Economics for Social Sciences
Review Questions
Course Introduction
Economics for Social Sciences introduces students to fundamental economic concepts and analytical tools relevant to understanding social phenomena. The course explores how individual and collective decisions shape resource allocation, markets, and public policy, emphasizing the role of incentives, costs, and benefits. Students will examine real-world issues such as inequality, welfare, labor markets, and poverty from both microeconomic and macroeconomic perspectives. Through case studies and empirical analysis, the course illustrates how economic reasoning contributes to broader debates in the social sciences, fostering critical thinking and informed evaluation of current events and societal challenges.
Recommended Textbook
ECON Micro 2 2nd Edition by William
A. McEachern
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21 Chapters
3947 Verified Questions
3947 Flashcards
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Chapter 1: The Art and Science of Economic Analysis
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148 Verified Questions
148 Flashcards
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Sample Questions
Q1) One problem with rent controls is that policy makers often ignore its secondary effects.
A)True
B)False
Answer: True
Q2) Economics
A) studies human behavior when scarcity exists and choices must be made
B) provides the only reasonable explanation of how people make decisions
C) can accurately explain all human behavior since it is based on the assumption of rationality
D) is better at showing the way things ought to be than the other social sciences are E) is the only social science that can explain the existence and behavior of public institutions
Answer: A
Q3) Normative economic statements refer to what should be.
A)True
B)False
Answer: True
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Chapter 2: Economic Tools and Economics Systems
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185 Verified Questions
185 Flashcards
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Sample Questions
Q1) If Evan has an absolute advantage in cleaning and bookkeeping when compared to Gloria,then
A) Evan must also have a comparative advantage in cleaning and bookkeeping
B) Evan must have a comparative advantage in cleaning
C) Evan must have a comparative advantage in bookkeeping
D) Gloria has a comparative advantage in neither activity
E) we can conclude nothing about comparative advantage
Answer: E
Q2) According to Exhibit 2-1,in any given amount of time,
A) Maria has an absolute and a comparative advantage in typing
B) Maria has an absolute and a comparative advantage in doing laundry
C) Maria has a comparative advantage in both typing and doing laundry
D) Hans has an absolute and a comparative advantage in typing
E) Hans has an absolute advantage in doing laundry
Answer: B
Q3) A production possibilities frontier will shift inward if there is more unemployment of labor.
A)True
B)False
Answer: False
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Chapter 3: Economic Decision Makers
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196 Verified Questions
196 Flashcards
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Sample Questions
Q1) Determining the most socially desirable level of income equality or inequality
A) is done through markets,rather than by the government
B) is done directly by firms
C) involves normative economics
D) involves evaluation of public goods
E) involves evaluation of all externalities,both positive and negative
Answer: C
Q2) Household income is spent on all of the following except one.Which is the exception?
A) services
B) tax payments
C) durable goods
D) nondurable goods
E) dividends
Answer: E
Q3) Sole proprietorships produce more goods and services than does any other form of business organization.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Demand, supply, and Markets
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222 Flashcards
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Sample Questions
Q1) In Exhibit 4-13,a shift of the demand curve for pizza from D' to D can be determined by:
A) Increase in the consumers' income
B) Decrease in the price of pizza
C) Increase in the price of pizza ingredients
D) Decrease in consumers' income
E) Decrease in the price of pizza ingredients
Q2) Which of the following causes the supply of leather jackets to decrease?
A) an increase in the price of leather jackets
B) an increase in the price of leather
C) a decrease in the price of zippers
D) an increase in the number of motorcycles
E) a decrease in consumer income
Q3) In Exhibit 4-15,when the price is $15,an increase in the quantity supplied from 17 to 24 units can result from all of the following,except:
A) Increase in the number of producers
B) Technological advances
C) An increase in the price of a relevant resource
D) A decrease in the price of an alternative good
E) A decrease in the price of a relevant resource
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Chapter 5: Elasticity of Demand and Supply
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Sample Questions
Q1) If its value of cross-price elasticity is negative,a good must be a necessity.
A)True
B)False
Q2) If income rises and the demand for toothbrushes stays the same,income elasticity of toothbrushes is said to be unit elastic.
