Question 1

The National Industrial Recovery Act essentially legalized

Accepted Answer

A)  labor unions. 
B)  business cartels. 
C)  minimum wage laws. 
D)  import tariffs. 
A)  labor unions. 
B)  business cartels. 
C)  minimum wage laws. 
D)  import tariffs.

Question 2

The tragedy of the commons refers to a situation in which a resource is overexploited because it is not

Accepted Answer

A)  a common resource. 
B)  privately owned. 
C)  a public good. 
D)  scarce. 
A)  a common resource. 
B)  privately owned. 
C)  a public good. 
D)  scarce.

Question 3

When the 2010 Patient Protection and Affordable Care Act is fully implemented, it will

Accepted Answer

A)  substantially reduce the share of health care expenses paid by a third party. 
B)  require all Americans to purchase health care insurance from either a private or government source. 
C)  increase the competitiveness of the health insurance business by allowing people to purchase the insurance across state boundaries. 
D)  reduce the demand for health care and thereby lead to lower prices for health care services. 
A)  substantially reduce the share of health care expenses paid by a third party. 
B)  require all Americans to purchase health care insurance from either a private or government source. 
C)  increase the competitiveness of the health insurance business by allowing people to purchase the insurance across state boundaries. 
D)  reduce the demand for health care and thereby lead to lower prices for health care services.

Question 4

In 1960, more than half (52 percent) of federal expenditures were for national defense. In 2003, national defense accounted for approximately

Accepted Answer

A)  60 percent of the federal budget. 
B)  44 percent of the federal budget. 
C)  29 percent of the federal budget. 
D)  21 percent of the federal budget. 
A)  60 percent of the federal budget. 
B)  44 percent of the federal budget. 
C)  29 percent of the federal budget. 
D)  21 percent of the federal budget.

Question 5

The random walk theory implies that stock prices

Accepted Answer

A)  go down, then up, and then down again. 
B)  follow systematic trends. 
C)  can be forecast accurately by experts who are knowledgeable about how the stock market works. 
D)  will change as the result of unexpected factors that are virtually impossible to forecast accurately. 
A)  go down, then up, and then down again. 
B)  follow systematic trends. 
C)  can be forecast accurately by experts who are knowledgeable about how the stock market works. 
D)  will change as the result of unexpected factors that are virtually impossible to forecast accurately.

Question 6

In 2006, the income tax payments of the poorest 50 percent of Americans accounted for approximately what percent of all federal income tax revenue?

Accepted Answer

A)  3 percent 
B)  25 percent 
C)  50 percent 
D)  76 percent 
A)  3 percent 
B)  25 percent 
C)  50 percent 
D)  76 percent

Question 7

Union membership will be more attractive from the worker's viewpoint if

Accepted Answer

A)  the demand for the union labor is highly inelastic. 
B)  the supply of union labor is highly elastic. 
C)  only a few of the firms in the industry are unionized. 
D)  the membership dues charged by the union are extremely high. 
A)  the demand for the union labor is highly inelastic. 
B)  the supply of union labor is highly elastic. 
C)  only a few of the firms in the industry are unionized. 
D)  the membership dues charged by the union are extremely high.

Question 8

After a period of price stability in the 1990s, housing prices increased dramatically during 2002-2005 because

Accepted Answer

A)  regulations designed to make housing more affordable increased the demand for housing and drove housing prices upward. 
B)  regulations designed to make housing more affordable decreased the number of sub-prime loans and made home buying a safer investment. 
C)  mortgage lending standards tightened, and therefore mortgage loans for housing were only available to buyers purchasing highly expensive homes. 
D)  home buyers were putting more money down and requiring more return on their investment, driving housing prices up. 
A)  regulations designed to make housing more affordable increased the demand for housing and drove housing prices upward. 
B)  regulations designed to make housing more affordable decreased the number of sub-prime loans and made home buying a safer investment. 
C)  mortgage lending standards tightened, and therefore mortgage loans for housing were only available to buyers purchasing highly expensive homes. 
D)  home buyers were putting more money down and requiring more return on their investment, driving housing prices up.

Question 9

A school voucher program targeted towards low- and middle-income families would cause

Accepted Answer

A)  racial and economic segregation among schools to fall. 
B)  per-pupil funding in the public schools to fall. 
C)  salaries for outstanding teachers to fall. 
D)  competition between public and private schools to fall. 
A)  racial and economic segregation among schools to fall. 
B)  per-pupil funding in the public schools to fall. 
C)  salaries for outstanding teachers to fall. 
D)  competition between public and private schools to fall.

Question 10

Monetary policy from 1929 to 1933, and again in 1937 to 1938, was characterized by

Accepted Answer

A)  monetary expansion, which led to deflation. 
B)  monetary contraction, which led to deflation. 
C)  monetary expansion, which led to inflation. 
D)  monetary contraction, which led to inflation. 
A)  monetary expansion, which led to deflation. 
B)  monetary contraction, which led to deflation. 
C)  monetary expansion, which led to inflation. 
D)  monetary contraction, which led to inflation.

