Question 1

In 2007, the labor force participation rate of women was

Accepted Answer

A)  20.6 percent. 
B)  40.6 percent. 
C)  60.6 percent. 
D)  80.6 percent. 
A)  20.6 percent. 
B)  40.6 percent. 
C)  60.6 percent. 
D)  80.6 percent.

Question 2

"If China and India continue their economic expansion, the world cannot provide enough raw materials without terrible shortages worldwide." Evaluate this statement.

Accepted Answer

A)  True, increased demand from developing countries will swamp the existing supply of resources. 
B)  True, increased demand from China and India will lead to large shortages in the North America and Europe. 
C)  False, the shortage will be limited to China and India. 
D)  False, increasing scarcity will result in higher prices and the deployment of new technologies that increase the efficiency of production, and together these markets forces will help to balance demand and supply worldwide. 
A)  True, increased demand from developing countries will swamp the existing supply of resources. 
B)  True, increased demand from China and India will lead to large shortages in the North America and Europe. 
C)  False, the shortage will be limited to China and India. 
D)  False, increasing scarcity will result in higher prices and the deployment of new technologies that increase the efficiency of production, and together these markets forces will help to balance demand and supply worldwide.

Question 3

Data on the relationship between the percentage of the workforce unionized and the share of national income allocated to labor suggest that unionization has

Accepted Answer

A)  greatly altered the labor-capital distribution of national income. 
B)  increased the share of national income allocated to labor. 
C)  had a positive effect on the wages of nonunion workers. 
D)  had no significant impact on the share of income going to labor. 
A)  greatly altered the labor-capital distribution of national income. 
B)  increased the share of national income allocated to labor. 
C)  had a positive effect on the wages of nonunion workers. 
D)  had no significant impact on the share of income going to labor.

Question 4

Economic theory indicates that the growth of subsidies to healthcare consumers and accompanying expansion in third-party payments will

Accepted Answer

A)  place downward pressure on the prices of healthcare services. 
B)  lead to higher healthcare prices. 
C)  increase the incentive of consumers to economize on their purchases of healthcare services. 
D)  increase the incentive of healthcare providers to provide their services at economical prices. 
A)  place downward pressure on the prices of healthcare services. 
B)  lead to higher healthcare prices. 
C)  increase the incentive of consumers to economize on their purchases of healthcare services. 
D)  increase the incentive of healthcare providers to provide their services at economical prices.

Question 5

When a park is funded by visitors, but not by taxpayers in general,

Accepted Answer

A)  there will be too few parks, because most people will not pay to use a park. 
B)  visitors will be better served, because poor service would lead to reductions in revenues. 
C)  park budgets will decline. 
D)  park quality will decline. 
A)  there will be too few parks, because most people will not pay to use a park. 
B)  visitors will be better served, because poor service would lead to reductions in revenues. 
C)  park budgets will decline. 
D)  park quality will decline.

Question 6

The random walk theory implies that stock prices

Accepted Answer

A)  go down, then up, and then down again. 
B)  go up and then down in a predictable pattern. 
C)  follow systematic trends. 
D)  are unpredictable based on past trends. 
A)  go down, then up, and then down again. 
B)  go up and then down in a predictable pattern. 
C)  follow systematic trends. 
D)  are unpredictable based on past trends.

Question 7

Given the current structure of health-care finance, which of the following is most likely to occur when the baby boom generation begins to retire and the elderly population increases rapidly during the years following 2010?

Accepted Answer

A)  The demand for health-care services will decrease. 
B)  The prices of health-care services will grow less rapidly than has been the case during the last three decades. 
C)  The real (adjusted for inflation) expenditures on Medicare and the taxes to finance the program will tend to decline. 
D)  The health-care inflation and spending growth of recent decades will continue or even accelerate. 
A)  The demand for health-care services will decrease. 
B)  The prices of health-care services will grow less rapidly than has been the case during the last three decades. 
C)  The real (adjusted for inflation) expenditures on Medicare and the taxes to finance the program will tend to decline. 
D)  The health-care inflation and spending growth of recent decades will continue or even accelerate.

Question 8

During the 2007 to 2008 period, the wage premium of union workers, when compared to similar nonunion workers, was approximately

Accepted Answer

A)  9 percent. 
B)  21 percent. 
C)  28 percent. 
D)  33 percent. 
A)  9 percent. 
B)  21 percent. 
C)  28 percent. 
D)  33 percent.

Question 9

In a democratic setting, debt financing is attractive to elected political officials because

Accepted Answer

A)  it makes it possible for them to spend on current projects favored by their constituents without having to levy current taxes. 
B)  it drives up interest rates, which encourages saving. 
C)  it leads to higher taxes in the future, which will tend to slow economic growth. 
D)  it makes the cost of government more visible, which will help voters allocate government spending more efficiently. 
A)  it makes it possible for them to spend on current projects favored by their constituents without having to levy current taxes. 
B)  it drives up interest rates, which encourages saving. 
C)  it leads to higher taxes in the future, which will tend to slow economic growth. 
D)  it makes the cost of government more visible, which will help voters allocate government spending more efficiently.