A)True
B)False
Q3) If people have more time to adjust to a price change,
A) demand becomes more elastic,and supply becomes less elastic
B) demand becomes less elastic,and supply becomes more elastic
C) both supply and demand become less elastic
D) both supply and demand become more elastic
E) elasticity of both demand and supply tends toward unity
Q4) Between points b and c in Exhibit 5-7,price decreases by $1,quantity demanded increases by 10,
A) total revenue decreases by $1,and demand is elastic
B) total revenue decreases by $1,and demand is inelastic
C) total revenue increases by $40,and demand is elastic
D) total revenue increases by $40,and demand is inelastic
E) and total revenue increases by $80
Page 7
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Chapter 6: Consumer Choice and Demand
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164 Verified Questions
164 Flashcards
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Sample Questions
Q1) In order to derive a demand curve for cheese,we would change
A) income and hold other things constant
B) tastes and hold other things constant
C) the price of other goods and hold everything else constant
D) the price of cheese and hold other things constant
E) the price of all goods,including cheese and hold other things constant
Q2) Joe the Economist tells his wife,Jane,that he wants to spend a weekend fishing with his friends.She replies,"You don't love me anymore." Just before she hits Joe with a croquet mallet,Joe explains to her that she has confused the concepts of
A) marginal utility and price
B) income and price
C) marginal utility and total utility
D) love and death
E) consumer surplus and utility
Q3) The law of diminishing marginal utility implies that the marginal utility of my fifth waffle is less than the marginal utility of my friend's second waffle,other things constant.
A)True
B)False
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8
Chapter 7: Production and Cost in the Firm
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202 Verified Questions
202 Flashcards
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Sample Questions
Q1) If the Money Store earns a normal profit this year,its
A) economic profit is equal to its accounting profit
B) economic profit is zero
C) economic profit is equal to the average accounting profit in other industries
D) accounting profit is zero
E) accounting profit is less than its economic profit
Q2) In Exhibit 7-6,which costs are fixed costs?
A) rent,labor costs,and material costs
B) rent and labor costs
C) rent and material costs
D) labor and material costs
E) rent only
Q3) If total product for each of five units of labor is 10,16,20,30,and 34,respectively,the marginal product of the third unit is
A) 20
B) 10
C) 4
D) 0
E) 6
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Page 9
Chapter 8: Perfect Competition
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250 Verified Questions
250 Flashcards
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Sample Questions
Q1) For a perfectly competitive firm that should continue to operate in the short run,loss is minimized where
A) MR is maximized
B) MR = MC
C) P < MC
D) MR < MC
E) MR > ATC
Q2) Consider Exhibit 8-6.At which quantity will this firm maximize profit?
A) point a
B) point b
C) point c
D) point d
E) point e
Q3) The long-run supply curve for a constant-cost perfectly competitive industry is A) a ray from the origin at a 45-degree angle
B) perfectly inelastic
C) somewhat inelastic
D) perfectly elastic
E) declining
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Page 10
Chapter 9: Amonopoly
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257 Verified Questions
257 Flashcards
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Sample Questions
Q1) Suppose that a price-discriminating monopolist divides its market into two segments.If the firm sells its product for a price of $42 in the market segment where demand is relatively less elastic,the price in the market segment whose customers' demand is more elastic will be
A) $42
B) greater than $42
C) less than $42
D) less than marginal revenue in that market segment
E) equal to marginal revenue in that market segment
Q2) A monopolist maximizes profit at the quantity where its total revenue curve equals total cost.
A)True
B)False
Q3) The welfare loss of monopoly is also called
A) converted consumer surplus
B) deadweight loss
C) economic profit under monopoly
D) producer surplus
E) contestable profit
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Page 11
Chapter 10: Monopolistic Competition and Oligopoly
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219 Verified Questions
219 Flashcards
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Sample Questions
Q1) Game theory provides us with a general approach to understanding the behavior of firms when their choices are interdependent
A)True
B)False
Q2) If a firm must produce a significant share of market output before low average costs can be achieved,the structure of this industry will tend to be
A) monopolistic competition
B) perfect competition
C) oligopoly
D) either monopolistic competition or oligopoly
E) either perfect competition or monopolistic competition
Q3) Cost-plus pricing
A) is used only in oligopolistic market structures
B) simplifies pricing policy by adding a markup to average total cost
C) in actual practice leads to markups which are greater for more elastic demand curves
D) is likely to increase profits more than the use of marginal analysis
E) requires the firm to project the amount which will be sold and then "mark-up" the price based on average variable cost
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Page 12
Chapter 11: Resource Markets
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210 Verified Questions
210 Flashcards
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Sample Questions
Q1) A temporary price differential in resource markets is
A) eliminated by resource movements
B) caused by a failure of firms to maximize profits
C) eliminated by resources moving from highly-valued uses to lower-valued uses
D) caused by Congress increasing the federal minimum wage
E) a result of firms using the MRP = MRC rule in hiring resources
Q2) Consider two resource markets in which the demand curves slope downward.In market A,the supply curve is horizontal,equilibrium price is $6,and 100 units of the resource are hired.In market B,the supply curve is vertical,equilibrium price is $20,and 30 units of the resource are hired.Which of the following is true?
