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1) A decrease in the supply of loanable funds would tend to lower the interest rate.
2) Trade adjustment assistance provides subsidies to companies that have lost business
to foreign firms.
3) The government's ability to coerce people to do things is always detrimental to the
achievement of economic efficiency.
4) There were over one million legal immigrants into the United States in 2011.
5) Other things equal, short-term loans usually have lower rates of interest than do
long-term loans.
6) If car makers are required to install gadgets to improve the cleanliness of
car-exhaust, we would expect the equilibrium quantity in the car market to decrease.
7) The existence of "beaten paths" tends to discourage immigration because of the
perception that job prospects have been exhausted.
8) About three-fourths of all health care costs are paid out of pocket by patients.
9) The vicious circle of poverty implies that there is no way to break the circle; the poor
nations will always remain poor.
10) Unions prefer agency shops to open shops.
11) Price discrimination will result in consumers with more elastic demand purchasing
more of the good than when a single price is charged to all consumers in the market.
12) One major factor that serves as an economic basis for world trade is the uneven
distribution of resources among nations.
13) The modern view of technological advance is that it is an external force to which
the economy adjusts.
14)
Refer to the two diagrams for individual firms. In Figure 2 the firm's demand and
marginal revenue curves are represented by:
A.lines B and C respectively.
B.lines A and C respectively.
C.lines A and B respectively.
D.line B.
15) The profit-maximizing output of a pure monopoly is not socially optimal because in
equilibrium:
A.price equals minimum average total cost.
B.marginal revenue equals marginal cost.
C.marginal cost exceeds price.
D.price exceeds marginal cost.
16) Human resources in the poorest DVCs have the following characteristics, except:
A.Populations are large
B.Unemployment and under-employment are widespread
C.Population growth is low
D.Labor productivity is low
17)
The data illustrate the:
A.law of comparative advantage.
B.utility-maximizing rule.
C.law of diminishing marginal utility.
D.law of increasing opportunity costs.
18) Low-income developing countries generally have the following characteristics,
except:
A.Low population growth rates
B.Low levels of industrialization
C.Dependency on exports of agricultural products or raw materials
D.Minimal amounts of capital resources
19)
Refer to the diagram where xy is the relevant budget line and I1, I2, and I3 are
indifference curves. The equilibrium position for the consumer is at:
A.any point on xy.
B.point M.
C.point K.
D.point J.
20) One defining characteristic of pure monopoly is that:
A.The monopolist is a price taker
B.The monopolist uses advertising
C.The monopolist produces a product with no close substitutes
D.There is relatively easy entry into the industry, but exit is difficult
21) In the resource market:
A.businesses borrow financial capital from households.
B.businesses sell services to households.
C.households sell resources to businesses.
D.firms sell raw materials to households.
22) Answer the question on the basis of the following cost data for a purely competitive
seller:
Refer to the data. At 5 units of output, average fixed cost, average variable cost, and
average total cost are:
A.$10, $60, and $70 respectively.
B.$50, $40, and $90 respectively.
C.$10, $70, and $80 respectively.
D.$5, $25, and $30 respectively.
23) The value that consumers get (from consuming a product) over and above that they
actually paid for the product is called:
A.Consumer utility
B.Consumption expenditures
C.Consumer surplus
D.Consumer demand
24)
Refer to the diagram. The variables X and Y are:
A.inversely related.
B.directly related.
C.unrelated.
25) A firm should continue to operate even at a loss in the short run if:
A.Its output is above the break-even point
B.Its revenues are less than its fixed costs
C.It can cover its variable costs and some of its fixed costs
D.It has some fixed costs that cannot be brought down to zero
26) Government fiscal policy involves changing which of the following?
A.Interest rates.
B.Taxes and government spending.
C.Regulations on business.
D.The amount of money in circulation.
27) In modern economies, the cost of raising children has:
A.Decreased because of laxer enforcement of laws that make child labor illegal
B.Increased because of stronger enforcement of laws that make child labor illegal
C.Increased because of fewer requirements for schooling until adulthood
D.Decreased because of more requirements for schooling until adulthood
28) Why are the public sector and private sector imperfect institutions?
29) Explain the term laissez faire capitalism.
30) Assume that a consumer purchases a combination of products Y and Z. The MUy is
50 and the Py is $25. The MUz is 20 and the Pz is $5. What should this consumer do to
maximize utility?
31) What have been three major criticisms of agricultural policies over the past
half-century?
32) Explain how a legal cartel theory of regulation can be similar to a cartel.
33) A representative for a business company stated at a recent press conference that,
Unions provide little benefits to the economy, resulting in inefficiency and loss of
productivity. Can you counter his statement?
