Personal Investment Guide

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1. The supply curve for a monopoly
is the marginal revenue curve
is the marginal cost curve
is the total revenue curve
is the total cost curve
does not exist

2. Monopolization of a previously competitive market leads to (Points: 3)
reduced production and product quality and increased costs and prices
increased production and higher prices
increased production, product quality and prices
all of the above
none of the above

3. Which of the following best characterizes a cartel arrangement? (Points: 3)
open competition
shared competition
monopsony
shared monopoly
monopolistic competition

4. The relatively high salaries paid to professional athletes reflect (Points: 3)
their contribution to team revenue
the exploitation of fans
their contribution to society’s general well-being.
the success of labor union representation
the social value of professional sports

5. A country has a comparative advantage in the production of any good that it can produce (Points: 3)
at a lower absolute cost than can other countries
with less labor than can other countries
with a smaller sacrifice of some alternative good or service than can other countries
for export
all of the above

6. The price of one nation’s currency in terms of another is called (Points: 3)
the exchange rate
the international trade rate
tariff
a balance of trade account
a capital account

7. Leakages in the circular flow consist of (Points: 3)
savings, taxes, and exports
savings, investment, and exports
government spending, investment, and exports
savings, taxes, and imports
investment, taxes, and imports

8. An automobile factory worker unemployed because a robot now has his job is a victim of (Points: 3)
structural unemployment
cyclical unemployment
underemployment
frictional unemployment
seasonal unemployment

9. Inflation is most likely to benefit (Points: 3)
savings bank depositors
debtors
life insurance policyholders
persons living on fixed pensions
creditors

10. Decreasing excess reserves in the banking system is a means of curing (Points: 3)
shortages
demand-pull inflation
profit-push inflation
unemployment
none of the above

11. The longest sustained period of economic growth in modern U.S. history occurred during the (Points: 3)
1920s
1950s
1970s
1980s
1990s

12. The size of government is growing at (Points: 3)
a slower rate than the economy
approximately the same rate as the rest of the economy
a faster rate than the rest of the economy
none of the above
all of the above

13. Which of the following is an example of a collective good or service? (Points: 3)
a public highway
free cheese offered by the government
food stamps
social security
automobiles

14. The largest social insurance program in the United States is (Points: 3)
social security
entitlement programs
private insurance programs
welfare programs
transfer programs

15. Current projections estimate that the Social Security Trust Fund will be depleted (Points: 3)
around 2010
around 2015
around 2020
around 2040
around 2200

16. Profits serve no useful purpose in a private enterprise economy and should be taxed away by the government. (Points: 3)
True
False

17. Barriers to entry are often created by governments. (Points: 3)
True
False

18. Professional sports leagues are both cartels and monopsonies. (Points: 3)
True
False

19. The “civic pride” enjoyed by a major league city has no economic value. (Points: 3)
True
False

20. The euro will increase the transaction costs of trade between nations who are members of the European Union (EU). (Points: 3)
True
False

21. Today, custom unions or free trade zones can be found on every populated continent of the world. (Points: 3)
True
False

22. Unemployment will increase if the minimum wage increases. (Points: 3)
True
False

23. An increase in the money supply increases aggregate demand. (Points: 3)
Yes, I am nor a liar!