Introduction to Microeconomics Final Exam
Course Introduction
Introduction to Microeconomics explores the fundamental principles that govern the behavior of individuals, households, and firms in making decisions about the allocation of scarce resources. The course covers key concepts such as supply and demand, market equilibrium, elasticity, consumer choice, production and costs, and the different structures of markets, including perfect competition, monopoly, and oligopoly. Through theoretical models and real-world applications, students will gain a foundational understanding of how prices are determined, how markets function, and how economic agents respond to changes in policy and market conditions.
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Microeconomics Private and Public Choice 14th Edition by James D. Gwartney
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Chapter 1: The Economic Approach
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Q1) Which of the following is a positive economic statement?
A)The federal minimum wage should be raised to $6.50 per hour.
B)The United States spends too much on anti-terrorism efforts.
C)An increase in investment will lead to a higher rate of economic growth.
D)Economics is twice as interesting to study as philosophy.
Answer: C
Q2) A firm producing cans buys three tons of aluminum per day at $200 per ton. If it buys four tons per day, it receives a quantity discount on all units and pays only $175 per ton. The marginal cost of the fourth ton per day is
A)$100.
B)$175.
C)$700.
D)$225.
Answer: A
Q3) The basic ingredients in any economic decision are
A)scarcity and choice.
B)surpluses and shortages.
C)market prices and the use of efficient production methods.
D)needs and wants.
Answer: A
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Chapter 2: A: Some Tools of the Economist
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Q1) Don can produce 10 pens or 20 pencils in one hour while Bob can produce 15 pens or 5 pencils in one hour. Which of the following statements is correct?
A)Bob has a comparative advantage over Don in the production of pencils
B)Bob has a comparative advantage over Don in the production of pens
C)Don has a comparative advantage over Bob in the production of pens
D)Bob and Don cannot gain from specialization and exchange.
Answer: B
Q2) Creative destruction refers to the process where
A)new products and methods of production are continuously replacing old ones
B)producing more of one good causes you to produce less of another
C)everybody involved is made worse off
D)new ways to destroy buildings are employed
Answer: A
Q3) A point on the production possibilities curve represents a combination of goods that is
A)inefficient.
B)efficient.
C)unattainable.
D)attainable.
Answer: B
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Chapter 2: B: Some Tools of the Economist
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Q1) After the terrorist attacks on September 11, 2001, the United States began devoting substantial resources toward the War on Terrorism, homeland security, and relief efforts. Use the production possibilities curve to demonstrate how this might affect the production of other goods in the United States.
Answer: Increased resources devoted toward these efforts must come away from the production of other goods, reducing the production of these other goods.
Q2) "The economic wealth of this country was built primarily by some individuals profiting from a transaction, whereas others were harmed by that transaction." This statement indicates the speaker
A)fails to comprehend the idea that all voluntary trades benefit both parties involved.
B)fails to comprehend the fallacy of composition.
C)fails to understand the significance of the production possibilities curve.
D)uses the economic way of thinking. The statement is essentially correct.
Answer: A
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Chapter 3: A: Supply, Demand, and the Market Process
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Q1) The invisible hand principle indicates that competitive markets can help promote the efficient use of resources
A)only if buyers and sellers really care, personally, about economic efficiency.
B)even when each market participant cares only about their own self interest rather than about the overall efficiency of resource use.
C)even if business firms fail to produce goods efficiently.
D)if, and only if, businesses recognize their social obligation to keep costs low and use resources wisely.
Q2) The height of the supply curve at a quantity of 100 represents the
A)total value of all 100 units to consumers.
B)minimum price required to induce a producer to supply the hundredth unit.
C)equilibrium price of the good regardless of the position of the demand curve.
D)profit derived by producers from the sale of the hundredth unit.
Q3) The law of demand indicates that
A)every physical good has a use.
B)when people want a good badly enough, they will find a way to pay for it.
C)the desire for a good is unrelated to its price.
D)the quantity of a good that people will buy is inversely related to the price of the good.
