1. (TCO1) Wich of the following is considered to be an entrepreneur?
a. Self-employed person
b. MBA graduate hired by a firm to be its CEO
c. Production-line worker
d. Customer of a firm
2. (TCO1) A point outside the production possibilities curve is
a. attainable and the economy is efficient.
b. attainable, but the economy is inefficient.
c. unattainable, but the economy is inefficient.
d. unattainable and the economy is efficient.
3. (TCO1) Which would not be a characteristic of a capitalist economy?
a. Government ownership of most factors of production
b. Competition and unrestricted markets
c. Reliance on the market system
d. Freedom of enterprise and choice
4. (TCO2) The demand curve is a representation of the relationship between the quantity of a product demand and
5. (TCO2) A decrease in supply and a decrease in demand will
a. increase price and affect the equilibrium quantity in an indeterminate way
b. decrease the equilibrium quantity and decrease price
c. increase the equilibrium quantity and affect price in an indeterminate way
d. decrease the equilibrium quantity and affect price in an indeterminate way
6. (TCO 2) When the price of movie tickets in a certain town was reduced, the movie theaters’ revenue did not change. This suggests that the demand for the movie tickets in that town has a price-elasticity coefficient of
b. greater than 1
7. (TCO 2) The price of elasticity of demand increases with the length of the period considered because
a. consumers’ incomes will increase over time
b. the demand curve will shift outward as time passes
c. all prices will increase over time
d. consumers will be better able to find substitutes
8. (TCO 2) A purely competitive firm’s output is such that its marginal cost is $4 and marginal revenue is $5.
a. cut its price and raise its output
b. raise its price and cut output
c. leave price unchanged and raise output
d. leave price unchanged and cut output
9. (TCO 2) Consumers who clip redeem discount coupons
a. exhibit the same price elasticity of demand for a given product than consumers who do not clip and redeem coupons
b. exhibit the more price elasticity of demand for a given product than consumers who do not clip and redeem coupons
c. exhibit the less price elasticity of demand for a given product than consumers who do not clip and redeem coupons
d. cause total revenue to decrease for firms that issue coupons for their products
10. (TCO3) in the kinked demand model of oligopoly, if one firm increases its price, that most likely reaction of the other firms will be to
a. decrease their prices
b. increase their prices.
c. not change their prices.
d. reduce their quantity
11. (TCO 3) The main difference between the short run and the long run is that
a. firms earn zero profits in the long run
b. the long run always refers to a time period of one year or longer
c. in the short run , some inputs are fixed
d. in the long run, all inputs are fixed
12. (TCO 4) A recession is a decline
a. the inflation fate that last six months or longer
b. the unemployment rate that last six month or longer
c. real GDP that lasts six months or longer
d. potential GDP that lasts six months or longer
13. (TCO) In calculation the unemployment rate, part-time workers are
a. counted as unemployed because they are not working full-time
b. counted as employed because they are receiving payment for work
c. used to determine the size of the labor free, but not the unemployment rate
d. treated the same as “discouraged” workers who are not actively seeking employment
14. (TCO 4) GDP is the market value
a. resources (land, labor, capita and entrepreneurship) in an economy in a given year
b. all final goods and services produced in an economy in a given year
c. consumption and investment spending in an economy in a given year
d. all output produced and accumulated over the years
15. (TCO 4) Nominal GDP differs from real GDP because
a. nominal GDP is based on constraint prices
b. real GDP is based on current prices
c. real GDP is adjusted for changes in the price level
d. nominal GDP is adjusted for changes in the price level
16. (TCO 6) The goal of expansionary fiscal policy is to increase
a. the price level
b. aggregate supply
c. real GDP
17. (TCO 6) refer to the graph. What combination most likely cause a shift from AD1 to AD3?
a. increase in taxes and government spending
b. decrease in taxes and increase in government spending
c. Increase in taxes and decrease in government spending
d. decrease in taxes and government spending
18. (TCO 6) The American Recovery and Reinvestment Act of 2009 is a clear example of
a. nondiscretionary expansionary fiscal policy
b. nondiscretionary contractionary fiscal policy
c. discretionary contractionary fiscal policy
d. discretionary expansionary fiscal policy