61. Which of the following are the largest two sources of federal government revenues?
a. Revenue from tariffs and other fees
b. corporate income taxes and sales taxes.
c. Individual income taxes and social insurance taxes
d. Excise and other taxes
62. If a 10% increase in price leads to a 15% decrease in quantity demanded, demand is -----------------------------
a. perfectly elastic
b. elastic
c. unit elastic
d. inelastic
63. When a comparative advantage exists, what should the producer with the comparative advantage do?
a. Produce the item for which he does not have the comparative advantage
b. Produce both items
c. Produce the item for which he does have the comparative advantage
d. Produce neither item
64. Dumping occurs -------------------------------------------------------
a. when a country sells a product at a higher price in a foreign market than it does in its domestic market.
b. when a country sells defective units of its products in a foreign market, while keeping the properly-made units for its home market.
c. when a country sells a product at a lower price in a foreign market than it does in its domestic market.
d. when a country fails to follow the specificity principle.
65. The level of output that corresponds to the full employment of the labor force
a. is also called potential GDP
b. shifts to the right as the economy accumulates more resources
c. continuously shifts to the right over time as technological advances take place
d. all of the above
66. Full employment is always a normal condition
a. in the vertical AS-curve case
b. in the classical AS-curve case
c. if wages and prices are assumed to be perfectly flexible
d. all of the above
67. Which of the following would be included in the income approach to measure GDP?
a. Wages, profits, rents
b. Wages, profits, investment spending
c. The value added in production
d. Wages, rents, investment spending, consumption spending
e. None of the above
68. Which of the following would not be included in the U.S. GDP, as measured by the income approach?
a. The wages earned by a secretary working in the U.S.
b. The profits earned by a German company from its plant located in the U.S.
c. The profits earned by a U.S. company from its plant located in China
d. The rents earned by a U.S. landlord with rental properties.
69. If an economy's production possibilities curve has shifted out, we can unambiguously conclude that:
a. the supply of natural resources increased
b. potential GDP increased
c. technology improved
d. the supply of labor increased
70. When there is a downward shift in supply, equilibrium price ------------- and equilibrium quantity ----------------
a. falls, rises
b. falls, falls
c. rises, rises
d. rises, falls
71. When there is an upward shift in demand, equilibrium price ------------- and equilibrium quantity ----------------
a. falls, falls
b. rises, rises
c. rises, falls
d. falls, rises
72. Why should countries trade?
a. To help them thrive
b. To increase output
c. To decrease output
d. To keep them busy
73. Which of the following is a situation in which trade is advantageous?
a. Two countries produce the same goods for the same costs
b. Two countries are isolated
c. Two countries produce different goods for different costs
d. Two countries have the same markets
74. If there are two producers and two products, which of the following cannot happen?
(A) A producer has an absolute advantage on one product
(B) A producer has the comparative advantage on both products
(C) A producer has the comparative advantage on one product
(D) A producer has an absolute advantage on both products
75. Frequently a firm will go abroad to --------------------------
a. Protect its home market
b. Earn greater profits
c. test market a product
d. all of the above.
