Archives: Quiz

1) In the last six decades (1950-2009) farm employment in the U.S. has been: A.Increasing both in absolute numbers and as a proportion of the total employment B.Increasing in absolute numbers, but declining as a proportion of the total employment […]

1) An increase in the dollar price of the British pounds will: A.Increase the pound price of dollars B.Decrease the pound price of dollars C.Leave the pound price of dollars unchanged D.Cause Britain’s terms of trade with the United States […]

1) Refer to the diagram for a pure monopolist. Suppose a regulatory commission is created to determine a legal price for the monopoly. If the commission seeks to provide the monopolist with a “fair return,” it will set price at: […]

1) U.S. businesses are demanders of foreign currencies because they need them to: A.Sell goods and services exported to foreign countries B.Pay for goods and services imported from foreign countries C.Receive interest payments from foreign governments D.Receive interest payments from […]

1) Opportunity costs exist because: A.the decision to engage in one activity means forgoing some other activity. B.wants are scarce relative to resources. C.households and businesses make rational decisions. D.most decisions do not involve sacrifices or trade-offs. 2) A nation’s […]

1) The purely competitive employer of resource A will maximize the profits from A by equating the: A.price of A with the MRP of A. B.marginal productivity of A with the MRC of A. C.marginal productivity of A with the […]

1) A profit-maximizing monopolist facing the situation shown in the graph above should: A.Shut down in the short run B.Continue producing to minimize losses C.Continue producing to make economic profits D.Continue producing as long as price is greater than marginal […]

1) If technology dictates that labor and capital must be used in fixed proportions, an increase in the price of capital will cause a firm to use: A.more labor as a consequence of the substitution effect. B.more labor as a […]

1) Refer to the above graph for a purely competitive firm operating at a loss in the short run. Which area in the graph represents the portion of total costs that the firm can recoup by continuing to produce rather […]

1) Which of the following would be a significant cause of income inequality in the United States? A.Housing B.Discrimination C.In-kind transfers D.Social Security 2) The U.S. Department of Agriculture’s productivity index in terms of farm output per unit of farm […]

1) Refer to the table above for a certain product’s market in Econland. If the world price of the product were $6 and a tariff of $1 per unit were applied to imports of the product, then the total revenue […]

1) Earnings received from wealth: A.Contribute to income inequality B.Are the major source of income for families C.Are becoming more equal in the society D.Are primarily the result of advanced education 2) Monopolistic competition means: A.a market situation where competition […]

1) Symbols: Q = number of workers demanded; W = wage rate; and VTP = value of the cumulative total product (output) of the particular number of workers. Assumptions: (1) The current wage in Zinnia is $20 and the current […]

1) Average revenue and marginal revenue are equal at each output level in: A.Pure competition B.Monopolistic competition C.Monopoly D.Oligopoly 2) The perceived central economic problem associated with the U.S. health care system is: A.too many frivolous malpractice lawsuits. B.an overabundance […]

1) If the supply of product X is perfectly elastic, an increase in the demand for it will increase: A.equilibrium quantity but reduce equilibrium price. B.equilibrium quantity, but equilibrium price will be unchanged. C.equilibrium price but reduce equilibrium quantity. D.equilibrium […]

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 […]

1) The marginal tax rate is: A.less than the average tax rate when a tax is progressive. B.calculated by dividing total taxes paid by one’s total taxable income. C.the percentage of one’s total income that is paid in taxes. D.the […]

1) If the price of hand calculators falls from $10 to $9 and, as a result, the quantity demanded increases from 100 to 125, then: A.demand is elastic. B.demand is inelastic. C.demand is of unit elasticity. D.not enough information is […]

1) Refer to the market for loanable funds, as shown in the above graph. A decline in the interest rate is likely to: A.Lower capital investment B.Increase the quantity of loanable funds demanded C.Come about when there is a shortage […]

1) If a person drives with less care after purchasing auto insurance, this situation would be an example of a(n): A.Reverse wealth problem B.Negative externality problem C.Adverse selection problem D.Moral hazard problem 2) The debate over income distribution focuses on […]

1) Refer to the diagram. For output level Q, per unit costs of C are: A.unattainable and imply the inefficient use of resources. B.unattainable, given resource prices and the current state of technology. C.attainable, but imply the inefficient use of […]

1) In which of the following industry structures is the entry of new firms the most difficult? A.Pure monopoly. B.Oligopoly. C.Monopolistic competition. D.Pure competition. 2) The individual firm in a purely competitive labor market faces: A.a perfectly elastic labor supply […]

1) Assumptions: (1) Employers in this market are willing and able to ignore minimum wage laws; (2) Sd represents the supply of domestic-born (and legal immigrant) workers; (3) St represents the total supply of workers in this labor market (Sd […]

1) Refer to the diagrams. In which case would the coefficient of income elasticity be negative? A.A B.B C.C D.D 2) Assume that the short-run cost and demand data given in the table below confront a monopolistic competitor selling a […]

1) When DVD players start becoming obsolete then, to potential thieves, the: A.Marginal utility of stealing them increases B.Marginal utility of stealing them decreases C.Marginal cost of stealing them increases D.Marginal cost of stealing them decreases 2) The monopolistically competitive […]

