1)
Refer to the given data. We can conclude from the information given that this firm is a:
A.pure monopolist.
B.discriminating monopolist.
C.monopolistic competitor.
D.pure competitor.
2) The price elasticity of demand for a popular sporting event is 2. If the price of a
ticket to this event increases by 10 percent, the quantity of tickets demanded will:
A.Decrease by 5 percent
B.Decrease by 20 percent
C.Decrease by 10 percent
D.Decrease by 0.2 percent
3) As it applies to insurance, the moral hazard problem is the tendency for:
A.those most likely to collect on insurance to buy it.
B.those who buy insurance to take less precaution in avoiding the insured risk.
C.sellers to price discriminate.
D.sellers to restrict output and charge high prices.
4) An income tax is progressive if the:
A.absolute amount paid as taxes varies directly with income.
B.percentage of income paid as taxes is the same regardless of the size of income.
C.percentage of income paid as taxes increases as income increases.
D.tax rate varies inversely with income.
5) Which of the following is not characteristic of the demand for a commodity that is
elastic?
A.The relative change in quantity demanded is greater than the relative change in price.
B.Buyers are relatively sensitive to price changes.
C.Total revenue declines if price is increased.
D.The elasticity coefficient is less than one.
6) Which of the following would contribute to a U.S. balance of payments surplus?
A.The United States makes a unilateral tariff reduction on imported goods.
B.General Motors pays a dividend to a Swiss stockholder.
C.The United States cuts back on U.S. military personnel stationed in Germany.
D.Russian vodka becomes increasingly popular in the United States.
7)
Refer to the data. The firm’s optimal amount of R&D spending is:
A.$20 million.
B.$40 million.
C.$60 million.
D.$80 million.
8)
Refer to the diagram for a monopolistically competitive producer. If this firm were to
realize productive efficiency, it would:
A.also realize an economic profit.
B.incur a loss.
C.also achieve allocative efficiency.
D.have to produce a smaller output.
9)
Refer to the labor market diagram where D is the labor demand curve, S is the labor
supply curve, and MRC is the marginal resource (labor) cost curve. If this were a purely
competitive labor market, the equilibrium wage rate and level of employment would be:
A.$5 and 3 respectively.
B.$6 and 4 respectively.
C.$7 and 5 respectively.
D.$8 and 3 respectively.
10) The increased practice of “defensive medicine” is a consequence of:
A.Professional board licensing requirements
B.The threat of medical lawsuits
C.Incentives given by drug companies
D.An Act passed by Congress
11) The statement in a newspaper that “consumer prices rose last month by 1 percent,
and if this trend continues, the annual rate of inflation will be 12 percent for the year” is
an example of:
A.A normative economic statement
B.A positive economic statement
C.Microeconomic analysis
D.Rational self-interest
12) The HITECH Act of 2009 provides $20 billion of subsidies to encourage hospitals
and physicians to:
A.Use more hi-tech diagnostic equipment
B.Adopt electronic medical-records systems
C.Switch from human lab-technicians to electronic ones
D.Devote more research efforts toward hi-tech treatments
13) Suppose you have a limited money income and you are purchasing products A and
B, whose prices happen to be the same. To maximize your utility, you should purchase
A and B in such amounts that:
A.their marginal utilities are the same.
B.their total utilities are the same.
C.their marginal and total utilities are proportionate.
D.the income and substitution effects associated with each are equal.