1) All other things equal, increased concern for medical ethics will:
A.Increase the demand for health care
B.Decrease the demand for health care
C.Increase the supply of health care
D.Decrease the supply of health care
2) Which of the following statements about the European Union (EU) is true?
A.All members of the EU use a common currency (the euro).
B.The EU has abolished most trade barriers among participating countries, and has
common tariffs applied to non-EU goods.
C.The EU has eliminated most barriers to the trade of goods and services among
participating nations but largely restricts the movement of labor and capital.
D.Trade within the EU is liberalized, but EU nations set most of their own policies with
regard to trade with non-EU nations.
3)
Refer to the above graphs. (Assume that the pre-migration labor force in Country A is 0d
and that it is 0u in country B.) Domestic output in country A will, after the immigration:
A.Decrease by area abc
B.Decrease by area adec
C.Increase by area abc
D.Increase by area adec
4) Which will not be a determinant of the price elasticity of demand for an input?
A.The price of the input
B.The substitutability of other resources for the input
C.The elasticity of demand for the product it produces
D.The total cost of an input as a proportion of the total cost of producing units of output
5) If the United States has full employment and the dollar dramatically depreciates in
value, we can expect (other things equal):
A.both U.S. imports and U.S. exports to rise.
B.both U.S. imports and U.S. exports to fall.
C.U.S. exports to fall and U.S. imports to increase.
D.inflation to occur.
6) Answer the question on the basis of the following 2008 balance of payments
statement for Transylvania. All figures are in billions of dollars.
Refer to the given data. In 2008 Transylvania was a net recipient of transfers from the
rest of the world.
7) The neoclassical economists “invisible hand” of the market is driven by people’s:
A.Sense of fairness
B.Generosity
C.Self-interest
D.Time inconsistency
8) Dumping is the sale of a product in a foreign market:
A.At a price below its domestic price or cost of production
B.That does not meet the quality standards in the domestic market
C.And is the principal means used to enforce nontariff barriers
D.And is encouraged by voluntary export restraints
9) Creative destruction is:
A.the process by which large firms buy up small firms.
B.the process by which new firms and new products replace existing dominant firms
and products.
C.a term coined many years ago by Adam Smith.
D.applicable to planned economies but not to market economies.
10) Some agricultural sub-Saharan nations of Africa have overfarmed and overgrazed
their land to the extent that significant portions of it have turned into desert. This
suggests that:
A.the production possibilities curves of such nations are more bowed out from the
origin.
B.the production possibilities curves of such nations have shifted inward.
C.the production possibilities curves of such nations have shifted outward.
D.these nations are operating at some point outside of their production possibilities
curves.
11)
Refer to the diagram. If this industry is purely monopolistic, the profit-maximizing
price and quantity will be:
A.P3 and Q3.
B.P1 and Q1.
C.P2 and Q2.
D.indeterminate on the basis of the information given.
12) Suppose the total demand and supply of loanable funds (in billions) are as follows:
(a)Use the graph below to depict the supply and demand for loanable funds.
(b)What will be the market or equilibrium interest rate? What is the equilibrium
quantity of loanable funds?
(c)Suppose the government establishes a usury loan that sets the interest rate at 4%.
Explain the economic effects of this usury law.
13) Secret conspiracies to fix prices are examples of:
A.cartels.
B.price leadership.
C.overt collusion.
D.covert collusion.
14) The crowding model is primarily concerned with explaining:
A.occupational discrimination.
B.human-capital discrimination.
C.the size of the discrimination coefficient.
D.why affirmative action is reverse discrimination.
15) Which of the following statements is true?
A.The active antitrust perspective believes that competitive market forces will
automatically and actively reduce a firm’s monopoly power in the long run
B.The active antitrust perspective believes that the government should play the role of
officials and umpires and enforce the rules of the competitive game
C.The laissez-faire perspective views firms as players in a competitive game who will
sometimes violate the rules in order to gain a huge advantage over others
D.The laissez-faire perspective believes that an active enforcement of antitrust policy is
the only way to reduce the monopoly power of giant firms
16) Many economists agree that government should deal with monopolists on a
case-by-case basis. Policy options include the following, except:
A.If the monopoly is attained and maintained through anticompetitive behavior, the
government can file a suit based on antitrust laws
B.If the firm is a natural monopoly, the government may decide to regulate its prices
and operations
C.If the monopoly is maximizing economic profits, the government should subsidize
new firms to enter the industry
D.If the monopoly is subject, and vulnerable, to potential competition, the government
can decide to leave it alone