1) In comparing the changes in TVC and TC associated with an additional unit of
output, we find that:
A.no generalization about the changes in TC and TVC can be made.
B.the changes in TC and TVC are equal.
C.the change in TC is greater than the change in TVC.
D.the change in TVC is greater than the change in TC.
2) “Transfer payments” may be thought of as:
A.Wages and salaries
B.Purchases of services
C.Taxes in reverse
D.Expenditures on products
3) Assume that a purely competitive firm uses two resources, labor (L) and capital (C),
to produce a certain product. In which situation would the firm be maximizing profit?
A.Case A
B.Case B
C.Case C
D.Case D
4) In the long run, the representative firm in monopolistic competition tends to have:
A.Excess capacity
B.Economic profits
C.No product differentiation
D.A perfectly elastic demand curve
5) Which one of the following topics would be of the most interest to a public choice
economist?
A.The theory of comparative advantage.
B.The law of increasing opportunity cost.
C.Inflation and unemployment.
D.Rent-seeking behavior.
6) Who is the most likely to be a union member in the United States?
A.A female retail trade worker.
B.A male transportation worker.
C.An African-American manager.
D.A white agricultural worker.
7) In the inelastic portion of a monopolist’s demand curve, an increase in price will:
A.Reduce output quantity, increase total revenue, and increase total cost
B.Reduce output quantity, increase total revenue, and decrease total cost
C.Raise output quantity, decrease total revenue, and increase total cost
D.Reduce output quantity, decrease total revenue, and decrease total cost
8) If competitive industry Y is incurring substantial losses, output will:
A.expand as resources move toward industry Y.
B.contract as resources move toward industry Y.
C.contract as resources move away from industry Y.
D.expand as resources move away from industry Y.
9) The process of observing real-world behavior, developing hypotheses, testing them
against facts, then using the results to construct theories is called:
A.Opportunity cost estimation
B.The scientific method
C.Marginal analysis
D.Normative analysis
10)
Refer to the diagram. Which one of the following would shift the production
possibilities curve from PP1 to PP2?
A.Worsening of the AIDS epidemic.
B.Immigration of skilled workers into the economy.
C.An increase in consumer prices.
D.A reduction in hourly wages.
11) The demand for most agricultural products is:
A.elastic with respect to price but inelastic with respect to income.
B.inelastic with respect to price but elastic with respect to income.
C.elastic with respect to both price and income.
D.inelastic with respect to both price and income.
12)
In the diagram variables X and Y are:
A.both dependent variables.
B.directly related.
C.inversely related.
D.unrelated.