Archives: Quiz

1) Suppose the domestic price (no-international-trade price) of copper is $1.20 a pound in the United States while the world price is $1.00 a pound. Assuming no transportation costs, the United States will: A.have a domestic surplus of copper. B.export […]

1) Refer to the above graph. An increase in labor demand is shown by the: A.shift from labor demand curve D1 to D2. B.shift from labor demand curve D3 to D2. C.move from a to b along labor demand curve […]

1) the larger the positive cross elasticity coefficient of demand between products x and y, the: a.stronger their complementariness. b.greater their substitutability. c.smaller the price elasticity of demand for both products. d.the less sensitive purchases of each are to increases […]

1) Refer to the above diagram showing the domestic demand and supply curves for a specific standardized product in a particular nation. If the world price of this product is $1, this nation will: A.export all of the product. B.import […]

1) Refer to the above diagram and assume the economy is initially at point b1. The long-run relationship between the unemployment rate and the rate of inflation is represented by: A.the line connecting b1 and c1. B.the line through b1, […]

1) the following production possibilities tables for countries alpha and beta: refer to the above tables. according to the concept of comparative advantage: a.alpha should specialize in x; beta in y b.beta should produce some x and some y c.alpha […]

1) In the above diagram, (1) is the: A.expected-rate-of-return curve and (2) is the average total cost curve. B.total revenue curve and (2) is the interest-rate-cost-of funds-curve. C.expected-rate-of-return curve and (2) is the interest-rate-cost-funds curve. D.marginal cost curve and (2) […]

1) the advantages of the corporate form of business include: a.the ability to raise financial capital by selling stocks and bonds. b.the fact that owners are subject to unlimited liability. c.the elimination of the principal-agent problem. d.single taxation of corporate […]

1) In the 1990s, Congress passed legislation that: A.will eventually replace the $1 bill with a $1 coin. B.allows non-bank firms such as Chrysler and IBM to own large commercial banks or thrifts. C.replaces the twelve Federal Reserve Banks with […]

1) Commercial banks create money when they: A.accept cash deposits from the public. B.purchase government securities from the central banks. C.create checkable deposits in exchange for IOUs. D.raise their interest rates. 2) refer to the above long-run cost diagram for […]

1) Currently capitalist income, that is, corporate profits, interest, and rent, accounts for about what percentage of the income paid to American resource suppliers? A.10 percent B.20 percent C.50 percent D.80 percent 2) refer to the above diagram. total revenue […]

1) Over the past decade, U.S. per capita consumption of water: A.and energy have both increased. B.has increased, while per capita consumption of energy has fallen. C.and energy have leveled off or fallen. D.has fallen, while per capita consumption of […]

1) a decreasing-cost industry is one in which: a.contraction of the industry will decrease unit costs. b.input prices fall or technology improves as the industry expands. c.the long-run supply curve is perfectly elastic. d.the long-run supply curve is upsloping. 2) […]

1) In the above diagram, a substantial appreciation of the U.S. dollar with no immediate change in the U.S. price level would result in a: A.movement upward along an existing aggregate supply curve such as AS1. B.movement downward along an […]

1) refer to the above diagram. the firm will realize an economic profit if price is: a.p1 b.p2 c.p3 d.p4 2) A negative externality or spillover cost occurs when: A.firms fail to achieve allocative efficiency. B.firms fail to achieve productive […]

1) when average fixed costs are falling: a.average total cost must be falling. b.average variable cost may be either rising or falling. c.marginal cost must be falling. d.average variable costs must be rising. 2) a person will be more likely […]

1) Which of the following groups of economists is most likely to favor annually balanced Federal budgets? A.Mainstream economists B.Supply-side economists C.Rational expectations economists D.Functional finance economists 2) In the last half of the 1990s, the usual short-run tradeoff between […]

1) Answer the next two questions using the following information: The price of a bond with no expiration date is $1000 and its fixed annual interest payment is $50; bond annual rate of interest is 5%. (a)If the price of […]

1) import quotas are: a.maximum limits on the quantity or total value of specific products imported to a nation. b.excise taxes or duties placed on imported products. c.licensing requirements, unreasonable quality standards, and the like designed to impede imports. d.government […]

1) given the annual rate of economic growth, the “rule of 70” allows one to: a.determine the accompanying rate of inflation. b.calculate the size of the gdp gap. c.calculate the number of years required for real gdp to double. d.determine […]

1) which of the following is a characteristic of pure monopoly? a.close substitute products b.barriers to entry c.the absence of market power d.”price taking” 2) households in the aggregate use the largest share of their total income to: a.pay taxes. […]

1) Refer to the above 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 economist who advocated a […]

1) refer to the above diagram. at p2, this firm will: a.produce 44 units and realize an economic profit. b.produce 44 units and earn only a normal profit. c.produce 66 units and earn only a normal profit. d.shut down in […]

1) The Federal Open Market Committee (FOMC) is made up of: A.the chair of the Board of Governors along with the 12 presidents of the Federal Reserve Banks. B.the seven members of the Board of Governors along with the president […]

1) One of the implications of the supply-side anecdote is that: A.tax cuts distributed equally across all workers would result in some people being paid by the government to work. B.it is unwise to dine with supply-side economists if you […]

