Which of the following is
Question:Can you help on this?
1. Which of the following is
not a factor of production?
- Human capital
- Physical capital
2. A free good is:
- something no one wants.
- a good provided by the government free of charge.
- something people want that isn’t scarce.
- something that isn’t scarce because no one wants it.
- a contradiction in terms, because no goods are free.
3. Which of the following is a marginal cost of going to a baseball game?
- Time given up studying for tomorrow’s exam
- The concert given up because you spent money on the ticket to the ball game
- The game you missed last week because you studied for this exam
- Both A and B are marginal costs, because each is an additional cost incurred when you go to a ball game.
- None of these are marginal costs, though both A and B represent opportunity costs.
4. Most modern economies are:
- traditional economic systems.
- capitalist market systems.
- laissez-faire economic systems.
- government-controlled economies.
- a mixture of command, capitalist, and traditional economic systems.
5. Economists assume people:
- are selfish.
- maximize their benefits.
- pursue their self-interest.
- care only about themselves.
- want to collect as much money as possible.
Use this table for questions 6 and 7.
Baking per day
Icing per day
Shep and Al have a custom cake-decorating business. The chart shows how many cakes each can bake or decorate in one day, when they perform just one or the other activity.
6. Which of the following statements is correct?
- Al has an absolute advantage in baking, since he can bake twice as many cakes as he can ice.
- Al has a comparative advantage in icing because Shep can bake more cakes than Al can.
- Shep has a comparative advantage in baking because he gives up less icing than Al does when he bakes a cake.
- Shep has a comparative advantage in icing because he gives up less baking than Al does when he bakes a cake.
- Shep has a comparative advantage in both baking and icing because he can do more of both in one day than Al can.
7. If Al specializes in baking cakes:
- Shep should specialize in baking cakes.
- Shep should split his time between baking and icing.
- We can’t determine what Shep should do because it depends on the value of icing and baking.
- Al is making a huge mistake and their enterprise will fail.
- None of the above
Use this graph for question 8.
8. The production possibilities frontier above shows points A, B, and C. Which is correct?
I. Point A is an inefficient use of resources.
II. Point B is an impossible level of production.
III. Point C is an inefficient use of resources.
IV. Point B is an efficient use of resources.
- Only I
- Only II
- Only I and IV
- Only III and IV
- Only I and III
9. The demand curve for orange juice will shift to the right if:
- the cost of growing oranges increases.
- the cost of shipping orange juice decreases.
- an advertisement airs showing everyone’s favorite athlete drinking apple juice.
- the government publishes information showing new heah benefits from drinking orange juice.
- the price of orange juice decreases.
10. The supply curve for velvet paintings will shift to the left if:
- velvet Elvis paintings become much more popular.
- velvet artwork goes out of style.
- people stop buying velvet clothes, leading to extra velvet available for making paintings.
- the price of paint increases.
- the price of velvet paintings increases.
11. If an increase in celery harvest technology significantly reduces the cost of harvesting celery:
- the demand for celery will increase.
- the supply of celery will increase.
- the supply of celery will decrease.
- the celery supply curve will shift to the left.
- the supply will increase and the supply curve will shift to the left.
12. A price floor:
- resus in an excess demand.
- holds the price below the market clearing price.
- resus in an excess supply.
- creates a shortage by holding the price below the market clearing price.
- creates a surplus by holding the price above the market clearing price.
Use the following graph for questions 13 and 14.
13. Three prices are indicated on the vertical axis: A, B, and C. Which of the following statements are correct?
I. Price A is the equilibrium price.
II. Price B is a price support.
III. Price C would create shortage.
- I only
- II only
- III only
- I and III only
- II and III only
14. If the market price is at point A, what can you expect?
- The price will fall to point C as sellers put their excess inventory on sale.
- The price will stay at point A.
- The price will fall to point B as sellers put their excess inventory on sale.
- The price will fall to point B, then increase again to point A.
- The price will fall to point B, then fall even further to point C.
15. If the demand for bottled water increases:
- the equilibrium price and quantity increase.
- the equilibrium price and quantity decrease.
- the equilibrium price increases, and the equilibrium quantity decreases.
- the equilibrium price decreases, and the equilibrium quantity increases.
- the equilibrium price increases, but the change in equilibrium quantity is indeterminant.
16. If consumers suddenly desire many more temporary tattoos, and at the same time, the cost of henna, an ingredient in temporary tattoos increases:
- the equilibrium price and quantity increase in the tattoo market.
