Economic Perspectives on Social Issues
Mock Exam
Course Introduction
This course explores how economic theories and tools can be applied to understand and address a variety of contemporary social issues, such as inequality, healthcare, education, environmental challenges, and discrimination. Students will examine the ways in which market mechanisms, government policies, and individual choices shape social outcomes, evaluating both intended and unintended consequences. Emphasis is placed on critical analysis of policy interventions, the role of incentives, and the complexities arising from interactions between economic and social factors. By the end of the course, students will be equipped to analyze social problems through an economic lens and to consider potential solutions grounded in economic reasoning.
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) Mary Ann's straight line PPC indicates that the opportunity cost of coconut cream pies is
A)Increasing
B)Decreasing
C)Constant
D)100
E)0
Answer: C
Q2) Any change for which MSB>MSC will
A)Increase social well-being
B)Decrease social well-being
C)Not change social well-being
D)Cost more than it is worth to society
E)Increase GDP
Answer: A
Q3) A broad-based education is generally ineffective in improving the quality of a country's labor forcE.
A)True
B)False
Answer: False
Page 3
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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) Since 1990,foreign investment in China has
A)Increased slightly
B)Increased significantly
C)Been unchanged
D)Decreased slightly
E)Decreased significantly Answer: B
Q2) Which of the following is NOT one of the "other things equal" underlying the demand curve?
A)Prices of resources
B)Purchasing power of buyers
C)Buyers' tastes and Answer: A
Q3) If the demand for a good increases in a monopoly market,price will rise and firms will enter the industry in the long run
A)True
B)False Answer: False
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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
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Sample Questions
Q1) In a mixed economy,governments intervene in markets to affect the prices of individual goods.
A)True
B)False
Answer: True
Q2) Research suggests that as the minimum wage is increased by 10%,the associated increase in the teenage unemployment rate is nearly
A)1 percent
B)10 percent
C)20 percent
D)25 percent
E)30 percent
Answer: A
Q3) Minimum housing standards prevent any property deterioration in rent controlled housing.
A)True
B)False
Answer: False
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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) Which of the following is a service provided by the environment?
A)Use as a habitat
B)Provision of amenities
C)Provision of raw materials
D)Waste disposal
E)All of the above
Q2) At the economically efficient level of control,MSB
A)Equals MSC
B)Equals $30,000
C)Is lower than at one unit less pollution control
D)Is higher than at one unit more pollution control
E)Is all of the above
Q3) When pollution rights markets are used,the overall level of pollution is reduced if the government sells additional licenses.
A)True
B)False
Q4) The optimum level of pollution is zero.
A)True
B)False
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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) More criminal justice expenditures should be made for detection and apprehension of criminals.
A)True
B)False
Q2) Curves D<sub>1</sub> and S<sub>1</sub> represent the market for marijuana if it is illegal.Legalization of marijuana will cause equilibrium price and quantity to change to A)P<sub>1</sub> and Q<sub>2</sub>
B)P<sub>2</sub> and Q<sub>1</sub>
C)P<sub>3</sub> and Q<sub>4</sub>
D)P<sub>4</sub> and Q<sub>3</sub>
E)None of the above
Q3) Recreational activities for youths in depressed areas might help reduce criminal activities by increasing the opportunity cost of committing crimes.
A)True
B)False
Q4) A polio vaccine is an example of a good that is semi-privatE.
A)True
B)False
Page 7
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Chapter 6: The Economics of Education: Crisis and Reform
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Sample Questions
Q1) The United States is toward the middle of countries in rankings of percent of GDP per capita spent on education.
A)True
B)False
Q2) Greater segregation along racial lines is a likely result of
A)Purely private K-12 education
B)No public K-12 education
C)Voucher programs
D)Tuition subsidies
E)All of the above
Q3) The negative slope of the demand curve shows that
A)The marginal cost of education increases as more is purchased
B)The marginal benefit of education increases as more is purchased
C)The marginal benefit of each additional year of education decreases
D)There are positive spillover benefits of education
E)Tuition can be raised above T<sub>1</sub> dollars
Q4) Private schools must pay some types of costs that public schools do not.
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) The Civil Rights Act of 1964 protects workers from discrimination based on all the following characteristics except one? Which one?
A)Race
B)Color
C)Gender
D)Religion
E)Age
Q2) Which of the following statements concerning the Earned Income Tax Credit (EITC)is false?
A)The EITC has significantly reduced official poverty rates in the U.S.since enacted in 1975
B)If a family's tax liability is less than its EITC,the family will receive a check for the difference from the IRS
C)The EITC is eventually phased out as family income increases
D)More than 20 million American households now claim the EITC on tax returns each year
E)None of the above
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Page 9
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) The capture theory of regulation suggests
A)In the absence of regulation,consumer welfare is often captured by firms in the market
B)The lost consumer welfare due to unfair business practices can be offset through government regulation
C)When market failure exists,regulation is appropriate
D)The regulators of an industry are often "captured" by the firms in the market
E)None of the above
Q2) At the profit maximizing quantity,the firm's total revenue equals
A)$10
B)$15
C)$20
D)$1,000
E)$1,400
Q3) Marginal revenue for a monopolist is less than the price it charges for its product.