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Chapter 3: B: Supply, Demand, and the Market Process
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Q1) If cigars and cigarettes are substitute goods, an increase in the price of cigars would result in
A)an increase in the demand for cigarettes.
B)a decrease in the price of cigarettes.
C)a decrease in the demand for cigarettes.
D)a decrease in the demand for cigars.
Q2) Figure 3-10 illustrates the conditions of demand and supply in the market for compact discs. Indicate the equilibrium price and quantity.
A)price, $20; quantity, 2,000
B)price, $15; quantity, 3,000
C)price, $10; quantity, 2,000
D)price, $10; quantity, 4,000
Q3) Market prices are
A)conveyors of information.
B)determined by the interactions of supply and demand in voluntary exchange.
C)indicators of the relative scarcity of resources and products.
D)all of the above.
Q4) Economists maintain that the price of a product has no effect on demand. How can this be true?
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Chapter 4: A: Supply and Demand: Applications and Extensions
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Q1) Refer to Figure 4-7. The supply curve S and the demand curve D indicate initial conditions in the market for gasoline. A $.60-per-gallon excise tax on gasoline is levied, which shifts the supply curve from S to S . Which of the following states the actual burden of the tax?
A)$.50 for buyers and $.10 for sellers
B)$.50 for sellers and $.10 for buyers
C)The entire $.60 falls on sellers.
D)The entire $.60 falls on buyers.
Q2) When policymakers impose price controls, they
A)are usually following the advice of mainstream economists.
B)usually improve the efficiency of economic activity.
C)distort the signals that normally guide the allocation of resources.
D)demonstrate a willingness to sacrifice equity in order to improve efficiency.
Q3) In a market economy, which of the following would most likely cause a prolonged grain surplus?
A)a decrease in the demand for grain
B)an increase in the supply of grain
C)imposition of a price floor above the equilibrium price of grain
D)imposition of a price ceiling below the equilibrium price of grain
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Chapter 4: B: Supply and Demand: Applications and Extensions
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Q1) Refer to Figure 4-20. Suppose the same S and D curves apply, and a tax of the same amount per unit as shown here is imposed. Now, however, the sellers of the good, rather than the buyers, are required to pay the tax to the government. Now, relative to the case depicted in the figure,
A)the burden on buyers will be larger and the burden on sellers will be smaller.
B)the burden on buyers will be smaller and the burden on sellers will be larger.
C)the burden on buyers will be the same and the burden on sellers will be the same.
D)The relative burdens in the two cases cannot be determined without further information.
Q2) Suppose the U.S. government banned the sale and production of cigarettes. Which of the following would be most likely to occur?
A)No one would smoke anymore.
B)The amount of violence involved in the buying and selling of cigarettes would increase.
C)The price of cigarettes would decrease.
D)The supply for cigarettes would become elastic.
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Page 9
Chapter 5: Difficult Cases for the Market and the Role of Government
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Q1) When economists say that an activity meets the criterion for economic efficiency, they mean
A)a majority of citizens favor the activity.
B)the benefits that result from the activity exceed the costs.
C)the number of people who gain from the activity exceeds the number on whom costs are imposed.
D)the costs that result from the activity exceed the benefits.
Q2) Which of the following are ways in which the private market provides consumers with valuable information to help them make better decisions?
A)brand names
B)franchising
C)private sector certification firms and consumer report magazines
D)all of the above
Q3) If production of a good creates external benefits, a competitive market will likely produce
A)less output than would maximize profit.
B)more output than would maximize profit.
C)less output than is efficient.
D)more output than is efficient.
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Chapter 6: The Economics of Collective Decision-Making
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Q1) Which of the following increases the political power of special interest groups and makes counterproductive government action more likely?
A)logrolling and pork barrel legislation
B)the rational-ignorance effect
C)public goods
D)both a and b, but not c
Q2) Crony capitalism is present when
A)businesses are either implicitly or explicitly prohibited from making donations to political candidates.
B)businesses either implicitly or explicitly provide political decision-makers with contributions and other forms of political support in "exchange" for government favors that will improve their profitability.
C)rule of law is present and government officials treat all citizens alike.
