Econ Final

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1.  Taking everything into account, which of the following kinds of monopoly is most likely to pose a serious problem of market failure?
A.
B.
C.
D.
2.  A flow of funds from financial markets to the government indicates that 
A.
B.
C.
D.
3.  Which of the following events comes first in the annual Federal budget cycle?
A.
B.
C.
D.
4.  The term frictional unemployment refers to workers
A.
B.
C.
D.
5.  It is more likely that at least some groups in a country will be hurt by trade
A.
B.
C.
D.
6.  A situation in which monetary policy loses its effectiveness, interest rates are low, and people accumulate large amounts of cash is called
A.
B.
C.
D.
7.  The minimum efficient scale for a firm is the level of output at which 
A.
B.
C.
D.
8.  An open market purchase by the Fed is an example of which of the following?
A.
B.
C.
D.
9.  In a two-good, two-country world, international trade can increase
A.
B.
C.
D.
10.  Which of the following markets can contain a number of firms producing differentiated products?
A.
B.
C.
D.
11.  An industry in which one firm has a 20 percent share of the market and eight other firms each have a 10 percent share has a Herfindahl index of
A.
B.
C.
D.
12.  Other things being equal, which of the following would tend to cause the British pound to appreciate?
A.
B.
C.
D.
13.  Which of the following types of unemployment can be less than 0 at the peak of the business cycle?
A.
B.
C.
D.
14.  If a firm decided it could save on total cost by unplugging itself from the local electric utility and buying its own generating equipment, we could assume that
A.
B.
C.
D.
15.  A country has a large budget deficit that is financed by creation of new money (monetization) . As a result, the country has a serious danger of 
A.
B.
C.
D.
16.  Japan can produce a car in 1,000 hours and a computer in 100 hours. Brazil can produce a car in 2,000 hours and a computer in 250 hours. Which of the following statements is correct?
A.
B.
C.
D.
17.  In a two-nation world in which both nations specialize in the production of the product for which they possess a comparative advantage
A.
B.
C.
D.
18.  If the price level increases, the real value of paper currency held by consumers
A.
B.
C.
D.
19.  Suppose that during a recession, a country has an output gap of $100 billion. In order to close the output gap using fiscal policy, it must increase government purchases
A.
B.
C.
D.
20.  A country that experiences a period of falling prices accompanied by falling real output and rising unemployment is suffering from
A.
B.
C.
D.
21.  If a country has an unsustainable debt pyramid, it must
A.
B.
C.
D.
22.  Because of the multiplier effect, a $100 increase in planned investment tends ot cause an increase of more than $100 in 
A.
B.
C.
D.
23.  According to a supply and demand analysis, the likely effect of a minimum wage law would be
A.
B.
C.
D.
24.  Assuming gasoline and tires to be complementary goods, the intial effect on the tire market of an increase in the price of gasoline (other things being equal), would be best described as?
A.
B.
C.
D.
25.  Where the marginal cost curve is below the average variable cost curve, 
A.
B.
C.
D.
26.  Which of the following is required for every market?
A.
B.
C.
D.
27.  Which of the following economists advocated a policy rule based on a steady rate of growth for the money stock?
A.
B.
C.
D.
28.  Pollution is an example of which of the following?
A.
B.
C.
D.
29.  Which of the following is an example of a supply shock that would shift the aggregate supply curve upward?
A.
B.
C.
D.
30.  Which of the following is an example of normative economics
A.
B.
C.
D.
31.  Deficits or surpluses of state and local governments
A.
B.
C.
D.
32.  The market for hair styling services in a medium- to large-sized community would best be described as which of the following?
A.
B.
C.
D.
33.  Faster economic growth necessarily causes
A.
B.
C.
D.
34.  Scarcity is
A.
B.
C.
D.
35.  Starting from a point of long-run equilibrium, the intial effects of demand-side inflation would include an increase in
A.
B.
C.
D.
36.  Suppose the Fed announces a target federal funds rate of 3 percent. Changing market conditions then increase banks' demand for reserves. Which of the following actions would help the Fed to hold the federal funds rate close to its target?
A.
B.
C.
D.