1) Refer to the above diagrams. Suppose that government undertakes fiscal policy designed to increase aggregate demand from AD1 to AD2 and thereby to increase GDP from X to Z. In terms of graph B, which of the following might […]

1) Which of the following statements is correct? A.Economic profits can properly be regarded as the salaries received by the hired managers of corporations. B.Economic rent is a price paid for productive land resources whose supply is perfectly inelastic. C.Economic […]

1) the mr = mc rule: a.applies only to pure competition. b.applies only to pure monopoly. c.does not apply to pure monopoly because price exceeds marginal revenue. d.applies both to pure monopoly and pure competition. 2) assume that a consumer […]

1) Refer to the above diagrams. A decline in aggregate expenditures from AE2 to AE1 resulting from the real-balances, interest-rate effect, and foreign purchases effects would be depicted as: A.a movement from A to C along aggregate demand curve AD1. […]

1) Refer to the above table. A decrease in government purchases of $5 would: A.increase real GDP by $5. B.increase real GDP by $10. C.decrease real GDP by $5. D.decrease real GDP by $15. 2) if the consumer price index […]

1) rosenbaum is purchasing products c and d in utility-maximizing amounts. if the price of c is $4 and the price of d is $2, then: a.the marginal utility of d is twice that of c b.the marginal utility of […]

1) refer to the above data. alpha has a comparative advantage in producing: a.neither steel nor wheat. b.both steel and wheat. c.steel. d.wheat. 2) Which of the following is not a feature of the Food, Conservation, and Energy Act of […]

1) which of the following is real capital? a.a pair of stockings b.a construction crane c.a savings account d.a share of ibm stock 2) an owner’s liability for the debts of a business is: a.limited in a corporation to the […]

1) refer to the above diagram. which of the following is a positive statement? a.a point inside the production possibilities curve is superior to a point on the curve because the former requires less work effort. b.because any society should […]

1) Development assistance as a percentage of GDP is greatest for which of the following industrialized nations (as of 2007)? A.U.S. B.Norway C.Canada D.Netherlands 2) Currently farm employment is about: A.15.8 percent of total employment. B.9.4 percent of total employment. […]

1) Complete the accompanying table. (a)What is the break-even level of income? How is it possible for households to dissave at very low income levels? (b)If the proportion of total income consumed decreases and the proportion saved increases as income […]

1) the following data confronting a firm: refer to the above data. this firm is selling its output in a(n): a.imperfectly competitive market. b.monopolistic market. c.purely competitive market. d.oligopolistic market. 2) assuming a pure monopolist’s demand curve is downsloping, its […]

1) in the circular flow model: a.households sell resources to firms. b.households receive income through the product market. c.households spend income in the resource market. d.businesses neither buy nor sell resources. 2) Other things equal, an increase of corporate bonds […]

1) For a firm selling its product in an imperfectly competitive market, the marginal revenue product of labor can be found by: A.adding marginal product to total product as one more unit of labor is employed. B.adding marginal revenue to […]

1) The long-run trend of real wages: A.cannot be determined from available data on nominal wages and the price level. B.has been downward because the price level has risen faster than nominal wages. C.has been upward. D.has been downward because […]

1) The basic issue in the DuPont cellophane case was: A.whether trade crossed state lines. B.defining the relevant market. C.structure versus behavior. D.the rule of reason. 2) the term “other things equal” means that: a.the associated statement is normative. b.many […]

1) In the United States from 1929 to 1933, real GDP _____________, and the unemployment rate ________________. A.declined by 27 percent; rose to 25 percent. B.increased by 21 percent; fell to 2 percent. C.declined by 21 percent; rose to 27 […]

1) migrant workers who face imperfect skill transferability may: a.have to settle for a lower wage than they were expecting at the time of migration. b.overcome this problem through greater motivation and effort. c.return to their origin nation because the […]

1) Which of the following market structures do economists generally agree is the least conducive to R&D and innovation? A.monopolistic competition B.pure competition C.pure monopoly D.oligopoly 2) Farm groups spend considerable amounts of money to maintain and enlarge political support […]

1) Suppose the government purposely changes the economy’s standardized budget from a deficit of 3 percent of real GDP to a surplus of 1 percent of real GDP. The government is engaging in a(n): A.expansionary fiscal policy. B.contractionary fiscal policy. […]

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) The DVCs are: A.located primarily in Northern Europe. B.located primarily in Western Europe. C.located primarily in Africa, Asia, and Latin America. D.more-or-less evenly distributed over the various continents. 2) The supply of land is: A.almost perfectly inelastic. B.negatively sloped. […]

1) assumptions: 1) employers in this market are willing and able to ignore minimum wage laws; 2) sd represents the supply of domestically-born (and legal immigrant) workers; 3) st represents the total supply of workers in this labor market (sd […]

1) a price floor means that: a.inflation is severe in this particular market. b.sellers are artificially restricting supply to raise price. c.government is imposing a maximum legal price that is typically below the equilibrium price. d.government is imposing a minimum […]

1) The labor demand curve of an imperfectly competitive seller is downward sloping: A.solely because of diminishing marginal utility. B.both because of diminishing returns and the necessity to lower price to sell more output. C.solely because product price must be […]