Archives: Quiz

1) In constructing models, economists: A.make simplifying assumptions. B.include all available information. C.must use mathematical equations. D.attempt to duplicate the real world. 2) Suppose there are only two planets in the universe, Zenope and Zuranda. On each planet, its inhabitants […]

1) If a more efficient technology was discovered by a firm, there would be: A.An upward shift in the AVC curve B.An upward shift in the AFC curve C.A downward shift in the AFC curve D.A downward shift in the […]

1) When people look at consumption options in isolation, such as when considering to buy an over-priced warranty to go with the purchase of a new high-end refrigerator, and focusing on the value of the refrigerator in isolation (not relative […]

1) Assume the total real output of a developing country increases from $8 billion to $8.2 billion while its population expands from 14 to 15 million people from one year to the next. Over the year, per capita income has: […]

1) In pure competition, if the market price of the product is initially higher than the minimum average cost of the firms, then: A.Some firms will exit the industry and the industry supply will decrease B.Other firms will enter the […]

1) Which of the following would not be considered a capital resource by economists? A.A van used by a mother to transport the family around B.An office computer used by an accountant C.A crane used by a building contractor D.A […]

1) Refer to the above graph. The Gini ratio would be greatest for which curve? A.a B.b C.c D.d 2) In answering the question, assume a graph in which dollars are measured on the vertical axis and output on the […]

1) The dollar sum of costs that an insured individual must pay before the insurer begins to pay would be considered: A.Copayments B.Play-or-pay C.Fee for service D.Deductibles 2) Which of the following statements applies to the Social Security program? A.Benefits […]

1) The following is cost information for the Creamy Crisp Donut Company: Entrepreneur’s potential earnings as a salaried worker = $50,000 Annual lease on building = $22,000 Annual revenue from operations = $380,000 Payments to workers = $120,000 Utilities (electricity, […]

1) Which of the following would not shift the demand curve for beef? A.A widely publicized study that indicates beef consumption increases one’s cholesterol. B.A reduction in the price of cattle feed. C.An effective advertising campaign by pork producers. D.A […]

1) Use the following data to answer the question: Refer to the data. Diminishing returns begin to occur with the hiring of the _________ unit of labor. A.first B.second C.third D.seventh 2) A firm will be hiring labor and capital […]

1) The law of increasing opportunity costs: A.applies to land-intensive commodities but not to labor-intensive or capital-intensive commodities. B.results in straight-line production possibilities curves rather than curves that are bowed outward from the origin. C.refutes the principle of comparative advantage. […]

1) If sellers could price-discriminate and charge two different prices to two different groups of buyers in order to increase revenues, then the sellers would charge: A.A higher price to the buyers whose demand is elastic B.A higher price to […]

1) The minimum efficient scale of a firm: A.is realized somewhere in the range of diseconomies of scale. B.occurs where marginal product becomes zero. C.is in the middle of the range of constant returns to scale. D.is the smallest level […]

1) The marginal utility of leisure time appears to: A.Be the same even for people with widely different incomes B.Be exempt from the law of diminishing marginal utility C.Increase as the quantity of available leisure time decreases D.Equal zero for […]

1) Refer to the diagram and assume a single good. If the price of the good decreases from $6.30 to $5.70, consumer expenditure would: A.decrease if demand were D1 only. B.decrease if demand were D2 only. C.decrease if demand were […]

1) Conglomerate mergers are combinations of: A.Many small firms B.Firms producing the same product C.Firms producing unrelated products D.Firms operating at different stages in a given production process 2) Tariffs and import quotas would benefit the following groups, except: A.Consumers […]

1) A perfectly elastic demand curve implies that the firm: A.must lower price to sell more output. B.can sell as much output as it chooses at the existing price. C.realizes an increase in total revenue that is less than product […]

1) A firm will find it profitable to hire workers up to the point at which their: A.marginal resource cost equals their wage rate. B.wage rate equals product price. C.MP is equal to their MRP. D.marginal resource cost is equal […]

1) The pizza analogy of income distribution would be most closely associated with which one of the following questions? A.If resources are used to make pizza, what other goods and services must be given up to do this? B.If cutting […]

1) An industry has five firms, each with a market share of 20 percent. There is no foreign competition, entry into the industry is difficult, and no firm is on the verge of bankruptcy. If two of the firms in […]

1) The real interest rate can be estimated by: A.subtracting the pure interest rate from the nominal interest rate. B.dividing the nominal interest rate by the consumer price index. C.subtracting the nominal interest rate from the rate of inflation. D.subtracting […]

1) Suppose that Book-Cost Busters (BCB), without authorization, reproduced a best-selling novel and placed it for downloading on the BCB pay-for-use website. This action would violate the publisher’s: A.profit rights. B.patent. C.copyright. D.trademark. 2) The Patient Protection and Affordable Care […]

1) Which of the following countries received the largest amount of emigrant remittances in 2011? A.India B.Mexico C.Philippines D.China 2) Why do cereals marketers most prefer to have their brand occupy the shelf-space a foot or two below a typical […]

1) When gasoline at $3.60/gallon looks relatively cheap after a period of $5-a-gallon gas, that’s an illustration of the: A.Planning fallacy B.Confirmation bias C.Framing effect D.Availability heuristic 2) Entrepreneurs are those people who are: A.Their own bosses B.Executive officers of […]

