Question 1

What is the economically efficient level of emissions from a particular source?

Accepted Answer

A)  zero 
B)  the quantity at which the marginal cost to achieve lower emissions equals the additional value of reducing pollution 
C)  the level determined by EPA (Environmental Protection Agency) scientists that will save the most lives 
D)  the level emitted when markets are allowed to function with no government regulation 
A)  zero 
B)  the quantity at which the marginal cost to achieve lower emissions equals the additional value of reducing pollution 
C)  the level determined by EPA (Environmental Protection Agency) scientists that will save the most lives 
D)  the level emitted when markets are allowed to function with no government regulation

Question 2

The Great Depression was an era marked by

Accepted Answer

A)  steady growth in GDP and a decline in the rate of unemployment. 
B)  a prolonged period of high unemployment and output substantially below its potential. 
C)  a large decline in the stock market followed by a steady recovery. 
D)  a failure of expansionary monetary policy to stimulate output and employment. 
A)  steady growth in GDP and a decline in the rate of unemployment. 
B)  a prolonged period of high unemployment and output substantially below its potential. 
C)  a large decline in the stock market followed by a steady recovery. 
D)  a failure of expansionary monetary policy to stimulate output and employment.

Question 3

Third-party payments by either the government or an insurance company accounted for ____ of the 2009 healthcare expenditures, compared to ____ paid by third parties in 1960.

Accepted Answer

A)  40 percent; 20 percent 
B)  20 percent; 40 percent 
C)  86 percent; 45 percent 
D)  96 percent; 73 percent 
A)  40 percent; 20 percent 
B)  20 percent; 40 percent 
C)  86 percent; 45 percent 
D)  96 percent; 73 percent

Question 4

When it comes to environmental policy,

Accepted Answer

A)  choices are influenced by the costs and benefits that decision makers expect. 
B)  values are subjective, as in other areas of the economy. 
C)  policy choices often have unintended secondary effects. 
D)  all of the above are true. 
A)  choices are influenced by the costs and benefits that decision makers expect. 
B)  values are subjective, as in other areas of the economy. 
C)  policy choices often have unintended secondary effects. 
D)  all of the above are true.

Question 5

What percentage of the total government expenditures of the United States is undertaken at the federal level?

Accepted Answer

A)  approximately 20 percent 
B)  approximately 40 percent 
C)  approximately 60 percent 
D)  approximately 80 percent 
A)  approximately 20 percent 
B)  approximately 40 percent 
C)  approximately 60 percent 
D)  approximately 80 percent

Question 6

Which of the following is true about those graduating with college degrees?

Accepted Answer

A)  The proportion of college degrees earned by women has been declining in recent decades. 
B)  The proportion of college degrees earned by women has been virtually constant during the last four decades. 
C)  In 2008, only about 42 percent of those graduating from college were women. 
D)  In 2008, only about 42 percent of those graduating from college were men. 
A)  The proportion of college degrees earned by women has been declining in recent decades. 
B)  The proportion of college degrees earned by women has been virtually constant during the last four decades. 
C)  In 2008, only about 42 percent of those graduating from college were women. 
D)  In 2008, only about 42 percent of those graduating from college were men.

Question 7

The secondary mortgage market is the market

Accepted Answer

A)  designated specifically for prime and other low risk mortgages. 
B)  designated specifically for sub-prime and other high risk mortgages. 
C)  where mortgages originated by a lender are sold to another financial institution. 
D)  where home purchasers borrow funds from mortgage originators. 
A)  designated specifically for prime and other low risk mortgages. 
B)  designated specifically for sub-prime and other high risk mortgages. 
C)  where mortgages originated by a lender are sold to another financial institution. 
D)  where home purchasers borrow funds from mortgage originators.

Question 8

If a third party pays a larger and larger share of the purchasing price of a good, economic theory indicates that

Accepted Answer

A)  the total expenditures (including those made by the third party) on the good will decline. 
B)  the demand for the good will decrease. 
C)  consumers will have a stronger incentive to economize on their use of the good. 
D)  suppliers will have less incentive to provide the good at low prices. 
A)  the total expenditures (including those made by the third party) on the good will decline. 
B)  the demand for the good will decrease. 
C)  consumers will have a stronger incentive to economize on their use of the good. 
D)  suppliers will have less incentive to provide the good at low prices.

Question 9

Did the fiscal policy of the 1930s bring an end to the Great Depression?

