Contemporary Economic Problems
Exam Review
Course Introduction
This course examines the pressing economic issues facing societies today, analyzing their causes, consequences, and potential solutions from both domestic and global perspectives. Topics include unemployment, inflation, income inequality, technological change, environmental challenges, globalization, and financial crises. Through a blend of theoretical frameworks and real-world case studies, students learn to critically evaluate current economic policies and debates, understand trade-offs, and assess the impact of various policy interventions on different stakeholders. By the end of the course, students will have developed analytical tools to engage thoughtfully with modern economic challenges and policy decision-making.
Recommended Textbook
Economics of Social Issues 20th Edition by Ansel Sharp
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15 Chapters
1882 Verified Questions
1882 Flashcards
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Chapter 1: Alleviating Human Misery: The Role of Economic
Reasoning
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124 Verified Questions
124 Flashcards
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Sample Questions
Q1) The available data on various countries of the world show that there is an inverse relationship between population densities and per capita GDP.
A)True
B)False
Answer: False
Q2) When comparing the performance of economies in terms of the average well-being of their inhabitants,which measure is most appropriate?
A)Real GDP
B)GDP
C)Real GDP per capita
D)GDP per capita
E)Base year GDP
Answer: C
Q3) Capital flight from less developed to developed countries tends to offset capital infusions from developed countries.
A)True
B)False
Answer: True
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Chapter 2: Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) The State Planning Commission in China has the task of
A)Determining what goods and services should be produced
B)Determining what quantities of goods and services are produced
C)Determining the allocation of resources used in the production of goods and services
D)How the goods and services are to be distributed
E)Performing all of the tasks listed above
Answer: E
Q2) If consumers expect an increase in the price of coffee next month,what will happen to the equilibrium price and quantity of coffee this month?
A)Price will increase,quantity will decrease
B)Price will increase,quantity will increase
C)Price will decrease,quantity will decrease
D)Price will decrease,quantity will increase
E)The new equilibrium price and quantity can not be determined
Answer: B
Q3) An increase in consumer income can either increase or decrease demand for a good
A)True
B)False
Answer: True
Page 4
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Chapter 3: Government Control of Prices in Mixed Systems:
Who Are the Winners and Losers
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123 Verified Questions
123 Flashcards
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Sample Questions
Q1) Firms can offset increased wage costs due to an increase in the minimum wage by increasing efficiency.
126.Evidence indicates the minimum wage has little effect on the income distribution.
A)True
B)False
Answer: True
Q2) A change in the hours of work that occurs in response to a wage change,other things equal,is known as the
A)Supply of labor
B)Substitution effect
C)Income effect
D)Wage effect
E)Opportunity cost of labor
Answer: B
Q3) The majority of individuals support the minimum wagE.
A)True
B)False
Answer: True
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Chapter 4: Pollution Problems: Must We Foul Our Own Nests
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128 Verified Questions
128 Flashcards
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Sample Questions
Q1) Assuming that the economy is operating on the PPC TT<sub>1</sub>,the benefit of increasing pollution is shown on the graph as a movement from
A)A<sub>2</sub> to A<sub>1</sub>
B)C<sub>2</sub> to C<sub>1</sub>
C)q<sub>2</sub> to q<sub>1</sub>
D)TT<sub>2</sub> to TT<sub>1</sub>
E)C<sub>2</sub> to 0
Q2) An upstream paper mill pollutes water used by a downstream water bottling plant,forcing the latter to clean the water it uses.Which of the following is true?
A)Both will over-produce
B)The paper mill will under-produce and the bottling plant will over-produce
C)The paper mill will over-produce and the bottling plant will under-produce
D)Both will under-produce
E)Neither will over-produce or under-produce
Q3) Federal grants made to state and local governments for the construction of sewage treatment facilities encourage private industries to develop low pollution methods of production.
