Tran Duc Thanh – Suu tầm

1. Which of the following factors of production would best be described as human

capital?
a. money used to start a business.
b. skills and training that help workers to complete their role in producing a
finished product.
c. effort put forth by human workers.
d. currency provided to businesses through subsidies and other government
programs.

2. Which of the following would make it possible for a country to consume beyond its
individual production possibilities curve?

a. producing only products for which they have an absolute advantage

b. importing products from other countries at a relatively lower opportunity cost

c. imposing a tariff on all imports

d. producing more consumer goods rather than capital goods

3. Assume that pizza and stromboli are substitutes. Which of the following best describes
the effect on the pizza market if the price of stromboli decreases?

a. Demand for pizza will shift right

b. Demand for pizza will shift left

c. Supply for pizza will shift right

d. Supply for pizza will shift left

e. Both demand and supply for pizza will shift left.

4. An effective price ceiling in the market for tea will most likely result in a/an
a. decrease in demand for sugar, a complement for tea
b. increase in demand for coffee, a substitute for tea
c. surplus of tea
d. shortage of tea
5. On a downward sloping, straight line demand curve, which of the following is always
true?
a. Price elasticity of demand is the same at all points along the curve
b. Price elasticity increases as quantity increases
c. Price elasticity decreases as quantity increases
d. Demand is perfectly elastic at the midpoint of the demand curve
e. Total revenue is higher when demand is elastic than when demand is inelastic.
6. Use the following graph to answer questions 6 & 7.
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i.
7. The graph above illustrates the production possibilities for Country X. Assume Country
X is currently producing 30 capital goods and 40 consumer goods. Which of the
following combinations could Country X produce that would most likely accelerate
economic growth?

a. 0 capital goods; 50 consumer goods

b. 90 capital goods; 20 consumer goods
c. 150 capital goods; 50 consumer goods
d. 60 capital goods; 20 consumer goods

8. Using the same graph above, assuming Country X is producing efficiently, calculate
their opportunity cost to increase production of consumer goods from 20 units to 30
units.
a. 3 capital goods
b. 10 capital goods
c. 30 capital goods
d. 10 consumer goods
e. None, when producing efficiently, there is no opportunity cost
9. In the competitive market for jelly beans (a normal good), all of the following are
true EXCEPT
a. A decrease in consumer income would shift demand to the left
b. A decrease in the price of a substitute good would shift demand to the left
c. An increase in the number of buyers would shift demand to the right
d. A decrease in the price of jelly beans would shift demand to the right

10. The quantity of acrylic paint supplied decreased from 500 tons per week to 400 tons
per week when the price of acrylic paint decreased from $20 per ton to $10 per ton.
The price elasticity of supply for acrylic paint over this price range is
a.perfectly elastic
b. perfectly inelastic
c. relatively inelastic
d. relatively elastic
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e. unit elastic

11. Which of the following best describes a perfectly competitive market?

a. a market structure with a large number of interdependent large firms selling
identical products
b. a market structure with dozens of small firms offering a differentiated product
with easy entry into the market
c. a market that is productively efficient, but not allocatively efficient
d. a market that has high barriers to entry
e. a market structure where individual firms have no control over the price that
they charge
12. In a perfectly competitive labor market, imposing a binding minimum wage will bring
about what change(s) on the demand and supply graph?
a. increase in wage, decrease in quantity of workers hired
b. increase in wage, increase in quantity of workers hired
c. decrease in wage, decrease in quantity of workers hired
d. decrease in wage, increase in quantity of workers hired

13. In 2014, 13 billion bushels of corn were harvested and sold for $3.70 per bushel. The
next year, 13 billion bushels of corn were harvested and sold at $3.50 per bushel. Which
of the following changes in supply and demand could have caused this change?
a. Supply decreased while demand decreased
b. Supply increased while demand decreased
c. Supply decreased while demand increased
d. Supply increased while demand did not change
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14. An early frost destroys 20% of the coffee bean crop. If the supply and demand for
coffee beans are both relatively inelastic, and the frost does not impact the quality of
the coffee beans that make it to market, which of the following will most likely occur
to the equilibrium price and quantity of coffee beans?
a. Price and quantity will both increase
b. Price and quantity will both decrease
c. Price will increase, quantity will decrease
d. Price will decrease, quantity will increase

15. The graph above shows the supply and demand for water filters. If the government
imposes a price floor at $40 per unit, the result will be
a. a surplus of 300 units
b. a shortage of 300 units
c. a surplus of 400 units
d. a shortage of 400 units
e. None of the above
16. Which of the following is true if the government enacts a per-unit tax on a product
with relatively inelastic demand and relatively elastic supply?
a. The price that consumers pay will decrease.
b. The demand for the product will decrease.
c. The tax burden will fall equally on both consumers and producers.
d. The tax burden will fall more on consumers than on producers.