D)government officials spend taxpayer funds only on productive projects.
Q3) Congressman Localstuff always votes for a balanced budget amendment to the U.S. Constitution. He also always votes for spending bills supported by the leadership of his political party. Is this rational?
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Chapter 7: Consumer Choice and Elasticity
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Q1) Sally is on her college golf team and only uses Titleist golf balls. She states: "I don't care what the price is, I will only buy Titleists." Is this a believable assertion?
Q2) The price elasticity of demand for automobiles measures the responsiveness of
A)consumer purchases to a change in the price of automobiles.
B)consumer purchases to a change in the quality of automobiles.
C)supplier production levels to a change in the price of automobiles.
D)consumer purchases of automobiles to a change in their income.
Q3) Which one of the following goods would likely have the most inelastic demand?
A)Kellogg's corn flakes
B)salt
C)a new Toyota automobile
D)fresh green beans
Q4) If the elasticity of demand for cigarettes is 0.4, then an increase in the price of a pack of cigarettes from $1.00 to $1.30 would reduce quantities demanded by about A)27 percent.
B)40 percent.
C)12 percent.
D)95 percent.
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Chapter 8: A: Costs and the Supply of Goods
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Q1) The short run is the time period during which
A)all of the firm's costs are fixed.
B)the value of the firm's assets starts to decay.
C)the firm can adjust all inputs freely.
D)some of the firm's input decisions are constrained by previous commitments.
Q2) Which of the following is a difference between corporations and partnerships?
A)Partnerships are subject to double taxation; corporations are not.
B)With partnerships, ownership rights are divisible and easily transferable; this is not true for corporations.
C)Corporate owners face limited liability; owners of partnerships do not.
D)Corporations always have more owners than partnerships.
Q3) The average variable cost (AVC) and average total cost (ATC) for a firm are indicated in Figure 8-11. The firm's total cost of producing 20 units is
A)$6.
B)$84.
C)$120.
D)$150.
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Chapter 8: B: Costs and the Supply of Goods
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Q1) The boss observes that her 10 workers produce 1,000 widgets a day. She concludes that she can employ 20 workers and make 2,000 widgets, 30 to make 3,000, or 40 to make 4,000. Explain why this observation is either correct or incorrect.
Q2) James opened a baseball manufacturing operation, and initially the more balls he made, the lower the per-unit cost. Now, as output expands, his per-unit costs are rising. He concludes that diseconomies of scale have set in. Is he correct? Why?
Q3) Suppose you are planning to open a lemonade stand. List separately all the explicit and implicit costs that might be involved.
Q4) The AB Manufacturing Company has hired an economist to evaluate its financial situation. She explains to the board of directors that the company is making zero economic profit. Should the company go out of business?
Q5) Andy wants to maximize his grade-point average. Having spent six hours studying for his final exam in economics, Andy calculates his grade and discovers that even with a perfect score on the final, he will not pass the course. He decides to study two more hours so he will not have wasted the first six hours. Is this a good decision? Why or why not?
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Chapter 9: A: Price Takers and the Competitive Process
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Q1) Refer to Table 9-1. After the increase in the market price to $570, what is the maximum profit per month the Tuckers can earn?
A)$560
B)$580
C)$630
D)$1,130
Q2) Other things constant, if wheat production is a price-taker industry, a decrease in the price of fertilizer used to grow wheat will
A)increase the supply of wheat.
B)increase the demand for wheat.
C)decrease the supply of wheat.
D)do both a andb.
Q3) In a price-taker market,
A)all firms in the market charge different prices depending upon their respective costs of production.
B)there are generally a small number of very large firms.
C)the firms all produce identical products.
D)firms will usually make economic losses in the long run.
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Chapter 9: B: Price Takers and the Competitive Process
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Q1) Amy runs a business in a market where all firms are price takers. Bill suggests that she lower her price to attract even more business. Should Amy follow Bill's suggestion, or should she even consider raising her price?
Q2) When an economist states that a firm is earning zero economic profit, this statement implies that the firm
A)will be forced out of business unless market conditions change.
