1、Name: _ Date: _1. The circular flow model shows that households use income for:A) consumption, saving, and factor payments.B) consumption, taxes, and factor payments.C) taxes, saving, and factor payments.D) consumption, taxes, and saving.2. In the circular flow diagram, firms receive revenue from th
2、e _ market, which is used to purchase inputs in the _ market.A) goods; financialB) factor; financialC) goods; factorD) factor; goods3. In the circular flow model, households receive income from the _ market and save through the _ market.A) goods; financialB) factor; financialC) goods; factorD) facto
3、r; goods4. In the long run, the level of national income in an economy is determined by its:A) factors of production and production function.B) real and nominal interest rate.C) government budget surplus or deficit.D) rate of economic and accounting profit.5. An economys factors of production and it
4、s production function determine the economys:A) labor force participation rate.B) budget surplus or deficit.C) population growth rate.D) output of goods and services.6. In the long run, what determines the level of total production of goods and services in an economy?A) the interest rate and the amo
5、unt of national savingB) the quantity of capital, quantity of labor, and production technologyC) consumption, investment, and government spendingD) the marginal products of capital and labor, constant returns to scale, and competition7. The two most important factors of production are:A) goods and s
6、ervices.B) labor and energy.C) capital and labor.D) saving and investment.8. Unlike the real world, the classical model with fixed output assumes that:A) all factors of production are fully utilized.B) all capital is fully utilized but some labor is unemployed.C) all labor is fully employed but some
7、 capital lies idle.D) some capital lies idle and some labor is unemployed.9. A production function is a technological relationship between:A) factor prices and the marginal product of factors.B) factors of production and factor prices.C) factors of production and the quantity of output produced.D) f
8、actor prices and the quantity of output produced.10. The production function feature called “constant returns to scale” means that if we:A) multiply capital by z1 and labor by z2, we multiply output by z3.B) increase capital and labor by 10 percent each, we increase output by 10 percent.C) increase
9、capital and labor by 5 percent each, we increase output by 10 percent.D) increase capital by 10 percent and increase labor by 5 percent, we increase output by 7.5 percent.11. If an increase of an equal percentage in all factors of production results in an increase in output of the same percentage, t
10、hen a production function has the property called:A) constant marginal product of labor.B) increasing marginal product of labor.C) constant returns to scale.D) increasing returns to scale.12. If bread is produced by using a constant returns to scale production function, then if the:A) number of work
11、ers is doubled, twice as much bread will be produced.B) amount of equipment is doubled, twice as much bread will be produced.C) amounts of equipment and workers are both doubled, twice as much bread will be produced.D) amounts of equipment and workers are both doubled, four times as much bread will
12、be produced.13. At any particular point in time, the output of the economy:A) is fixed because the supplies of capital and labor and the technology are fixed.B) is fixed because the demand for goods and services is fixed.C) varies because the supplies of capital and labor vary.D) varies because the
13、technology for turning capital and labor into goods and services varies.14. The neoclassical theory of distribution:A) was developed by Karl Marx.B) is rejected by most economists today.C) shows that the national income of an economy is not equal to total output.D) is a theory of how national income
14、 is divided among the factors of production.15. The price received by each factor of production for its services is determined by:A) demand for output and supply of factors.B) demand for factors and supply of output.C) demand and supply of output.D) demand and supply of factors.16. When factor suppl
15、y is fixed and quantity of the factor is graphed on the horizontal axis while factor price is graphed on the vertical axis, the factor:A) supply curve is horizontal.B) supply curve is vertical.C) supply curve slopes up to the right.D) demand curve slopes up to the right.17. A competitive firm:A) is
16、small relative to the market in which it trades.B) has to charge a lower price when it wants to sell more goods.C) has several large competitors with whom it engages in fierce competition.D) can set the wage at which it hires workers.18. A firms economic profit is:A) the price of output minus the wa
17、ge minus the rental price of capital.B) revenue minus costs.C) revenue plus capital costs.D) the price of output minus labor costs.19. A competitive firm chooses the:A) price at which to sell the product produced.B) wage to pay labor.C) quantity of labor and capital to employ.D) rental price to pay
18、capital.20. The marginal product of labor is:A) output divided by labor input.B) additional output produced when one additional unit of labor is added.C) additional output produced when one additional unit of labor and one additional unit of capital are added.D) value of additional output when one d
19、ollars worth of additional labor is added.21. The property of diminishing marginal product means that, after a point, when additional quantities of:A) a factor are added, output diminishes.B) both labor and capital are added, output diminishes.C) both labor and capital are added, the marginal produc
20、t of labor diminishes.D) a factor is added when another factor remains fixed, the marginal product of that factor diminishes.22. A competitive, profit-maximizing firm hires labor until the:A) marginal product of labor equals the wage.B) price of output multiplied by the marginal product of labor equ
21、als the wage.C) real wage equals the real rental price of capital.D) wage equals the rental price of capital.23. The real wage is the return to labor measured in:A) dollars.B) units of output.C) units of labor.D) units of capital.24. The marginal product of capital is:A) output divided by capital in
22、put.B) additional output produced when one additional unit of capital is added.C) additional output produced when one additional unit of capital and one additional unit of labor are added.D) value of additional output when one dollars worth of additional capital is added.25. The real rental price of
23、 capital is the price per unit of capital measured in:A) dollars.B) units of output.C) units of labor.D) units of capital.26. The real wage will increase if:A) the supply of labor increases.B) the productivity of labor increases.C) the price of output increases.D) the supply of capital decreases.27.
