1) A increase in demand coupled with a simultaneous and bigger decrease in supply will
cause equilibrium:
A.Price to go up and quantity to go down
B.Price to go up and quantity to go up
C.Price to go down and quantity to go down
D.Price to go down and quantity to go up
2) According to the concept of the “invisible hand,” if Susie opens and operates a
profitable childcare center, then:
A.government should regulate the business to ensure quality.
B.the profit Susie earns indicates that she is overcharging for her services.
C.she has served society’s interests by providing a desired good or service.
D.this demonstrates that consumer sovereignty is not present in this market.
3)
In the diagram, economic discrimination is best represented by point:
A.A
B.C rather than D or E
C.E rather than D or C
D.F
4) If you know that total fixed cost is $200, total variable cost is $600, and total product
is 4 units, then average total cost must be:
A.$200
B.$250
C.$800
D.$3200
5) The fact that an ounce of gold is priced higher than an ounce of chocolate suggests
that:
A.The marginal utility of the last unit of gold consumed is greater than the marginal
utility of the last unit of chocolate consumed
B.The total utility of gold is greater than the total utility of chocolate
C.Gold is a normal good while chocolate is an inferior good
D.There are many substitutes for chocolate, but few for gold
6) The income of a consumer is $40, the price of A is $8, and the price of B is $4. If the
quantity of A is measured vertically, then the slope of the budget line is:
A.0.5
B.1.0
C.2.0
D.2.5
7) The greater the area between the Lorenz curve and the diagonal in the Lorenz curve
diagram, the:
A.smaller is the Gini ratio and the greater is the degree of income inequality.
B.larger is the Gini ratio and the greater is the degree of income inequality.
C.smaller is the Gini ratio and the lesser is the degree of income inequality.
D.larger is the Gini ratio and the lesser is the degree of income inequality.
8) Which of the following is not an important source of revenue for the federal
government?
A.Corporate income taxes.
B.Property taxes.
C.Payroll taxes.
D.Personal income taxes.
9)
If the prices of X and Y are $2 and $4 per unit, respectively, and this consumer has $10
in income to spend, to maximize total utility, this consumer should buy:
A.1 unit of X and 1 unit of Y.
B.2 units of X and 2 units of Y.
C.1 unit of X and 2 units of Y.
D.5 units of X and no units of Y.
10) Use the following information and table to answer the next two questions. Suppose
the demand for wheat during a certain time is that shown in the table below. The
Federal government wishes to support the price of wheat at $4.25 a bushel.
(a)What would the competitive market price of wheat be if the output of wheat were
2200 thousand bushels during that year? What would the government take?
(b)What would the competitive market price of wheat be if the output were 2000
bushels during that period of time? What action would the government take?
11) “Nudges” refer to:
A.subtle changes in policies or practices that result in large behavioral changes.
B.legal changes made without much publicity that require significant changes in
behavior.
C.coercion by governmental authorities.
D.changes in endowments that significantly alter behavior.
12) The following table is for a purely competitive market for resources.
Refer to the above table. How many more workers will the firm hire when the wage rate
is $15 instead of $30?
A.1 worker
B.2 workers
C.3 workers
D.4 workers
13) The Gini ratio:
A.measures the relative extent of poverty in a nation.
B.compares the income of persons, households, or households at the 90th percentile of
the income distribution to the income at the 10th percentile.
C.is a numerical measure of the overall dispersion of income in a nation.
D.is found by dividing the entire area below and to the right of the diagonal in the
Lorenz diagram by the area between the diagonal and Lorenz curve.
14) One difference between monopolistic competition and pure competition is that:
A.Products may be homogeneous in monopolistic competition
B.There is some control over price in monopolistic competition
C.Monopolistic competition has significant barriers to entry
D.Firms differentiate their products in pure competition
15) Which of the following made monopoly and restraints of trade criminal offenses
against the federal government?
A.Celler-Kefauver Act of 1950
B.Wheeler-Lea Act of 1938
C.Clayton Act of 1914
D.Sherman Act of 1890
16) “Macroeconomics is the part of economics concerned with individual units such as
a person, a household, a firm, or an industry.” This statement is:
A.positive but incorrect.
B.positive and correct.
C.normative but incorrect.
D.normative and correct.
17) How could you use the Coase theorem to predict what would happen when smoke
from a factory creates dirty air and slightly acid rain for all the residents in the area in a
one-mile radius of the plant?
18) The following are three short-run average total cost schedules for the only three
possible plant sizes, 1, 2, and 3 . Find the long-run average cost schedule and show the
result in the second table.
19) Evaluate this statement using behavioral economics and the idea of fairness: When
John is driving down a lonely stretch of highway, he debates whether or not he should
throw his stinky garbage out the window. He decides to hold it until the next gas station.
20) Describe the graph for a long-run supply curve in a decreasing-cost industry. Why
does it have this slope?
21) What are the major principles of the General Agreement on Tariffs and Trade?