1) Other things being the same, if the demand for labor is inelastic:
A.Decreases in wage rates will result in greater payrolls
B.Increases in wage rates will result in greater payrolls
C.Increases in wage rates will result in smaller payrolls
D.Decreases in wage rates will increase both employment and worker incomes
2)
Refer to the above graphs of D and MR for a monopolist. Which of the following
statements is true?
A.Demand is elastic at a price of P1
B.Demand is inelastic at a price of P2
C.The price elasticity of demand is constant over the entire demand curve
D.Demand is unitary-elastic over the entire demand curve
3) Economic theory suggests that the optimal level of immigration in the United States:
A.is zero.
B.occurs where the marginal benefit of the last immigrant equals or just exceeds the
marginal cost of the last immigrant.
C.occurs where the marginal benefit of the last immigrant equals or just exceeds zero.
D.occurs at the level where the difference between the marginal benefit and marginal
cost of the last immigrant is maximized.
4) If a purely competitive firm is maximizing economic profit:
A.it is necessarily maximizing per-unit profit.
B.it may or may not be maximizing per-unit profit.
C.then per-unit profit will be minimized.
5) In the Microsoft antitrust case, the federal government said in essence that:
A.the mere presence of monopoly violated the Sherman Act, irrespective of Microsoft’s
behavior.
B.Microsoft was a “bad monopoly.”
C.Microsoft was generally a “good monopoly” but that its tying contracts involving
Internet Explorer violated the Clayton Act.
D.the case was similar to the U.S. Steel case of 1920.
6) The amount of land covered by forests is:
A.declining in all nations.
B.increasing in all nations.
C.increasing in places like the United States and Western Europe, while declining in
countries in South and Central America.
D.declining in places like the United States and Western Europe, while increasing in
countries in South and Central America.
7) The Heritage Foundation in 2012 ranked which of the following economies to have
among the highest economic freedom?
A.The United States
B.Germany
C.Argentina
D.Hong Kong
8) Use the labor demand data on the left and the labor supply data on the right in
answering the following question:
Refer to the given data. The firm will maximize profits (or minimize losses) by
employing:
A.5 workers.
B.4 workers.
C.3 workers.
D.2 workers.
9)
The diagram shows the short-run average total cost curves for five different plant sizes
of a firm. The position of these five curves in relation to one another reflects:
A.economies and diseconomies of scale.
B.the effect of fixed costs on ATC as output increases.
C.the law of constant costs.
D.the law of diminishing returns.
10) Which of the following is the most important source of tax revenue for state
governments?
A.Personal income tax
B.Property taxes
C.Sales and excise taxes
D.Corporate income tax
11) One major problem with concentration ratios is that they fail to take into account:
A.The localized market for products
B.Excess capacity in production
C.Price leadership
D.Mutual interdependence
12) Which of the following is not a basic characteristic of pure competition?
A.Considerable nonprice competition.
B.No barriers to the entry or exit of firms.
C.A standardized or homogeneous product.
D.A large number of buyers and sellers.
13) Government laws and policies need to be uniformly enforced. But this leads to all
of the following problems, except:
A.Inflexibility
B.Massive paperwork
C.Excessively detailed rules
D.Haphazard application
14) An economist for a bicycle company predicts that, other things equal, a rise in
consumer incomes will increase the demand for bicycles. This prediction assumes that:
A.there are many goods that are substitutes for bicycles.
B.there are many goods that are complementary to bicycles.
C.there are few goods that are substitutes for bicycles.
D.bicycles are normal goods.
15) The decision in the U.S. Steel case:
A.reflected a behavioralist approach to antitrust.
B.reflected a structuralist approach to antitrust.
C.divided U.S. Steel into a number of smaller companies.
D.ruled that U.S. Steel had engaged in illegal price-fixing.
16) Suppose the market wage rate for whites is $18 an hour and the monetary value a
prejudiced employer attaches to the disutility of hiring African-Americans is $3. This
employer will be indifferent between hiring African-Americans and whites only when
the African-American wage rate is:
A.$3
B.$12
C.$15
D.$21
17) Russia, Australia, and France have adopted policies to encourage higher birthrates
by:
A.Decreasing benefits for single workers
B.Penalizing firms with long work hours
C.Mandating longer holidays and vacations
D.Offering monetary awards for having a child