A)True
B)False
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10
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) College athletes who enter the major leagues are always hired by the team that is willing to pay the highest salary.
A)True
B)False
Q2) Economic factors cannot explain why teams relocate between cities.
A)True
B)False
Q3) Profits are more equally distributed in a competitive industry than in an industry dominated by a cartel.
A)True
B)False
Q4) The public relations benefit of a city's professional sports team is generally more valuable than the number of jobs it creates.
A)True
B)False
Q5) If a player's MRP> MCL,the player should be hired by the team.
A)True
B)False
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Chapter
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131 Verified Questions
131 Flashcards
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Sample Questions
Q1) Pegging the exchange rate at $1.25
A)Imposes a price floor
B)Results in a balance of payments problem
C)Will increase British demand for U.S.exports
D)Will increase U.S.demand for British imports
E)Will do of the above
Q2) The largest part of the U.S.supply of foreign currency arises from
A)Investments made by foreigners in the U.S
B)Exports of merchandise
C)Net investment income
D)Gifts that persons abroad send persons in the U.S
E)None of the above
Q3) What have researchers concluded about the net effect of NAFTA on the number of jobs in the U.S.economy?
A)NAFTA has increased the number of U.S.jobs
B)NAFTA has had no effect on the number of U.S.jobs
C)NAFTA has significantly reduced the number of U.S.jobs
D)The number of U.S.jobs has increased in some sectors of the economy,while in other sectors it has reduced the number of jobs
E)No one has examined this issue yet
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Chapter 11: Economic Growth: Why Is the Economic Road so
Bumpy
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138 Verified Questions
138 Flashcards
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Sample Questions
Q1) Another name for the trough of a business cycle is recession.
A)True
B)False
Q2) What was the primary opportunity cost of the former Soviet Union's policy to heavily invest in capital for economic growth?
A)An inability to trade with other nations
B)Democracy
C)Foregone consumer goods
D)Technological innovations
E)Foregone military goods
Q3) Which of the following is NOT a component of the Index of Leading Economic Indicators?
A)Stock market prices
B)An index of consumer expectations
C)New building permits granted
D)Real money supply
E)None of the abovE.All are part of the index
Q4) In economics,the past is a very poor predictor of the futurE.
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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Sample Questions
Q1) Because of recent changes in the regulatory system,commercial banks are able to offer a smaller variety of financial products and services than in the past.
A)True
B)False
Q2) A shift from MS<sup>1</sup> to MS<sup>2</sup> would be the result of
A)An increase in aggregate demand
B)An increase in aggregate supply
C)A decision by the Fed to purchase government securities by the FOMC
D)A decision by the Fed to sell government securities by the FOMC
E)A change in the stock market
Q3) Home equity loans
A)Allow a home owner to recapture some of the increase in the value of their home without selling the home
B)A way for homeowners to issue stock,or equity,in their home
C)Only used when home prices are increasing
D)A way for the market to eliminate paper profits
E)None of the above
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Page 14
Chapter 13: Unemployment and Inflation:
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Sample Questions
Q1) Inflation may affect the distribution of income in the economy and may increase national output.
A)True
B)False
Q2) Involuntary unemployment occurs when wage rates are too low,i.e.,below competitive levels.
A)True
B)False
Q3) The relationship shown by the Phillips curve,which implies a tradeoff between inflation and unemployment rates,is a long-run phenomenon.
A)True
B)False
Q4) The best description of the growth of the money supply since 1960 is that it has
A)Increased steadily
B)Increased rapidly during the 1980's
C)Decreased steadily
D)Decreased rapidly during the 1960's
E)Shown patterns of both fast and slow growth over the decades
Page 15
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Chapter 14: Government Spending,Taxation,and the
National Debt: Who Wins and Who Loses
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Sample Questions
Q1) If an output tax is levied on a product that has a perfectly elastic demand,the tax will be shifted completely to the consumer in the form of higher prices.
A)True
B)False
Q2) Which of the following countries has the lowest taxes collected (as a percent of GDP)?
A)The United States
B)Germany
C)Italy
D)France
E)The United Kingdom
Q3) The excess tax burden is in the form of the loss in private production that may take place if incentives to work and to produce are discourageD.
A)True
B)False
Q4) Transfer payments are government expenditures for currently produced goods and services.
A)True
B)False
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Chapter
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Sample Questions
Q1) A modest increase in taxes could postpone Social Security's financial crisis for decades.
A)True
B)False
Q2) Part A of the Medicare program (Hospital Insurance)is financed primarily by
A)A monthly premium
B)A 2.9% tax levied on wages and salaries
C)An allocation from general tax revenues
D)User fees paid by patients
E)Insurance deductibles
Q3) Currently,the total combined tax rate collected by Social Security is
A)21.6% of earnings
B)15.3% of earnings
C)7.65% of earnings
D)6.20% of earnings
E)1.45% of earnings
Q4) The Social Security Trust Fund currently has a negative balancE.
A)True
B)False
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