Question-1

Which of the following is NOT demonstrated by a production possibility curve?

Scarcity

Opportunity cost

Necessity for choice due to scarcity

Price

Question-2

The market price __________ the equilibrium price.

can be higher than, but never lower than

can be lower than, but never higher than

can be higher than, or lower than

is always equal to

Question-3

The poverty line is set:

by the U.S. Bureau of the Census (based on family food budgets).

at the same income level right now as it's been since 1982.

so high that over 30% of all Americans are officially poor.

by the United Nations for every country in the world.

Question-4

If a monopolist has a straight-line demand curve, then its marginal revenue curve will:

be the same as the demand curve.

fall twice as quickly as the demand curve.

lie below the demand curve at all points.

cross the demand curve.

Question-5

As long as total utility is increasing, we know that marginal utility is:

positive.

decreasing.

increasing.

negative.

Question-6

A key reason that our gasoline prices elevated rapidly from 2006 to 2008 was:

tight global supplies and high prices.

the war in the Middle East.

greed by oil exporting countries.

inflation.

Question-7

In order for real wages to grow:

productivity must grow.

productivity must fall.

money wages must grow.

money wages must fall.

Question-8

The substitution effect and the output effect work in the:

same direction some of the time.

same direction all of the time.

opposite direction some of the time.

opposite direction all of the time.

Question-9

The law of demand holds for:

individuals, but not for markets.

markets, but not for individuals.

both individuals and for markets.

neither individuals nor for markets.

Question-10

A firm will maximize its profits or minimize its loss at the output where:

the difference between price and marginal cost is at its maximum.

total cost equals total revenue.

marginal cost equals marginal revenue.

total revenue equals variable cost.

There is a negative relationship between two variables if:

they move in opposite directions.

they move in the same direction.

one variable changes and the other does not.

neither variable moves.

A firm produces its product using both capital and labor. When it does not change its capital usage, but doubles its labor input, its output increases by less than 50 percent. Which of the following is the most likely explanation of this finding?

The principle of opportunity cost

The principle of diminishing returns

The marginal principle

The spillover principle

The price of iPhones has fallen dramatically. Which of the following is likely to happen?

The quantity of iPhones supplied will decrease.

The quantity of iPhones supplied will increase.

The supply of iPhones will decrease.

The supply of iPhones will increase

If the demand for school ball caps is inelastic, an increase in price will result in:

a decrease in profits.

an increase in total revenue.

a decrease in total revenue.

an increase in the quantity demanded.

An electrician licensing program in the state of North Carolina requires each electrician to obtain a license and renew it each year. Which of the following is a result of having the licensing program in North Carolina?

A decrease in total surplus

Excess demand for electrical service

An increase in the quality of electrician

All of the above are a result of the licensing program.

The self-interest theory of government was suggested by:

James Buchanan.

Charles M. Tiebout.

bureaucrats.

the European Union.

Suppose that the only input used in the generation of solar energy is sunlight, which has a zero cost. The average total cost of producing electricity is:

zero.

equal to the marginal cost.

equal to the average fixed cost.

immeasurably high.

When a firm increases output and the costs rise disproportionately slower, then the long-run average cost curve is __________ and the firm is experiencing __________ .

horizontal; constant returns to scale

downward sloping; constant returns to scale

upward sloping; diseconomies of scale

downward sloping; economies of scale

Limit pricing occurs when a firm sets price:

equal to marginal cost.

equal to average cost.

at different amounts for different groups of consumers.

so low that other firms are prevented from entering the market.

Which of the following statements about featherbedding is correct?

It could increase production costs, resulting in higher prices for products.

The quantity of labor demanded by firms could actually decrease.

It could lead to a lower wage and smaller employment in the long run.

All of the above.