17. Herman spends his entire income on only two goods: bagels and juice. Currently, his MU
for bagels is 12, and his MU for juice is 6. If the price for each bagel is $3, and the price
for each juice is $1, this Herman should
a. buy more bagels and more juice
b. buy less bagels and less juice
c. buy more bagels and less juice
d. buy less bagels and more juice

18. Assume peanut farmers hire their workers in a perfectly competitive labor market and
sell their product in a perfectly competitive product market. A decrease in the demand
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for peanuts will result in which of the following changes in the labor market?
a. The supply curve for labor will shift to the right.
b. The demand curve for labor will shift to the right.
c. The supply curve for labor will shift to the left.
d. The demand curve for labor will shift to the left.

19. All of the following are true about an country's production possibilities curve
EXCEPT
a. If it is bowed out (concave to the origin), it is experiencing increasing
opportunity costs of production
b. An increase in unemployment causes the curve to shift inward towards the origin.
c. It shows the alternative combinations of goods that can be produced given a
country's scarce resources
d. If it is a straight line, the country is experiencing constant opportunity costs of
production
e. Producing a quantity on the production possibilities curve is always productively
efficient
20. Historically, coal miners had a very high risk of developing various lung diseases, due
in part to lack of ventilation. Engineering advancements allowed better ventilation in
mines, eliminating some of this risk. Which is the most likely impact of these
engineering advancements upon the supply and demand for labor in the mining
industry?
a. Demand curve will shift left, supply curve will shift right
b. Demand curve will shift left, supply curve will shift left
c. Demand curve will shift right, supply curve will shift right
d. Demand curve will not shift, supply curve will shift left
e. Demand curve will not shift, supply curve will shift right
21. If the demand for health care is very inelastic, an increase in the price of health care
will
a. increase the total revenue of health care providers
b. decrease the total revenue of health care providers
c. decrease the total consumer expenditures on health care
d. cause the demand for health care to increase

22. If only one supplier in a perfectly competitive market received a per-unit subsidy this
year, how will this subsidy impact the firm's price and output in the short run?
a. price will increase; output will increase
b. price will not change; output will increase
c. price will decrease; output will increase
d. price will not change; output will decrease
e. price will decrease; output will decrease
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23. The table above provides the number of minutes it takes for Noah and Sydney to mow
lawns and to pull weeds. Assuming they choose their jobs based on the principle of
comparative advantage, which of the following should occur?

a. Noah should mow lawns while Sydney pulls weeds.

b. Sydney should mow lawns while Noah pulls weeds.
c. Both Noah and Sydney should pull weeds, and they should hire an additional
worker to mow lawns.
d. Noah should split his time equally between both jobs.
e. Sydney should split his time equally between both jobs.
24. Assume tomatoes are an input used in traditional sauce. If the price of tomatoes
decreases, and at the same time, there is an increase in the price of alfredo sauce — a
substitute for traditional sauce, which of the following will definitely result from the
combination of these factors?
a. The equilibrium quantity of traditional sauce will increase.
b. The equilibrium quantity of traditional sauce will decrease.
c. The equilibrium quantity of traditional sauce will be unaffected.
d. The equilibrium price of traditional sauce will increase.
e. The equilibrium price of traditional sauce will decrease.
25. A local coffee shop increases the price of a coffee from $3.25 to $3.50. If the demand
for coffee is relatively price inelastic, how will this change most likely affect the
amount of coffee purchased and the coffee shop's total revenue?
a. The amount purchased remains the same; revenue increases
b. The amount purchased increases; revenue increases
c. The amount purchased decreases; revenue decreases
d. The amount purchased decreases; revenue increases
e. The amount purchased decreases; revenue remain the same

26. The cross-price elasticity of demand for Good X and Good Y is equal to +1.0. What
does this indicate about the relationship between Good X and Good Y?
a. Good X and Good Y are unit elastic
b. Good X and Good Y are complements
c. Good X and Good Y are substitutes
d. Good X and Good Y are both normal goods
e. Good X and Good Y are both inferior goods
27. Compared to a monopoly with identical demand and cost curves, a perfectly
competitive firm will
a. charge a lower price and produce a higher output
b. charge the same price and produce a higher output
c. charge a lower price and produce the same output
d. charge a higher price and produce a lower output
e. charge a higher price and produce the same output

