1) Which of the following occupations is not among the ten projected fastest-growing
U.S. occupations in terms of percentage increases?
A.School teachers.
B.Biomedical engineers.
C.Physical therapist assistants.
D.Personal care aides.
2) The market system’s answer to the fundamental question “What will be produced?” is
essentially:
A.”Goods and services that are profitable.”
B.”Low-cost goods and services.”
C.”Goods and services that can be produced using large amounts of capital.”
D.”Goods and services that possess lasting value.”
3) Suppose a technological improvement increases the productivity of a firm’s capital
and, simultaneously, its workers’ union negotiates a wage increase. We can predict that:
A.the firm will use relatively more capital and relatively less labor.
B.the firm will use relatively more labor and relatively less capital.
C.inputs of capital and labor will be unchanged.
D.the firm’s equilibrium output will necessarily increase.
4)
Refer to the above table. The producer surplus is $4 for producer:
A.A
B.B
C.C
D.D
5) Which of the following countries had the highest per capita energy consumption in
2009?
A.Brazil
B.China
C.Japan
D.United States
6) Suppose capital is readily substitutable for labor and that the price of capital falls. We
can conclude that the:
A.Substitution effect will tend to reduce the demand for labor
B.Output effect will tend to reduce the demand for labor
C.Demand for labor will necessarily decline
D.Demand for labor will necessarily increase
7)
Refer to the given data. Suppose that the union that provides labor to firms in this
market successfully negotiates an increase in the wage rate from $8 to $10. As a result
of the wage increase, firms will hire:
A.fewer workers and the total paid out for wages will decline.
B.fewer workers, but the total paid out for wages will increase.
C.fewer workers, but the total paid out for wages will remain unchanged.
D.more capital, if capital and labor are used in fixed proportions in production.
8) McDonald’s introduced the “Big Mac” in 1968 and it turned out to be a hit, but the
“Arch Deluxe” introduced in 1996 was not. The success or failure of a product in the
market system is determined by:
A.Capitalism and entrepreneurship
B.Specialization and exchange
C.Consumer sovereignty and dollar votes
D.Capital goods and roundabout production
9) A firm operating in competitive input and output markets purchases new technology,
which shifts the total product schedule from A to B, as shown in the data below. At the
market wage rate of $30 and product price of $5 this firm will:
A.Hire the same number of laborers in both situations
B.Increase the number of laborers hired from 4 to 6
C.Decrease the number of laborers hired from 4 to 3
D.Increase the number of laborers hired from 4 to 5
10)
Assumptions: These two graphs show two sectors of the labor market for a particular
kind of labor. Relevant product markets are competitive. The two labor demand curves
are identical and initially the quantities of labor employed in the two sectors are L1 and
L’1 and the wage rate in each sector is Wn.
Refer to the diagrams and assumptions. This analysis suggests that a union wage
advantage of Wu minus Ws causes a net efficiency:
A.loss equal to E – A
B.loss equal to C
C.gain equal to C
D.gain equal to B
11) A purely competitive firm currently producing 20 units of output earns marginal
revenues of $12 from each extra unit of output it sells. If it sells 30 units, then its total
revenues would be:
A.$120
B.$240
C.$360
D.Indeterminate based on the given information
12) What are the two major problems facing the health care system of the United
States?
A.The inadequate supply of physicians and the need to build more hospitals
B.Increasing the demand for and supply of health care
C.The rapid rate of technological change and an unhealthy population
D.The need to control costs and make health care accessible
13) Between 1996 and 2006, cash welfare payments to immigrants:
A.rose by 20 percent.
B.rose by 10 percent.
C.fell by 73 percent.
D.fell by 39 percent.
14) Raising the deductibles and copayments are a way of dealing with the:
A.Adverse selection problem of health insurance
B.Moral hazard problem of health insurance
C.Asymmetric information between doctors and patients
D.Externalities of health care
15) The price elasticity of demand for beef is about 0.60. Other things equal, this means
that a 20 percent increase in the price of beef will cause the quantity of beef demanded
to:
A.increase by approximately 12 percent.
B.decrease by approximately 12 percent.
C.decrease by approximately 32 percent.
D.decrease by approximately 26 percent.
16)
A firm faces the labor productivity and cost schedule in the table above. How many
workers will this profit-maximizing firm employ?
A.6
B.7
C.8
D.9
17) Movie theaters charge lower prices to see a movie in the afternoon than in the
evening because there is an:
A.Inelastic supply of movies in the evening
B.Elastic demand to see movies in the evening
C.Elastic demand to see movies in the afternoon
D.Inelastic demand to see movies in the afternoon
18) The number of Americans in 2010 who did not have health insurance coverage was
approximately:
A.12 million
B.49 million
C.85 million
D.121 million
19) Which of the following questions best illustrates the “framing effects” studied by
behavioral economists?
A.Which would you rather have after lunch today: an apple or an orange?
B.How much would you rather receive: $100 while everyone else gets $110, or $80 like
everyone else?
C.Where would you rather invest your funds in: stocks or gold certificates?
D.What would you rather do: go to college and postpone having a full-time job, or
forgo college and get a full-time job now?
20) Use the following data to answer the question.
How many units of labor will this firm hire in maximizing its profits?
21) Describe the various ways immigrants can legally enter into the United States.
22) What does it mean that innovators try to anticipate the future? What are the
economics consequences of this effort?
23) What supply and what demand approaches have been used to reduce surpluses of
farm commodities?
24) Shazam, a maker of magic wands, is selling in a purely competitive market. Its
output is 500 wands, which sell for $10 each. At this level of output, the marginal cost
is $10 and the average variable cost is $12. Should the firm increase output, decrease
output, or not produce? Why?
25) Can you imagine graphically a case where the efficiency loss from a tax would
equal zero? Explain.
26) Ford Motor Company announced a major rebate program for its cars and trucks.
The rebate program amounts to a simple reduction in price. The company executives
hope to increase revenue as a result of this rebate program. What economic explanation
would justify this decision?
27) Why do behavioral economists find it important to understand the mental process
that determines decision making?
28) Identify at least two factors other than distance and the age of prospective migrants
that may affect the cost and benefit calculations of emigrants to the United States.