1) Public choice theorists contend that: A.government can efficiently correct instances of market system failure. B.the existence of cost-benefit analysis has brought about the efficient use of resources in the public sector. C.public bureaucracies are inherently more efficient than private […]

1) Under which of the following conditions would a profit-maximizing monopolist necessarily raise price? A.If product demand was price-elastic B.If marginal revenue is positive C.If marginal revenue was greater than marginal cost D.If marginal cost was greater than marginal revenue […]

1) The fallacy of composition states that: A.because economic systems are composed of so many diverse economic units, economic laws are necessarily inexact. B.the anticipation of a particular event can affect the composition of that event when it occurs. C.what […]

1) Suppose the price of a product rises and the total revenue of sellers increases. A.It can be concluded that the demand for the product is elastic. B.It can be concluded that the supply of the product is elastic. C.It […]

1) If the world price of a product rises relative to the domestic price in a trading nation, then for that product: A.Exports and imports will increase B.Exports and imports will decrease C.Exports will increase and imports will decrease D.Imports […]

1) Refer to the graph above, showing the long-run supply and demand curves in a purely competitive market. We know that in this market, the marginal: A.Cost equals marginal benefit at P1Q1 B.Benefit exceeds marginal cost at the output level […]

1) Refer to the figure. If more criminals are in the mix of potential immigrants, how will this affect the optimal quantity of immigrants? A.It will increase MC and reduce the optimal quantity. B.It will increase MC and raise the […]

1) The concept of price elasticity of demand measures: A.the slope of the demand curve. B.the number of buyers in a market. C.the extent to which the demand curve shifts as the result of a price decline. D.the sensitivity of […]

1) The mass affordability of the iPhone is the results of the following, except: A.Mass production and spreading of fixed costs B.The law of diminishing returns in manufacturing C.Economies of scale and large volumes D.Mass sales and distribution cost-savings 2) […]

1) Answer the question below on the basis of the following demand and cost data for a pure monopolist. Refer to the above table. The profit-maximizing price for the monopolist will be: A.$2.50 B.$2.25 C.$2.00 D.$1.75 2) The stronger the […]

1) All other things equal, increased concern for medical ethics will: A.Increase the demand for health care B.Decrease the demand for health care C.Increase the supply of health care D.Decrease the supply of health care 2) Which of the following […]

1) A decrease in the prices of two products that a consumer buys out of a constant budget would cause the consumer’s: A.Indifference curves to shift outward from the origin B.Indifference curves to shift inward to the origin C.Budget line […]

1) Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market specified in the following situation: In the market for leather coats, when […]

1) A conglomerate merger: A.can extend the line of products sold, extend the territories in which products are sold, or combine totally unrelated products. B.is defined as a merger involving two firms that previously had a buyer-seller relationship. C.is defined […]

1) Assume that an industry is significantly affected by import competition from foreign suppliers. Taking this factor into account, it would mean that: A.The Herfindahl index would be significantly higher in that industry because there are more firms in the […]

1) Assume the figure applies to a pure monopolist and that MC is the same for both graphs. If this firm is able to price discriminate between children and adults, its economic profit will be: A.(P2 – MC) (Q1C + […]

1) Assume that in year 1 your average tax rate is 20 percent on a taxable income of $20,000. If the marginal tax rate on the next $10,000 of taxable income is 30 percent, what will be the average tax […]

1) A normative statement is one that: A.is based on the law of averages. B.applies only to microeconomics. C.applies only to macroeconomics. D.is based on value judgments. 2) In a graph showing the market supply and demand for British pounds […]

1) In 2005, chief executive officers’ (CEOs’) pay at U.S. firms with around $500 million in annual sales averaged: A.$600 thousand. B.$1.2 million. C.$2.2 million. D.$4.5 million. 2) If a regulatory commission wants to provide a natural monopoly with a […]

1) The ceteris paribus assumption is employed in economic analysis, in order to: A.State economic goals B.Simplify the complex world C.Evaluate an economic system D.Approximate real-world conditions 2) Which act specifically outlawed price discrimination when such discrimination is not justified […]

1) Which is the best example of price discrimination? A.An airline company charging lower fares per pound for air freight than for passengers B.A telephone company charging lower rates to weekend users than weekday users C.A supermarket charging lower prices […]

1) Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Refer to the data. If the market price for this firm’s product is $24, it will produce: […]

1) The Sherman Act was designed to: A.exempt commercial banks from the antitrust laws. B.make interlocking directorates legal. C.prohibit misleading and antisocial advertising. D.make monopoly and acts that restrain trade illegal. 2) Reasons for the rapid rise in demand for […]

1) In recent years, the industrially advanced nations as a group have provided foreign aid amounting to about what percentage of their aggregate outputs? A.0.25 percent. B.0.7 percent. C.1 percent. D.2 percent. 2) In a sequential game, the first mover […]

1) What is the reason why large, short-run declines in farm prices do not significantly reduce farm production in the short run? A.Farmers’ variable costs are high compared with their fixed costs B.Farmers’ fixed costs are high compared with their […]