1. Voluntary migration of skilled craftworkers from low-paying to high-paying nations is most likely to be opposed by: (Points : 2)
[removed] business groups in the high-paying nations. [removed] craft workers who stay in the low-paying nations. [removed] industrial unions in the high-paying nations. [removed] craft unions in the high-paying nations. |
2. In the market for superstars: (Points : 2)
[removed] earnings reflect pricing power rather than marginal revenue product. [removed] small differences in talent get magnified into huge differences in pay. [removed] entry and exit rarely occur. [removed] product demand is typically highly elastic. |
3. Labor market discrimination creates a: (Points : 2)
[removed] redistribution of a larger domestic output. [removed] larger domestic output but no redistribution. [removed] smaller domestic output but no redistribution. [removed] redistribution of a smaller domestic output. |
4. The incentive function of prices: (Points : 2)
[removed] indicates that price increases bring forth more of a resource. [removed] is the idea that competitive markets will always clear. [removed] applies to all resources. [removed] only applies to land. |
5. The individual firm in a purely competitive labor market faces: (Points : 2)
[removed] a perfectly elastic labor supply curve and a downsloping labor demand curve. [removed] a perfectly elastic labor demand curve and an upsloping labor supply curve. [removed] labor demand and labor supply curves both of which are perfectly elastic. [removed] a downsloping labor demand curve and an upsloping labor supply curve. |
6. A manufacturer using both capital and labor decides to use more labor and less capital because of an increase in the price of capital. This is likely the result of: (Points : 2)
[removed] capital and labor being complementary inputs. [removed] capital and labor being substitute inputs. [removed] the output effect being greater than the substitution effect. [removed] diminishing returns being applicable to capital but not to labor. |
7. The fact that people prefer present consumption to future consumption results in: (Points : 2)
[removed] a downsloping demand for loanable funds curve. [removed] an upsloping supply of loanable funds curve. [removed] a downsloping supply of loanable funds curve. [removed] an upsloping demand for loanable funds curve. |
8. Export supply curves are __________________; import demand curves are ___________________. (Points : 2)
[removed] horizontal; vertical [removed] vertical; horizontal [removed] downsloping; upsloping [removed] upsloping; downsloping |
9. In the real world, specialization is rarely complete because: (Points : 2)
[removed] nations normally experience increasing opportunity costs in producing more of the product in which they are specializing. [removed] production possibilities curves are straight lines rather than curves bowed outward as viewed from the origin. [removed] one nation’s imports are necessarily another nation’s exports. [removed] international law prohibits monopolies. |
10. In comparing a tariff and an import quota we find that: (Points : 2)
[removed] the tariff and quota both generate the same amount of revenue for the United States Treasury. [removed] the tariff generates revenue for the United States Treasury but the quota does not. [removed] the quota generates revenue for the United States Treasury but the tariff does not. [removed] neither the tariff nor the quota generates revenue for the United States Treasury. |
11. Countries engaged in international trade specialize in production based on: (Points : 2)
[removed] relative levels of GDP. [removed] comparative advantage. [removed] relative exchange rates. [removed] relative inflation rates. |
12. The idea of efficiency wages is that: (Points : 2)
[removed] the wages of each type of labor must be proportionate to their marginal products. [removed] the wages of each type of labor must be equal to their marginal products. [removed] firms might get greater work effort by paying above-equilibrium wage rates. [removed] workers are more diligent when paid below-equilibrium wages. |
13. The Earned Income Tax Credit: (Points : 2)
[removed] increases the personal income tax liability of low-income working families. [removed] provides a cash payment to low-income working families if their tax credit exceeds their tax liability. [removed] is designed to make labor force employment less attractive. [removed] was eliminated as part of welfare reform in 1996. |
14. Independent unions: (Points : 2)
[removed] have greater combined membership than the AFL-CIO. [removed] are not affiliated with the AFL-CIO. [removed] include the United Autoworkers and Carpenters Union. [removed] have about the same combined membership as the AFL-CIO. |
15. Capitalist income (corporate profits, interest, and rent) has: (Points : 2)
[removed] declined sharply since 1900 because of the growing strength of labor unions. [removed] remained approximately constant in this century. [removed] increased significantly because of rising rents. [removed] fallen in this century because of the declining importance of corporations. |
16. As it relates to international trade, dumping: (Points : 2)
[removed] is a form of price discrimination illegal under U.S. antitrust laws. [removed] is the practice of selling goods in a foreign market at less than cost. [removed] constitutes a general case for permanent tariffs. [removed] is defined as selling more goods than allowed by an import quota. |
17. The Lorenz curve portrays: (Points : 2)
[removed] the functional distribution of income. [removed] the ratio of labor to capitalist income. [removed] the personal distribution of income. [removed] income equality. |
18. A deficit on the current account: (Points : 2)