A)True
B)False
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Page 6
Chapter 5: Economics of Crime and Its Prevention: How
Much Is Too Much
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126 Verified Questions
126 Flashcards
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Sample Questions
Q1) Group projects can suffer from a free-rider problem.
A)True
B)False
Q2) With prohibition,supply in the market for beer will
A)Increase
B)Decrease
C)Shift to the right
D)Not be affected
E)Become flatter
Q3) A budget is allocated efficiently when all functions within the budget receive the same amount of funding.
A)True
B)False
Q4) Free-riders can be useful in group work situations because they cause the work to be completed by those members of the group who are best at the assigned tasks.
A)True
B)False
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Chapter 6: The Economics of Education: Crisis and Reform
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) Which of the following happens as tuition increases?
A)The demand for education increases
B)The demand for education decreases
C)The supply of education increases
D)The years of education demanded fall
E)The cost of education increases
Q2) A college education does not improve earnings over a high school degreE.
A)True
B)False
Q3) The existence of spillover benefits results in an equilibrium quantity in the market that is socially optimal.
A)Higher than B)Lower than C)Equal to D)Better than E)More expansive than
Q4) Public K-12 education facilitates equal opportunity.
A)True
B)False
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Chapter 7: Poverty Problems and Discrimination: Why Are
so Many Still so Poor
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121 Verified Questions
121 Flashcards
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Sample Questions
Q1) Under the TANF program,most welfare recipients are required to work after two years of assistancE.
A)True
B)False
Q2) In 1996,the Personal Responsibility and Work Opportunity Act established which of the following programs?
A)Food Stamps
B)Medicaid and Medicare
C)Aid to Families with Dependent Children (AFDC)
D)Temporary Assistance for Needy Families (TANF)
E)Supplemental Security Income (SSI)
Q3) In a private enterprise system a sound comprehensive antipoverty program must include measures to increase the productivity of the poor.
A)True
B)False
Q4) Why might an individual's labor resource holdings differ?
A)Mental talents are not equally distributed among people
B)Physical talents are not equally distributed among people
C)People have different
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Chapter 8: The Economics of Monopoly Power: Can Markets
Be Controlled
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129 Verified Questions
129 Flashcards
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Sample Questions
Q1) Monopoly power in the U.S.does not pose a significant economic problem.
A)True
B)False
Q2) A four-firm concentration ratio of 0.9 indicates that the four largest firms in the industry control 90% of the industry's sales.
A)True
B)False
Q3) Some would argue that one of the primary benefits of possessing a monopoly is
A)The chance to erect entry barriers
B)The opportunity to live the quiet life
C)The ability to restrict output
D)The chance to create deadweight losses
E)The ability to jack up prices to consumers
Q4) Changes in the design and quality of a product often results in greater consumer satisfaction from the product.
A)True
B)False
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Chapter 9: The Economics of Professional Sports: What Is the Real Score
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) How many workers will this firm hire?
A)0
B)10
C)12
D)15
E)More than 15
Q2) Which of the following contributes to monopsony power in professional sports?
A)Player mobility
B)Free agency
C)Player drafts
D)All of the above
E)None of the above
Q3) Under which of the following conditions will a monopsony hire an additional worker? When
A)MCL > MRP
B)MCL < MRP
C)MRP = D
D)MC = MR
E)D > S
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Chapter 10: Competition in the Global Market-Place: Should
We Protect Ourselves From International Trade
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131 Verified Questions
131 Flashcards
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Sample Questions
Q1) Which of the following could cause a shift in the supply curve from S to S<sup>1</sup>? An increase in
A)U.S.exports to Nigeria
B)Nigerian exports to the U.S
C)U.S.travelers to Nigeria
D)All of the above
E)None of the above
Q2) In recent years,"protectionists" have won the battle with "free traders."
A)True
B)False
Q3) Pegging the exchange rate will eliminate balance of payment deficits.
A)True
B)False
Q4) Which of the following established a free trade zone?
