Archives: Quiz

1) Between 1995 and 2007 in the United States: A.average U.S. household wealth increased and median household wealth declined. B.average U.S. household wealth declined and median household wealth increased. C.both average and median U.S. household wealth declined. D.both average and […]

1) Refer to the above graph. It shows the cost curves for a competitive firm. If the market price of the product is $1.05 per unit, then the firm will produce how many units in the short run? A.Between 0 […]

1) Suppose you are given the following data on demand for a product. The price elasticity of demand (based on the midpoint formula) when price decreases from $9 to $7 is: A..63 B.1.16 C.1.60 D.2.27 2) Assume a firm is […]

1) Suppose a single firm has the marginal revenue product schedule for a particular type of labor given in the left table. Assume there are 150 firms with the same marginal-revenue-product schedules for this particular type of labor. Refer to […]

1) Refer to the diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product. With a PcPt per-unit tariff, per-unit revenue received by domestic and foreign producers […]

1) The entrance of large numbers of “baby boomers” into the labor force in the 1970s and 1980s: A.caused substantial reductions in permanent unemployment. B.lessened income inequality. C.increased income inequality. D.had no impact on income inequality. 2) Which of the […]

1) Since 1990, U.S. immigrants have founded ____ of every _____ public companies financed by venture capital. A.1; 4 B.1; 3 C.1; 2 D.2; 5 2) Entrepreneurs: A.work exclusively in government and university R&D laboratories. B.often form small companies called […]

1) Other things equal, which of the following would shift an economy’s production possibilities curve to the left? A.The discovery of a low-cost means of generating and storing solar energy. B.The entrance of more women into the labor force. C.A […]

1) If you know that when a firm produces 10 units of output, total costs are $1,030 and average fixed costs are $10, then total variable costs are: A.$104 B.$930 C.$1,040 D.$1,130 2) A fundamental difference between the command system […]

1) The table below shows the rate of return and R&D spending for a hypothetical firm. Refer to the above table. Assume the interest-rate cost of funds falls from 10 percent to 6 percent. What will happen to the optimal […]

1) Refer to the diagram. Marginal utility: A.increases at an increasing rate. B.becomes negative after consuming 4 units of output. C.is found by dividing total utility by the number of units purchased. D.cannot be calculated from the total utility information. […]

1) A firm charged with monopolizing a market is less likely to be convicted if: A.the court accepts a broad definition of the market. B.the court accepts a narrow definition of the market. C.it has gained its monopoly through abusive […]

1) All of the following statements about economic profits are correct, except that they: A.Act as a signal to producers who make decisions about how to allocate scarce resources B.Are influenced by the degree of monopoly power C.Represent a reward […]

1) Kara and Kyle are competing sockeye salmon fishers. Both have been allocated ITQs that limit their catch to 2,000 tons of sockeye salmon each. Kara’s cost per ton is $8; Kyle’s cost per ton is $12. Refer to the […]

1) The three most important sources of federal tax revenue in order of descending importance are: A.sales, payroll, and personal income taxes. B.personal income, corporate income, and sales taxes. C.personal income, corporate income, and payroll taxes. D.personal income, payroll, and […]

1) The process by which new firms and new products replace existing dominant firms and products is called: A.monopolistic competition. B.mergers and acquisitions. C.process innovation. D.creative destruction. 2) Some economists have criticized standard government figures on income inequality, arguing that […]

1) Suppose some firms exit an industry characterized by monopolistic competition. We would expect the demand curve of a firm already in the industry to: A.Shift to the left B.Shift to the right C.Become less elastic D.Remain the same since […]

1) Refer to the diagram. At the profit-maximizing level of output, the firm will realize: A.an economic profit of ABHJ. B.an economic profit of ACGJ. C.a loss of GH per unit. D.a loss of JH per unit. 2) Immigration accounts […]

1) A farmer discovers a natural gas reserve on his property. He can extract the natural gas for a profit of $40 per unit now, $55 per unit in one year, $57 per unit in two years, and $60 in […]

1) In comparing the changes in TVC and TC associated with an additional unit of output, we find that: A.no generalization about the changes in TC and TVC can be made. B.the changes in TC and TVC are equal. C.the […]

1) Which of the following best describes the typical growth pattern of trees for logging? A.Trees grow slowly at first, then grow exponentially until cut down. B.Trees grow quickly at first, then continue to grow at a declining rate. C.Trees […]

1) Refer to the graph above. Suppose that it is shows the market for an insurance product. If something happens to heighten the adverse selection problem in this market, then: A.The supply curve will shift to the left B.The supply […]

1) Answer the question on the basis of the following four tax schedules for the given base of taxable income. Which of the above tax schedules is a progressive tax schedule throughout? A.A B.B C.C D.D 2) The two main […]

1) The downward-sloping demand curve of a monopolistic competitor: A.Reflects some level of control over its own price B.Becomes eventually horizontal in the long run C.Indicates collusion among the members of the product group D.Ensures that the firm will produce […]

1) What do wages paid to factory workers, interest paid on a bank loan, forgone interest, and the purchase of component parts have in common? A.None are either implicit or explicit costs. B.All are opportunity costs. C.All are implicit costs. […]