B)is doing as well as it could in any other line of business.
C)is earning a zero rate of return on its assets.
D)could earn a higher rate of return in other industries.
Q3) The competitive market process tends to promote economic prosperity because it
A)keeps the prices of goods higher than their production costs.
B)creates inefficiencies, which causes people to economize.
C)directs self-interested action toward the production of goods that are highly valued relative to their cost.
D)sends signals to the government about which goods to produce.
Q4) If a technological advance lowers a firm's production costs, why do prices typically fall? Shouldn't the firm maintain the same price and earn economic profit?
Q5) Why is it considered "ideal" for price to just equal marginal cost?
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Chapter 10: Price-Searcher Markets With Low Entry Barriers
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Q1) A major fruit juice manufacturer failed in its attempt to engage in price discrimination between students and all other consumers. What is the most likely explanation for this failure?
A)There was nothing to prevent the students from reselling the fruit juice to other consumers.
B)The two groups of consumers have different demand elasticities for fruit juice.
C)The cost of producing the product is relatively high.
D)Market demand for fruit juice is inelastic.
Q2) The free entry and exit of firms in a competitive price-searcher market guarantees that
A)both economic profits and economic losses can persist in the long run.
B)both economic profits and economic losses disappear in the long run.
C)economic profits, but not economic losses, can persist in the long run.
D)economic losses, but not economic profits, can persist in the long run.
Q3) A price-searcher firm will expand output and sales until
A)marginal revenue falls to equal the rising marginal cost.
B)marginal revenue rises to equal the falling marginal cost.
C)marginal revenue falls below marginal cost.
D)marginal cost rises above marginal revenue.
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Chapter 11: A: Price-Searcher Markets With High Entry
Barriers
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Q1) Which of the following provides the most secure protection for a firm with monopoly power?
A)quality advertising
B)legal barriers restricting entry into the market of the monopolist
C)predatory pricing
D)limited economies of scale
Q2) A monopolist has less to gain from cost-saving measures in the production process when
A)the monopoly is unregulated.
B)regulators use average cost pricing to set the monopolist's price.
C)the demand for the product of the monopolist is inelastic.
D)changes in the regulated price occur only after considerable delay.
Q3) The difficulty in analyzing oligopolistic behavior arises from the A)degree of government regulation of the market structure.
B)interdependent nature of oligopolistic decisions.
C)large number of firms in the industry.
D)market power of consumers.
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Chapter 11: B: Price-Searcher Markets With High Entry
Barriers
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Q1) Suppose all automobile manufacturers have collusively agreed to sell their cars at a uniform price. If a firm wanted to break this agreement and not be detected, what would be one way to do this?
Q2) The Big River Power Company is a regulated monopolist with pricing structured such that the stockholders receive a "fair" rate of return based on the firm's unit costs. Can economic thinking predict how the company executive offices are likely to be furnished? Given a choice between Hawaii and downtown Cleveland (20 miles away), where would we expect the Board of Directors to meet?
Q3) Licensing is a process in which a firm wanting to enter a market must
A)require all potential customers to obtain government permission to purchase the product.
B)notify the government within a certain period after it has entered the market.
C)pay all overdue taxes before entering the market.
D)obtain permission from the government to enter the market.
Q4) Monopoly is a word derived from Greek origins that means, roughly, single seller. Why is the definition of monopoly as single seller inadequate in economic terms?
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Page 19
Chapter 12: The Supply of and Demand for Productive Resources
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Q1) If the marginal revenue product of the fifth worker hired by a firm is $15 and the price of a unit of output is $5 regardless of how much is sold, then the marginal product of the fifth worker is
A)15 units of output.
B)5 units of output.
C)3 units of output.
D)45 units of output.
E)75 units of output.
Q2) Refer to Figure 12-4. With regard to cookie production, the figure implies
A)diminishing marginal product of workers.
B)diminishing marginal cost of cookie production.
C)decreasing cost of cookie production.
D)increasing marginal product of workers.
Q3) The demand curve for a human resource will be more elastic the
A)more and better substitutes are available for it.