A) All of the resource earnings in market A are opportunity costs.
B) All of the resource earnings in both markets are opportunity costs.
C) All of the resource earnings in market B are opportunity costs.
D) None of the resource earnings in either market is an opportunity cost.
E) None of the resource earnings in either market is economic rent.
Q3) The marginal revenue product curve slopes downward only if the firm is a price searcher in the product market.
A)True
B)False
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Page 13
Chapter 12: Labor Markets and Labor Unions
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211 Verified Questions
211 Flashcards
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Sample Questions
Q1) If nonmarket work is a normal good,then an increase in income _____ the time allocated to _____.
A) decreases;market work
B) decreases;leisure
C) increases;market work
D) increases;leisure
E) increases;nonmarket work
Q2) The union participation rate in the United States is
A) highest among government employees
B) highest among private sector workers
C) highest in the smokestack industries
D) highest in the service sector
E) higher than in Sweden
Q3) It is sometimes claimed that garbage collectors are paid more than elementary school teachers.If this is true,one reason might be
A) the difference in working conditions
B) that school teachers are usually women
C) that the supply of teachers is small
D) that the demand for teachers is small
E) that the market does not value teachers
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Chapter 13: Capital, interest, and Corporate Finance
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183 Verified Questions
183 Flashcards
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Sample Questions
Q1) The market value of ABC Corp. ,whose securities are publicly traded,can be found by
A) multiplying the price of its stock by the number of shares outstanding
B) dividing the number of shares outstanding by the price of the stock
C) adding the total value of its outstanding stock to the total value of its outstanding bonds
D) subtracting the total value of its outstanding bonds from the total value of its outstanding stock
E) subtracting the total value of its outstanding stock from the total value of its outstanding bonds
Q2) The present value of a given payment will be lower
A) if the payment comes sooner than expected
B) the lower the prevailing interest rate
C) the further in the future the payment is to be received
D) the sooner the payment is to be received
E) if the payment is made in cash
Q3) Administrative costs make small loans less profitable than large ones,other things equal.
A)True
B)False
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Page 15
Chapter 14: Transaction Costs, imperfect Information, and Market Behavior
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178 Verified Questions
178 Flashcards
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Sample Questions
Q1) According to the search model,a computerized used car search service should
A) reduce the amount of search
B) not affect the amount of search
C) increase price dispersion
D) reduce price dispersion
E) lower the marginal benefit of search
Q2) The law firm of Cheep,Cheeper,and Cheeperstill offers a salary of $35,000 to first-year lawyers.This firm will attract applications from
A) exactly the number of lawyers the firm wishes to hire
B) many lawyers whose marginal revenue product is greater than $35,000
C) many lawyers whose marginal revenue product is less than $35,000
D) only lawyers whose marginal revenue product is equal to $35,000
E) many lawyers whose marginal revenue cost is equal to $35,000
Q3) One result of asymmetric information in the market for used cars is that
A) few used cars are offered on the market
B) few lemons are sold
C) more lemons may be offered for sale than good cars
D) buyers benefit at the expense of sellers
E) good cars will sell for more than they are worth
Page 16
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Chapter 15: Economic Regulation and Antitrust Policy
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170 Verified Questions
170 Flashcards
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Sample Questions
Q1) Production by a monopoly would result in the socially optimal allocation of resources if
A) price is set equal to marginal cost
B) marginal revenue is set equal to price
C) marginal revenue is set equal to marginal cost
D) price is set equal to average total cost
E) marginal revenue is set equal to average total cost
Q2) If an industry consists of only two firms with equal market shares,then the Herfindahl index is
A) 50
B) 100
C) 2,500
D) 5,000
E) 10,000
Q3) As concentration in an industry increases,the value of the Herfindahl index falls.
