1)
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 given data, symbols, and assumptions. At the current wage rate, the
combined number of workers in the two nations is:
A.2
B.3
C.5
D.4
2)
Before the 1970’s, the immigrant population in the U.S.:
A.Was more likely to receive public assistance than people born in the United States
B.Was less likely to receive public assistance than people born in the United States
C.Was just as likely to receive public assistance as people born in the United States
D.Did not qualify for public assistance
3) Which of the following statements is false?
A.Studies show that developing nations that have relied on import restrictions to protect
domestic industries have had higher growth rates than similar nations pursuing more
open economic policies.
B.The U.S. Constitution forbids individual states from levying tariffs.
C.The high tariffs of the Smoot-Hawley Act of 1930 and the retaliation they caused
worsened the Great Depression.
D.The European Union has enhanced prosperity in Western Europe.
4) By December 2009, the recession that began in December 2007:
A.had shifted 2 million people out of TANF and into the unemployment compensation
system.
B.doubled the number of people on welfare.
C.raised the number of TANF recipients from 3.9 million to about 4.4 million.
D.raised the number of TANF recipients to about 5 percent of the population.
5)
Refer to the tables. Suppose that Duckistan and Herbania are each producing 14 units of
civilian goods and 2 units 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, but Duckistan is not.
D.neither Duckistan nor Herbania is fully employing its resources.
6) If a pure monopolist is producing more output than the MR = MC output:
A.the firm may, or may not, be maximizing profits.
B.it will be in the interest of the firm, but not necessarily of society, to reduce output.
C.it will be in the interest of the firm and society to increase output.
D.it will be in the interest of the firm and society to reduce output.
7) Which of the following will cause a decrease in market equilibrium price and an
increase in equilibrium quantity?
A.An increase in supply.
B.An increase in demand.
C.A decrease in supply.
D.A decrease in demand.
8)
Refer to the graph above, showing the long-run supply and demand curves in a purely
competitive market. The curves suggest that in this industry, the marginal benefit to
consumers of each unit of the product is:
A.Constant
B.Increasing
C.Decreasing
D.Not indicated in the graph
9) Which of the following industries most closely approximates pure competition?
A.Agriculture.
B.Farm implements.
C.Clothing.
D.Steel.
10) A nation can produce two products: tanks and autos. The table below is the nation’s
production possibilities:
Refer to the above table. The total opportunity cost of three units of tanks is:
A.6 units of tanks
B.350 units of autos
C.650 units of autos
D.1000 units of autos
11)
Refer to the above graph for an industry. If the industry was initially a monopoly, but
the monopolist was broken up into a large number of small, purely competitive firms
and production costs remained unchanged, then market price and industry output would
be:
A.P3, Q1
B.P1, Q3
C.P2, Q2
D.P1, Q1
12) If labor’s share of the income paid to American resource suppliers is broadly
defined as the sum of wages and salaries and proprietors’ income, we can say that
labor’s relative share has:
A.remained approximately constant since 1900.
B.increased dramatically at the expense of capitalist income.
C.declined by about one-third since 1900.
D.decreased because of the decline of unionism.
13) Answer the question on the basis of the following cost data for a firm that is selling
in a purely competitive market:
Refer to the data. If the market price for the firm’s product is $32, the competitive firm
will produce:
A.8 units at an economic profit of $16.
B.6 units at an economic profit of $7.98.
C.10 units at an economic profit of $4.
D.7 units at an economic profit of $41.50.