1)
Refer to the diagram above, which shows three supply curves for corn. A movement
from point a to point b is caused by a change in the:
A.Price of resources used to produce corn
B.Number of corn farmers
C.Price of corn in the market
D.Technology of corn farming
2) Which of the following will not cause a change in the demand for product A?
A.A change in the number of buyers
B.A change in the price of A
C.A decline in consumer incomes
D.A decrease in the price of close-substitute product B
3) Two of the implications of large U.S. trade deficits for the United States are:
A.decreased current consumption and decreased indebtedness to foreigners.
B.reduced budget deficits and decreased indebtedness to foreigners.
C.reduced current consumption and higher saving.
D.increased current consumption and increased indebtedness to foreigners.
4) The organization created to oversee the provisions of multilateral trade agreements,
resolve disputes under the international trade rules, and meet periodically to consider
further trade liberalization is called the:
A.International Monetary Fund (IMF).
B.World Trade Organization (WTO).
C.Common Market Organization (CMO).
D.International Trade Commission (ITC).
5) Any combination of goods lying outside of the budget line:
A.implies that the consumer is not spending all his income.
B.yields less utility than any point on the budget line.
C.yields less utility than any point inside the budget line.
D.is unattainable, given the consumer’s income.
6) Product reviews help to alleviate problems associated with:
A.asymmetric information.
B.moral hazard.
C.positive externalities.
D.negative externalities.
7) To maintain a fixed exchange rate, the government can use the following tools,
except:
A.Currency market intervention
B.Controlling the flow of trade through various barriers
C.Rationing of foreign exchange
D.Keeping its level of international reserves strictly fixed
8) Antitrust laws are essentially:
A.Anti-monopoly
B.Anti-banking
C.Anti-finance
D.Anti-competition
9) In the quintile distribution of income, the term “quintile” represents:
A.5 percent of the income receivers.
B.10 percent of the income receivers.
C.20 percent of the income receivers.
D.25 percent of the income receivers.
10) An industry comprised of 40 firms, none of which has more than 3 percent of the
total market for a differentiated product, is an example of:
A.monopolistic competition.
B.oligopoly.
C.pure monopoly.
D.pure competition.
11) Incomes of U.S. farmers tend to be boosted by:
A.Very good harvests on farms abroad
B.Economic weakness in Europe and Southeast Asia
C.Increased protectionism in farm policies abroad
D.A depreciation of the U.S. dollar
12) Edgar and Felicity are players in an ultimatum game for $100, where Felicity is the
proposer and Edgar is the responder. Suppose that Felicity proposes that she receive
$95, while Edgar receives only $5. How would behavioral economists expect Edgar to
respond?
A.Even though Edgar would be better off having $5 versus nothing, Edgar will likely
see the offer as unfair and reject it.
B.Edgar will accept the $5, as rejecting it would be economically irrational.
C.Edgar will suggest a counteroffer that he would accept.
D.Edgar will accept the offer if he is thinking with brain System 1 but reject it if
thinking with brain System 2.
13) According to the Consider This box “Superstars,” the high pay of superstars
reflects:
A.elastic product demand.
B.high marginal revenue productivity.
C.blocked occupational entry.
D.warped societal values.