Question 1

The current empirical evidence indicates that

Accepted Answer

A)  changes in the earth's cloud cover will clearly enhance the warming effects of carbon dioxide. 
B)  the increase in carbon dioxide, over thousands of years, is definitely the cause of global warming. 
C)  if global warming continues as most models predict, then in the next 100 years the sea levels clearly will rise by more than 10 feet. 
D)  none of the above is true. 
A)  changes in the earth's cloud cover will clearly enhance the warming effects of carbon dioxide. 
B)  the increase in carbon dioxide, over thousands of years, is definitely the cause of global warming. 
C)  if global warming continues as most models predict, then in the next 100 years the sea levels clearly will rise by more than 10 feet. 
D)  none of the above is true.

Question 2

When health insurance is purchased primarily through one's employer,

Accepted Answer

A)  direct purchase of health insurance becomes cheaper. 
B)  the benefits of the healthcare insurance are fully taxable. 
C)  it is more costly for employees to switch jobs and move to areas where jobs are available. 
D)  the overall number of people without health insurance decreases. 
A)  direct purchase of health insurance becomes cheaper. 
B)  the benefits of the healthcare insurance are fully taxable. 
C)  it is more costly for employees to switch jobs and move to areas where jobs are available. 
D)  the overall number of people without health insurance decreases.

Question 3

Water shortages are usually the result of

Accepted Answer

A)  profit-seeking owners of the resource holding water off the market and refusing to trade. 
B)  bad forecasts by water planners. 
C)  monopoly fixing of water prices. 
D)  a lack of tradeable property rights in water. 
A)  profit-seeking owners of the resource holding water off the market and refusing to trade. 
B)  bad forecasts by water planners. 
C)  monopoly fixing of water prices. 
D)  a lack of tradeable property rights in water.

Question 4

Which of the following is an example of a deficiency caused by a regulatory approach to pollution?

Accepted Answer

A)  ignored information provided by market signals 
B)  special interest influence on policies 
C)  lack of accountability by regulators for costs of regulation 
D)  all of the above 
A)  ignored information provided by market signals 
B)  special interest influence on policies 
C)  lack of accountability by regulators for costs of regulation 
D)  all of the above

Question 5

In the main chorus of the Keynes-Hayek rap lyrics, Keynes states "I want to steer markets" and Hayek replies, "I want them set free." These statements are referring to

Accepted Answer

A)  the tendency of Keynesians to favor government intervention and central planning and the tendency of Hayekians to favor free markets. 
B)  the tendency of Keynesians to favor restrictive fiscal policy and the tendency of Hayekians to favor expansionary fiscal policy. 
C)  the tendency of Keynesians to favor budget deficits and the tendency of Hayekians to insist on budget surpluses. 
D)  the tendency of Keynesians to favor fiscal policy and of Heyekians to favor monetary policy. 
A)  the tendency of Keynesians to favor government intervention and central planning and the tendency of Hayekians to favor free markets. 
B)  the tendency of Keynesians to favor restrictive fiscal policy and the tendency of Hayekians to favor expansionary fiscal policy. 
C)  the tendency of Keynesians to favor budget deficits and the tendency of Hayekians to insist on budget surpluses. 
D)  the tendency of Keynesians to favor fiscal policy and of Heyekians to favor monetary policy.

Question 6

Which of the following would tend to cause the observed earnings of women to be lower than the observed earnings of men?

Accepted Answer

A)  The average woman has fewer years of schooling than the average man. 
B)  The average number of hours worked is smaller for women than men. 
C)  Women are more likely to prefer jobs that have more flexible hours. 
D)  All of the above would be causes. 
A)  The average woman has fewer years of schooling than the average man. 
B)  The average number of hours worked is smaller for women than men. 
C)  Women are more likely to prefer jobs that have more flexible hours. 
D)  All of the above would be causes.

Question 7

The share of the labor force that was unionized fell from more than 30 percent in the 1950s to less than 15 percent in the 2000s. During this time period, the share of national income allocated to labor (in contrast to capital)

Accepted Answer

A)  decreased by approximately 10 percent. 
B)  decreased by more than 15 percent. 
C)  increased by 10 percent. 
D)  was virtually unchanged. 
A)  decreased by approximately 10 percent. 
B)  decreased by more than 15 percent. 
C)  increased by 10 percent. 
D)  was virtually unchanged.

Question 8

Suppose that new demands greatly reduce the proved reserves of titanium to unexpectedly low levels, and it appears that the new demands will continue. If the market price is unregulated, we should expect that the price will rise and

Accepted Answer

A)  increase exploration and encourage more effective recovery methods, resulting in additional new supplies of titanium. 
B)  encourage consumers and manufacturers to conserve titanium. 
C)  increase the incentive to find and use substitutes for titanium. 
D)  All of the above. 
A)  increase exploration and encourage more effective recovery methods, resulting in additional new supplies of titanium. 
B)  encourage consumers and manufacturers to conserve titanium. 
C)  increase the incentive to find and use substitutes for titanium. 
D)  All of the above.

