Archives: Quiz

1) The many layers of the federal government in the United States: A.lead to economic inefficiencies because of difficulty aggregating and conveying information. B.enhance government’s ability make effective decisions quickly. C.better allow the invisible hand to direct government resources to […]

1) Available research suggests that the union wage advantage diminishes the national output by: A.15 percent. B.8 percent. C.3 percent. D.less than 1 percent. 2) Microfinance can help directly support: A.Labor or workers B.Local governments C.Entrepreneurs D.Consumers Answer: C 3) […]

1) The fast-food restaurant industry would be an example of which market model? A.Monopolistic competition B.Pure competition C.Pure monopoly D.Oligopoly 2) An electricity company has the opportunity to use natural gas to generate electricity at a cost of $30 per […]

1) In a market economy, the government’s ability to coerce is beneficial in the following cases, except in: A.Correcting for positive externalities B.Correcting for negative externalities C.Producing public goods D.Fixing resource prices 2) Answer the question on the basis of […]

1) In the graph above, what is the price elasticity of supply (using the midpoint formula) between points A and B above? A.1 B.3 C.2 D.1/3 2) Suppose an excise tax is imposed on product X. We expect this tax […]

1) Refer to the diagram for a pure monopolist. Monopoly price will be: A.e. B.c. C.b. D.a. 2) Refer to the diagram for the corn market. Assuming no externalities, a price support of B causes: A.economies of scale. B.production to […]

1) A point or product-combination to the left of and inside a budget line: A.Is attainable, but a combination or point to the right of the line is unattainable B.Is unattainable, but a combination or point to the right of […]

1) Answer the question on the basis of the following production possibilities tables for two countries, North Cantina and South Cantina: Refer to the tables. The opportunity cost of the fifth unit of capital goods: A.is higher in North Cantina […]

1) Answer the question on the basis of the following information about the cost ratios for two productsfish (F) and chicken (C)in countries Singsong and Harmony. Assume that production occurs under conditions of constant costs and these are the only […]

1) Consumer’s income = $12 Refer to the data. Assume new product Z is introduced. How many units of Z will this consumer buy, given his or her $12 budget? A.Zero units. B.2 units. C.4 units. D.6 units. 2) The […]

1) Process innovation leads to technological advance because it: A.Decreases total product B.Increases average total costs C.Decreases productive efficiency D.Increases productive efficiency 2) Answer the question on the basis of the following information for a public good. Pa and Pb […]

1) The persistence of some “urban legends” and some myths is a reflection of the: A.Framing effect B.Confirmation bias C.Hindsight bias D.Availability heuristic 2) Most economists agree that deregulation in the 1970s and 1980s greatly benefited consumers in the following […]

1) Nonrivalry and nonexcludability are the main characteristics of: A.consumption goods. B.capital goods. C.private goods. D.public goods. 2) The values for the long-run ATC curves of three different firms are listed in the table below. (a)Which firm faces the lowest […]

1) Which of the following statements about a competitive firm is correct? A.To maximize profits a competitive firm should produce at that output at which total revenue is greatest B.In long-run equilibrium a competitive firm will produce at the point […]

1) In the taste-for-discrimination model: A.a decline in discrimination will reduce the actual African-American-white wage ratio. B.an increase in collective discrimination coefficients of employers will reduce the demand for African-American workers, decrease the African-American wage, and increase African-American employment. C.firms […]

1) Refer to the graph above. If the industry were purely competitive, then the market price would be: A.$25, which is higher than what the price would have been if the industry were a monopoly B.$25, which is lower than […]

1) In 2001, a U.S. court of appeals tossed out an earlier U.S. district court order that Microsoft: A.license Windows for sale by competitors. B.be split into two competing firms. C.divest itself of its Word and PowerPoint software programs. D.end […]

1) Refer to the above graph. A 3-percent general sales tax would have a structure that is illustrated by: A.Curve A B.Curve B C.Curve C D.None of the graphs 2) If the price of A is $12 and the price […]

1) Which of the following statements regarding people’s wants is true? A.Over time, people’s wants tend to be stable and constant B.As people consume more products, their wants will be reduced C.Intangible serves, like tangible goods, may satisfy people’s wants […]

1) In the short run, a purely competitive firm will always make an economic profit if: A.P = ATC. B.P > AVC. C.P = MC. D.P > ATC. 2) Scholarly estimates of the impact of immigration on the average American […]

1) Legislation designed to regulate natural monopolies would be based on which theory of regulation? A.Social B.Legal cartel C.Public interest D.Price fixing 2) The graph below shows the supply and demand curves for dollars in the pound/dollar market. Refer to […]

1) There was a spike in U.S. legal immigration from 1989 to 1991 due to: A.An unstable political situation in Mexico B.Increased international travel C.Tremendous economic growth in the U.S. economy D.An amnesty program legalizing formerly illegal immigrants 2) Of […]

1) Income mobility: A.contributes to greater wealth inequality in the United States. B.is less in the United States than in most developing nations. C.is the movement of individuals and households from one income quintile to another over time. D.makes lifetime […]

1) Which of the following would not be covered by Medicare? Payments for: A.All reasonable costs for the first sixty days of inpatient care in a hospital per “benefit period” B.Post-hospital nursing services, home health care, and hospice care for […]

1) The user cost of nonrenewable resources is: A.The current cost of extracting and selling the resource B.The future cost of extracting and selling the resource C.The opportunity cost of extracting and selling the resource today instead of in the […]

