Question 1

Which of the following is true?

Accepted Answer

A)  Real spending per student in American public elementary and secondary schools has fallen since 1970. 
B)  Spending per student in American public elementary schools is lower than that of most developed countries. 
C)  The achievement scores of American students are lower than those of students in most developed countries. 
D)  The achievement scores of American students have risen since the late 1960s. 
A)  Real spending per student in American public elementary and secondary schools has fallen since 1970. 
B)  Spending per student in American public elementary schools is lower than that of most developed countries. 
C)  The achievement scores of American students are lower than those of students in most developed countries. 
D)  The achievement scores of American students have risen since the late 1960s.

Question 2

Resource markets are like any other market in that

Accepted Answer

A)  the increase in quantity supplied in response to a higher price will generally be greater in the long run than in the short run. 
B)  the amount demanded of a resource is inversely related to its price. 
C)  higher prices encourage people to search for substitutes. 
D)  all of the above are correct. 
A)  the increase in quantity supplied in response to a higher price will generally be greater in the long run than in the short run. 
B)  the amount demanded of a resource is inversely related to its price. 
C)  higher prices encourage people to search for substitutes. 
D)  all of the above are correct.

Question 3

If the supply of health-care services is highly inelastic and larger government subsidies lead to an increase in the demand for the services,

Accepted Answer

A)  the prices of health-care services will rise by only a small amount, but the quantity supplied will increase substantially. 
B)  the prices of health-care services will rise substantially, but the quantity supplied will increase by only a small amount. 
C)  both health-care prices and the quantity of the services supplied will increase substantially. 
D)  the prices of health-care services will decline, but there will be only a small change in the quantity supplied. 
A)  the prices of health-care services will rise by only a small amount, but the quantity supplied will increase substantially. 
B)  the prices of health-care services will rise substantially, but the quantity supplied will increase by only a small amount. 
C)  both health-care prices and the quantity of the services supplied will increase substantially. 
D)  the prices of health-care services will decline, but there will be only a small change in the quantity supplied.

Question 4

As the football season approaches, the threat of a player strike would give

Accepted Answer

A)  both players and management an incentive to bargain seriously. 
B)  only the players an incentive to bargain seriously. 
C)  only management an incentive to bargain seriously. 
D)  neither party much incentive to bargain seriously. 
A)  both players and management an incentive to bargain seriously. 
B)  only the players an incentive to bargain seriously. 
C)  only management an incentive to bargain seriously. 
D)  neither party much incentive to bargain seriously.

Question 5

Which of the following is not one of the channels through which a union may raise wages?

Accepted Answer

A)  supply restrictions 
B)  increasing the demand for union labor 
C)  more competitive product pricing 
D)  bargaining power 
A)  supply restrictions 
B)  increasing the demand for union labor 
C)  more competitive product pricing 
D)  bargaining power

Question 6

Buying shares of corporate stock tends to be more risky when

Accepted Answer

A)  the stock of a single corporation is purchased. 
B)  the stock may have to be sold within a few months. 
C)  all stocks bought are in the same industry. 
D)  all of the above are true. 
A)  the stock of a single corporation is purchased. 
B)  the stock may have to be sold within a few months. 
C)  all stocks bought are in the same industry. 
D)  all of the above are true.

Question 7

During a recession, the political incentive structure will encourage politicians to

Accepted Answer

A)  undertake sound economic policies that are consistent with stability and growth. 
B)  adopt any policies, even bad ones, that give the appearance of taking action. 
C)  undertake policies that promote long-term economic growth rather than short-term benefits. 
D)  do nothing and let the recession run its course. 
A)  undertake sound economic policies that are consistent with stability and growth. 
B)  adopt any policies, even bad ones, that give the appearance of taking action. 
C)  undertake policies that promote long-term economic growth rather than short-term benefits. 
D)  do nothing and let the recession run its course.

Question 8

Which of the following will tend to lower the ability of a union to increase the wages of its members?

Accepted Answer

A)  strong competition from nonunion labor 
B)  threat of a strike 
C)  increased demand for union labor 
D)  all of the above 
A)  strong competition from nonunion labor 
B)  threat of a strike 
C)  increased demand for union labor 
D)  all of the above

Question 9

When the Social Security system begins running a deficit during the years following 2018, the bonds in the trust fund will be drawn down. The funds to redeem these bonds will have to come from

Accepted Answer

A)  higher taxes, spending reductions in other programs, or additional government borrowing. 
B)  the surplus funds deposited in governmental banking accounts. 
C)  equity capital being liquidated. 
D)  the sale of private equities and securities that the government has been purchasing with the funds. 
A)  higher taxes, spending reductions in other programs, or additional government borrowing. 
B)  the surplus funds deposited in governmental banking accounts. 
C)  equity capital being liquidated. 
D)  the sale of private equities and securities that the government has been purchasing with the funds.

