In conditions of full employment :

In conditions of full employment
 
  A) no one in or out of the labor force is unemployed.
  B) the only unemployment results from a normal frictions and structural mismatches in the labor market.
  C) the only unemployment results from cyclical swings in economic activity.
  D) no one in the labor force is unemployed.

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Ques. 2

Many nations are consistently accused of enjoying the benefits of membership in the United Nations, yet they provide few or no funds to support the organization. This is an example of
 
  A) the principle of rival consumption.
  B) the free-rider problem.
  C) the negative externality problem.
  D) the property rights problem.

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Ques. 3

All of the following are positive statements EXCEPT
 
  A) the President of the United States in 2008 was George W. Bush.
  B) California is in the United States.
  C) migratory birds fly south for the winter.
  D) a dog is man's best friend.

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Ques. 4

Generally, if a nation produces more consumer goods than capital goods
 
  A) more of all goods may be produced in the future.
  B) less of all goods may be produced in the future.
  C) about the same amount of capital goods may be produced in the future as are being produced today.
  D) society will have to forego future consumption of capital goods.

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Ques. 5

State the law of supply and explain it.
 
  What will be an ideal response?

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Ques. 6

Refer to the above figure. If the government imposes a price ceiling of 60
 
  A) the quantity traded will be 150, and the price will be 40.
  B) the quantity traded will be 100, and the price will be 60.
  C) the quantity traded will be 200, and the price will be 60.
  D) the quantity traded will be 150, and the price will be 60.

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Ques. 7

In the 1920s and 1930s, economists became increasingly aware that there were industries that did not fit the model of perfect competition or pure monopoly. Two separate theories of monopolistic competition resulted.
 
  Edward Chamberlin of Harvard published the Theory of Monopolistic Competition in 1933. Chamberlin defined monopolistic competition as A) a relatively large number of producers offering similar but differentiated products.
  B) a relatively small number of producers offering similar but differentiated products.
  C) a market situation in which a large number of firms produce identical products.
  D) a market situation in which a small number of firms produce similar products.

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Ques. 8

One of the strongest reasons that oligopolies exist is due to
 
  A) the homogeneity of their products.
  B) marginal cost pricing.
  C) lowest cost production.
  D) economies of scale.