Question 1

5 out of 5 points

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. The United States' balance of capital and financial
account is a:
Selected Answer:
surplus of $25.
Answers:

surplus of $5.
deficit of $10.

surplus of $25.
deficit of $5.
Question 2
5 out of 5 points

Refer to the diagram. At P3, this firm will:

Selected Answer:
produce 40 units and incur a loss.
Answers:

produce 14 units and realize an economic profit.

produce 62 units and earn only a normal profit.

produce 40 units and incur a loss.

shut down in the short run.
Question 3
5 out of 5 points

The movement of individuals and households from one income quintile to

another over time is called:
Selected Answer:
income mobility.
Answers:

income averaging.
wealth turnover.

income mobility.
the ratchet effect.
Question 4
5 out of 5 points

One cause of income inequality in the United States is:

Selected
Answer:

Answers:

differences in preferences for market work relative to nonmarket

activities as well as differences in preferences for types of work.
the free public school system.

differences in preferences for market work relative to nonmarket

activities as well as differences in preferences for types of work.
antidiscrimination laws.
a system of taxes and government transfers that redistributes

income away from the lowest earners.

Question 5
5 out of 5 points

The Clayton Act of 1914:

Selected
Answer:

outlawed price discrimination, tying contracts, acquisition of

stocks of competing corporations, and interlocking directorates
that lessen competition.

Answers:
outlawed price discrimination, tying contracts, acquisition of
stocks of competing corporations, and interlocking directorates
that lessen competition.
prohibited unfair or deceptive acts or practices in commerce that
tend to reduce competition.
outlawed vertical and conglomerate mergers.
prohibited one firm from acquiring the assets of another when
the effect was to limit competition.
Question 6
5 out of 5 points

Monopolistically competitive firms:

Selected
Answer:

Answers:

may realize either profits or losses in the short run but realize
normal profits in the long run.
realize normal profits in the short run but losses in the long
run.
incur persistent losses in both the short run and long run.

may realize either profits or losses in the short run but realize

normal profits in the long run.

persistently realize economic profits in both the short run and
long run.
Question 7
5 out of 5 points

In order for mutually beneficial trade to occur between two otherwise isolated
nations:
Selected
Answer:

Answers:

each nation must be able to produce at least one good

relatively cheaper than the other.
each nation must be able to produce at least one good
absolutely cheaper than the other.

each nation must be able to produce at least one good

relatively cheaper than the other.
each nation must face constant costs in the production of the
good it exports.
one nation's production must be labor-intensive while the other
nation's production is capital-intensive.
Question 8
5 out of 5 points

In the long run, the price charged by the monopolistically competitive firm
attempting to maximize profits:
Selected
Answer:
Answers:

will be equal to ATC.

must be less than ATC.
must be more than ATC.
may be either equal to ATC, less than ATC, or more than

ATC.

will be equal to ATC.

Question 9
5 out of 5 points

Resource pricing is important because:

Selected
Answer:
Answers:

of all of these reasons.

resource prices are a major determinant of money incomes.
resource prices allocate scarce resources among alternative
uses.
resource prices, along with resource productivity, are important
to firms in minimizing their costs.

of all of these reasons.

Question 10
5 out of 5 points

If a nation's goods exports are $55 billion, while its goods imports are $50
billion, we can conclude with certainty that this nation has a:
Selected Answer:
balance of trade (goods) surplus.
Answers:
balance of trade (goods) surplus.
balance of payments surplus.
positive balance on current account.
positive balance on goods and services.

Question 11
5 out of 5 points

International transactions fall into what two broad categories?

Selected Answer:
International trade and international asset transactions.
Answers:

Manufacturing trade and services trade.

International trade and international asset transactions.

Currency transactions and services trade.
Newly created assets and preexisting assets.
Question 12
5 out of 5 points

Answer the question on the basis of the following information. A farmer who
has fixed amounts of land and capital finds that total product is 24 for the
first worker hired; 32 when two workers are hired; 37 when three are hired;
and 40 when four are hired. The farmer's product sells for $3 per unit and the
wage rate is $13 per worker.
Refer to the given information. How many workers should the farmer hire?
Selected Answer:
3.
Answers:

1.
2.

3.
4.
Question 13
5 out of 5 points

If a U.S. importer can purchase 10,000 British pounds for $20,000, the rate of
exchange is:
Selected Answer:
$2 = 1 British pound in the United States.
Answers:

$1 = 2 British pounds in the United States.

