Archives: Quiz

1) Refer to the graph above, where Sd and Dd are the domestic supply and demand for a product. The world price of the product is $6. What would be the difference in the total revenue received by foreign producers […]

1) Which of the following countries had the highest fertility rate in 2012? A.Japan B.China C.Germany D.The United States 2) If a pure monopolist is producing at that output where P = ATC, then: A.its economic profits will be zero. […]

1) The concept of limited and bundled choice, as used in public choice theory, refers to the fact that: A.Politicians may not be objective in evaluating economic policy programs B.Because of the importance of television and other modern communication techniques, […]

1) Which of the following is not an example of a socio-cultural impediment to economic growth? A.Tribal allegiances that take precedence over national unity B.Religious beliefs and practices that severely limit economic activity C.Migration of labor resources from agricultural to […]

1) If many people in a community get flu shots, the whole community benefits including those that did not get flu shots. Therefore, not enough people may decide to get the shots. This is one illustration of: A.The market allocating […]

1) Which of the following appears as a positive item on the balance of payments accounts for the United States? A.U.S. government sending aid to natural-disaster victims in Asia B.American tourists spending money in the other countries C.The buying of […]

1) Refer to the diagram. Rent controls are best illustrated by: A.price A B.quantity E C.price C D.price B 2) Which of the following would be the best example of regulatory capture? A.Starbucks buys up all the available supplies of […]

1) Refer to the diagram. Assuming equilibrium price P1, producer surplus is represented by areas: A.a + b. B.a + b + c + d. C.c + d. D.a + c. 2) Refer to the table and graph. Suppose that […]

1) The economic inefficiency in an oligopoly may be reduced by the following, except: A.Increased competition from foreign producers B.Limit pricing due to potential entrants C.Economic profits used to fund technological advance D.Aggressive advertising by rivals 2) Refer to the […]

1) Assume a DVC has a real per capita output of $1,000 as compared to $20,000 for an IAC. If both nations realize a 4 percent growth of their real per capita outputs, after one year the absolute real per […]

1) Refer to the diagram. If this labor market is monopsonistic, the wage rate and level of employment respectively will be: A.D and E. B.C and F. C.B and F. D.A and F. 2) The sales tax is a regressive […]

1) Majority voting may produce economically inefficient outcomes because it: A.Does not always lead to fair results B.Requires everyone to vote and bear the costs C.Does not consider the strength of individual voters’ preferences D.Does not provide benefits to everyone […]

1) If unemployed workers leave a nation, the standard of living (national income per capita) will rise in that nation. 2) Which of the following groups has the highest proportion of unskilled illegal immigrants in the U.S.? A.Agricultural workers B.Construction […]

1) Edith is buying products X and Y with her money income. Suppose her budget line shifts rightward (outward). This might be the result of: A.the prices of X and Y increasing while her money income remains constant. B.her money […]

1) Refer to the diagram. At the profit-maximizing level of output, total cost will be: A.NM times 0M. B.0AJE. C.0CGC. D.0BHE. 2) Mutual interdependence means that: A.A firm’s behavior is affected by other firms’ actions B.A firm’s profits are affected […]

1) When a bakery manager reports that at her bakery, productivity of her 15 workers last month was 1,800 loaves per worker, she is referring to the: A.Total product of labor B.Average product of labor C.Marginal product of labor D.Total […]

1) Assume that the quantities of other resources employed by the firm remain constant. Refer to the above table. How many units of resource Y would the firm employ at a price of $50 per unit of Y? A.2 B.3 […]

1) Answer the question on the basis of the following information. Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes of $5,000, $2,500, $1,250, $750, and $500, respectively. Refer to the given […]

1) The best example of an industrial union is the: A.United Association of Plumbers and Pipefitters B.International Brotherhood of Electrical Workers C.American Medical Association D.United Auto Workers 2) Which of the following groups does not belong with the others? A.Permanent […]

1) Since 1960, real hourly compensation in the United States has approximately: A.remained the same. B.risen by 40 percent. C.doubled. D.tripled. 2) Which of the following is most likely to be a natural monopoly? A.Aircraft manufacturing B.Auto manufacturing C.Electric utilities […]

1) There is an adverse selection problem in the market for used cars because: A.Owners of poor-quality cars have a strong incentive to sell their cars, while owners of high-quality used cars have more incentive to keep their cars B.Owners […]

1) “Impulse buying” is often the result of a: A.Rational optimizing decision in response to incentives and prices B.Precise estimation of one’s marginal utilities and price comparisons C.Systematic non-rational behavior that marketers can take advantage of D.Random error in a […]

1) What activity traditionally receives the largest share of total business spending on R&D (research and development) in the U.S.? A.Invention B.Development C.Basic research D.Applied research 2) Between 2002 and 2011, legal immigration into the U.S. averaged about: A.500,000 per […]

1) Refer to the diagram pertaining to two nations and a specific product. Point G is the: A.domestic price for the nation represented by lines FA and FC. B.world equilibrium price. C.domestic price for the nation represented by lines GB […]

1) Economic profits are calculated by subtracting: A.explicit costs from total revenue. B.implicit costs from total revenue. C.implicit costs from normal profits. D.explicit and implicit costs from total revenue. 2) Assume that you pay $10,000 of tax on a taxable […]