- the equilibrium price and quantity decrease in the tattoo market.
- the equilibrium price increases and the equilibrium quantity decreases in the tattoo market.
- the equilibrium price decreases and the equilibrium quantity increases in the tattoo market.
- the equilibrium price increases, but the change in equilibrium quantity is indeterminate in the tattoo market.
17. If demand is elastic, which of the following is least likely to be true?
- Consumers spend a small portion of their income on the good.
- The price is high.
- Consumers are sensitive to a change in the price of the good.
- An increase in the price resus in a decrease in the total revenue from sales.
- There are many substitutes for the good.
18. If the quantity demanded of green nail polish increases a lot and the price barely changes at all, we can conclude:
- nothing useful.
- the demand for green nail polish is elastic.
- the supply of green nail polish is inelastic.
- there are many substitutes to green nail polish.
- green nail polish is very expensive.
19. If the price of cable service changes from $20 to $30 a month, what percentage of current cable users give up their cable serve if the demand is elastic?
- More than 25%
- More than 33%
- More than 50%
- More than 66%
- More than 100%
20. If an increase in the price of good A resus in a decrease in the demand for good B:
- A and B are substitutes.
- A is a normal good, and B is an inferior good.
- A and B are complements.
- A is an inferior good, and B is a substitute good.
- A is a substitute good, and B is a complement good.
21. The law of diminishing marginal utility says:
A. as consumption increases, total utility decreases.
B. as consumption decreases, total utility increases.
C. as income increases, total utility decreases.
D. as consumption decreases, marginal utility decreases.
E. as consumption increases, marginal utility decreases.
22. The demand curve is downward sloping due to the income effect and the substitution effect. The income effect says:
A. people buy more normal goods when their income increases.
B. people buy more inferior goods when their income decreases.
C. higher prices resu in a decrease in the purchasing ability of income, and so less quantity demanded.
D. lower prices resu in an increase in the purchasing ability of income, and so greater demand.
E. None of the above
Use the following graph to answer questions 23, 24, and 25.
23. At point U, the marginal utility for consumers is:
24. The total utility consumers place on 100 units of the good is:
25. The consumer surplus when the price is $1 equals:
26. For a perfectly competitive firm in the short run, what is the lowest price the firm will continue to operate at?
A. Price equal to marginal cost
B. Price equal to marginal revenue
C. Price equal to average variable cost
D. Price equal to average total cost
E. Price equal to total cost
27. Which of the following industries are characterized by free entry and exit?
I. Perfect competition
II. Monopolistic competition
A. I only
B. I and II only
C. I and III only
D. I and II and III only
E. All industries have free entry and exit
28. Price discrimination is:
A. selling the same good to different consumers for the same price.
B. selling only to consumers who meet certain ethnic or social criteria.
C. selling different goods to different people depending on their ability to pay.
D. selling the same good to different consumers for different prices.
E. unfairly selling at a really high price so only the weahy can afford the product.
29. Which of the following industries are characterized by positive economic profit in the long run?
I. Perfect competition
II. Monopolistic competition
A. All of the industries generate positive economic profit in the long run.
B. Only I
C. Only II and III
D. Only III and IV
E. Only IV
30. Allocative inefficiency means:
A. goods aren’t going to the consumers who value them the most.
B. goods aren’t being allocated at a low cost.
C. firms aren’t producing all goods that consumers value more than the cost of production.
D. firms could produce at lower costs than they’re producing at if they reallocated their resources.
E. resources aren’t being used by the firms that value them the most.
31. A productively efficient firm maximizing its profits is:
A. operating at the minimum of their average variable cost curve.
B. operating where marginal revenue equals average total cost.
C. operating at the minimum of marginal cost.
D. operating where marginal cost equals average variable cost.
E. operating at different points on the cost curves, depending on which market structure the firm is in.
Use this graph to answer questions 32 and 33.
32. This graph shows a firm in long-run equilibrium. This graph most likely characterizes:
A. a dominant firm in an oligopoly.
B. a firm in a cartel.
C. a firm in perfect competition.
D. a monopoly.
E. a firm in monopolistic competition.
33. This firm is earning economic profits, since:
A. P1 is greater than P2.
B. point A is above point C.
C. demand is tangent to the ATC curve at point B.
D. the firm is producing where MR equals MC at point C.
E. None of these. This firm is earning normal profits, not positive economic profits.
34. According to the oligopoly model of the kinked demand curve:
A. a firm expects its price decreases to be matched by other firms, but not its price increases.
B. a firm expects its price increases to be matched by other firms, but not its price decreases.
C. a firm expects all its price changes to be matched by its rivals.
D. a firm thinks demand is much less elastic above the current market price than below.
E. a firm expects its price increases to be matched, and it thinks demand is much less elastic above the current market price.
