Microeconomics is best described as the study of:
A. the choices made by individual households, firms, and governments.
B. inflation, unemployment, gross national product, and the nation's economy as a whole.
C. how markets interact in the aggregate economy.
D. marginal changes in the economy.
Answer: A
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Which of the following describes a barrier to entry?
A) something that establishes a barrier to expanding output B) anything that protects a firm from the arrival of new competitors C) a government regulation that bars a monopoly from earning an economic profit D) firms already in the market incurring economic losses so that no new firm wants to enter the market E) Firms are legally prohibited from exiting the market in order to enter another market.
Which of the following is not a financial asset?
a. a corporate bond b. a piece of real estate c. an IOU d. a share of Coca-Cola stock e. a Treasury bond
Which of the following tests helps in the detection of heteroskedasticity?
A. The Breusch-Pagan test B. The Breusch-Godfrey test C. The Durbin-Watson test D. The Chow test