Question 10

Which of the following was most responsible for bringing the Great Depression to an end?

Accepted Answer

A)  the increase in industrial demand due to the military build-up prior to World War II 
B)  the expansionary monetary policy of the Fed during the 1930s 
C)  the New Deal policies that expanded government spending, stimulated demand, and increased output 
D)  the increase in import tariffs that saved jobs and expanded total employment 
A)  the increase in industrial demand due to the military build-up prior to World War II 
B)  the expansionary monetary policy of the Fed during the 1930s 
C)  the New Deal policies that expanded government spending, stimulated demand, and increased output 
D)  the increase in import tariffs that saved jobs and expanded total employment

Question 11

If an employer could really hire women who were willing and able to do the same work as men for 20 percent less, profit-seeking employers would have

Accepted Answer

A)  a strong incentive to hire more women, which would shrink this differential. 
B)  little incentive to hire women, since hiring men would still be more profitable. 
C)  a strong incentive to hire fewer women, and this would reduce the wage gap between men and women. 
D)  a strong incentive to hire fewer women, which would expand the wage gap between men and women to an even higher level. 
A)  a strong incentive to hire more women, which would shrink this differential. 
B)  little incentive to hire women, since hiring men would still be more profitable. 
C)  a strong incentive to hire fewer women, and this would reduce the wage gap between men and women. 
D)  a strong incentive to hire fewer women, which would expand the wage gap between men and women to an even higher level.

Question 12

When is the definition and enforcement of property rights especially difficult?

Accepted Answer

A)  when many polluters harm a large group of people by emitting the same pollutant 
B)  when a single polluter is harming a single person or entity 
C)  when land is owned by a corporation 
D)  when the benefits of prosecution are clear 
A)  when many polluters harm a large group of people by emitting the same pollutant 
B)  when a single polluter is harming a single person or entity 
C)  when land is owned by a corporation 
D)  when the benefits of prosecution are clear

Question 13

Since 1970, union membership, as a percent of the labor force,

Accepted Answer

A)  has remained virtually unchanged. 
B)  has increased, as more government workers have decided to unionize. 
C)  has decreased. 
D)  has gone through wild swings both up and down. 
A)  has remained virtually unchanged. 
B)  has increased, as more government workers have decided to unionize. 
C)  has decreased. 
D)  has gone through wild swings both up and down.

Question 14

Fannie Mae and Freddie Mac held a competitive advantage over other mortgage lenders primarily because

Accepted Answer

A)  they were established as non-profit entities and thus did not need to show that they were profitable. 
B)  they could borrow funds cheaper than other lenders because their bonds were perceived to be backed by the federal government. 
C)  they were allowed to institute higher loan standards than other banks and mortgage lenders. 
D)  they were exempt from federal regulations monitoring lending practices. 
A)  they were established as non-profit entities and thus did not need to show that they were profitable. 
B)  they could borrow funds cheaper than other lenders because their bonds were perceived to be backed by the federal government. 
C)  they were allowed to institute higher loan standards than other banks and mortgage lenders. 
D)  they were exempt from federal regulations monitoring lending practices.

Question 15

Between 2001-2005,

Accepted Answer

A)  both sub-prime and adjustable rate mortgages decreased as a share of the total. 
B)  both sub-prime and adjustable rate mortgages increased as a share of the total. 
C)  sub-prime loans increased, but adjustable rate loans decreased as a share of the total. 
D)  sub-prime loans decreased, but adjustable rate loans increased as a share of the total. 
A)  both sub-prime and adjustable rate mortgages decreased as a share of the total. 
B)  both sub-prime and adjustable rate mortgages increased as a share of the total. 
C)  sub-prime loans increased, but adjustable rate loans decreased as a share of the total. 
D)  sub-prime loans decreased, but adjustable rate loans increased as a share of the total.

Question 16

"I am in favor of increasing the corporate income tax. Businesses should shoulder a larger share of the tax burden." This statement is

Accepted Answer

A)  essentially correct. 
B)  false; businesses already shoulder most of the tax burden in the United States. 
C)  false; economic analysis indicates that the individual should pay more taxes and businesses less. 
D)  misleading; all taxes, including those levied on businesses, are paid by people. 
A)  essentially correct. 
B)  false; businesses already shoulder most of the tax burden in the United States. 
C)  false; economic analysis indicates that the individual should pay more taxes and businesses less. 
D)  misleading; all taxes, including those levied on businesses, are paid by people.

