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1) Which of the following statements is (are) correct?
a.Relative to some other scientists, economists find it more difficult to conduct
experiments.
b.Theory and observation are important in economics as well as in other sciences.
c.To obtain data, economists often rely upon the natural experiments offered by history.
d.All of the above are correct.
2) Which of the following statements is correct? An individual worker's labor supply
curve
a.can never be backward sloping.
b.slopes backward if that person responds to a higher wage by taking fewer hours of
leisure per week.
c.slopes backward if that person responds to a higher opportunity cost of leisure by
working fewer hours per week.
d.slopes upward if that person works the same number of hours per week, regardless of
the opportunity cost of leisure.
3) Refer to Figure 9-20. With trade, Vietnamese rice producers will produce
a.2,000 units of rice and their producer surplus will be 4,000.
b.2,000 units of rice and their producer surplus will be 7,500.
c.3,000 units of rice and their producer surplus will be 7,500.
d.3,000 units of rice and their producer surplus will be 9,000.
4) You have been asked by your economics professor to graph the market for lumber
and then to analyze the change that would occur in equilibrium price as a result of
recent forest fires in the west. Your first step would be to
a.decide which direction to shift the curve.
b.decide whether the fires affected demand or supply.
c.graph the shift to see the effect on equilibrium.
d.None of the above is correct.
5) Table 17-12
The table shows the town of Driveaway's demand schedule for gasoline. Assume the
town's gasoline seller(s) incurs a cost of $2 for each gallon sold, with no fixed cost.
Refer to Table 17-12. Suppose there are exactly two sellers of gasoline in Driveaway:
Amogo and Spilmerica. If Amogo sells 150 gallons and Spilmerica sells 100 gallons,
then
a.Amogo's profit is $150 and Spilmerica's profit is $100.
b.Amogo's profit is $100 and Spilmerica's profit is $66.67.
c.Amogo's profit is $75 and Spilmerica's profit is $50.
d.there is an excess supply of gasoline in Driveaway.
6) Table 12-16
In this tax system which of the following is possible?
a.vertical and horizontal equity
b.vertical but not horizontal equity
c.horizontal but not vertical equity
d.neither horizontal nor vertical equity
7) Which of the following areas of study typifies microeconomics as opposed to
macroeconomics?
a.the impact of minimum-wage laws on employment in the fast food industry
b.the effect of changes in household saving rates on the growth rate of national income
c.the impact of faster money growth on the rate of inflation
d.a comparison of alternative tax policies and their respective impacts on the rate of the
nation's economic growth
8) A lump-sum tax minimizes deadweight loss.
a.True
b.False
9) Which of the following explains why long-run average cost at first decreases as
output increases?
a.diseconomies of scale
b.less-efficient use of inputs
c.fixed costs becoming spread out over more units of output
d.gains from specialization of inputs
10) If a country has the comparative advantage in producing a product, then that
country must also have the absolute advantage in producing that product.
a.True
b.False