Question 9

The General Theory of John Maynard Keynes exerted a major impact on macroeconomics during the 20th century primarily because

Accepted Answer

A)  it provided the only logically consistent view of what caused the Great Depression. 
B)  it provided a reasonable explanation of what went wrong during the Great Depression and what could be done to prevent it from happening again. 
C)  it explained how gross domestic product could be measured and why this was important. 
D)  it derived the conditions necessary for maximum efficiency of resource use and explained how these conditions could be achieved through central planning. 
A)  it provided the only logically consistent view of what caused the Great Depression. 
B)  it provided a reasonable explanation of what went wrong during the Great Depression and what could be done to prevent it from happening again. 
C)  it explained how gross domestic product could be measured and why this was important. 
D)  it derived the conditions necessary for maximum efficiency of resource use and explained how these conditions could be achieved through central planning.

Question 10

The National Industrial Recovery Act, passed in 1933, was an attempt to

Accepted Answer

A)  break monopolies and cartels, and introduce competition into several different industries. 
B)  fix prices, wages, and quotas for several industries in an effort to keep prices high. 
C)  lower corporate taxes and remove collusive behavior in an effort to keep U.S. firms competitive with foreign manufacturers. 
D)  create a stable economic environment that would encourage investment and expansion in the industrial sector of the economy. 
A)  break monopolies and cartels, and introduce competition into several different industries. 
B)  fix prices, wages, and quotas for several industries in an effort to keep prices high. 
C)  lower corporate taxes and remove collusive behavior in an effort to keep U.S. firms competitive with foreign manufacturers. 
D)  create a stable economic environment that would encourage investment and expansion in the industrial sector of the economy.

Question 11

According to the Keynesian view, capitalism

Accepted Answer

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. 
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.

Question 12

Which of the following is true of regulation?

Accepted Answer

A)  Regulatory agencies often ignore the secondary effects of their actions and fail to foresee future problems. 
B)  Policy-makers are hesitant to call for new regulations even when it is clear they would help avert future crises. 
C)  Mortgage lending and banking have historically been unregulated and therefore regulation in these sectors will be unpopular. 
D)  Past regulations have been effective at averting crises, but they are unpopular because they reduce the profitability of the regulated industry. 
A)  Regulatory agencies often ignore the secondary effects of their actions and fail to foresee future problems. 
B)  Policy-makers are hesitant to call for new regulations even when it is clear they would help avert future crises. 
C)  Mortgage lending and banking have historically been unregulated and therefore regulation in these sectors will be unpopular. 
D)  Past regulations have been effective at averting crises, but they are unpopular because they reduce the profitability of the regulated industry.

Question 13

Since the 1970s, the percentage of women preparing for careers in professions has been ____, while the female/male earnings ratio has been ____ during this same period.

Accepted Answer

A)  rising; declining 
B)  rising; increasing 
C)  falling; increasing 
D)  falling; declining 
A)  rising; declining 
B)  rising; increasing 
C)  falling; increasing 
D)  falling; declining

Question 14

Historically, when a diverse set of stocks is held over a lengthy time period, stocks have yielded a ____ rate of return, and the variation in the rate of return has been ____.

Accepted Answer

A)  low; low 
B)  low; high 
C)  high; low 
D)  high; high 
A)  low; low 
B)  low; high 
C)  high; low 
D)  high; high

Question 15

Which of the following is true?

Accepted Answer

A)  Managed equity funds that have yielded attractive returns during the last 5 or 10 years can generally be counted on to yield similar returns in the future. 
B)  Managed funds generally outperform indexed equity mutual funds. 
C)  An investment strategy that yielded a high rate of return in the past will often be disastrous in the future. 
D)  Indexed equity mutual funds are usually tied directly to either the Consumer Price Index or the GDP deflator. 
A)  Managed equity funds that have yielded attractive returns during the last 5 or 10 years can generally be counted on to yield similar returns in the future. 
B)  Managed funds generally outperform indexed equity mutual funds. 
C)  An investment strategy that yielded a high rate of return in the past will often be disastrous in the future. 
D)  Indexed equity mutual funds are usually tied directly to either the Consumer Price Index or the GDP deflator.

Question 16

If a firm operates in a competitive industry and its unionized labor force is successful in bargaining for a wage increase, where is the firm likely to get the money to pay the higher wages?

Accepted Answer

If it is a competitive industry, the own

Question 17

Which of the following is true?

Accepted Answer

A)  People who invest in the stock market are virtually certain to make money. 
B)  Investors in the stock market can reduce their risk if they hold shares of specific stocks for only short periods of time. 
C)  The risk of stock market investments can be reduced through the holding of a diverse portfolio of unrelated stocks over long periods of time. 
D)  In the long run, corporate bonds can be expected to yield a higher real rate of return than ownership of stocks. 
A)  People who invest in the stock market are virtually certain to make money. 
B)  Investors in the stock market can reduce their risk if they hold shares of specific stocks for only short periods of time. 
C)  The risk of stock market investments can be reduced through the holding of a diverse portfolio of unrelated stocks over long periods of time. 
D)  In the long run, corporate bonds can be expected to yield a higher real rate of return than ownership of stocks.