$2 = 1 British pound in the United States.

$1 = 2 British pounds in Great Britain.
$.5 = 1 British pound in Great Britain.
Question 14
5 out of 5 points

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. The United States' balance on financial account is a:
Selected Answer:
$20 billion surplus.
Answers:
$20 billion surplus.
$15 billion surplus.
$30 billion deficit.
$20 billion deficit.
Question 15
5 out of 5 points

Countries engaged in international trade specialize in production based on:

Selected Answer:
comparative advantage.
Answers:

relative levels of GDP.

comparative advantage.
relative exchange rates.
relative inflation rates.
Question 16
5 out of 5 points

Answer the question on the basis of the following information. A farmer who
has fixed amounts of land and capital finds that total product is 24 for the
first worker hired; 32 when two workers are hired; 37 when three are hired;
and 40 when four are hired. The farmer's product sells for $3 per unit and the
wage rate is $13 per worker.
Refer to the given information. The marginal product of the second worker is:
Selected Answer:
8.
Answers:

24.

8.
5.
1.
Question 17
5 out of 5 points

Which of the following would call for outpayments from the United States?
Selected Answer:
The United States purchases assets abroad.
Answers:

The United States exports computer software.

The United States purchases assets abroad.

Foreigners purchase assets in the United States.
Foreign tourists spend money in the United States.
Question 18
5 out of 5 points

Which of the following statements best illustrates the concept of derived

demand?
Selected
Answer:

Answers:

A decline in the demand for shoes will cause the demand for
leather to decline.
As income goes up, the demand for farm products will increase
by a smaller relative amount.
A decline in the price of margarine will reduce the demand for
butter.

A decline in the demand for shoes will cause the demand for
leather to decline.
When the price of gasoline goes up, the demand for motor oil
will decline.
Question 19
5 out of 5 points

Answer the question on the basis of the following information. A farmer who
has fixed amounts of land and capital finds that total product is 24 for the
first worker hired; 32 when two workers are hired; 37 when three are hired;
and 40 when four are hired. The farmer's product sells for $3 per unit and the
wage rate is $13 per worker.
Refer to the given information. The marginal revenue product of the second
worker is:
Selected Answer:
$24.
Answers:
$24.
$8.
$15.
$9.
Question 20
5 out of 5 points

Each of the following has contributed to growing income inequality in the

United States since 1975 except:
Selected Answer:
government transfers.
Answers:

the decline in unionism.

greater demand for highly skilled workers.
stronger international competition from imports.

government transfers.
Question 21
5 out of 5 points

The monopolistically competitive seller maximizes profit by producing at the

point where:
Selected Answer:
marginal revenue equals marginal cost.
Answers:

total revenue is at a maximum.

average costs are at a minimum.

marginal revenue equals marginal cost.

price equals marginal revenue.
Question 22
5 out of 5 points

In the short run, a profit-maximizing monopolistically competitive firm sets it

price:
Selected Answer:
above marginal cost.
Answers:

equal to marginal revenue.

equal to marginal cost.

above marginal cost.

below marginal cost.
Question 23
5 out of 5 points

Answer the question on the basis of the following production possibilities

tables for two countries, Latalia and Trombonia:

The given data indicate that production in:

Selected
Answer:

both Latalia and Trombonia is subject to constant opportunity

costs.

Answers:
both Latalia and Trombonia is subject to constant opportunity
costs.
Trombonia is subject to decreasing costs, but production in
Latalia occurs under increasing opportunity costs.
Latalia is subject to increasing costs, but production in
Trombonia occurs under constant opportunity costs.
both Latalia and Trombonia are subject to the law of increasing
opportunity costs.
Question 24
5 out of 5 points

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. At 3 units of output, total variable cost is ____ and total cost
is ____.
Selected Answer:
$60; $210
Answers:

$20; $70

$60; $210
$20; $210
$60; $350
Question 25
5 out of 5 points

If discrimination based on gender and race was eliminated, we would expect

the:
Selected
Answer:
Answers:

personal distribution of income to become more equal.

personal distribution of income to become less equal.

personal distribution of income to become more equal.

personal distribution of income to be unaffected.
functional distribution of income to change in favor of profits
and interest.
Question 26
5 out of 5 points

The Sherman Act was designed to:

Selected Answer:
make monopoly and acts that restrain trade illegal.
Answers:

exempt commercial banks from the antitrust laws.

make interlocking directorates legal.
prohibit misleading and antisocial advertising.

make monopoly and acts that restrain trade illegal.