1) The domestic opportunity cost of producing 100 barrels of chemicals in Germany is one ton of steel. In France, the domestic opportunity cost of producing 100 barrels of chemicals is two tons of steel. In this case: A.France has […]

1) U.S. exports represent two flows: A.An outflow of goods or services, and an outflow of payments B.An inflow of goods or services, and an outflow of payments C.An outflow of goods or services, and an inflow of payments D.An […]

1) Many economists are critical of the minimum wage because they believe that it: A.hurts the efforts of labor unions. B.reduces the number of available job opportunities. C.conflicts with policies designed to equalize the distribution of income. D.causes labor shortages […]

1) A fishery collapse occurs when the: A.Fishery goes out of business B.Fishery is taken over by a government agency C.Fishery’s population is harvested at a higher rate than it reproduces D.Fishery’s population reproduces at a higher rate than it’s […]

1) Which of the following is mainly involved in social regulation? A.The Social Security Administration B.The Federal Communications Commission C.The Food and Drug Administration D.The Interstate Commerce Commission 2) Which of the following DVC policies is not likely to increase […]

1) The demand curve for loanable funds represents the behavior of: A.Lenders B.Savers C.Borrowers D.Bankers 2) Which of the following policies has succeeded in reducing fishery catch sizes without creating an “arms race” among fishers? A.Limiting the length of the […]

1) Suppose that Katie and Kelly each expects to receive $500 worth of marginal benefits from a proposed new recreation center, whereas Kerry expects to receive only $100 worth. If the proposed tax levied on each for the center would […]

1) The safest way for an individual to leave a burning theater is to run for the nearest exit; it is therefore also the best means of escape for a large audience. This assertion illustrates the: A.”after this, therefore because […]

1) Which of the following nations has the highest per capita spending on health care? A.Germany B.Canada C.France D.United States 2) Public finance is the sub-discipline of economics that studies the various ways in which: A.The general public acquire financing […]

1) Refer to the above graph. All of the following development would allow a movement from point C to a point outside the production possibilities curve, except: A.An increase in the supply of resource B.An improvement in the quality of […]

1) In terms of the circular flow diagram, households make expenditures in the _____ market and receive income through the _____ market. A.product; financial B.resource; product C.product; resource D.capital; product 2) Since 1980 the difference between the earnings of college […]

1) Which of the following is not a reason why government may play a key role in the early stage of economic development in developing nations? A.The infrastructure provided by government B.The abundance of entrepreneurs who need to be regulated […]

1) As a result of the Great Recession of 2007-2009, illegal immigration to the United States: A.has increased dramatically. B.fell significantly during the recession but has increased since the recession and the illegal immigrant population is growing significantly again. C.illegal […]

1) Which of the following claims is not made by opponents of a value-added tax (VAT)? A.Savings and investment is discouraged because future consumption is penalized. B.The VAT is regressive, potentially leading to additional progressive taxes to offset the regressive […]

1) The larger the diameter of a natural gas pipeline, the lower is the average total cost of transmitting 1,000 cubic feet of gas 1,000 miles. This is an example of one reason for: A.Economies of scale B.Diminishing returns to […]

1) Farm policy in the United States over the past eight decades has been designed primarily to: A.Shift resources from the farm sector to the nonfarm sector B.Reduce monopoly in the farm sector C.Enhance and stabilize farm prices and income […]

1) The “dictator game” and “ultimatum game” are experiments that have provided field evidence for: A.The invisible hand B.Fairness C.Self-interest D.Cognitive biases 2) As the firm in the diagram expands from plant size #3 to plant size #5, it experiences: […]

1) The short-run supply curve for a competitive firm is the: A.Entire MC curve B.Segment of the MC curve lying below the AVC curve C.Segment of the MC curve lying above the AVC curve D.Segment of the AVC curve lying […]

1) A competitive firm in the short run can determine the profit-maximizing (or loss-minimizing) output by equating: A.price and average total cost. B.price and average fixed cost. C.marginal revenue and marginal cost. D.price and marginal revenue. 2) In fisheries management, […]

1) Assume that a firm’s interest-rate cost-of-funds curve for R&D is perfectly elastic. Which of the following would increase a firm’s optimal R&D expenditures and, in equilibrium, reduce the expected rate of return on the last dollar of R&D? A.A […]

1) Answer the question on the basis of the following cost data for a purely competitive seller: Refer to the data. If product price is $25, the firm will: A.shut down and incur a $90 loss. B.shut down and incur […]

1) Most economists agree that government efforts in economic development must be: A.Employed to substitute for private efforts B.Designed to support private efforts C.The sole driver of economic development D.Kept at a minimum because we can always rely on markets […]

1) Which of the following claims is not made by defenders of lotteries? A.Lotteries are a relatively painless way to fund important government services. B.Lotteries help reduce organized crime by providing an alternative to illegal gambling. C.Lotteries are preferable to […]

1) There is a surplus of tomatoes in the market. This implies that: A.The current price is set above the equilibrium level B.The price will be rising, as a result C.Supply of tomatoes is more than the demand D.Quantity demanded […]

1) Refer to the above graph with three demand curves. An “increase in quantity demanded” would be illustrated by a change from: A.Point 4 to point 6 B.Point 5 to point 1 C.Point 4 to point 1 D.Point 2 to […]