[removed] normally causes a surplus on the capital and financial account. [removed] normally causes a deficit on the capital and financial account. [removed] has no relationship to the capital and financial account. [removed] means that a nation is making international transfers. |
19. A nation’s capital and financial account: (Points : 2)
[removed] contains inpayment items, but not outpayment items. [removed] includes service exports and service imports. [removed] includes both inpayments and outpayments. [removed] includes net investment income and net transfers. |
20. By reducing labor turnover, unions may increase productivity because a lower turnover rate: (Points : 2)
[removed] results in a less-experienced work force. [removed] increases the incentive for firms to provide training to their workers. [removed] allows firms to employ a greater number of younger, more energetic workers. [removed] increases the incentive for firms to substitute labor for capital in the production process. |
21. The lifetime distribution of income is more equal than the annual distribution. This statement is: (Points : 2)
[removed] true, because the rich have gotten richer and the poor have gotten poorer. [removed] true, because there is considerable income mobility over time. [removed] false, because people tend to stay in the same income quintile over extended periods of time. [removed] false, because the rich have gotten richer and the poor have gotten poorer. |
22. Supporters of offshoring claim that its benefits include: (Points : 2)
[removed] increased demand for workers in complementary jobs. [removed] keeping U.S. firms profitable by lowering production costs. [removed] reduced prices for consumers. [removed] all of these. |
23. The earnings of highly educated workers: (Points : 2)
[removed] rise more slowly than those of less-educated workers. [removed] rise more rapidly than those of less-educated workers. [removed] rise at about the same rate as those of less-educated workers. [removed] stagnate earlier than do those of less-educated workers. |
24. The marginal productivity theory of income distribution suggests that : (Points : 2)
[removed] government should subsidize the most productive workers through a system of transfer payments. [removed] each individual should receive income based on his contribution to total output. [removed] resource owners should receive income based on the idea of “from each according to his ability, to each according to his wants.” [removed] resource owners should receive income based upon their needs. |
25. The demand for airline pilots results from the demand for air travel. This fact is an example of: (Points : 2)
[removed] resource substitutability. [removed] rising marginal resource cost. [removed] elasticity of resource demand. [removed] the derived demand for labor. |
26. The availability of health insurance tends to: (Points : 2)
[removed] decrease the demand for health care and cause an underallocation of resources to the health care industry. [removed] increase the quantity of health care demanded and cause an underallocation of resources to the health care industry. [removed] increase the quantity of health care demanded and cause an overallocation of resources to the health care industry. [removed] decrease the quantity of health care demanded and cause an overallocation of resources to the health care industry. |
27. The Gini ratio of income inequality ranges between: (Points : 2)
[removed] 0 and 10,000. [removed] 1 and 10. [removed] 1 and +1. [removed] 0 and 1. |
28. Henry George advocated a single tax on: (Points : 2)
[removed] real capital. [removed] entrepreneurial profits. [removed] land. [removed] labor income. |
29. The crowding of women and minorities into a restricted number of occupations: (Points : 2)
[removed] has no impact on the size of the domestic output or its distribution in the long run. [removed] will increase the size of the domestic output and make its distribution more equal. [removed] will decrease the size of the domestic output and make its distribution less equal. [removed] will increase the size of the domestic output, but make its distribution less equal. |
30. Renewable resources: (Points : 2)
[removed] can never be exhausted permanently. [removed] can be exhausted if harvest rates exceed replenishment rates for an extended period. [removed] can be exhausted if replenishment rates exceed harvest rates for an extended period. [removed] will tend to be over-harvested when they are private property. |
31. The marginal cost-marginal benefit approach to migration suggests that: (Points : 2)
[removed] the optimal amount of immigration to the United States is probably zero. [removed] everyone who wishes to come to the United States should be allowed to do so. [removed] a particular level of immigration may be too low or too high. [removed] efforts to reduce the inflow of illegal immigrants should be abandoned. |
32. When economists say that health care services are overconsumed, they mean that: (Points : 2)
[removed] rich people buy too much health care and poor people buy too little. [removed] some resources now used in the health care industry could produce alternative goods and services that society values more highly. [removed] health care is being purchased in amounts such that marginal benefits exceed marginal costs. [removed] the price of health care is below equilibrium so that quantity demanded exceeds quantity supplied. |
33. In the United States, the rate of unionization is: (Points : 2)
[removed] higher in mining than in government. [removed] lower in transportation than agriculture. [removed] higher in transportation than in retail trade. [removed] lower in government than in finance, insurance, and real estate. |
34. Two of the implications of large U.S. trade deficits for the United States are: (Points : 2)