1) Refer to the diagram for athletic shoes. The optimal output of shoes is: A.Q1. B.Q2. C.Q3. D.greater than Q3. 2) The traditional view regarding population and growth in DVCs is that: A.The most important factor affecting population growth in […]

1) Assume that Abby, Ben, Clara, Joe, and Matt are the only citizens in a community. A proposed public good has a total cost of $1000. All five citizens will share an equal portion of this cost in taxes. The […]

1) Why do credit card companies typically require small minimum payment amounts on their customers’ monthly credit card statements? A.Credit card companies are concerned that their customers will be put in financial distress if required to make higher payments. B.Credit […]

1) Which of the following occupations is not among the ten projected fastest-growing U.S. occupations in terms of percentage increases? A.School teachers. B.Biomedical engineers. C.Physical therapist assistants. D.Personal care aides. 2) The market system’s answer to the fundamental question “What […]

1) Taxes on commodities or on purchases are known as: A.corporate income taxes. B.sales and excise taxes. C.personal income taxes. D.payroll taxes. 2) The fundamental cause of agricultural price and income instability in the United States has been a(n): A.Lack […]

1) Indifference curve analysis: A.presumes, as does utility analysis, that satisfaction is numerically measurable. B.presumes, unlike utility analysis, that satisfaction is numerically measurable. C.presumes only that the consumer can say one combination of two goods yields more or less utility […]

1) An increase in interest rates: A.Raises the present value of a future amount B.Lowers the present value of a future amount C.Lowers the future value of a present amount D.Has no effect on present or future amount 2) What […]

1) In the short run, the individual competitive firm’s supply curve is that segment of the: A.average variable cost curve lying below the marginal cost curve. B.marginal cost curve lying above the average variable cost curve. C.marginal revenue curve lying […]

1) The Patient Protection and Affordable Care Act (PPACA) of 2010 is more commonly known as: A.Dodd Frank B.Obamacare C.Stimulus spending D.Quantitative easing (QE) 2) Suppose that Rosa is considering migration to another country. To move, she will have to […]

1) Junior collects baseball cards. He owns one Felix Hernandez card that sells in most shops for $15. He is interested in buying a different Felix card that also sells for $15. According to behavioral economics: A.Junior should value the […]

1) Refer to the above graph. Which of the following movements would indicate a reduction in unemployment? A.From point C to point D B.From point F to point H C.From point E to point D D.From point D to point […]

1) The demographic transition view of population growth argues that, on average (and as perceived by parents), the marginal: A.benefits of extra children are larger in IACs than in DVCs. B.costs of extra children are lower in IACs than in […]

1) A increase in demand coupled with a simultaneous and bigger decrease in supply will cause equilibrium: A.Price to go up and quantity to go down B.Price to go up and quantity to go up C.Price to go down and […]

1) Some economists claim that unions reduce economic efficiency by: A.providing a voice mechanism for workers. B.insisting that promotions be based on ability rather than seniority. C.imposing restrictions on the kinds of jobs workers may perform. D.increasing worker turnover. 2) […]

1) According to prospect theory, firms are more likely to shrink packages than raise prices because: A.consumers feel the loss of a price increase more than they feel the loss of buying a smaller package for their money. B.they don’t […]

1) Which of the following statements pertains to macroeconomics? A.Because the minimum wage was raised, Mrs. Olsen decided to enter the labor force. B.A decline in the price of soybeans caused farmer Wanek to plant more land in wheat. C.National […]

1) In a world with two products, wheat (W) and coffee (C), nation Alpha produces wheat and nation Beta produces coffee. Nation Alpha prefers an exchange rate of 1W = 2C and nation Beta prefers an exchange rate of 1W […]

1) For all practical purposes, the supply of land is: A.almost perfectly inelastic. B.negatively sloped. C.relatively elastic. D.perfectly elastic. 2) Suppose that under its collective bargaining agreement the ABC Corporation can hire nonunion workers, but such workers must join the […]

1) The legal cartel theory of regulation argues that: A.regulation encourages firms to inflate their production costs. B.firms in certain industries want to be regulated rather than face the rigors of competition. C.social regulation has been carried beyond the point […]

1) A game in which one firm’s gain must equal the other firm’s loss is called a: A.Positive-sum game B.Zero-sum game C.Negative-sum game D.One-time game 2) A firm decides to make a $10 million expenditure on research and development that […]

1) Refer to the above graph. It shows the total product (TP) curve. At which point is the marginal product zero? A.Point a B.Point b C.Point c D.Point d 2) A firm will employ more of an input whose relative […]

1) In pure competition, price is determined where the industry: A.Demand and supply curves intersect B.Total cost is greater than total revenue C.Demand intersects the individual firm’s marginal cost curve D.Average total cost equals total variable cost 2) If country […]

1) Refer to the above graph. It shows a firm which buys its inputs and sells its output in competitive markets. If the firm develops a new technology that increases labor productivity, the equilibrium level of employment for this firm […]

1) “The bigger the volume, the lower the cost, and we pass these savings on to you” is a familiar slogan. Its idea is illustrated in which of the above graphs? A.Graph A B.Graph B C.Graph C D.Graph D 2) […]

1) If you pay a $2,000 tax on $10,000 of taxable income and a $4,000 tax on a taxable income of $16,000, the tax is progressive. 2) The supply curve for a monopolist is the upward-sloping portion of the marginal […]