1) Suppose that at prices of $1, $2, $3, $4, and $5 for product Z, the corresponding
quantities supplied are 3, 4, 5, 6, and 7 units, respectively. Which of the following
would increase the quantities supplied of Z to, say, 6, 8, 10, 12, and 14 units at these
prices?
A.Improved technology for producing Z.
B.An increase in the prices of the resources used to make Z.
C.An increase in the excise tax on product Z.
D.Increases in the incomes of the buyers of Z.
2) Which of the following arguments for trade protection contends that new domestic
industries need support to establish themselves and survive?
A.The increased domestic employment argument.
B.The cheap foreign labor argument.
C.The diversification-for-stability argument.
D.The infant industry argument.
3) About what percentage of health care spending in the U.S. is financed by private
health insurance?
A.15%
B.33%
C.50%
D.75%
4) Those who feel that unions positively affect productivity and efficiency argue that
unions are:
A.”voice mechanisms” that reduce labor turnover.
B.”exit mechanisms” that reduce labor turnover.
C.”voice mechanisms” that accelerate labor turnover.
D.”exit mechanisms” that accelerate labor turnover.
5) The process by which new firms and new products replace existing dominant firms
and products is called:
A.monopolistic competition.
B.the inverted-U process.
C.process innovation.
D.creative destruction.
6) Foreign exchange rates refer to the:
A.Price at which purchases and sales of foreign goods take place
B.Rate of exchange of goods and services between two trading nations
C.Price of one nation’s currency in terms of another nation’s currency
D.Difference between exports and imports of a particular nation with another
7) Which one of the following is concerned with social regulation?
A.Equal Employment Opportunity Commission
B.Federal Communications Commission
C.Sherman Commission
D.Federal Energy Regulatory Commission
8)
Refer to the diagram. If actual production and consumption occur at Q2:
A.efficiency is achieved.
B.an efficiency loss (or deadweight loss) of a + b + c + d occurs.
C.an efficiency loss (or deadweight loss) of a + c occurs.
D.an efficiency loss (or deadweight loss) of e + f occurs.
9) What is an example of a technological breakthrough that came out of a government
or university laboratory?
A.Hybrid seeds
B.Scotch tape
C.Thinsulate insulation
D.Post-it note pads
10) If in the short run a firm’s total product is increasing, then its:
A.marginal product must also be increasing.
B.marginal product must be decreasing.
C.marginal product could be either increasing or decreasing.
D.average product must also be increasing.
11)
Refer to the above graph of the market for wheat. The government adopts a price
support program for wheat, and supports the wheat price at P2. As a result of this price
support program:
A.There will be a shortage of wheat in the amount of AB
B.There will be a surplus of wheat in the amount of Q1Q2
C.There will be a surplus of wheat in the amount of Q0Q2
D.Wheat farmers will receive less total income than if there were no price support
program
12) Large agricultural subsidies for food and fiber in IACs hurt the economies of the
DVCs by:
A.causing higher prices for imported food products.
B.lowering saving rates in the DVCs.
C.encouraging “brain drains” from the DVCs.
D.reducing world agricultural prices and thus export income of the DVCs.
13) U.S. firms collectively devote the largest portion of their total R&D spending to:
A.applied research (pursuing invention).
B.basic scientific research.
C.innovation and diffusion.
D.financing startup firms.
14) Which of the following is a reason why individual firms under pure competition
would not find it gainful to advertize their product?
A.Firms produce a homogeneous product
B.The quantity of the product demanded is very large
C.The market demand curve cannot be increased
D.Firms do not make long-run profits