37.  A rise in the price of coffee is likely to have which of the following initial effects on the market for tea, a subsitute?
A.
B.
C.
D.
38.  Aggregate concentration is a concept that applies to
A.
B.
C.
D.
39.  If firms in a monopolistically competitive industry are earning pure economic profits in short-run equilibrium, we will expect the number of firms to
A.
B.
C.
D.
40.  If a pure monopolist can sell 100 units of output at $50 per unit and 101 units of output at $49.99 per unit, marginal revenue in that range of output is approximately
A.
B.
C.
D.
41.  Which of the following is an illustration of entrepreneurship?
A.
B.
C.
D.
42.  Which of the following might cause firms in more concentrated industries to earn higher rates of return, on the average, than firms in less concentrated industries?
A.
B.
C.
D.
43.  An episode during which real ouput drops below its natural level while unemployment and the price level both rise is best described as
A.
B.
C.
D.
44.  A firm has total capital of $500 million. The opportunity cost of capital is 12 percent per year. The firm earns an accounting profit of $65 million and has no other implicit costs. Its pure economic profit is
A.
B.
C.
D.
45.  Observations of the U.S. economy suggest that in the short run, when the price level of final goods changes, input prices tend to adjust
A.
B.
C.
D.
46.  A tax on imports is known as a: 
A.
B.
C.
D.
47.  Suppose the government passes corporate accounting reforms that improve the investment climate and strengthen business confidence. Taking the multiplier effect into account, which of the following is likely to follow?
A.
B.
C.
D.
48.  The term "bank" in broad terms, as used in this chapter, refers to which of the following?
A.
B.
C.
D.
49.  In a certain year, the economy has a negative output gap and a buget deficit of $100 billion. If taxes and spending laws were the same, but real output were at its natural level, the budget deficit would be $25 billion. From this information, it appears that in this year the economy has
A.
B.
C.
D.
50.  An increase in the cost of raising hogs, other things being equal, would be likely to affect the price of bacon via
A.
B.
C.
D.
51.  It takes 5 labor hours to produce a ton of steel in Japan and 3 labor hours in the United States, and it requires 20 labor hours to produce a car in Japan and only 15 labor hours in the United States. If Japan and the United States were the only two countries involved in trade, we would expect
A.
B.
C.
D.
52.  Karen spends $20 to hire a tutor to help her prepare for her economics final. This expense should be considered part of
A.
B.
C.
D.
53.  Inflation in the United States was highest, on average, during which of the following periods?
A.
B.
C.
D.
54.  In long-run equilibrium for a perfectly competitive firm, ATC equals:
A.
B.
C.
D.
55.  The required-reserve ratio is the minimum reserves that the central bank requires a bank or thrift to hold stated as a percentage of
A.
B.
C.
D.
56.  When the Fed makes an open market sale of secutiries, the nation's money supply will
A.
B.
C.
D.
57.  Monetizing the deficit refers to:
A.
B.
C.
D.
58.  The total of consumer plus producer surplus under simple monopoly will tend to be 
A.
B.
C.
D.
59.  Control of climate change is likely to be a particulary difficult problem for environmental policy because
A.
B.
C.
D.
60.  A perfectly competitive firm's short-run supply curve is best described as
A.
B.
C.
D.
61.  Which of the following best describes the views of economists who favor policy rules?
A.
B.
C.
D.
62.  A recession is a 
A.
B.
C.
D.
63.  A perfectly competitive firm sells its output for $50 a unit. At 1,000 units of output, marginal cost is $40 and is increasing, average variable cost is $35, and average total cost is $60. To maximize short-run profit, what should the firm do?
A.
B.
C.
D.
64.  U.S. government reforms of social secutiry and Medicare that increased revenues for these programs or reduced expenditures on them would be an example of which of the following?
A.
B.
C.
D.
65.  Which of the following market structures is likely to have the most barriers to entry?
A.
B.
C.
D.
66.  The law of diminishing returns implies that the marginal physical product curve must 
A.
B.
C.
D.
67.  Which of the following adds reserves to the banking system?
A.
B.
C.
D.
68.  A monopolist than wants to maximize profits should produce where:
A.
B.
C.
D.
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