A)True
B)False
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Chapter 16: Public Goods and Public Choice
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119 Flashcards
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Sample Questions
Q1) In response to the threat of budget cuts,the Connecticut State Department of Recreation proposed shutting down many state parks and beaches.This is a good example of
A) cost efficiency in bureaus
B) Niskanen's theory of budget-maximizing bureaus
C) the median-voter model
D) logrolling
E) direct democracy
Q2) Legislation that provided cotton producers a subsidy is an example of:
A) Special-interest legislation
B) Competing-interest legislation
C) Concentrated-costs legislation
D) Public-interest legislation
E) Widespread benefits and costs
Q3) Budget maximization results in a budget equal to that desired by the median voter.
A)True
B)False
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Chapter 17: Externalities and the Environment
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187 Flashcards
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Sample Questions
Q1) Untreated raw sewage is dumped directly into rivers and oceans
A) only in less-developed economies
B) only in rural areas
C) only in urban areas
D) in every large city in the United States
E) in some of the largest U.S.cities
Q2) As more pollution is abated,the marginal social benefit from further abatement diminishes.
A)True
B)False
Q3) Suppose research indicates that the effects of a one degree increase in Earth's average temperature would be much more devastating than previously believed.Therefore,the greater the marginal benefit of reducing greenhouse gases,other things constant,
A) the lower the optimal level of emissions
B) the higher the optimal level of emissions
C) the likelier that the level of emissions would have no effect
D) the lower the optimal level of cleaner air
E) None of the answers is correct
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Page 19
Chapter 18: Income Distribution and Poverty
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Sample Questions
Q1) The most recent data indicates households in the top fifth of the income distribution earn nearly ten times as much income as those in the bottom fifth.
A)True
B)False
Q2) In a market economy,household income is determined primarily by
A) the age of the head of household
B) the gender of the head of household
C) luck
D) the productivity of labor resources
E) government transfer payments
Q3) Taxes and in-kind transfers make the distribution of income more unequal.
A)True
B)False
Q4) Food stamps and Medicaid are examples of
A) money transfers
B) resource earnings
C) in-kind transfers
D) tax expenditures
E) capital gains
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Chapter 19: International Trade
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161 Flashcards
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Sample Questions
Q1) Exhibit 19-8 shows the demand and supply of shirts for the country of Eragos.If the world price is $4 per shirt,and the government of Eragos imposes a tariff of $1,the Eragoans are:
A) Producing 11 and importing 4 shirts
B) Producing 8 and importing 15 shirts
C) Producing 11 and importing 13 shirts
D) Producing 8 and importing 4 shirts
E) Producing 11 and importing 20 shirts
Q2) Exhibit 19-8 shows the demand and supply of shirts for the country of Eragos.If trade with other countries is prohibited,the Eragoans are:
A) Producing 8 shirts and sell them at a price of $6 per shirt
B) Producing 8 shirts and sell them at a price of $4 per shirt
C) Consuming 8 shirts at a price of $6 per shirt
D) Consuming 8 shirts at a price of $4 per shirt
E) Consuming 13 shirts at a price of $6 per shirt
Q3) Whenever the opportunity costs of goods are significantly different in different countries,there are gains from specialization and trade.
A)True
B)False
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Page 21
Chapter 20: International Finance
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224 Flashcards
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Sample Questions
Q1) The Bretton Woods system fixed all exchange rates in terms of the U.S.dollar.
A)True
B)False
Q2) When the international financial system operated under the gold standard, A) the currencies of most countries were convertible into gold B) all international transactions were financed with gold C) the price of gold was determined by the supply and demand for foreign exchange D) the quantity of money demanded was always the same E) there was very little inflation
Q3) The value of U.S.merchandise exports is a debit in the U.S.balance-of-payments account.
A)True
B)False
Q4) If the U.S.dollar appreciates,it becomes cheaper for Australians to visit their relatives in the United States.
A)True
B)False
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Chapter 21: Developing and Transitional Economies
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105 Flashcards
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Sample Questions
Q1) The country of Bananaland has an abundant supply of banana trees and therefore must be a modern industrial economy.
A)True
B)False
Q2) Which of the following creates an obstacle to pursuing freer international trade?
A) Consumers do not recognize their potential gains
B) Losses are widespread
C) Domestic producers do not recognize their potential losses
D) Government has plenty of political will and support to remove trade barriers
E) Consumers can easily organize to demand free trade
Q3) Privatization is the
A) process of turning private enterprises into public enterprises
B) the same as nationalization
C) process of turning public enterprises into private enterprises
D) process of turning state-owned enterprises into public enterprises
E) process of turning sole proprietor enterprises into corporate enterprises
Q4) In high- income countries,children do not suffer from malnutrition.
A)True
B)False
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