[removed] decreased current consumption and decreased indebtedness to foreigners. [removed] reduced budget deficits and decreased indebtedness to foreigners. [removed] reduced current consumption and higher saving. [removed] increased current consumption and increased indebtedness to foreigners. |
35. Statistical discrimination: (Points : 2)
[removed] can persist in the long run if differences in average characteristics among groups continue. [removed] will tend to diminish in the long run, because nondiscriminating firms will drive out discriminating firms. [removed] requires that employers have discrimination coefficients greater than zero. [removed] is also known as occupational segregation. |
36. Employers will hire more units of a resource if: (Points : 2)
[removed] the price of the resource increases. [removed] the productivity of the resource increases. [removed] the price of the good being produced declines. [removed] the price of a complementary resource rises. |
37. Collective bargaining agreements usually cover: (Points : 2)
[removed] wages and hours. [removed] union status. [removed] seniority and job opportunities. [removed] all of these. |
38. The basic argument for income inequality is that: (Points : 2)
[removed] the very rich establish consumption patterns that are desirable for the rest of society to emulate. [removed] the rich buy luxury goods that soon become affordable to everyone else because of economies of scale. [removed] income inequality is essential to maintain incentives to produce. [removed] inequality undermines incentives and tends to reduce the size of the national income. |
39. The total fertility rate: (Points : 2)
[removed] measures the average number of children that a woman is expected to have during her lifetime. [removed] measures the average number of children that each couple is expected to have during their lifetime. [removed] equals the rate of population change over time. [removed] rises as income rises. |
40. If a U.S. importer can purchase 10,000 pounds for $20,000, the rate of exchange is: (Points : 2)
[removed] $1 = 2 pounds in the United States. [removed] $2 = 1 pound in the United States. [removed] $1 = 2 pounds in Great Britain. [removed] $.5 = 1 pound in Great Britain. |
41. Given the availability of the Medicaid program, why are so many poor people uninsured? (Points : 2)
[removed] Because only a fixed percentage of the population can participate in Medicaid at any time. [removed] Because many poor people earn enough that they do not qualify for Medicaid. [removed] Because nonincome requirements screen many poor people from the program. [removed] Because only native-born Americans are eligible for the program. |
42. A market in which the money of one nation is exchanged for the money of another nation is a: (Points : 2)
[removed] resource market. [removed] bond market. [removed] stock market. [removed] foreign exchange market. |
43. The parity ratio: (Points : 2)
[removed] compares worker productivity in the farm and nonfarm sectors. [removed] is the ratio of per capita farm income to per capita nonfarm income. [removed] is the ratio of prices received by farmers to prices paid by farmers. [removed] is the ratio of prices paid by farmers to prices received by farmers. |
44. Other things equal, the monopsonistic employer will pay a: (Points : 2)
[removed] lower wage rate and hire fewer workers than will a purely competitive employer. [removed] higher wage rate but hire fewer workers than will a purely competitive employer. [removed] lower wage rate but hire a larger number of workers than will a purely competitive employer. [removed] higher wage rate and hire a larger number of workers than will a purely competitive employer. |
45. Defensive medicine refers to the idea that: (Points : 2)
[removed] it is more cost-efficient to prevent illnesses than to cure them. [removed] physicians may require unnecessary testing as a means of protecting themselves against malpractice suits. [removed] doctors know much more about diagnosing and treating illnesses than do health care consumers. [removed] physicians do not advertise their services or fees. |
46. A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that: (Points : 2)
[removed] labor costs and product prices are not related. [removed] there is no discernible relationship between wage rates and labor productivity. [removed] wage rates and labor productivity are directly related. [removed] wage rates and labor productivity are inversely related. |
47. Featherbedding refers to: (Points : 2)
[removed] a situation in which a union forces an employer to hire union workers in preference to nonunion workers. [removed] the requirement that unneeded workers be retained on a job. [removed] the refusal by one union to handle or transport goods produced by workers in another union. [removed] disputes among two or more unions as to which will perform certain jobs. |
48. A major implication of asymmetric information is that: (Points : 2)
[removed] health care suppliers may reduce the supply of health care. [removed] health care suppliers may increase the demand for health care. [removed] collusion between health care suppliers and purchasers may accelerate the rise in costs. [removed] resources may be underallocated to the health care industry. |
49. An example of a social insurance program is ____________, whereas an example of public assistance program is _______. (Points : 2)
[removed] Temporary Assistance for Needy Households; unemployment compensation [removed] Supplemental Security Income; unemployment compensation [removed] Social Security; food stamps [removed] Medicaid; Medicare |
50. A lower equilibrium interest rate: (Points : 2)
[removed] increases saving, reduces total spending, and increases total output. [removed] decreases saving, increases total spending, and decreases total output. [removed] increases investment, increases total spending, and increases total output. [removed] decreases investment, decreases total spending, and increases total output. |