1) A state government wants to increase the taxes on cigarettes to increase tax revenue. Because cigarettes are addictive, we would expect its demand to be: A.Elastic, thus the government’s cigarette-tax revenues would rise with a tax increase B.Elastic, thus […]

1) Alex and Ben are both loggers wanting to harvest timber from the same forest. Alex prefers to harvest and replant at a sustainable rate; Ben wants to harvest as many trees as possible to maximize short-run profit, and then […]

1) Refer to the payoff matrix. Suppose that Alpha and Beta agree that they will both pursue a high-price strategy. If Beta then cheats on the agreement in order to increase profits, which of the following is true? A.If this […]

1) A high concentration ratio indicates that: A.The industry is highly profitable B.The industry is highly competitive C.Many firms produce most of the output in an industry D.Few firms produce most of the output in an industry 2) Refer to […]

1) Farmer Jones is producing wheat, and must accept the market price of $6.00 per bushel. At this time, her average total costs and her marginal costs both equal $8.00 per bushel. Her average variable costs are $5 per bushel. […]

1) The following data show the supply and demand schedules for a product. Refer to the above data. The government now introduces a subsidy payment to producers of $30 per unit. Assuming a purely competitive market for the product, the […]

1) The reason that the supply curve for labor in a purely competitive market slopes upward is because: A.The wage rate paid to workers falls as more are hired B.The marginal product of labor falls as output increases C.Marginal resource […]

1) In interpreting the Ed value as either elastic or inelastic, we look at the: A.Ed coefficient with its negative sign B.Absolute value of the Ed coefficient C.Percent change in price D.Percent change in quantity 2) In the labor market […]

1) Price discrimination for concessions at ball parks is not applied to adults and children because: A.Children’s demand for food is elastic and adults’ demand for food is inelastic B.Adults’ demand for food is elastic and children’s demand for food […]

1) Suppose that a union successfully negotiated a 10 percent wage increase and the quantity of labor demanded decreased by 10 percent. Given a fixed labor demand curve, we can conclude that: A.the labor demand curve is upsloping. B.labor demand […]

1) An amount of R&D spending that is greater than the optimal amount indicates that the: A.Marginal benefit of R&D expenditures is equal to the marginal cost B.Marginal benefit of R&D expenditures is greater than the marginal cost C.Interest-rate cost-of-funds […]

1) If producers must obtain higher prices than before to produce a given level of output, then the following has occurred: A.A decrease in demand. B.An increase in demand. C.A decrease in supply. D.An increase in supply. 2) Based on […]

1) Suppose a college economics department decides to use a single economics text for all sections of principles of economics. Also assume that the three individual members of the textbook selection committee have the following preferences. Assuming all other textbook […]

1) Creative destruction is most often associated with: A.International trade B.Technological advance C.Government spending D.Private consumption 2) Which of the following best explains why the net flow of illegal immigrants to the United States has been close to zero (particularly […]

1) In determining one’s personal income tax, taxable income is: A.total income less deductions and exemptions. B.all income. C.all income other than wages and salaries. D.wage and salary income only. 2) Refer to the above graph. If this labor market […]

1) Unless people can benefit from conservation, there is a temptation to: A.delay resource extraction as long as possible. B.extract and use resources at a constant rate. C.extract and use resources as quickly as possible. D.ban the extraction of nonrenewable […]

1) Suppose that the Anytown city government asks private citizens to donate money to support the town’s annual holiday lighting display. Assuming that the citizens of Anytown enjoy the lighting display, the request for donations suggests that: A.the display creates […]

1) If the price-elasticity coefficient for a good is .75, the demand for that good is described as: A.Normal B.Elastic C.Inferior D.Inelastic 2) Refer to the diagram, which relates to Firm A. Which of the following would shift A’s average […]

1) Refer to the diagram for a natural monopolist. If a regulatory commission set a maximum price of P1, the monopolist would produce output: A.Q2 and realize a normal profit. B.Q4 and realize a normal profit. C.Q3 and realize an […]

1) The terms of trade reflect the: A.rate at which gold exchanges internationally for any domestic currency. B.ratio at which nations will exchange two goods. C.fact that the gains from trade will be equally divided. D.cost conditions embodied in a […]

1) The demographic transition view alleges that: A.the DVCs must first accept the use of birth control techniques to increase their standards of living. B.population growth will only decline if mortality rates exceed birth rates. C.if incomes first rise, population […]

1) Refer to the short-run production and cost data. The curves of Figures A and B suggest that: A.marginal product and marginal cost reach their maximum points at the same output. B.marginal cost reaches a minimum where marginal product is […]

1) Refer to the diagram, which pertains to a purely competitive firm. Curve C represents: A.total revenue and marginal revenue. B.marginal revenue only. C.total revenue and average revenue. D.average revenue and marginal revenue. 2) Answer the question based on the […]

1) If a firm increases all of its inputs by 10 percent and its output increases by 15 percent, then: A.it is encountering diseconomies of scale. B.it is encountering economies of scale. C.the law of diminishing returns is taking hold. […]

1) Refer to the diagrams. The case of substitute goods is represented by figure: A.A B.B C.C D.D 2) Normative statements are concerned primarily with: A.facts and theories. B.what ought to be. C.what is. D.rational choice involving costs and benefits. […]