Econ Final

68 Questions  I  By AshyMSU

  
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1.  A point representing 500 roast turkey dinners and 600 steak dinners lies outside the production possibilty frontier of Joe's Restaurant, given the factors of production and technology available to it. This means that
A.
B.
C.
D.
2.  When the economy approaches the peak of a business cycle
A.
B.
C.
D.
3.  Which of the following is an example of normative economics
A.
B.
C.
D.
4.  Which of the following tends to increase during hyperinflation?
A.
B.
C.
D.
5.  If expansionary monetary policy is used to hold real output above its natural level for several years in a row, the result is likely to be
A.
B.
C.
D.
6.  If a perfectly competitive firm is operating at a point where marginal cost and product price are between average variable cost and average total cost, its accounting profit must be
A.
B.
C.
D.
7.  Which of the following will produce a rightward shift in the aggregate demand curve?
A.
B.
C.
D.
8.  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.
9.  Economists who have made empirical studies of the relationship between concentration and market performance have generally looked at the data relating to
A.
B.
C.
D.
10.  A tax on imports is known as a: 
A.
B.
C.
D.
11.  To attract the attention of potential customers, U.S. bank spends $500 to hire a band to play at the opening of a branch at the new Walmart shopping center. With regard to the ongoing operations of the new branch, the cost of hiring the band is considered to be
A.
B.
C.
D.
12.  Which of the following is an illustration of entrepreneurship?
A.
B.
C.
D.
13.  At an output of 100 units, a monopolist's marginal cost is $33, its marginal revenue is $33, its average variable cost is $30, and its average total cost is $38. To maximize profit or minimize loss in the short run, what should the firm do?
A.
B.
C.
D.
14.  The tendency of policymakers to delay painful anti-inflation policies until after an election is an example of which of the following?
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B.
C.
D.
15.  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.
16.  If a country exports fish and imports wheat, an interruption of trade will be likely to decrease
A.
B.
C.
D.
17.  Which of the following is not a component of domestic product?
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B.
C.
D.
18.  A monopolist than wants to maximize profits should produce where:
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B.
C.
D.
19.  An unexpected increase in the rate of inflation will tend to
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B.
C.
D.
20.  Suppose John can sew four shirts per day or knit six caps per day, whereas Jane can sew three shirts per day or knit for caps per day. It can then be said that
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B.
C.
D.
21.  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.
22.  The required-reserve ratio is the minimum reserves that the central bank requires a bank or thrift to hold stated as a percentage of
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B.
C.
D.
23.  Of the following persons, which one would be officially classified as unemployed?
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B.
C.
D.
24.  Faster economic growth necessarily causes
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B.
C.
D.
25.  ERB stabilization policy means a policy to combat hyperinflation that is based on
A.
B.
C.
D.
26.  If domestic product = 1,000, consumption = 800, planned investment = 100, government purchases = 150, exports =50, and imports = 75, then unplanned inventory investment must be
A.
B.
C.
D.
27.  The interest rate charged by the Fed on loans of reserve to banks is known as the 
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B.
C.
D.
28.  A cartel maximizes total profits for its membership by setting output at the point where the industry's marginal cost curve intersects
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B.
C.
D.
29.  Which of the following statements is true of MC > ATC?
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B.
C.
D.
30.  Which of the following is necesssary in order for a monopolist to practice price discrimination?
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B.
C.
D.
31.  During the Great Depression of the 1930's 
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B.
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D.
32.  The "other things being equal" clause in the law of demand covers
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D.
33.  In a two-nation world in which both nations specialize in the production of the product for which they possess a comparative advantage
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B.
C.
D.
34.  An increase in the cost of raising hogs, other things being equal, would be likely to affect the price of bacon via
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B.
C.
D.
35.  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
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B.
C.
D.
36.  If there is an increase in demand in a perfectly competitive industry
A.
B.
C.
D.
37.  An early study by Joe Bain concluded that
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B.
C.
D.
38.  Which of the following best characterizes the official policy of the Federal Reserve regarding asset bubbles, as implemented during the period before the recession that started at the end of 2007? 
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B.
C.
D.
39.  If an individual member of a cartel could be certain of escaping detection, it would be tempted to cheat by 
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B.
C.
D.
40.  A firm is said to experience economies of scale over the range of output for which long-run average cost
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C.
D.
41.  If firms in a monopolistically competitive industry are earning pure economic profits in short-run equilibrium, we will expect the number of firms to
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B.
C.
D.
42.  An episode during which real ouput drops below its natural level while unemployment and the price level both rise is best described as
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B.
C.
D.
43.  Given powers granted to the Fed since 2008, and setting aside extreme crisis conditions, which of the following interest rates would normally be expected to be the highest?
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B.
C.
D.
44.  If the nominal rate of interest is 3 percent and the rate of inflation is -5 percent (5 percent rate of deflation), the real interest rate is
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B.
C.
D.
45.  The expected level of input prices can be determined by looking at the intersection of the 
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B.
C.
D.
46.  A situation in which monetary policy loses its effectiveness, interest rates are low, and people accumulate large amounts of cash is called
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B.
C.
D.
47.  If total investment exceeds saving, 
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B.
C.
D.
48.  Trade in meat and wheat between two countries is least likely to be profitable if
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B.
C.
D.
49.  In 2003, it cost $185 to purchase the same basket of consumer goods that could have been purchased for $100 in 1982. A worker who earned $800 per week in 1982 and $1,550 per week in 2003, therefore, would have experienced
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B.
C.
D.
50.  Which of the following best describes the policy of the Fed?
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B.
C.
D.
51.  As a percentage of GDP, which of the following is larger in China than in the United States?
A.
B.
C.
D.
52.  As the economy moves up and to the left along the aggreagte demand curve from a short-run equilibrium to a new long-run equilibrium
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D.
53.  Which of the following events comes first in the annual Federal budget cycle?
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D.
54.  A limit pricing strategy implies charging a price that is less than the 
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D.
55.  Starting from a point of long-run equilibrium, the intial effects of demand-side inflation would include an increase in
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B.
C.
D.
56.  Aggregate concentration is a concept that applies to
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D.
57.  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
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D.
58.  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
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B.
C.
D.
59.  Where is the cap-and-trade approach used most extensively for carbon emissions as of 2008? 
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B.
C.
D.
60.  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.
61.  In Norway, it takes 5 labor hours to produce a ton of wheat and 5 to produce a ton of fish; in Greece it takes 3 labor hours to produce a ton of wheat and 3 to produce a ton of fish. If these are the only two goods and only two trading countries, we would expect
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B.
C.
D.
62.  During a visit to Havana, Cuba, you notice long lines outside every butcher shop. The most reasonable conclusion to be drawn from this observation is that the
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D.
63.  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
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B.
C.
D.
64.  If a country exports products of land-intensive indutries and imports products of labor-intensive industires, we would expect that the county's 
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B.
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D.
65.  The study of the factors determining the price of gasoline relative to the price of other fuels would be primarily a concern of
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C.
D.
66.  Which of the following is required for every market?
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D.
67.  If the steelworkers' union negotiates a new contract with sharply higher wages, we would expect, once a new equilibrium is reached in the steel market,
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B.
C.
D.
68.  The minimum efficient scale for a firm is the level of output at which 
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B.
C.
D.
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