1) Answer the question on the basis of the following information: Harry owns a barber shop and charges $6 per haircut. By hiring one barber at $10 per hour, the shop can provide 24 haircuts per eight-hour day. By hiring […]

1) The so-called pork-barrel politics refers to congressional members: A.Trading votes with one another B.Receiving perks and freebies from businesses trying to sway their votes C.Paying close attention to the vocal special interest groups D.Inserting provisions for local narrow projects […]

1) Why, according to behavioral economics, would supermarkets place gum, candy, and other small convenience items near the cash registers? A.Those are the shelving locations that minimize costs. B.Stores try to make frequently purchased items quicker and easier for consumers […]

1) A firm is hiring resources X, Y, and Z in the profit-maximizing amounts when: A.MRPx/Px equals MRPy/Py equals MRPz/Pz equals 1. B.the sum of the MRPs of the three resources is at a minimum. C.the marginal revenue productivity of […]

1) Which country has the largest share of total world exports? A.Japan. B.Germany. C.United States. D.China. 2) In considering euros and dollars, the rates of exchange for the euro and the dollar: A.are directly related. B.are inversely related. C.are unrelated. […]

1) The following table contains hypothetical data for the 2012 U.S. balance of payments. Answer the question on the basis of this information. All figures are in billions of dollars. Refer to the given data. Item (6) indicates that: A.the […]

1) Suppose that Julia receives a $20 gift card for the local coffee shop, where she only buys lattes and muffins. If the price of a latte is $4 and the price of a muffin is $2, then we can […]

1) The question is based on the following table that provides information on the production of a product that requires one variable input. Refer to the above table. Marginal product is zero when the total product is: A.0 B.5 C.56 […]

1) Suppose a firm anticipates that an R&D expenditure of $100 million will result in a new production process that will reduce costs and thus create a one-time added profit of $112 million a year later. The firm’s expected rate […]

1) Chronic budget deficits can be attributed to: A.unfunded liabilities. B.voters wanting government programs but not wanting to pay taxes. C.inappropriate monetary policy. D.state budget laws. 2) In a typical graph for a purely competitive firm, at the point where […]

1) Kelly works at an ice cream shop and observes that the number of people buying ice cream varies greatly from day to day. For a couple of weeks she has recorded the number of people at the shop each […]

1) In saying that the present system of floating exchange rates is managed, we mean that: A.countries that allow their exchange rate to move freely will lose their borrowing privileges with the IMF. B.the value of any IMF member’s currency […]

1) Refer to the above graph. Consider a situation where price increases from P3 to P4. In this price range, demand is relatively: A.Inelastic because the loss in total revenue (areas E + F + G) is greater than the […]

1) Marginal resource cost is: A.The increase in a firm’s total cost caused by hiring one additional unit of an input B.A firm’s cost of hiring one group of inputs, such as capital or labor C.The firm’s demand curve for […]

1) If a technological advance increases a firm’s labor productivity, we would expect its: A.average total cost curve to rise. B.average total cost curve to fall. C.total cost curve to rise. D.average total cost curve to be unaffected. 2) Suppose […]

1) Which would be an example of public ownership as a response to natural monopolies? A.Federal Energy Regulatory Commission B.Federal Trade Commission C.U.S. Food and Drug Administration D.U.S. Postal Service 2) Which of the following goods would most probably be […]

1) Suppose that Alpha’s real output rose from $400 billion in year 1 to $428 billion in year 2. Its growth rate for this period was: A.14 percent. B.12 percent. C.9 percent. D.7 percent. 2) When a nation is under-allocating […]

1) The table below shows the supply and demand schedules for the European euro. Refer to the table above. If European governments decided to fix the price of a euro at $0.80, they would have to: A.Buy 286 euros B.Buy […]

1) Which of the following would, other things equal, reduce the demand for U.S. farm products? A.Poorer crops abroad. B.Strong economic growth abroad. C.Improved trade relations with China and Russia. D.Appreciation of the U.S. dollar. 2) New scientific knowledge mainly […]

1) The argument that a large firm dominating an industry will not necessarily act like a monopolist, as expressed in the 1920 U.S. Steel case, suggests that the application of antitrust laws should be based on firm: A.Behavior B.Structure C.Efficiency […]

1) Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. For which graph is the output level Q0 at minimum efficient scale? A.Graph A B.Graph B C.Graph C D.Graph D 2) An indifference curve: […]

1) A market: A.reflects upsloping demand and downsloping supply curves. B.entails the exchange of goods, but not services. C.is an institution that brings together buyers and sellers. D.always requires face-to-face contact between buyer and seller. 2) Anti-competitive price discrimination, interlocking […]

1) In equilibrium, if $1 = 0.5 pound sterling and 1 pound sterling = 40 Swiss francs, the exchange rate between dollar and franc will be: A.1 franc = $.10 B.1 franc = $.20 C.$1 = 80 francs D.$1 = […]

1) Assume that in year 1 you pay an average tax rate of 20 percent on a taxable income of $20,000. In year 2, you pay an average tax rate of 25 percent on a taxable income of $30,000. Assuming […]

1) If the market demand for the product increases, in the short run a purely competitive firm: A.Will not change its output quantity because there are so many firms that the individual firm will not be affected by the change […]