1. The big tradeoff in economics is a tradeoff between
(A)equity and efficiency.
(B)equality and inequality.
(C)marginal cost and marginal benefit.
(D)Scarcity and opportunity cost.

2. According to the principle of comparative advantage, if Taiwan trades with China, most likely, (A)the Taiwan will benefit and China will lose. (B)the Taiwan will lose and China will benefit. (C)neither of the countries will benefit. (D)both countries will benefit.

3. Ms. Lollipop opened a candy store in December 2013. She rented a building for $25,000 a year and used $30,000 from her savings account, which earned an annual interest rate of 5 percent, to buy capital equipment. In December 2014, the market value of her capital equipment was $26,000. What is the economic depreciation of Lollipop's capital? (A)$3,000 (B)$4,000 (C)$1,000 (D)$25,000

4. Mrs. Smith operates a business in a competitive market. The current market price is $8.10. At her profit-maximizing level of production, the average variable cost is $8.00, and the average total cost is $8.25. Mrs. Smith should (A)shut down her business in the short run but continue to operate in the long run. (B)continue to operate in the short run but shut down in the long run. (C)continue to operate in both the short run and long run. (D)shut down in both the short run and long run.

5. Cheating by a member of a cartel ___________ consumer surplus and ___________ the total economic profit earned by all the firms in the cartel. (A)increases； increases (B)increases； decreases (C)decreases； increases (D)decreases； decreases

6. Street lights are a public good.If street lights were provided by the private market, at the equilibrium quantity, it would be the case that (A)MSB = MSC (B)MSC ＞ MC (C)MSB ＞ MSC (D)MSB ＞ MB

7. In the foreign exchange market, if the supply of dollars ___________ and simultaneously the demand for dollars ___________, then the exchange rate definitely ___________. (A)increases； increases； depreciates (B)decreases； increases； depreciates (C)increases； decreases； depreciates (D)decreases； decreases； appreciates

8. In 2013, the U.S. credit card balance was $866 billion. Which of the following is true? (A)The $866 billion balance is part of M2 but not part of M1. (B)The $866 billion balance is part of both M1 and M2. (C)Only that portion of the $866 billion actually charged in 2009 is counted in M1 and M2. (D)No part of the $866 billion balance is counted in M1 and M2.

9. The order for the chain of events for the Keynesian model is for a change in ___________ to lead to a change in ___________, which is then multiplied resulting in a change in ___________. (A)investment； animal spirits； the price level (B)business confidence； investment； real GDP (C)the Fed's intermediate targets； the Fed's goals； real GDP (D)real GDP； income； consumption

10. If the economy is at potential GDP and the central makes an open market sale of government securities, in the long run the aggregate ___________ curve shifts ___________ and the price level ___________. (A)demand； rightward； rises (B)supply； leftward； rises (C)demand； leftward； falls (D)supply； leftward； falls

1. "The tax on insulin in the Philippines is anywhere between 10 and 20 percent. If you are rich and living in the Philippines, this is not a problem, but if you are poor, then insulin becomes something that you cannot afford." Why do buyers care so much about a tax on insulin, a vital daily medicine for those with diabetes? (A) Because buyers pay virtually the entire tax on insulin because the demand is almost perfectly inelastic (B) Because sellers increase their profit when there is a tax (C) Because more insulin can be provided to those in need (D) Because the tax incidence is equal between the buyers and sellers

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