28. Which of the following best describes the supply and demand curves for a firm hiring
labor in a perfectly competitive labor market?
a. Firm's demand curve for labor is horizontal, firm's supply curve for labor is
Tran Duc Thanh – Suu tầm

upward sloping
b. Firm's demand curve for labor is horizontal, firm's supply curve for labor is
horizontal
c. Firm's demand curve for labor is horizontal, firm's supply curve for labor is
downward sloping
d. Firm's demand curve for labor is downward sloping, firm's supply curve for
labor is upward sloping
e. Firm's demand curve for labor is downward sloping, firm's supply curve for
labor is horizontal

29. A country will most likely cause an outward shift in its production possibilities by
a. Increasing the price of product(s) for which it has a comparative advantage
b. Investing in the development of new technology
c. Producing more of its most expensive products
d. Reducing foreign trade and increasing taxes on businesses
e. Reducing its spending for developing human capital
30. If the price of baseball caps increases, which of the following will most likely occur in the
market for baseball caps?
a. The demand for baseball caps will decrease
b. The supply of baseball caps will increase
c. The quantity supplied for baseball caps will increase
d. The demand will decrease and the supply will increase
e. There will be a shortage of baseball caps in the market

31. As the price of cinnamon increases by 10 percent, and as a result, the quantity demanded
for spice X decreases by 5 percent. Based on this information, calculate the value of the
cross price elasticity of demand coefficient and determine whether cinnamon and spice X
are complements or substitutes.
a. 2.0; substitutes
b. -2.0; complements
c. 0.5; substitutes
d. -0.5; complements
e. -0.5; substitutes

32. Which of the following best describes the law of supply?

a. When the supply for a good increases, the price will increase
b. When the supply for a good increases, the price will decrease
c. When the price of a good increases, its supply increases.
d. When the price of a good increases, its quantity supplied increases.
e. When the price of a good increases, its supply and demand will both decrease
33. All of the following would shift the supply curve for grapes in the short run EXCEPT
a. an increase in the wages paid to grape harvesters
b. the elimination of per-unit subsidies provided for firm's producing grapes
c. an increase in government regulations concerning grape production
d. a strike by all vineyard workers
e. an increase in all household incomes
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34. Assume the demand for NZT is perfectly inelastic and the supply for NZT is relatively
elastic. Which of the following would result from a decrease in supply?
a. Price will increase; Quantity will decrease
b. Price will decrease; Quantity will increase
c. Price will remain the same; Quantity will decrease
d. Price will increase; Quantity will remain the same

35. In a perfectly competitive product market, if both the quantity and price for a product
decrease, which of the following most likely caused this change?
a. a decrease in demand
b. an increase in demand
c. a decrease in supply
d. an increase in both demand and supply

36. Using the same amount of time and resources, Lydia can assemble either 8 block towers
or 4 jigsaw puzzles; Anna can assemble either 4 block towers or 4 jigsaw puzzles.
Based on this information, which of the following statements is correct?
a. Lydia has a comparative advantage in assembling jigsaw puzzles
b. Anna has a comparative advantage in assembling jigsaw puzzles
c. Anna has an absolute advantage in assembling jigsaw puzzles
d. Anna has an absolute advantage in assembling block towers
e. Lydia has a comparative advantage in assembling both block towers and
jigsaw puzzles
37. Which of the following will cause the demand curve for grape jelly to shift to the left?
a. A decrease in the price of peanut butter assuming that peanut butter and jelly
are complements
b. An increase in the price of marshmallow fluff assuming that grape jelly and
marshmallow fluff are substitutes
c. A increase in the income of consumers, assuming that grape jelly is an inferior
good
d. An increase in the wages of workers who work in the jelly factories
e. A decrease in the number of firms producing grape jelly
38. Assume marshmallows and graham crackers are complements. If the price of graham
crackers decreases, which of the following will most likely occur in the short run in the
marshmallow market?
a. Demand for marshmallows will decrease
b. Supply for marshmallows will decrease
c. Price and quantity for marshmallows will increase
d. Price and quantity for marshmallows will decrease
e. Quantity for marshmallows will increase, while price for marshmallows is
indeterminate

39. Assume that restaurant meals are normal with an income elasticity of +1.5. If income
decreases by 10%, the quantity of restaurant meals demanded should:
a. Increase by more than 10%
b. Increase by less than 10%
c. Decrease by more than 10%
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d. Decrease by less than 10%

e. Decrease by exactly 10%