Question 18

Which of the following reforms could help to improve the operation and efficiency of health-care markets?

Accepted Answer

A)  shifting Medicare at least partially from a reimbursement service to a defined-benefit plan 
B)  placing more emphasis on the demand side of the health-care market 
C)  encouraging the purchase of health insurance policies with first-dollar coverage and small co-payments 
D)  All of the reforms listed above could help to improve the situation. 
A)  shifting Medicare at least partially from a reimbursement service to a defined-benefit plan 
B)  placing more emphasis on the demand side of the health-care market 
C)  encouraging the purchase of health insurance policies with first-dollar coverage and small co-payments 
D)  All of the reforms listed above could help to improve the situation.

Question 19

When water cannot be traded among current and potential users, then

Accepted Answer

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. 
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.

Question 20

Since 1950, the price of crude oil, corrected for inflation, has

Accepted Answer

A)  gone steadily upward. 
B)  generally declined, with brief price spikes upward in 1973 and 1987. 
C)  showed one peak in the early 1980s and another substantial rise after 2000, but otherwise showed little trend. 
D)  changed very little, in real terms. 
A)  gone steadily upward. 
B)  generally declined, with brief price spikes upward in 1973 and 1987. 
C)  showed one peak in the early 1980s and another substantial rise after 2000, but otherwise showed little trend. 
D)  changed very little, in real terms.

The current empirical evidence indicates that

When health insurance is purchased primarily through one's employer,

Water shortages are usually the result of

Which of the following is an example of a deficiency caused by a regulatory approach to pollution?

In the main chorus of the Keynes-Hayek rap lyrics, Keynes states "I want to steer markets" and Hayek replies, "I want them set free." These statements are referring to

Which of the following would tend to cause the observed earnings of women to be lower than the observed earnings of men?

The share of the labor force that was unionized fell from more than 30 percent in the 1950s to less than 15 percent in the 2000s. During this time period, the share of national income allocated to labor (in contrast to capital)

Suppose that new demands greatly reduce the proved reserves of titanium to unexpectedly low levels, and it appears that the new demands will continue. If the market price is unregulated, we should expect that the price will rise and

The General Theory of John Maynard Keynes exerted a major impact on macroeconomics during the 20^th century primarily because

The National Industrial Recovery Act, passed in 1933, was an attempt to

According to the Keynesian view, capitalism

Which of the following is true of regulation?

Since the 1970s, the percentage of women preparing for careers in professions has been , while the female/male earnings ratio has been during this same period.

Historically, when a diverse set of stocks is held over a lengthy time period, stocks have yielded a rate of return, and the variation in the rate of return has been .

Which of the following is true?

If a firm operates in a competitive industry and its unionized labor force is successful in bargaining for a wage increase, where is the firm likely to get the money to pay the higher wages?

Which of the following is true?

Which of the following reforms could help to improve the operation and efficiency of health-care markets?

When water cannot be traded among current and potential users, then

Since 1950, the price of crude oil, corrected for inflation, has

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 current empirical evidence indicates that

When health insurance is purchased primarily through one's employer,

Water shortages are usually the result of

Which of the following is an example of a deficiency caused by a regulatory approach to pollution?

In the main chorus of the Keynes-Hayek rap lyrics, Keynes states "I want to steer markets" and Hayek replies, "I want them set free." These statements are referring to

Which of the following would tend to cause the observed earnings of women to be lower than the observed earnings of men?

The share of the labor force that was unionized fell from more than 30 percent in the 1950s to less than 15 percent in the 2000s. During this time period, the share of national income allocated to labor (in contrast to capital)

Suppose that new demands greatly reduce the proved reserves of titanium to unexpectedly low levels, and it appears that the new demands will continue. If the market price is unregulated, we should expect that the price will rise and

The General Theory of John Maynard Keynes exerted a major impact on macroeconomics during the 20th century primarily because

The National Industrial Recovery Act, passed in 1933, was an attempt to

According to the Keynesian view, capitalism

Which of the following is true of regulation?

Since the 1970s, the percentage of women preparing for careers in professions has been ____, while the female/male earnings ratio has been ____ during this same period.

Historically, when a diverse set of stocks is held over a lengthy time period, stocks have yielded a ____ rate of return, and the variation in the rate of return has been ____.

Which of the following is true?

If a firm operates in a competitive industry and its unionized labor force is successful in bargaining for a wage increase, where is the firm likely to get the money to pay the higher wages?

Which of the following is true?

Which of the following reforms could help to improve the operation and efficiency of health-care markets?

When water cannot be traded among current and potential users, then

Since 1950, the price of crude oil, corrected for inflation, has

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

The General Theory of John Maynard Keynes exerted a major impact on macroeconomics during the 20^th century primarily because

Since the 1970s, the percentage of women preparing for careers in professions has been , while the female/male earnings ratio has been during this same period.

Historically, when a diverse set of stocks is held over a lengthy time period, stocks have yielded a rate of return, and the variation in the rate of return has been .