Question 17

Which of the following contributed to the severity of the Great Depression in the 1930s?

Accepted Answer

A)  large increases in tax rates in 1932 and again in 1936 
B)  large increases in the money supply during the early 1930s 
C)  a reduction in tariffs protecting many U.S. industries 
D)  a substantial tax rate reduction, which led to large deficits and high interest rates during the early 1930s 
A)  large increases in tax rates in 1932 and again in 1936 
B)  large increases in the money supply during the early 1930s 
C)  a reduction in tariffs protecting many U.S. industries 
D)  a substantial tax rate reduction, which led to large deficits and high interest rates during the early 1930s

Question 18

The overall trend in resource prices has been

Accepted Answer

A)  upward. 
B)  downward. 
C)  constant. 
D)  increasing exponentially. 
A)  upward. 
B)  downward. 
C)  constant. 
D)  increasing exponentially.

Question 19

The 18th century Scottish philosopher Alexander Tytler argued that democracy

Accepted Answer

A)  would survive indefinitely into the future once it was established. 
B)  was the only form of government that would be able to control excessive government spending financed by debt. 
C)  would tend to collapse from excessive debt once a majority of voters discovered they could vote themselves benefits at the expense of others. 
D)  would lead to persistent government surpluses because elected political officials would find the surpluses attractive relative to budget deficits. 
A)  would survive indefinitely into the future once it was established. 
B)  was the only form of government that would be able to control excessive government spending financed by debt. 
C)  would tend to collapse from excessive debt once a majority of voters discovered they could vote themselves benefits at the expense of others. 
D)  would lead to persistent government surpluses because elected political officials would find the surpluses attractive relative to budget deficits.

Question 20

In 2008, how many states permitted public school choice in some or all school districts?

Accepted Answer

A)  25 
B)  30 
C)  35 
D)  40 
A)  25 
B)  30 
C)  35 
D)  40

Which of the following is true?

Resource markets are like any other market in that

If the supply of health-care services is highly inelastic and larger government subsidies lead to an increase in the demand for the services,

As the football season approaches, the threat of a player strike would give

Which of the following is not one of the channels through which a union may raise wages?

Buying shares of corporate stock tends to be more risky when

During a recession, the political incentive structure will encourage politicians to

Which of the following will tend to lower the ability of a union to increase the wages of its members?

When the Social Security system begins running a deficit during the years following 2018, the bonds in the trust fund will be drawn down. The funds to redeem these bonds will have to come from

Which of the following was most responsible for bringing the Great Depression to an end?

If an employer could really hire women who were willing and able to do the same work as men for 20 percent less, profit-seeking employers would have

When is the definition and enforcement of property rights especially difficult?

Since 1970, union membership, as a percent of the labor force,

Fannie Mae and Freddie Mac held a competitive advantage over other mortgage lenders primarily because

Between 2001-2005,

"I am in favor of increasing the corporate income tax. Businesses should shoulder a larger share of the tax burden." This statement is

Which of the following contributed to the severity of the Great Depression in the 1930s?

The overall trend in resource prices has been

The 18^th century Scottish philosopher Alexander Tytler argued that democracy

In 2008, how many states permitted public school choice in some or all school districts?

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

Which of the following is true?

Resource markets are like any other market in that

If the supply of health-care services is highly inelastic and larger government subsidies lead to an increase in the demand for the services,

As the football season approaches, the threat of a player strike would give

Which of the following is not one of the channels through which a union may raise wages?

Buying shares of corporate stock tends to be more risky when

During a recession, the political incentive structure will encourage politicians to

Which of the following will tend to lower the ability of a union to increase the wages of its members?

When the Social Security system begins running a deficit during the years following 2018, the bonds in the trust fund will be drawn down. The funds to redeem these bonds will have to come from

Which of the following was most responsible for bringing the Great Depression to an end?

If an employer could really hire women who were willing and able to do the same work as men for 20 percent less, profit-seeking employers would have

When is the definition and enforcement of property rights especially difficult?

Since 1970, union membership, as a percent of the labor force,

Fannie Mae and Freddie Mac held a competitive advantage over other mortgage lenders primarily because

Between 2001-2005,

"I am in favor of increasing the corporate income tax. Businesses should shoulder a larger share of the tax burden." This statement is

Which of the following contributed to the severity of the Great Depression in the 1930s?

The overall trend in resource prices has been

The 18th century Scottish philosopher Alexander Tytler argued that democracy

In 2008, how many states permitted public school choice in some or all school districts?

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

The 18^th century Scottish philosopher Alexander Tytler argued that democracy