Accepted Answer

A)  No, government spending and budget deficits as a share of GDP were relatively small during the 1930s, and there is little evidence that fiscal policy did much to stimulate output. 
B)  No, even though budget deficits steadily rose from 2 percent of GDP in the early 1930s to more than 10 percent of GDP in 1939, this expansionary fiscal policy had little effect on output. 
C)  Yes, even though the spending programs of the New Deal led to budget deficits, they also led to a steady reduction in the rate of unemployment during the latter half of the 1930s. 
D)  Yes, the fiscal policy that kept the federal budget balanced throughout the 1930s created a stable business climate and eventually stimulated investment. 
A)  No, government spending and budget deficits as a share of GDP were relatively small during the 1930s, and there is little evidence that fiscal policy did much to stimulate output. 
B)  No, even though budget deficits steadily rose from 2 percent of GDP in the early 1930s to more than 10 percent of GDP in 1939, this expansionary fiscal policy had little effect on output. 
C)  Yes, even though the spending programs of the New Deal led to budget deficits, they also led to a steady reduction in the rate of unemployment during the latter half of the 1930s. 
D)  Yes, the fiscal policy that kept the federal budget balanced throughout the 1930s created a stable business climate and eventually stimulated investment.

Question 10

Which of the following factors will reduce considerably the ability of a union to raise the wages of its workers?

Accepted Answer

A)  an elastic demand for the goods produced by union labor 
B)  a five-year apprenticeship before one can qualify for jobs held by union members 
C)  high tariffs on goods produced by the union labor 
D)  favoritism in the allocation of government contracts to firms that employ union labor 
A)  an elastic demand for the goods produced by union labor 
B)  a five-year apprenticeship before one can qualify for jobs held by union members 
C)  high tariffs on goods produced by the union labor 
D)  favoritism in the allocation of government contracts to firms that employ union labor

Question 11

Given the current tax rate structure and promised benefit levels, persons that are currently 40 years old or younger can expect to earn approximately what real rate of return on their Social Security contributions?

Accepted Answer

A)  0 percent 
B)  2 percent 
C)  10 to 12 percent 
D)  15 to 20 percent 
A)  0 percent 
B)  2 percent 
C)  10 to 12 percent 
D)  15 to 20 percent

Question 12

Which of the following is true?

Accepted Answer

A)  All of the current revenues flowing into the Social Security system are needed for benefit payments to current retirees. 
B)  If the Social Security surplus was used to pay down the privately held federal debt, this would reduce future taxes and, thereby, make it easier to deal with the retirement of the baby boomers. 
C)  During the 1980s and 1990s, most of the social security surplus was used to reduce the national debt. 
D)  When the Social Security surplus is used to cover the current operating expenses of the federal government, it will make it easier for future taxpayers to provide promised Social Security benefits to baby boomers. 
A)  All of the current revenues flowing into the Social Security system are needed for benefit payments to current retirees. 
B)  If the Social Security surplus was used to pay down the privately held federal debt, this would reduce future taxes and, thereby, make it easier to deal with the retirement of the baby boomers. 
C)  During the 1980s and 1990s, most of the social security surplus was used to reduce the national debt. 
D)  When the Social Security surplus is used to cover the current operating expenses of the federal government, it will make it easier for future taxpayers to provide promised Social Security benefits to baby boomers.

Question 13

What is the primary source of higher real wages?

Accepted Answer

A)  labor unions 
B)  the threat of a strike by a union 
C)  increases in productivity 
D)  increases in the supply of money 
A)  labor unions 
B)  the threat of a strike by a union 
C)  increases in productivity 
D)  increases in the supply of money

Question 14

Evaluate the following: "Employers who discriminate against women will have lower costs than rival firms that hire employees strictly on the basis of merit (productivity)."

Accepted Answer

Economic theory suggests that this view

Question 15

Which of the following statements is correct?

Accepted Answer

A)  Approximately 50 percent of our national income is allocated to human capital, while the remaining 50 percent is allocated to physical capital in the form of rents, interest, and corporate profits. 
B)  As union membership as a share of the U.S. labor force has declined during the last three decades, the share of national income allocated to physical capital has risen. 
C)  Unions have consistently opposed minimum wage legislation because it tends to cause unemployment. 
D)  During the past several decades, the share of output going to capital has been virtually constant, even though union membership as a share of the labor force has decreased. 
A)  Approximately 50 percent of our national income is allocated to human capital, while the remaining 50 percent is allocated to physical capital in the form of rents, interest, and corporate profits. 
B)  As union membership as a share of the U.S. labor force has declined during the last three decades, the share of national income allocated to physical capital has risen. 
C)  Unions have consistently opposed minimum wage legislation because it tends to cause unemployment. 
D)  During the past several decades, the share of output going to capital has been virtually constant, even though union membership as a share of the labor force has decreased.

