1.Who are winners of a move to free trades?

A)Consumers of exported goods

B)Producers of exported goods

C)Producers of imported goods

D)None of the above answers

2.The short-run shutdown condition occurs for a firm in the short-run when

A)Price per unit good is equal to average variable cost per unit good

B)Price per unit good is greater than average variable cost per unit good

C)Price per unit good is less than average variable cost per unit good

D)Price is greater than total cost.

3.Which of the following problems describes the 'Decision Pitfalls' of a rational individual in economy?

A)Ignoring implicit costs

B)Failing to think at the margin

C)Measuring costs or benefits proportionally

D)All the above answers

4.Which of the following explanations is true?

A)Higher inflation reduces the real value of money held by the public, reducing wealth and spending

B)Inflation redistributes resources from less affluent people, who spend a high percentage of their disposable income, to more affluent people, who spend a smaller percentage of disposable income

C)Higher inflation creates uncertainty in planning for households and firms, reducing their spending.

D)All the above answers

5.Refer to the accompanying figure. At a price of $3, there will be:

A)an excess demand of 5 units.

B)an excess demand of 7 units.

C)an excess supply of 7 units.

D)an excess supply of 2 units.

6.Goods A and B are substitutes and each belongs to a perfectly competitive industry. If supply of A decreases due to an increase in the price of its inputs, in the short run we would expect existing firms in B industry to:

A)increase their price.

B)experience a decrease in their profits.

C)face more demand.

D)attract less firms into the industry.

7.Refer to the table below. An output level of 15 units, this firm's accounting profit is ________, and its economic profit is ________.

Quantity

Total Revenue

Explicit Costs

Implicit Costs

10

50

36

5

15

75

63

6

20

100

93

7

25

125

125

8

30

150

161

9

A) $6; $63

B) $12; $6

C) $6; $12

D) $63; $6

8.Use the following graph to answer the question.

In an open economy, how many TVs will this country import?

A.

30 000

B.

60 000

C.

90 000

D.

120 000

9.Loose monetary policy _____ interest rates, which _____ the demand for domestic currency and _____ the fundamental value of the exchange rate.

A. increases; increases; increases

B. increases; increases; decreases

C. increases; decreases; increases

D. decreases; decreases; decreases

10.ABC Pizza Shop hires cooks in a competitive market. The raw material required to make each pizza costs $6. The pizza shop's daily output varies with the number of workers hired, as shown in the table below:

If the pizzas sell for $10 per pie, what is the value of marginal product for the fifth worker?

A.

$160

B.

$140

C.

$120

D.

$84