B)more difficult it is to substitute other resources for it.
C)more inelastic the demand for the product the resource is used to produce.
D)shorter the time period under consideration.
Q4) There is an Italian soccer player who makes more than $10 million a year. Why?
Page 20
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Chapter 13: Earnings, Productivity, and the Job Market
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Q1) If Congress suddenly passes legislation that required all U.S. workers to receive the same annual pay, we would expect
A)less human capital investment.
B)a shortage of workers to fill the least desirable jobs.
C)a surplus of workers to fill the easy, desirable jobs.
D)all of the above.
Q2) Which one of the following is most likely to reduce the mobility of labor between jobs?
A)an increase in the minimum wage
B)legislation relaxing licensing requirements for entry into many occupations
C)the taxation of unemployment compensation in the same manner as income from other sources
D)both b and c above
Q3) Which of the following could be an institutional barrier to employment?
A)licensing requirements
B)labor unions
C)minimum wages
D)all of the above
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Chapter 14: Investment, the Capital Market, and the Wealth of Nations
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Q1) If the interest rate is 10 percent, the net present value of $500 to be received one year from now is
A)$413.22.
B)$450.
C)$454.55.
D)$500.
Q2) Entrepreneurship is characterized by
A)the ability to visualize and undertake economically beneficial projects.
B)originality and innovation.
C)leadership and discovery.
D)all of the above.
Q3) The additional amount a person is willing to pay to obtain a good or resource now rather than later is called the
A)interest rate.
B)nominal price of future goods.
C)inflationary premium.
D)risk premium.
Q4) Erin just won Lotto America, which will pay her $40 million over the next 20 years at a rate of $2 million a year. Is Erin $40 million richer today?
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Chapter 15: Income Inequality and Poverty
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Q1) Imagine two countries, Lebos and Egap, that have identical average annual incomes. In Lebos, the poorest families one year almost always end up as the richest families the next year and become middle-income families the year after that. In Egap, however, the poor remain poor and rich remain rich. Which of the following is true about the two countries?
A)The measured distribution of annual income in any given year is more equal in Lebos than in Egap.
B)The measured distribution of annual income in any given year is more equal in Egap than in Lebos.
C)The measured distribution of annual income in any given year will be the same in Lebos and Egap.
D)The distribution of lifetime income is more equal in Egap than in Lebos.
Q2) Compared to low-income families, high-income families tend to
A)have smaller family sizes (fewer persons per family).
B)have more workers per family.
C)be headed by a person who has not completed high school.
D)supply fewer weeks of work per year.
Q3) Why don't we divide the economic pie evenly so that each person receives the same income?
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Chapter 16: Appendix: Government Spending and Taxation
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Q1) "I am in favor of increasing the corporate income tax. Businesses should shoulder a larger share of the tax burden." This statement is
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.
Q2) When the number of families with someone employed by the government is added to those receiving income from transfer programs, the share of American families receiving income from the government is
A)less than 20 percent
B)approximately 50 percent of the total
C)approximately 62 percent of the total
D)a little more than 75 percent of the total
Q3) How has the structure of the personal income tax changed and the share of taxes paid by various income groups changed in recent decades?
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Chapter 17: Appendix: the Economics of Social Security
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Q1) What will the federal government have to do in order to redeem the bonds in the Social Security Trust Fund?
A)raise taxes
B)cut expenditures on other government programs
C)borrow additional funds
D)Some combination of a, b, andc.
Q2) A shortfall of tax revenues at current rates relative to promised benefits for a government program is called
A)a personal retirement account.
B)an expected equity.
C)a promissory note.
D)an unfunded liability.
Q3) Which of the following tends to increase the attractiveness of a retirement system based on savings and investment rather than pay-as-you-go principles?
A)a persistent increase in the number of workers relative to the number of retirees
B)a large number of workers relative to the number of retirees
C)a reduction in the number of workers relative to the number of retirees
D)a persistent increase in the life expectancy of retirees.
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Q1) The stock price of a firm is primarily a reflection of the
A)firm's current net earnings per share.
B)firm's expected future net earnings per share.