Question 10

"The Great Depression was caused by the 1929 stock market crash." Which of the following is an indication that this statement is false?

Accepted Answer

A)  The stock market had regained most of its losses from the October 1929 crash by April 1930. 
B)  The recessionary conditions actually began in the mid-1920s before the stock market crash. 
C)  The Great Depression was a result of government failure to intervene in market activity. 
D)  Economic theory indicates that a reduction in stock prices would reduce the consumer price index and thereby stimulate output and employment. 
A)  The stock market had regained most of its losses from the October 1929 crash by April 1930. 
B)  The recessionary conditions actually began in the mid-1920s before the stock market crash. 
C)  The Great Depression was a result of government failure to intervene in market activity. 
D)  Economic theory indicates that a reduction in stock prices would reduce the consumer price index and thereby stimulate output and employment.

Question 11

The classic resource study of Barnett and Morse found that

Accepted Answer

A)  resource costs have been rising at such a rate that, within fifty years, the prices of most natural resources will be exorbitant. 
B)  the current proved reserves of most minerals are becoming perilously low. 
C)  resource prices declined between 1870 and 1920, but since 1920 the relative price of natural resources has been increasing at an annual rate of approximately 3.5 percent. 
D)  technology and developing substitutes outran our use of scarce natural resources during the last century, so that relative resource prices have declined. 
A)  resource costs have been rising at such a rate that, within fifty years, the prices of most natural resources will be exorbitant. 
B)  the current proved reserves of most minerals are becoming perilously low. 
C)  resource prices declined between 1870 and 1920, but since 1920 the relative price of natural resources has been increasing at an annual rate of approximately 3.5 percent. 
D)  technology and developing substitutes outran our use of scarce natural resources during the last century, so that relative resource prices have declined.

Question 12

Which of the following grew rapidly during the years following the passage of the Medicare and Medicaid programs?

Accepted Answer

A)  the share of healthcare expenditures financed by third parties 
B)  the prices of healthcare relative to the prices of other goods and services 
C)  expenditures on healthcare as a share of the economy 
D)  all of the above 
A)  the share of healthcare expenditures financed by third parties 
B)  the prices of healthcare relative to the prices of other goods and services 
C)  expenditures on healthcare as a share of the economy 
D)  all of the above

Question 13

Between 1960 and 2010, the proportion of workers belonging to a union

Accepted Answer

A)  decreased substantially in the private sector. 
B)  was approximately constant in the private sector. 
C)  decreased substantially in the government sector. 
D)  was approximately constant in the government sector. 
A)  decreased substantially in the private sector. 
B)  was approximately constant in the private sector. 
C)  decreased substantially in the government sector. 
D)  was approximately constant in the government sector.

Question 14

Regarding wealth and environmental quality,

Accepted Answer

A)  richer people are more willing to make sacrifices to gain greater environmental quality. 
B)  poor nations are less resilient when faced with the threats caused by environmental degradation. 
C)  richer people are more able to make sacrifices to gain greater environmental quality. 
D)  all of the above 
A)  richer people are more willing to make sacrifices to gain greater environmental quality. 
B)  poor nations are less resilient when faced with the threats caused by environmental degradation. 
C)  richer people are more able to make sacrifices to gain greater environmental quality. 
D)  all of the above

Question 15

Between 1970 and 2009, the achievement scores of American students ____, and real spending per student in American public elementary and secondary schools ____.

Accepted Answer

A)  rose; fell 
B)  rose; rose 
C)  fell; rose 
D)  fell; fell 
A)  rose; fell 
B)  rose; rose 
C)  fell; rose 
D)  fell; fell

Question 16

The demand for unionized labor will generally be more elastic, and it will be more difficult for the union to achieve above-equilibrium wages when

Accepted Answer

A)  there are many close substitutes for the unionized workers. 
B)  trade barriers limit the importation of the product produced by the unionized workers. 
C)  the cost of employing the unionized workers is a small part of the total cost of product that they produce. 
D)  the demand for the product produced by the unionized workers is highly inelastic. 
A)  there are many close substitutes for the unionized workers. 
B)  trade barriers limit the importation of the product produced by the unionized workers. 
C)  the cost of employing the unionized workers is a small part of the total cost of product that they produce. 
D)  the demand for the product produced by the unionized workers is highly inelastic.

Question 17

Investment in a broad portfolio of stocks is most attractive for

Accepted Answer

A)  short-term investors. 
B)  long-term investors. 
C)  investors seeking a steady rate of return. 
D)  investors who will need the funds for other purposes in about 10 years. 
A)  short-term investors. 
B)  long-term investors. 
C)  investors seeking a steady rate of return. 
D)  investors who will need the funds for other purposes in about 10 years.

Question 18

What is a major objection that is usually raised against a voucher system?

