1) if an economy is operating inside its production possibilities curve for consumer
goods and capital goods, it:
a.can only produce more consumer goods by producing fewer capital goods.
b.can only produce more capital goods by producing fewer consumer goods.
c.can produce more of both consumer goods and capital goods by using resources that
are currently idle.
d.must improve its technology to produce more output.
2)
Refer to the above diagrams that show identical marginal utility from income curves for
Singer and Catalano. If a given income of $20,000 is initially distributed so that Singer
receives $15,000 and Catalano $5,000, the marginal utility:
A.of the last dollar of income will be greater for Catalano than for Singer.
B.derived from the last dollar will not be comparable as between the two income
receivers.
C.of the last dollar of income will be the same for both Singer and Catalano.
D.of the last dollar of income will be greater for Singer than for Catalano.
3) a caller to a radio talk show states that protesters against globalization are a
collection of “anarchist punks, nave college students, and trade union radicals.” this is
an example of:
a.the fallacy of composition.
b.the economic perspective.
c.loaded terminology.
d.marginal analysis.
4) susie has lost her job in a vermont textile plant because of import competition. she
intends to take a short course in electronics and move to oregon where she anticipates
that a new job will be available. we can say that susie is faced with:
a.secular unemployment.
b.cyclical unemployment.
c.structural unemployment.
d.frictional unemployment.
5) Assume that aggregate demand in the economy is excessive, causing demand-pull
inflation. Which of the following would be most in accord with appropriate government
fiscal policy?
A.an increase in Federal income tax rates
B.an increase in the size of income tax exemptions for each dependent
C.passage of legislation providing for the construction of 8,000 new school buildings
D.an increase in soil conservation subsidies to farmers
6)
Assume that a firm’s interest-rate-cost of funds curve for R&D is perfectly elastic.
Which of the following would increase a firm’s optimal R&D expenditures and, in
equilibrium, reduce the expected rate of return on the last dollar of R&D?
A.a rightward shift of the expected-rate-of-return curve
B.an upward shift of the interest-rate-cost of funds curve
C.a leftward shift of the expected-rate-of-return curve
D.a downward shift of the interest-rate-cost of funds curve
7)
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 above data, symbols, and assumptions. both nations have:
a.identical labor demand curves.
b.perfectly elastic labor demand curves.
c.downsloping labor demand curves.
d.upsloping labor demand curves.
8) (Advanced analysis) Answer the next question(s) on the basis of the following
information for a private open economy:
The equilibrium GDP (=Y) in the above economy is:
A.$200.
B.$245.
C.$320.
D.$350.
9) Suppose that Marlen Fisher has legal protection against anyone producing and
selling a fishing lure specifically named “MarFish.” This legal protection is most likely
to be a:
A.trademark.
B.restraining order.
C.patent.
D.copyright.
10) the accompanying table that shows average total costs (atc) for a manufacturing
firm whose total fixed costs are $10:
refer to the above data. the average variable cost of 4 units of output is:
a.$33.50.
b.$28.50.
c.$19.00.
d.$21.00.
11)
The above curve is known as the:
A.Taylor rule.
B.Okun Curve.
C.Laffer Curve.
D.Phillips Curve.
12)
refer to the above tables. suppose that duckistan and herbania are each producing 14
units of civilian goods and 2 unit of military goods. then:
a.duckistan is fully employing its resources but herbania is not.
b.both duckistan and herbania are fully employing their resources.
c.herbania is fully employing its resources by duckistan is not.
d.neither duckistan nor herbania are fully employing their resources.
13) Assume that an appliance manufacturer is employing variable resources X and Y in
such amounts that the MRPs of the last units of X and Y employed are $100 and $60
respectively. Resource X can be hired at $50 per unit and resource Y at $20 per unit.
The firm:
A.should hire more of both X and Y.
B.should hire more of Y and less of X.
C.is producing with the least-costly combination of X and Y, but could increase its
profits by employing more of X and less of Y.
D.is using the least-cost combination of X and Y, but could increase its profits by
employing less of both X and Y.
14) for every 1 percentage point that the actual unemployment rate exceeds the natural
rate, a 2 percentage point negative gdp gap occurs. this is a statement of:
a.taylor’s rule.
b.okun’s law.
c.say’s law.
d.the coase theorem.
15) Other things equal, if the supply of money is reduced:
A.the demand for money will increase.
B.the interest rates will fall.
C.bond prices will fall.
D.investment spending will increase.
16) if there are no statistical discrepancies, ndp is:
a.ni minus net foreign factor income.
b.ni plus corporate income taxes.
c.gdp deflated for increases in the price level.
d.gdp minus taxes on production and imports.