Question 11

Which of the following contributes to the poor performance of the healthcare industry?

Accepted Answer

A)  An increasing share of healthcare costs is paid for directly by consumers. 
B)  The tax system discourages the purchase of healthcare through employers, while offering advantages to those who purchase healthcare plans directly. 
C)  State regulations often force insurers to cover items such as in-vitro fertilization, drug rehabilitation, and marriage counseling, which drive up insurance costs. 
D)  State regulations make it attractive for health insurers to provide only low-cost, catastrophic health insurance. 
A)  An increasing share of healthcare costs is paid for directly by consumers. 
B)  The tax system discourages the purchase of healthcare through employers, while offering advantages to those who purchase healthcare plans directly. 
C)  State regulations often force insurers to cover items such as in-vitro fertilization, drug rehabilitation, and marriage counseling, which drive up insurance costs. 
D)  State regulations make it attractive for health insurers to provide only low-cost, catastrophic health insurance.

Question 12

When a highly valued resource cannot be easily traded, as is often true with water flowing in a river, then

Accepted Answer

A)  it will not be hoarded by the rich, but will be available to all on an equal basis. 
B)  we can expect shortages from time to time, and conflicts over access to its use. 
C)  its price will be low as a result. 
D)  markets in the resource will clear more easily, without greed and profit to get in the way. 
A)  it will not be hoarded by the rich, but will be available to all on an equal basis. 
B)  we can expect shortages from time to time, and conflicts over access to its use. 
C)  its price will be low as a result. 
D)  markets in the resource will clear more easily, without greed and profit to get in the way.

Question 13

An analysis of stock market prices during 1929 to 1930 indicates that

Accepted Answer

A)  the stock market crash of October 1929 was the cause of the Great Depression of the 1930s. 
B)  stock market prices rose steadily throughout the entire year of 1930. 
C)  after recovering most of its value from the crash of October 1929, stock prices again declined steadily during the debate and passage of the Smoot-Hawley trade bill. 
D)  after the crash of October 1929, the Smoot-Hawley trade bill marked the beginning of a steady recovery of the stock market. 
A)  the stock market crash of October 1929 was the cause of the Great Depression of the 1930s. 
B)  stock market prices rose steadily throughout the entire year of 1930. 
C)  after recovering most of its value from the crash of October 1929, stock prices again declined steadily during the debate and passage of the Smoot-Hawley trade bill. 
D)  after the crash of October 1929, the Smoot-Hawley trade bill marked the beginning of a steady recovery of the stock market.

Question 14

Which of the following is true?

Accepted Answer

A)  Employers who discriminate against women will have lower costs than rival firms that hire employees strictly on the basis of merit (productivity). 
B)  If employers can hire equally productive female employees at a lower wage than males, the profit motive gives them a strong incentive to do so. 
C)  The female/male earnings ratio is higher for persons who are married than for those who remain single. 
D)  Both a and c are true. 
A)  Employers who discriminate against women will have lower costs than rival firms that hire employees strictly on the basis of merit (productivity). 
B)  If employers can hire equally productive female employees at a lower wage than males, the profit motive gives them a strong incentive to do so. 
C)  The female/male earnings ratio is higher for persons who are married than for those who remain single. 
D)  Both a and c are true.

Question 15

Non-renewable resources are those that

Accepted Answer

A)  are not renewed by nature, but their supply can be easily expanded by humans. 
B)  are naturally renewed by nature; timber provides an example. 
C)  are not renewed by nature, at a significant rate. 
D)  cannot be recycled, by their very nature. 
A)  are not renewed by nature, but their supply can be easily expanded by humans. 
B)  are naturally renewed by nature; timber provides an example. 
C)  are not renewed by nature, at a significant rate. 
D)  cannot be recycled, by their very nature.

Question 16

Firms will be much more willing to consent to significant wage increases when

Accepted Answer

A)  right-to-work laws are present. 
B)  the demand for the final product is weak. 
C)  the firm has low product inventory. 
D)  the demand for the final product is elastic. 
A)  right-to-work laws are present. 
B)  the demand for the final product is weak. 
C)  the firm has low product inventory. 
D)  the demand for the final product is elastic.

Question 17

Compared to 1980, the top marginal federal income tax rate today is

Accepted Answer

A)  substantially lower and the rate structure is less progressive than in 1980. 
B)  substantially lower and the rate structure is more progressive than in 1980. 
C)  substantially higher and the rate structure is less progressive than in 1980. 
D)  substantially higher and the rate structure is more progressive than in 1980. 
A)  substantially lower and the rate structure is less progressive than in 1980. 
B)  substantially lower and the rate structure is more progressive than in 1980. 
C)  substantially higher and the rate structure is less progressive than in 1980. 
D)  substantially higher and the rate structure is more progressive than in 1980.