A)EU
B)GATT
C)UN
D)WTO
E)NAFTA
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Chapter 11: Economic Growth: Why Is
Bumpy
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138 Verified Questions
138 Flashcards
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Sample Questions
Q1) Investments in capital goods increase an economy's ability to produce consumer goods in the futurE.
A)True
B)False
Q2) Which of the following is consistent with economic growth?
A)Lower unemployment
B)Increased GDP
C)Increased aggregate demand
D)Increased sales
E)All of the above
Q3) Which of the following is cited as contributing to the recent slowdown in economic growth?
A)Slower rates of technological advancement
B)Changes in composition of the labor force
C)Low rates of saving and investment
D)Government regulation and public debt
E)All of the above
Q4) Some forms of government regulation of business may reduce productivity and th A)True
B)False
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Chapter 12: Money,Banking and the Financial System: Old
Problems With New Twists
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) When you use dollar bills to pay for a purchase at a store,money is serving which function?
A)A medium of exchange
B)A measure of value
C)A store of value
D)A barter facilitator
E)All of the above
Q2) In late 2008,the US Treasury Department began
A)Closing banks that were not following regulations
B)To implement the Troubled Asset Relief Program (TARP)
C)Raising interest rates to stimulate the economy
D)Engaging in open market operations
E)To implement the opening of a new Bank of the United States
Q3) Based on the diagram,the opportunity cost of money is higher if
A)The interest rate is i<sub>0</sub>
B)The interest rate is i<sub>1</sub>
C)The money supply is curve MS<sup>1</sup>
D)The money supply is curve MS<sup>2</sup>
E)The opportunity cost of money is not shown in the diagram
Page 14
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Chapter 13: Unemployment and Inflation: Can We
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119 Verified Questions
119 Flashcards
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Sample Questions
Q1) Which of the following would cause a shift from D<sup>1</sup> to D<sup>2</sup>?
A)An increase in investment
B)A decrease in consumption
C)An increase in imports
D)An increase in saving
E)All of the above
Q2) Given S<sup>1</sup> and D<sup>1</sup>,which of the following changes reduces unemployment? A shift to
A)D<sup>0</sup>
B)D<sup>2</sup>
C)S<sup>0</sup>
D)All of the above
E)None of the above
Q3) If inflation stimulates production and employment,the economy experiences which of the following effects of inflation?
A)Equity
B)Efficiency
C)Output
D)Input
E)None of the above
Page 15
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Chapter 14: Government Spending,Taxation,and the
National Debt: Who Wins and Who Loses
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) Government expenditures have grown faster than the GDP since 1958,representing about fifty percent of GDP today.
A)True
B)False
Q2) The Economic Growth and Taxpayer Relief Reconciliation Act,the Job Creation and Worker Assistance Act,and the Jobs and Growth Tax Relief Act each reduced effective tax rates on incomE.
A)True
B)False
Q3) Which of the following shifts represents the effect of a tax on this good levied independent of output?
A)D to D<sub>1</sub>
B)D<sub>1</sub> to D
C)S to S<sub>1</sub>
D)S<sub>1</sub> to S
E)None of the above
Q4) An output tax will be shifted completely forward if demand is price elastiC.
A)True
B)False
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Chapter 15: Social Security and Medicare: How Secure Is Our Safety
Net for the Elderly
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124 Verified Questions
124 Flashcards
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Sample Questions
Q1) If I put extra into a savings account so that I can leave assets to my children to compensate them for their payments into the Social Security system,I am exhibiting which of the following effects?
A)Retirement
B)Bequest
C)Wealth substitution
D)Opportunity cost
E)None of the above
Q2) If patients pay the full price for office visits,what price will be charged in the market?
A)$0
B)$25
C)$50
D)$75
E)More than $75
Q3) Both Social Security and Medicare are social insurance programs.
A)True
B)False
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Page 17