C)discounted value of the firm's expected future net earnings per share.
D)firm's current net earnings per share multiplied by the interest rate.
E)book value of the firm.
Q2) A firm's stock price will be higher when the interest rate is ____ and the value of the firm's expected future profits are ____.
A)lower; larger
B)lower; smaller
C)higher; larger
D)higher; smaller
Q3) Which of the following will reduce the risk accompanying equity (stock) investments?
A)the purchase of shares of a mutual fund that holds the stocks of many diverse corporations
B)the purchasing and holding of equities over a lengthy period of time
C)the purchase of shares in firms doing business in a wider variety of industries and markets
D)all of the above
Page 26
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Chapter 19: Appendix: Great Debates in Economics: Keynes Versus Hayek
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Q1) In his book The Road to Serfdom, Friedrich Hayek argued that the growth of government
A)was essential if the ups and downs of the business cycle were going to be controlled.
B)must be increased if western democracies were going to survive.
C)could only be achieved if monetary policy-makers were willing to expand the supply of money more rapidly.
D)endangered freedom and moved Western democracies toward tyranny, just as it had done in Nazi Germany and the Soviet Union.
Q2) According to the Keynesian view, capitalism
A)is a highly productive form of economic organization that works best when government intervention is least.
B)experiences booms and busts because of the instability of private investment that is driven by fickle changes in business optimism.
C)experiences booms and busts that are primarily the result of inappropriate monetary policy.
D)experiences fluctuations in aggregate demand that cannot be controlled with fiscal policy.
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Chapter 20: Appendix: the Crisis of 2008: Causes and Lessons for the Future
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Q1) Since 1995, federal regulations have
A)tightened mortgage lending standards and therefore made it difficult to obtain a loan to purchase a house.
B)increased the down payment housing buyers are required to make in order to obtain a mortgage loan.
C)loosened lending standards and made it possible for many buyers to purchase a house with little or no down payment.
D)required investment banks to maintain more capital against their holdings of mortgage loans.
Q2) During the 1980s and 1990s, the Federal Reserve's monetary policy focused primarily on
A)keeping short-term interest rates low in order to stimulate real output and economic growth.
B)a variety of factors, such as unemployment and real GDP, resulting in variable inflation rates throughout this period.
C)keeping inflation low and the general price level relatively stable.
D)monetary expansion in order to reduce unemployment.
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Chapter 21: Appendix: Lessons From the Great Depression
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Sample Questions
Q1) What prompted the large increase in tax rates in 1932 in the midst of an economic recession?
A)concern that inflation would rise due to increases in real output and aggregate demand
B)expansionary fiscal policy designed to stimulate aggregate demand
C)the Keynesian view that taxes should be increased during a recession
D)the view that the federal government should maintain a balanced budget
Q2) Which of the following was true with regard to the Great Depression?
A)The policies of the New Deal brought the Great Depression to an end well before World War II.
B)Sound economic policy was followed during this era, which makes the length and severity of the Great Depression puzzling to economists.
C)The length and severity of the Great Depression was the result of unsound economic policies followed by both the Hoover and Roosevelt Administrations.
D)The Great Depression was largely the result of the highly expansionary monetary policy of the Fed during the 1930s.
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Chapter 22: Appendix: the Economics of Healthcare
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Sample Questions
Q1) If a third party pays for an individual to consume a good, how is the decision making of consumers affected? How does this affect the actions of suppliers?
Q2) Which of the following is true?
A)Healthcare in Canada and most of the European countries is a socialized industry.
B)Socialization of the healthcare industry eliminates the problem of scarcity in the healthcare industry.
C)The high-income countries of Europe are able to provide as much healthcare, free of charge, as their citizens want.
D)All of the above are true.
Q3) Third-party payments by either the government or an insurance company accounted for ____ of the 2009 healthcare expenditures, compared to ____ paid by third parties in 1960.
A)40 percent; 20 percent
B)20 percent; 40 percent
C)86 percent; 45 percent
D)96 percent; 73 percent
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Chapter 23: Appendix:education: Problems and Performance
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Sample Questions
Q1) Relative to other countries, U.S. spending per pupil for public elementary and secondary education is
A)among the lowest in the world.