Question 18

Which of the following contributed to the rising mortgage default and foreclosure rates and the eventual economic crisis of 2008?

Accepted Answer

A)  tightened mortgage lending standards and the reduction of loanable funds during 2001-2005 
B)  the increase in the greed of Wall Street bankers and other commercial lenders 
C)  the substantial increase in sub-prime and adjustable rate mortgages as a share of the total during 2001-2006 
D)  the increase in the household savings rate during the two decades following 1985 
E)  the increase in fixed rate mortgages as a share of the total during the decade prior to the crisis 
A)  tightened mortgage lending standards and the reduction of loanable funds during 2001-2005 
B)  the increase in the greed of Wall Street bankers and other commercial lenders 
C)  the substantial increase in sub-prime and adjustable rate mortgages as a share of the total during 2001-2006 
D)  the increase in the household savings rate during the two decades following 1985 
E)  the increase in fixed rate mortgages as a share of the total during the decade prior to the crisis

Question 19

The burning of fossil fuels may cause global warming. Considering both the science and the reactions of crops, human health, and other factors across differing climates, economists generally agree that

Accepted Answer

A)  to protect the interests of future generations, the buildup of carbon dioxide must soon be stopped. 
B)  any climate change, if it actually occurs, will be extremely costly. 
C)  there will be both costs and benefits if the climate warms. 
D)  all people will be worse off if the climate warms. 
A)  to protect the interests of future generations, the buildup of carbon dioxide must soon be stopped. 
B)  any climate change, if it actually occurs, will be extremely costly. 
C)  there will be both costs and benefits if the climate warms. 
D)  all people will be worse off if the climate warms.

Question 20

Which of the following most clearly distinguishes government from a private business?

Accepted Answer

A)  production of goods and services-private businesses produce things; governments do not 
B)  the power to tax 
C)  the hiring of law enforcement employees to protect property rights 
D)  selfishness-the owners and managers of private businesses are selfish; government officials are not 
A)  production of goods and services-private businesses produce things; governments do not 
B)  the power to tax 
C)  the hiring of law enforcement employees to protect property rights 
D)  selfishness-the owners and managers of private businesses are selfish; government officials are not

The National Industrial Recovery Act essentially legalized

The tragedy of the commons refers to a situation in which a resource is overexploited because it is not

When the 2010 Patient Protection and Affordable Care Act is fully implemented, it will

In 1960, more than half (52 percent) of federal expenditures were for national defense. In 2003, national defense accounted for approximately

The random walk theory implies that stock prices

In 2006, the income tax payments of the poorest 50 percent of Americans accounted for approximately what percent of all federal income tax revenue?

Union membership will be more attractive from the worker's viewpoint if

After a period of price stability in the 1990s, housing prices increased dramatically during 2002-2005 because

A school voucher program targeted towards low- and middle-income families would cause

Monetary policy from 1929 to 1933, and again in 1937 to 1938, was characterized by

Which of the following contributes to the poor performance of the healthcare industry?

When a highly valued resource cannot be easily traded, as is often true with water flowing in a river, then

An analysis of stock market prices during 1929 to 1930 indicates that

Which of the following is true?

Non-renewable resources are those that

Firms will be much more willing to consent to significant wage increases when

Compared to 1980, the top marginal federal income tax rate today is

Which of the following contributed to the rising mortgage default and foreclosure rates and the eventual economic crisis of 2008?

The burning of fossil fuels may cause global warming. Considering both the science and the reactions of crops, human health, and other factors across differing climates, economists generally agree that

Which of the following most clearly distinguishes government from a private business?

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

The National Industrial Recovery Act essentially legalized

The tragedy of the commons refers to a situation in which a resource is overexploited because it is not

When the 2010 Patient Protection and Affordable Care Act is fully implemented, it will

In 1960, more than half (52 percent) of federal expenditures were for national defense. In 2003, national defense accounted for approximately

The random walk theory implies that stock prices

In 2006, the income tax payments of the poorest 50 percent of Americans accounted for approximately what percent of all federal income tax revenue?

Union membership will be more attractive from the worker's viewpoint if

After a period of price stability in the 1990s, housing prices increased dramatically during 2002-2005 because

A school voucher program targeted towards low- and middle-income families would cause

Monetary policy from 1929 to 1933, and again in 1937 to 1938, was characterized by

Which of the following contributes to the poor performance of the healthcare industry?

When a highly valued resource cannot be easily traded, as is often true with water flowing in a river, then

An analysis of stock market prices during 1929 to 1930 indicates that

Which of the following is true?

Non-renewable resources are those that

Firms will be much more willing to consent to significant wage increases when

Compared to 1980, the top marginal federal income tax rate today is

Which of the following contributed to the rising mortgage default and foreclosure rates and the eventual economic crisis of 2008?

The burning of fossil fuels may cause global warming. Considering both the science and the reactions of crops, human health, and other factors across differing climates, economists generally agree that

Which of the following most clearly distinguishes government from a private business?

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