Question 27
5 out of 5 points

Export supply curves are __________________; import demand curves are

___________________.
Selected Answer:
upsloping; downsloping
Answers:

horizontal; vertical
vertical; horizontal
downsloping; upsloping

upsloping; downsloping
Question 28
5 out of 5 points

Each of the following contributes to income inequality except:

Selected Answer:
government transfers.
Answers:

differences in ability and training.

differences in job tastes.
differences in wealth ownership.

government transfers.
Question 29
5 out of 5 points

The terms of trade reflect the:

Selected
Answer:
Answers:

ratio at which nations will exchange two goods.

rate at which gold exchanges internationally for any domestic
currency.

ratio at which nations will exchange two goods.

fact that the gains from trade will be equally divided.
cost conditions embodied in a single country's production
possibilities curve.
Question 30
5 out of 5 points

Refer to the diagram. This firm will earn only a normal profit if product price
is:
Selected Answer:
P3.
Answers:

P1.
P2.

P3.
P4.
Question 31
5 out of 5 points

Which of the following would call for inpayments to the United States?
Selected

Answer:

U.S. firms sell insurance to Brazilian shippers.

Answers:

Gold flows into the United States.

U.S. firms sell insurance to Brazilian shippers.

The United States sends foreign aid to developing
countries.
The United States imports German automobiles.
Question 32
5 out of 5 points

Which one of the following is not prohibited by the original Clayton Act?
Selected
Answer:

Answers:

The purchase of the assets of rival firms that lessens

competition.
The purchase of the stocks of rival firms that lessens
competition.

The purchase of the assets of rival firms that lessens

competition.
An exclusive dealer or tying agreements that lessen
competition.
Price discrimination that lessens competition.
Question 33
5 out of 5 points

Which of the following is directly illegal under the Sherman Act?

Selected Answer:
Price-fixing.
Answers:

Price discrimination.

Tying contracts.

Price-fixing.
Interlocking directorates.
Question 34
5 out of 5 points

Refer to the diagram. The firm will produce at a loss if price is:
Selected Answer:
P2.
Answers:

less than P1.

P2.
P3.
P4.
Question 35
5 out of 5 points

Refer to the diagram. The firm will realize an economic profit if price is:
Selected Answer:
P4.
Answers:

P1.

P2.
P3.

P4.
Question 36
5 out of 5 points

Answer the question on the basis of the following production possibilities

tables for two countries, Latalia and Trombonia:

Refer to the tables. In Latalia the domestic real cost of 1 ton of pork:
Selected Answer:
is 5 tons of beans.
Answers:

is 3 tons of beans.
diminishes with the level of pork production.

is 5 tons of beans.
is 1/5 of a ton of beans.
Question 37
5 out of 5 points

In the long run, a profit-maximizing monopolistically competitive firm sets it

price:

Selected Answer:
above marginal cost.
Answers:
above marginal cost.
below marginal cost.
equal to marginal revenue.
equal to marginal cost.
Question 38
5 out of 5 points

Some economists have criticized standard government figures on income

inequality, arguing that these data:
Selected
Answer:

Answers:

overstate the degree of income inequality by failing to include

noncash transfers as income.
exclude households whose earnings arise in the public sector.
conceal the strong trend toward greater equality in household
sizes.
conceal the growth of poverty due to a growing number of
discouraged workers.

overstate the degree of income inequality by failing to include

noncash transfers as income.
Question 39
5 out of 5 points

Which of the following is least likely to violate the Sherman Act or the Clayton
Act?
Selected
Answer:

Competitive firms F and G independently charge lower prices to

frequent customers than to occasional customers.
Answers:

Competitive firms A, B, and C meet and agree to charge a

common price.
Competitive firms D and E, each with 35 percent market shares,
merge into a single firm.

Competitive firms F and G independently charge lower prices to

frequent customers than to occasional customers.
Large dominant firm H forces buyers to purchase its product X
in order to buy its popular product Y.
Question 40
5 out of 5 points

In the short run, the price charged by a monopolistically competitive firm

attempting to maximize profits:
Selected
Answer:

Answers:

may be either equal to ATC, less than ATC, or more than

ATC.
must be less than ATC.
must be more than ATC.

may be either equal to ATC, less than ATC, or more than

ATC.
must be equal to ATC.
Wednesday, August 17, 2016 2:16:18 PM CDT