurance paying two-thirds of the cost is:
A.$20,000
B.$40,000
C.$60,000
D.$80,000
9) In the following question you are asked to determine, other things equal, the effects
of a given change in a determinant of demand or supply for product X upon (1) the
demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the
equilibrium quantity (Q) of X.
Refer to the given information. Consumer expectations that the price of X will rise
sharply in the future will:
A.increase S, increase P, and increase Q.
B.increase D, increase P, and increase Q.
C.decrease S, increase P, and increase Q.
D.increase D, decrease P, and increase Q.
10) Answer the question based on the following payoff matrix for a duopoly in which
the numbers indicate the profit in millions of dollars for each firm:
Refer to the above payoff matrix. Assume that firm B adopts a low-price strategy while
firm A maintains a high-price strategy. Compared to the results from a high-price
strategy for both firms, firm B will now:
A.Lose $75 million in profit and firm A will gain $50 million in profit
B.Gain $50 million in profit and firm A will lose $50 million in profit
C.Gain $75 million in profit and firm A will lose $50 million in profit
D.Gain $50 million in profit and firm A will lose $75 million in profit
11) A major difficulty with the argument that trade barriers are necessary because
foreign workers are paid low wages is that:
A.labor costs and product prices are not related.
B.there is no discernible relationship between wage rates and labor productivity.
C.wage rates and labor productivity are directly related.
D.wage rates and labor productivity are inversely related.
12)
Refer to the above graph showing the revenue curves for a monopolist. The elastic
portion of the demand curve ranges from quantity:
A.0 to Q4
B.Q2 to Q4
C.0 to Q3
D.Q3 to Q4
13) As it applies to insurance, the adverse selection problem is the tendency for:
A.those most likely to collect on insurance to buy it.
B.those who buy insurance to take less precaution in avoiding the insured risk.
C.sellers to price discriminate.
D.sellers to restrict output and charge high prices.
14) Which one of the following is a normative economic statement?
A.The unemployment rate fell for the fourth straight month, reflecting the effects from
stronger economic growth in the second quarter
B.The worsening balance of trade must be corrected if this nation is to remain
competitive in the world economy
C.Consumer prices are rising at a faster rate than in past months, indicating a renewal of
inflationary pressures on the economy
D.To help balance the Federal budget, Congress increased the tax on gasoline to its
highest level in the past ten years