1) Suppose you are given the following data on demand for a product. The price
elasticity of demand (based on the midpoint formula) when price decreases from $9 to
$7 is:
A..63
B.1.16
C.1.60
D.2.27
2) Assume a firm is operating at minimum average total cost in the short run. If there is
a decrease in output it follows that:
A.Marginal cost increases
B.Average fixed cost increases
C.Average total cost decreases
D.Average variable cost increases
3) The post hoc, ergo propter hoc fallacy suggests that:
A.positive statements are always followed by normative judgments.
B.positive statements can never be proven true or false.
C.if one acts on one’s expectations, those expectations will always be fulfilled.
4)
Refer to the diagram. This economy will experience unemployment if it produces at
point:
A.A.
B.B.
C.C.
D.D.
5) In a situation where an externality occurs, the “third party” refers to those who:
A.Buy the product from others
B.Produce the product for others
C.Trade the product with others outside the nation or community
D.Are not directly involved in the transaction or activity
6) Answer the question on the basis of the following 2012 balance of payments data (+
and -) for the hypothetical nation of Zabella. All figures are in billions of dollars.
Refer to the given data. Zabella has a balance of trade (goods):
A.deficit of $10 billion.
B.surplus of $5 billion.
C.surplus of $10 billion.
D.deficit of $5 billion.
7) According to behavioral economists, giving to charity:
A.contradicts the view that people are narrowly self-interested.
B.appears unselfish but in fact is driven by self-interest.
C.results from an ability to accurately calculate benefits and costs.
D.is done solely to receive the utility from public recognition.
8) Which of the following is not a possible source of natural monopoly?
A.Large-scale network effects.
B.Simultaneous consumption.
C.Greater use of specialized inputs.
D.Rent-seeking behavior.
9)
The individual demand curve that is implied by the budget constraints and indifference
curves above will be:
A.Perfectly elastic
B.Relatively elastic
C.Perfectly inelastic
D.Relatively inelastic
10) Technological advance improves productive efficiency by:
A.lowering average total cost.
B.increasing marginal utility.
C.enhancing monopoly power.
D.giving society a more-preferred mix of goods and services.
11) The table below shows the total utility data for products X and Y. Assume that the
prices of X and Y are $3 and $4, respectively, and that consumer income is $18.
Refer to the above table. If the price of X decreases to $2, then the utility-maximizing
combination of the two products is:
A.2 of X and 2 of Y
B.2 of X and 3 of Y
C.3 of X and 3 of Y
D.4 of X and 4 of Y
12) The diagnosis-related-group (DRG) system adopted by Medicare since 1983 has
had the following effects, except:
A.Hospitals now receive a fixed payment for treating each patient
B.The average length of a hospital stay has increased
C.More patients are treated on an outpatient basis
D.Hospitals now have an incentive to restrict the amount of resources used for patients