24、 An increase in the supply of capital will:A) increase the real rental price of capital.B) decrease the real rental price of capital.C) increase the productivity of capital.D) decrease the real interest rate.28. In the classical model, what adjusts to eliminate any unemployment of labor in the econo
25、my?A) the average price levelB) the interest rateC) the real rental price of capitalD) the real wage29. The neoclassical theory of distribution explains the allocation of:A) output between goods and services.B) output among consumption, investment, and government spending.C) income among factors of
26、production.D) income between saving and investment.30. Economic profit is zero if:A) all factors are paid their marginal products and the law of diminishing returns is valid.B) all factors are paid their marginal products and there are constant returns to scale.C) all firms maximize profits and none
27、 are competitive.D) all firms maximize profits and all factors are paid their marginal products.31. According to Eulers theorem, if competitive firms pay each factor its marginal product and the production function has constant returns to scale, the sum of all factor payments will equal:A) total inv
28、estment.B) total saving.C) total profits.D) total output.32. Accounting profit is:A) economic profit minus the return to capital.B) equal to economic profit.C) economic profit plus the return to capital.D) equal to the economic return to capital.33. According to the neoclassical theory of distributi
29、on, if firms are competitive and subject to constant returns to scale, total income in the economy is distributed:A) only to the labor used in production.B) partly between labor and capital used in production, with the surplus going to the owners of the firm as profits.C) equally between the labor a
30、nd capital used in production.D) between the labor and capital used in production, according to their marginal productivities.34. According to the neoclassical theory of distribution, total output is divided between payments to capital and payments to labor depending on their:A) supply.B) equilibriu
31、m growth rates.C) relative political power.D) marginal productivities.35. What determines the distribution of national income between labor and capital in a competitive, profit-maximizing economy with constant returns to scale?A) the relative quantity of labor to capitalB) the interest rateC) the ra
32、tio of public saving to private savingD) the marginal productivity of labor relative to the marginal productivity of capital36. In fourteenth-century Europe, the bubonic plague:A) reduced the population of Europe by about one-half.B) substantially increased economic output in Europe.C) substantially
33、 increased real rentals on land in Europe.D) substantially increased real wages in Europe.37. With a CobbDouglas production function, the share of output going to labor:A) decreases as the amount of labor increases.B) increases as the amount of labor increases.C) increases as the amount of capital i
34、ncreases.D) is independent of the amount of labor.38. If output is described by the production function Y = AK 0.2L0.8, then the production function has:A) constant returns to scale.B) diminishing returns to scale.C) increasing returns to scale.D) a degree of returns to scale that cannot be determin
35、ed from the information given.39. If Y = AK0.5L0.5 and A, K, and L are all 100, the marginal product of capital is:A) 50.B) 100.C) 200.D) 1000.40. Since 1960, the U.S. ratio of labor income to total income has:A) been about 2.5 to 1.B) been about 0.7.C) increased steadily.D) decreased steadily.41. I
36、f the production function describing an economy is Y = 100 K.25L.75, then the share of output going to labor:A) is 25 percent.B) is 75 percent.C) depends on the quantities of labor and capital.D) depends on the state of technology.42. In a CobbDouglas production function the marginal product of labo
37、r will increase if:A) the quantity of labor increases.B) the quantity of capital increases.C) capitals share of output increases.D) average labor productivity decreases.43. In a CobbDouglas production function the marginal product of capital will increase if:A) the quantity of labor increases.B) the
38、 quantity of capital increases.C) labors share of output increases.D) average capital productivity decreases.44. According to Goldin and Katz, the increasing income inequality of recent decades is the result of:A) increases in the rates of technological advance and educational attainment.B) decrease
39、s in the rates of technological advance and educational attainment.C) a steady pace of technological advance and a slowdown in educational advance.D) a decrease in the rate of technological advance and an increase in the rate of educational advance.45. Skill-biased technological change _ the demand
40、for high-skilled workers, while the slowdown in the pace of educational advancement reduces the supply of skilled workers, resulting in relatively _ wages for skilled workers.A) increases; higherB) increases; lowerC) decreases; higherD) decreases; lower46. The public policy implication of Goldin and
41、 Katzs analysis of growing income inequality is that reversing this trend will require that more of societys resources be put into:A) space exploration.B) capital expenditures.C) education.D) transfer payments.47. Estimates by Goldin and Katz indicate that the financial returns of a year of college
42、_ between 1980 and 2005.A) increased.B) decreased.C) did not change.D) were negative.48. According to the neoclassical theory of distribution, in an economy described by a CobbDouglas production function, workers should experience high rates of real wage growth when:A) real interest rates are high.B
43、) real interest rates are low.C) average labor productivity is growing rapidly.D) capitals share of income is growing rapidly.49. According to the neoclassical theory of distribution, in an economy described by a CobbDouglas production function, when average labor productivity is growing rapidly:A)
44、labors share of total income will be increasing.B) labors share of income will be decreasing.C) workers will experience high rates of real wage growth.D) economic profits will be positive.50. In a closed economy, the components of GDP are:A) consumption, investment, government purchases, and exports
45、.B) consumption, investment, government purchases, and net exports.C) consumption, investment, and government purchases.D) consumption and investment.51. The demand for output in a closed economy is the sum of:A) public saving and private saving.B) the quantity of capital and labor and production te
46、chnology.C) consumption, investment, and government spending.D) government purchases and transfer payments minus tax receipts.52. Disposable personal income is defined as income after the payment of all:A) taxes.B) interest.C) loans.D) social insurance contributions.53. A consumption function shows the relationship between consumption and:A) income.B) personal income.C) disposable income.D) taxes.