35. Which of the following is not true? A profit-maximizing monopolist:
A. is the only seller of a good with no good substitutes.
B. is a dominant firm.
C. has a lot of market power.
D. has a supply curve.
E. produces where marginal revenue equals marginal cost.
36. How does a firm’s market power affect the slope of the derived factor demand curve?
A. It doesn’t.
B. More market power means a positive slope, and less means a negative slope.
C. More market power means a flatter derived factor demand curve.
D. More market power means a steeper derived factor demand curve.
E. More market power means a more positive slope of the factor demand curve.
37. The marginal revenue product curve shows:
A. a positive relationship between the price of a resource and the output it generates.
B. a positive relationship between the price of a resource and the quantity firms will want to use.
C. a negative relationship between the price of a resource and the output it generates.
D. a negative relationship between the additional revenue an input generates and the level of output.
E. None of these
38. The derived demand for a resource will be more elastic if:
A. the demand for the final good produced with that resource is elastic.
B. there are few substitutes for the final good produced with that resource.
C. there are only a few other ways the resource can be used.
D. the factor makes up only a small part of the production costs.
E. very little time is afforded to demanders to find aernatives.
39. A factor demand curve will shift to the left if:
A. factor demand increases.
B. factor demand decreases.
C. the price of a complementary factor decreases.
D. the price decrease of a complementary factor causes demand to decrease.
E. None of these
40. An increase in the minimum wage will:
A. resu in higher incomes without a loss of jobs.
B. resu in higher incomes for many and only a few job losses, if labor demand is elastic.
C. resu in higher incomes for only a few and many job losses, if labor demand is inelastic.
D. resu in higher incomes for many and only a few job losses, if labor demand is inelastic.
E. cause a labor shortage.
41. In a monopsonistic labor market:
A. there’s only one seller of labor.
B. there’s only one buyer of labor.
C. a union always represents the workers.
D. a union never represents the workers.
E. there’s no derived demand for labor.
42. Which of the following is not true? A union:
A. increases union-members earnings or job security.
B. represents the interests of union members.
C. will decrease the level of employment in the unionized industry.
D. is part of a bilateral monopoly if the union exists in a monopsonistic labor market.
E. represents the interests of all workers, union members or not.
43. Economic rent is:
A. income earned by owners of land above the opportunity cost of the land.
B. rent paid for borrowing money.
C. income earned by resource owners above the opportunity cost of the resource.
D. income earned by owners of capital.
E. income earned by all resource owners.
44. Today, anti-trust legislation is designed to:
A. control firms whose anti-competitive behaviors are harming consumers.
B. break up trusts.
C. break up monopolies.
D. punish firms that make lots of money.
E. set up the role of government in regulating natural monopolies
45. A non-rival good is never:
A. a public good.
B. provided by the government.
C. used up by a consumer.
E. None of the above. A non-rival good can be any of these.
46. One economic argument in support of public education is:
A. it provides positive externalities.
B. it provides negative externalities.
C. education should be fairly available to all citizens.
D. public education keeps youths out of the labor force.
E. it’s necessary to graduate from high school to receive social security benefits.
47. A progressive tax is one where:
A. a high-income household pays more taxes than a low-income household.
B. a high-income household pays fewer taxes than a low-income household.
C. high- and low-income households pay the same in taxes.
D. taxes are paid only by the richest people in an economy.
E. a high-income household pays a larger share of their income in taxes than does a low-income household.
48. The government redistributes income:
A. by using a regressive tax system.
B. by using a progressive tax system.
C. by transferring money to low-income households.
D. by both a regressive tax system and income transfers.
E. by both a progressive tax system and income transfers.
49. Which of the following is a public good?
A. Public education
B. National parks
C. National defense
D. Library books
E. Postage stamps
50. What is a free rider?
A. Someone who rides public transit at no charge
B. Someone who enjoys something without getting into anyone else’s way
C. Someone who enjoys something without bearing the cost of providing it
D. Someone who rides horses in public land provided by the government
E. None of the above