1) If the nominal wage rises by 4 percent, and the price level rises by 7 percent, the real
wage will:
A.be unaffected.
B.rise by 3 percent.
C.fall by 3 percent.
D.rise by 11 percent.
2) For which one of the following goods would we need to sum individual demand
curves vertically to obtain the total demand curve?
A.frozen yogurt
B.bubble gum
C.microwave popcorn
D.courts of law
3)
refer to the above data. at the point where 3 units are being sold, the coefficient of price
elasticity of demand:
a.cannot be estimated.
b.suggests that the market is purely competitive.
c.is less than unity (one).
d.is greater than unity (one).
4) The following table shows government spending and tax revenue for a hypothetical
economy over a five-year period. All figures are in billions.
(a)In what years were there budget deficits and what were the amounts?
(b)In what year was there a budget surplus and what was the amount?
(c)What is the public debt in this economy over the five years?
(d)If the size of the economy (GDP) was $6000 billion what would the public debt in
year 5 as a percentage of GDP.
5) the following cost data for a firm that is selling in a purely competitive market:
refer to the above data. if there were 1,000 identical firms in this industry and total or
market demand is as shown below, equilibrium price will be:
a.$32.
b.$42.
c.$36.
d.$13.
6) (last word) which of the following is a source of data for the investment component
of u.s. gdp?
a.the census bureau’s retail trade survey
b.the census bureau’s housing starts survey and housing sales survey.
c.the conference board’s survey of consumer sentiment
d.the bureau of labor statistics consumer price index
7) Which of the following best describes the idea of a political business cycle?
A.Politicians are more willing to cut taxes and increase government spending than they
are to do the reverse.
B.Fiscal policy will result in alternating budget deficits and surpluses.
C.Politicians will use fiscal policy to cause output, real incomes, and employment to be
rising prior to elections.
D.Despite good intentions, various timing lags will cause fiscal policy to reinforce the
business cycle.
8) real gdp measures:
a.current output at current prices.
b.current output at base year prices.
c.base year output at current prices.
d.base year output at current exchange rates.
9) the letters a, b, and c designate three successively larger plant sizes.
refer to the above data. in the long run the firm should use plant size “a” for:
a.all possible levels of output.
b.10 to 30 units of output.
c.30 to 60 units of output.
d.all outputs greater than 40.
10) real income can be determined by:
a.dividing the price level by nominal income.
b.inflating nominal income for inflation.
c.dividing the annual rate of inflation into the number “70.”
d.deflating nominal income for inflation.
11) determine, other things equal, the effects of a given change in a determinant of
demand or supply for product x upon (1) the demand (d) for, or supply (s) of, x, (2) the
equilibrium price (p) of x and (3) the equilibrium quantity (q) of x.
refer to the above. an increase in the price of a product that is a close substitute for x
will:
a.decrease d, increase p, and decrease q.
b.increase d, increase p, and decrease q.
c.increase d, increase p, and increase q.
d.increase d, decrease p, and increase q.
12) The XYZ Corporation’s collective bargaining agreement indicates that it may hire
either union or nonunion workers and that the latter are under no obligation to join the
union. This agreement embodies:
A.an open shop.
B.a closed shop.
C.a union shop.
D.an agency shop.
13) if you owned a small farm, which of the following would be a fixed cost?
a.harvest labor
b.hail insurance
c.fertilizer
d.seed
14) a purely competitive firm’s short-run supply curve is:
a.the upward sloping portion of its marginal cost curve.
b.the upward sloping portion of its average variable cost curve.
c.its marginal cost curve above average variable cost.
d.its average total cost curve.
15) The following data for the hypothetical nations of Alpha and Beta. Qs is domestic
quantity supplied and Qd is domestic quantity demanded.
Refer to the above data. The equilibrium world price must be lower than $4 because at
$4:
A.both nations want to import steel.
B.both nations want to export steel.
C.Beta wants to export more than Alpha.
D.Alpha wants to import more than Beta.
16) If the dollar depreciates relative to the Russian ruble, the ruble:
A.will be less expensive to Americans.
B.may either appreciate or depreciate relative to the dollar.
C.will appreciate relative to the dollar.
D.will depreciate relative to the dollar.
17) to maximize profit a pure monopolist must:
a.maximize its total revenue.
b.maximize the difference between marginal revenue and marginal cost.
c.maximize the difference between total revenue and total cost.
d.produce where average total cost is at a minimum.
18) a nondiscriminating pure monopolist’s demand curve:
a.is perfectly inelastic.
b.coincides with its marginal revenue curve.
c.lies above its marginal revenue curve.
d.lies below its marginal revenue curve.
19) The demand curve for labor would shift leftward as the result of:
A.an increase in the price of the product labor is producing.
B.a decrease in the productivity of labor.
C.an increase in the price of labor.
D.a decrease in the price of capital, provided the output effect exceeds the substitution
effect.