1. Which of the following conditions is characteristic of a monopolistically competitive firm in short-run equilibrium?
(A) P = AR
(B) MR = MC
(C) P ＞ MC
(D) All of the above are correct.

7. Catherine is such a ____ person that all of her colleagues find it hard to work with her. Her picky personality also leaves her only few friends. (A) captious (B) diurnal (C) enamored (D) florid

8. The audience ____ after witnessing the funny clown fell down on the stage. (A) haggled (B) guffawed (C) instigated (D) masticated

9. Tens of thousands of people protested on the street and demanded that their president with _____ and corruption should step down. (A) obeisance (B) panoply (C) nepotism (D) quorum

10. She _____ for days, hoping to come up with the best answer to the difficult question. (A) serrated (B) tantalized (C) undulated (D) ruminated

2. When economists talk about growth in the economy, they measure that growth as the (A) absolute change in nominal GDP from one period to another. (B) percentage change in nominal GDP from one period to another. (C) absolute change in real GDP from one period to another. (D) percentage change in real GDP from one period to another.

3. Suppose that a college professor is creating an exam in her university office. Which of the following would be an example of a factor of production used by the professor? (i) the professor’s time  (ii) a computer software program into which the professor types the exam questions (iii) the physical space of the professors office where she works when creating the exam (iv) the interest on the professor’s home mortgage (A) (i) only (B) (i) and (ii) only (C) (i), (ii), and (iii) only (D) (i), (ii), (iii), and (iv)

4. Other things the same, when the price level rises, interest rates (A) rise, so firms increase investment. (B) rise, so firms decrease investment. (C) fall, so firms increase investment. (D) fall, so firms decrease investment.

5. Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket’s cost was $50； in 2014, the basket’s cost was $52； and in 2016, the basket’s cost was $55. The value of the CPI in 2016 was (A) 90.9. (B)104.0. (C)105.0. (D)110.0. 

6. Suppose Susan can wash 3 windows per hour or she can iron 6 shirts per hour. Paul can wash 1 window per hour or he can iron 6 shirts per hour. (A) Susan has a comparative advantage over Paul in washing windows. (B) Paul has a comparative advantage over Susan in ironing shirts. (C)Susan has an absolute advantage over Paul in washing windows. (D)All of the above are correct.

7. The opportunity cost of going to college is (A) the earnings given up to attend college. (B)the total amount spent on items that are required for attending college. (C)zero, since college education will allow a student to earn a higher income after graduation. (D)the total amount in (a) plus the earnings in (b).