Question 16

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

Accepted Answer

A)  lead to higher healthcare prices. 
B)  lead to lower healthcare prices. 
C)  reduce the incentive of consumers to economize. 
D)  increase the incentive of healthcare providers to provide their services at a low cost. 
E)  do both a and c above. 
A)  lead to higher healthcare prices. 
B)  lead to lower healthcare prices. 
C)  reduce the incentive of consumers to economize. 
D)  increase the incentive of healthcare providers to provide their services at a low cost. 
E)  do both a and c above.

Question 17

As the baby boom generation, born during 1946 through 1960, reaches retirement age during the 2011 through 2030 period, the number of workers per Social Security beneficiary is expected to

Accepted Answer

A)  increase to five. 
B)  remain constant at approximately seven. 
C)  decline to approximately five. 
D)  decline to approximately two. 
A)  increase to five. 
B)  remain constant at approximately seven. 
C)  decline to approximately five. 
D)  decline to approximately two.

Question 18

Compared to the 1970s and early 1980s, household debt as a share of income in 2007 has

Accepted Answer

A)  increased at a steady rate over time. 
B)  remained about the same. 
C)  more than doubled. 
D)  decreased slowly over time. 
A)  increased at a steady rate over time. 
B)  remained about the same. 
C)  more than doubled. 
D)  decreased slowly over time.

Question 19

The Social Security program is primarily a

Accepted Answer

A)  compulsory retirement income program set up on sound insurance principles. 
B)  forced-savings program where workers save during their working years and receive the principal and interest on these savings at retirement. 
C)  program designed to tax current workers in order to provide benefits for current retirees. 
D)  voluntary savings program run by the government. 
A)  compulsory retirement income program set up on sound insurance principles. 
B)  forced-savings program where workers save during their working years and receive the principal and interest on these savings at retirement. 
C)  program designed to tax current workers in order to provide benefits for current retirees. 
D)  voluntary savings program run by the government.

Question 20

Briefly explain why the Social Security system will face a "crisis" in the coming years.

Accepted Answer

The pay-as-you-go Social Security system

What is the economically efficient level of emissions from a particular source?

The Great Depression was an era marked by

Third-party payments by either the government or an insurance company accounted for of the 2009 healthcare expenditures, compared to paid by third parties in 1960.

When it comes to environmental policy,

What percentage of the total government expenditures of the United States is undertaken at the federal level?

Which of the following is true about those graduating with college degrees?

The secondary mortgage market is the market

If a third party pays a larger and larger share of the purchasing price of a good, economic theory indicates that

Did the fiscal policy of the 1930s bring an end to the Great Depression?

Which of the following factors will reduce considerably the ability of a union to raise the wages of its workers?

Given the current tax rate structure and promised benefit levels, persons that are currently 40 years old or younger can expect to earn approximately what real rate of return on their Social Security contributions?

Which of the following is true?

What is the primary source of higher real wages?

Evaluate the following: "Employers who discriminate against women will have lower costs than rival firms that hire employees strictly on the basis of merit (productivity)."

Which of the following statements is correct?

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

As the baby boom generation, born during 1946 through 1960, reaches retirement age during the 2011 through 2030 period, the number of workers per Social Security beneficiary is expected to

Compared to the 1970s and early 1980s, household debt as a share of income in 2007 has

The Social Security program is primarily a

Briefly explain why the Social Security system will face a "crisis" in the coming years.

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

What is the economically efficient level of emissions from a particular source?

The Great Depression was an era marked by

Third-party payments by either the government or an insurance company accounted for ____ of the 2009 healthcare expenditures, compared to ____ paid by third parties in 1960.

When it comes to environmental policy,

What percentage of the total government expenditures of the United States is undertaken at the federal level?

Which of the following is true about those graduating with college degrees?

The secondary mortgage market is the market

If a third party pays a larger and larger share of the purchasing price of a good, economic theory indicates that

Did the fiscal policy of the 1930s bring an end to the Great Depression?

Which of the following factors will reduce considerably the ability of a union to raise the wages of its workers?

Given the current tax rate structure and promised benefit levels, persons that are currently 40 years old or younger can expect to earn approximately what real rate of return on their Social Security contributions?

Which of the following is true?

What is the primary source of higher real wages?

Evaluate the following: "Employers who discriminate against women will have lower costs than rival firms that hire employees strictly on the basis of merit (productivity)."

Which of the following statements is correct?

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

As the baby boom generation, born during 1946 through 1960, reaches retirement age during the 2011 through 2030 period, the number of workers per Social Security beneficiary is expected to

Compared to the 1970s and early 1980s, household debt as a share of income in 2007 has

The Social Security program is primarily a

Briefly explain why the Social Security system will face a "crisis" in the coming years.

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

Third-party payments by either the government or an insurance company accounted for of the 2009 healthcare expenditures, compared to paid by third parties in 1960.