Accepted Answer

A)  Students attending private schools tend to outperform their public school counterparts on standardized tests. 
B)  Voucher programs would primarily benefit low-income families. 
C)  Voucher programs will create a more heterogeneous student population. 
D)  Voucher programs would drain funds away from the public schools, and thereby cause their quality to decrease. 
A)  Students attending private schools tend to outperform their public school counterparts on standardized tests. 
B)  Voucher programs would primarily benefit low-income families. 
C)  Voucher programs will create a more heterogeneous student population. 
D)  Voucher programs would drain funds away from the public schools, and thereby cause their quality to decrease.

Question 19

Which of the following would be most likely to push stock prices higher?

Accepted Answer

A)  higher interest rates and the expectation of larger future corporate profits 
B)  higher interest rates and the expectation of smaller future corporate profits 
C)  lower interest rates and the expectation of larger future corporate profits 
D)  lower interest rates and the expectation of smaller future corporate profits 
A)  higher interest rates and the expectation of larger future corporate profits 
B)  higher interest rates and the expectation of smaller future corporate profits 
C)  lower interest rates and the expectation of larger future corporate profits 
D)  lower interest rates and the expectation of smaller future corporate profits

Question 20

Compared to the situation during the first 125 years of the United States (1790-1915), today total government expenditures are ____ share of the economy, and a greater proportion of those expenditures take place at the ____ level(s).

Accepted Answer

A)  a smaller; federal 
B)  about the same; federal 
C)  a larger; federal 
D)  a larger; state and local 
A)  a smaller; federal 
B)  about the same; federal 
C)  a larger; federal 
D)  a larger; state and local

In 2007, the labor force participation rate of women was

"If China and India continue their economic expansion, the world cannot provide enough raw materials without terrible shortages worldwide." Evaluate this statement.

Data on the relationship between the percentage of the workforce unionized and the share of national income allocated to labor suggest that unionization has

Economic theory indicates that the growth of subsidies to healthcare consumers and accompanying expansion in third-party payments will

When a park is funded by visitors, but not by taxpayers in general,

The random walk theory implies that stock prices

Given the current structure of health-care finance, which of the following is most likely to occur when the baby boom generation begins to retire and the elderly population increases rapidly during the years following 2010?

During the 2007 to 2008 period, the wage premium of union workers, when compared to similar nonunion workers, was approximately

In a democratic setting, debt financing is attractive to elected political officials because

"The Great Depression was caused by the 1929 stock market crash." Which of the following is an indication that this statement is false?

The classic resource study of Barnett and Morse found that

Which of the following grew rapidly during the years following the passage of the Medicare and Medicaid programs?

Between 1960 and 2010, the proportion of workers belonging to a union

Regarding wealth and environmental quality,

Between 1970 and 2009, the achievement scores of American students , and real spending per student in American public elementary and secondary schools .

The demand for unionized labor will generally be more elastic, and it will be more difficult for the union to achieve above-equilibrium wages when

Investment in a broad portfolio of stocks is most attractive for

What is a major objection that is usually raised against a voucher system?

Which of the following would be most likely to push stock prices higher?

Compared to the situation during the first 125 years of the United States (1790-1915), today total government expenditures are share of the economy, and a greater proportion of those expenditures take place at the level(s).

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Filters

Exam 16: Applying the Basics: Special Topics in Economics

In 2007, the labor force participation rate of women was

"If China and India continue their economic expansion, the world cannot provide enough raw materials without terrible shortages worldwide." Evaluate this statement.

Data on the relationship between the percentage of the workforce unionized and the share of national income allocated to labor suggest that unionization has

Economic theory indicates that the growth of subsidies to healthcare consumers and accompanying expansion in third-party payments will

When a park is funded by visitors, but not by taxpayers in general,

The random walk theory implies that stock prices

Given the current structure of health-care finance, which of the following is most likely to occur when the baby boom generation begins to retire and the elderly population increases rapidly during the years following 2010?

During the 2007 to 2008 period, the wage premium of union workers, when compared to similar nonunion workers, was approximately

In a democratic setting, debt financing is attractive to elected political officials because

"The Great Depression was caused by the 1929 stock market crash." Which of the following is an indication that this statement is false?

The classic resource study of Barnett and Morse found that

Which of the following grew rapidly during the years following the passage of the Medicare and Medicaid programs?

Between 1960 and 2010, the proportion of workers belonging to a union

Regarding wealth and environmental quality,

Between 1970 and 2009, the achievement scores of American students ____, and real spending per student in American public elementary and secondary schools ____.

The demand for unionized labor will generally be more elastic, and it will be more difficult for the union to achieve above-equilibrium wages when

Investment in a broad portfolio of stocks is most attractive for

What is a major objection that is usually raised against a voucher system?

Which of the following would be most likely to push stock prices higher?

Compared to the situation during the first 125 years of the United States (1790-1915), today total government expenditures are ____ share of the economy, and a greater proportion of those expenditures take place at the ____ level(s).

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Filters

Between 1970 and 2009, the achievement scores of American students , and real spending per student in American public elementary and secondary schools .

Compared to the situation during the first 125 years of the United States (1790-1915), today total government expenditures are share of the economy, and a greater proportion of those expenditures take place at the level(s).