1) The budget line shows the various incomes that an individual can earn from different
jobs.
2) One implication of the Laffer Curve in supply-side arguments is that cutting taxes
may actually reduce the budget deficit, contrary to what traditional economics teaches.
3) When corporations use retained earnings to finance the R&D for a new venture the
marginal cost of financing is zero.
4) Savings are generated when current consumption is less than current output.
5) In the foreign exchange market, if Canadian companies import more products from
the U.S., then the demand for Canadian dollars will increase.
6) The incidence of poverty is very high among the elderly (65 years or older).
7) A bilateral monopoly case is a situation where two monopolists in two countries are
selling competing products in the world market.
8) The government may create barriers to entry that serve to foster monopoly power of
firms.
9) When commercial banks borrow from the Federal Reserve Banks, they decrease their
excess reserves and their money-creating potential.
10) The demand for computers is derived from the demand for the capital resources that
are used to produce computers.
11) 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.
12) Saving equals disposable income plus consumption.
13) Fixed exchange rates usually provide more certainty to those engaged in
international trade.
14) If MRP of labor < wage rate, a firm should hire more workers.
15) The saving schedule shows the relationship of saving of households to the level of:
A.Consumption
B.Investment
C.Disposable income
D.The average propensity to save
16) Which of the following nations was the world’s largest exporter in 2012?
A.Germany
B.The United States
C.Japan
D.China
17) The Great Recession of 2007-09 was triggered by a:
A.Steep rise in bond values
B.Steep decline in housing prices
C.Sharp increase in oil prices
D.Sharp decline in the value of the U.S. dollar
18)
In a competitive market illustrated by the diagram above, a price ceiling of $10 per unit
will result in:
A.A shortage of 200 units
B.A surplus of 200 units
C.A surplus of 250 units
D.A shortage of 250 units
19) Which of the following is correct?
A.APC + APS = 1
B.APC + MPS = 1
C.APS + MPC = 1
D.APS + MPS = 1
20) Which of the following programs receives the smallest share of total Federal
spending?
A.Social security program
B.Defense
C.Medicare
D.Research & development
21) Among the worrisome consequences of the government’s aggressive
implementation of ZIRP and QE are the following, except:
A.If and when ZIRP and QE end, the government could be quickly confronted with
huge interest costs
B.Savers are being punished by the very low returns on their savings
C.Senior citizens are finding it easier to live off the earnings from their life-time
investments
D.Pension funds and retirement funds are finding it harder to keep their promises to
their contributors
22) Answer the question on the basis of the information given in the following table:
Refer to the given data. Which of the following best represents the labor demand
schedule for this firm?
A.
B.
C.
D.
23) The short-run aggregate supply curve:
A.Is vertical and the long-run aggregate supply curve is vertical
B.Slopes upward and the long-run aggregate supply curve also slopes upward
C.Slopes upward, but the long-run aggregate supply curve is horizontal
D.Slopes upward, but the long-run aggregate supply curve is vertical
24) Which of the following is a measure of economic growth that is most useful for
measuring geopolitical preeminence or military potential?
A.Growth in nominal GDP
B.Decreases in the rate of unemployment
C.Increases in real GDP per capita
D.Increases in real GDP
25) Explain the reasons for a decrease in the rate of illegal immigration in the United
States in recent years.
26) Explain the utility maximizing rule in terms of hot dogs and hamburgers purchased
at a ballgame.
27) How do you interpret the coefficient of the price elasticity of demand? Explain
when Ed is 1.5, 0.7, and 1.0.
28) B.
29) Complete the following short-run cost table using the information provided.