B)roughly average when compared with other countries.
C)among the highest in the world.
D)higher than in most other developed countries but less than in developing countries.
Q2) The incentive of schools to provide a high quality education at a low cost and the incentive of parents and students to shop around for the best schools will be weakest when education is produced
A)privately but paid for by taxpayers and provided free of charge.
B)by public schools and the cost of education is covered by taxes.
C)privately and parents must purchase it with their own money.
D)by public schools and parents purchase it with their own money.
Q3) When compared to the achievement scores of students in other nations, U.S. students are
A)well-below average.
B)well-above average.
C)about average.
D)above average in mathematics, but below average in science.
Page 31
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Chapter 24: Appendix: Earnings Differences Between Men and Women
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Q1) During the decade following the passage of the 1962 equal pay legislation and the 1964 civil rights legislation,
A)the male/female wage differential became much smaller.
B)the male/female wage differential became much larger.
C)there was little change in the earnings of women relative to men.
D)the educational choices of women and men became less similar.
Q2) During the last two decades, the number of women preparing for careers as professionals has ____, and the proportion of those completing college degrees has ____.
A)increased; decreased
B)increased; increased
C)decreased; decreased
D)decreased; increased
Q3) Which of the following is true about those graduating with college degrees?
A)The proportion of college degrees earned by women has been declining in recent decades.
B)The proportion of college degrees earned by women has been virtually constant during the last four decades.
C)In 2008, only about 42 percent of those graduating from college were women.
D)In 2008, only about 42 percent of those graduating from college were men.
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Chapter 26: Appendix: the Question of Resource Exhaustion
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Q1) Researcher Terry Anderson claims that with respect to the supply of water, trading it would be
A)wrong and counter-productive.
B)essentially impossible due to lack of technologies to move the water.
C)highly productive and bring cooperation among the traders.
D)a problem, since monopolists would come to own too much.
Q2) When water cannot be traded among current and potential users, then
A)each user will take more care to conserve, because added water cannot be obtained.
B)users have a strong incentive to conserve because they are now protected from price increases imposed by greedy entrepreneurs.
C)efficiency improves, as dry years can be better anticipated and planned for, and every user knows the quantity that will be available.
D)water will not flow to its highest valued uses, and some users will use water for relatively low-valued uses, because they cannot gain by selling it to others.
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Chapter 25: Appendix: Do Labor Unions Increase the Wages of Workers
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Sample Questions
Q1) From 1950 to 2008, union membership has declined from more than 30 percent of the workforce to approximately 12 percent. Over this period, the share of national income going to labor
A)declined substantially.
B)increased substantially.
C)remained approximately the same.
D)initially increased but has fallen recently.
Q2) What common goals, if any, do labor and management share?
Q3) Which of the following is not a cause of the decline in unionization in the United States?
A)deregulation in transportation and communication industries
B)increased foreign competition
C)growth in the number of smaller firms
D)an increase in the number of workers wishing to be union members
Q4) In which of the following occupations is union membership the highest?
A)sales
B)transportation
C)construction
D)government
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Q5) List some factors that might make the threat of a strike more effective.
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Chapter 27: Appendix: Difficult Environmental Cases and the
Role of Government
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Sample Questions
Q1) Which of the following is an effort to establish property rights and promote more efficient allocation of ocean fisheries?
A)Regulations limiting the length of the fishing season.
B)Regulations reducing the size of fishing boats and other equipment used in the industry.
C)Establishment of transferable individual fishing quotas.
D)Complete open access of ocean fishing to anyone who would like to enter the business.
Q2) The scientific evidence on the causes and consequences of global warming
A)is clear and indisputable.
B)is uncertain and variable.
C)indicates global warming should be stopped regardless of cost.
D)is of no importance to economists.
Q3) Which of the following is most likely to have the strongest demand for environmental quality?
A)countries with water pollution problems
B)poor countries
C)countries with air pollution problems
D)wealthy countries
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