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1) In order to apply the concept of diminishing returns to study time:
A.the amount of study time available must be held constant.
B.study time must be considered a long-run production process.
C.all inputs to the learning process must be allowed to vary.
D.all inputs to the learning process except for study time must be assumed to be fixed.
2) An industrial union:
A.Is most concerned with increasing the demand for workers in an industry
B.Restricts supply of labor through licensing requirements
C.Organizes a wide range of workers in an industry to gain bargaining power
D.Is most effective in a purely competitive industry
3)
A firm faces the labor productivity and cost schedule in the table above. The wage rate
schedule suggests that the firm:
A.Is purely competitive in the labor market
B.Is purely competitive in the product market
C.Has some monopoly power in the product market
D.Is not purely competitive in the labor market
4) Black markets are associated with:
A.price floors and the resulting product surpluses.
B.price floors and the resulting product shortages.
C.ceiling prices and the resulting product shortages.
D.ceiling prices and the resulting product surpluses.
5) In the United States, research and development spending as a percentage of GDP is:
A.1.5 to 2.0 percent, which is lower than that of most other industrial countries.
B.2.5 to 3.0 percent, which is higher than that of most other industrial countries.
C.4.5 to 5.0 percent, which is lower than that of most other industrial countries.
D.5.5 to 6.0 percent, which is higher than that of most other industrial countries.
6)
Refer to the diagram. An industrial (inclusive) union could increase employment in this
labor market:
A.by negotiating any wage rate between W1 and W4
B.by negotiating a wage rate greater than W4
C.only if it accepted a wage rate below W1
D.only if it could shift the labor demand curve rightward.
7) The public interest theory of industrial regulation contends that:
A.while industrial regulation is sound in theory, bureaucrats allow monopolists to
obtain excessive profits.
B.regulated monopolies are tantamount to legal cartels.
C.the objective of regulation is to protect the public from the market power inherent in
natural monopolies.
D.firms in some industries want to be regulated.
8) People's tendency to attribute their successes to personal effort or special personal
trait, while blaming their failures on the faults of others or on something beyond their
control is called:
A.Confirmation bias
B.Framing effect
C.Hindsight bias
D.Self-serving bias
9)
Refer to the diagram, assuming that the firm represented is operating on curve TC0.
What is the user cost of extracting a unit of this resource?
A.$20.
B.$40.
C.$60.
D.It cannot be determined with the information given.
10) One feature of pure monopoly is that the firm is:
A.A producer of products with close substitutes
B.One of several producers of a product
C.A price taker
D.A price maker
11)
Refer to the game theory matrix where the numerical data show the profits resulting
from alternative combinations of advertising strategies for Ajax and Acme. Ajax's
profits are shown in the upper right part of each cell; Acme's profits are shown in the
lower left. Without collusion, the outcome of the game:
A.maximizes joint profits for the firms.
B.results in a prisoner's dilemma.
C.results in greater economic efficiency.
D.forces one or more firms out of the industry.
12) Which of the following would be considered part of wealth?
A.Wages and salaries
B.Rental payments
C.Profits from a corporation
D.Corporate stock holdings
13) A tax is regressive if it:
A.Takes a higher percentage of income as income increases
B.Takes the same percentage of income regardless of income level
C.Takes a smaller percentage of income as income increases
D.Is levied on consumers
14)
Refer to the diagram. The production of Q1 units of output at an average cost of a:
A.is not possible, given present technology and resource prices.
B.can be achieved if the firm would hire the optimal mix of resources.
C.would entail X-inefficiency.
D.can be realized if the last dollar spent on each input were equal to its marginal
product.
