Question 1

The Hotelling Principle is the idea that the price of a ________ is expected to rise at a rate equal to the ________.

Accepted Answer

A) nonrenewable natural resource; inflation rate 
B) unit of capital; interest rate 
C) nonrenewable natural resource; interest rate 
D) unit of capital; inflation rate 
E) nonrenewable natural resource; percentage increase in demand 
A) nonrenewable natural resource; inflation rate 
B) unit of capital; interest rate 
C) nonrenewable natural resource; interest rate 
D) unit of capital; inflation rate 
E) nonrenewable natural resource; percentage increase in demand

Question 2

A regressive income tax

Accepted Answer

A) taxes income at an average rate that decreases with income. 
B) taxes lower income people a smaller percentage than higher income people. 
C) receives more from rich people, but taxes them at the same rate as poor people. 
D) taxes everyone at the same rate. 
E) taxes income at a marginal rate that increases with rises in income. 
A) taxes income at an average rate that decreases with income. 
B) taxes lower income people a smaller percentage than higher income people. 
C) receives more from rich people, but taxes them at the same rate as poor people. 
D) taxes everyone at the same rate. 
E) taxes income at a marginal rate that increases with rises in income.

Question 3

Use the figure below to answer the following questions.
   
Figure 18.3.2
-If a union and the monopsonist in Figure 18.3.2 agree to bargaining, the outcome is an hourly wage rate

Accepted Answer

A) of $7. 
B) between $4 and $7. 
C) between $4 and $9. 
D) between $7 and $9. 
E) of $9. 
A) of $7. 
B) between $4 and $7. 
C) between $4 and $9. 
D) between $7 and $9. 
E) of $9.

Question 4

Water from the Mackenzie River is an example of

Accepted Answer

A) a nonrenewable natural resource. 
B) a natural resource that can be used repeatedly. 
C) capital. 
D) a static resource. 
E) a capital service. 
A) a nonrenewable natural resource. 
B) a natural resource that can be used repeatedly. 
C) capital. 
D) a static resource. 
E) a capital service.

Question 5

Use the table below to answer the following questions.
Table 18.2.3
  
-Emperor Spring Rolls produces spring rolls.The market for spring rolls is perfectly competitive, and the price of a spring roll is $3.50.The labour market is competitive, and the wage rate is $28 a day.Table 18.2.3 shows the workers' total product schedule.To maximize its profit, Emperor produces ________ spring rolls a day.

Accepted Answer

A) 32 
B) 44 
C) 54 
D) 62 
E) 66 
A) 32 
B) 44 
C) 54 
D) 62 
E) 66

Question 6

Use the table below to answer the following questions.
Table 18.2.1
  
-Refer to Table 18.2.1.If the firm can sell all the output it wants for the price of $4 a unit, what is the profit-maximizing number of workers if the wage rate is $12?

Accepted Answer

A) zero 
B) 10 
C) 4 
D) 8 
E) 6 
A) zero 
B) 10 
C) 4 
D) 8 
E) 6

Question 7

The income effect on labour supply refers to

Accepted Answer

A) the fact that at higher wages the worker earns more income. 
B) the fact that as the wage rate increases and income increases, labourers demand more of all normal goods, including leisure activities. 
C) the increase in the income of firms that is necessary to pay higher wages. 
D) the fact that as workers become more productive, they earn more income. 
E) the fact that as the wage rate increases and income increases, labourers demand more of all normal goods, including labour. 
A) the fact that at higher wages the worker earns more income. 
B) the fact that as the wage rate increases and income increases, labourers demand more of all normal goods, including leisure activities. 
C) the increase in the income of firms that is necessary to pay higher wages. 
D) the fact that as workers become more productive, they earn more income. 
E) the fact that as the wage rate increases and income increases, labourers demand more of all normal goods, including labour.

Question 8

When compared to a monopsony labour market with the same value of marginal product curve and labour supply curve, a perfectly competitive labour market will pay a

Accepted Answer

A) lower wage and employ fewer workers. 
B) lower wage and employ more workers. 
C) higher wage and employ fewer workers. 
D) higher wage and employ more workers. 
E) higher wage and employ the same amount of workers. 
A) lower wage and employ fewer workers. 
B) lower wage and employ more workers. 
C) higher wage and employ fewer workers. 
D) higher wage and employ more workers. 
E) higher wage and employ the same amount of workers.

Question 9

The distribution of wealth

Accepted Answer

A) understates the degree of inequality because it does not take into account the family's stage in its life cycle. 
B) understates the degree of inequality because it does not take into account the distribution of human capital. 
C) overstates the degree of inequality because it does not take into account the family's stage in its life cycle. 
D) overstates the degree of inequality because it does not take into account the distribution of human capital. 
E) is an accurate measure of the degree of inequality. 
A) understates the degree of inequality because it does not take into account the family's stage in its life cycle. 
B) understates the degree of inequality because it does not take into account the distribution of human capital. 
C) overstates the degree of inequality because it does not take into account the family's stage in its life cycle. 
D) overstates the degree of inequality because it does not take into account the distribution of human capital. 
E) is an accurate measure of the degree of inequality.

Question 10

Use the figure below to answer the following questions.
   
Figure 19.1.3
-In Figure 19.1.3, the richest 20 percent of all families receive what share of all income?

Accepted Answer

A) 10 percent 
B) 20 percent 
C) 30 percent 
D) 40 percent 
E) 80 percent 
A) 10 percent 
B) 20 percent 
C) 30 percent 
D) 40 percent 
E) 80 percent

Question 11

Joe earns $100,000 per year.He pays a tax rate of 28 percent on the first $60,000 of income and a tax rate of 15 percent on income above $60,000.This tax system is an example of a ________ income tax.

Accepted Answer

A) progressive 
B) proportional 
C) regressive 
D) flat 
E) Both B and D are correct. 
A) progressive 
B) proportional 
C) regressive 
D) flat 
E) Both B and D are correct.

Question 12

If the annual rate of interest is 10 percent per year, what is the present value of $100 received one year from now?

Accepted Answer

A) $90.00 
B) $90.91 
C) $95.45 
D) $100.00 
E) $110.00 
A) $90.00 
B) $90.91 
C) $95.45 
D) $100.00 
E) $110.00

Question 13

Between 1970 and 2005, the world Gini ratio ________ indicating ________ in the world distribution of income.

Accepted Answer

A) fell; greater equality 
B) fell; greater inequality 
C) did not change; no change 
D) rose; greater equality 
E) rose; greater inequality 
A) fell; greater equality 
B) fell; greater inequality 
C) did not change; no change 
D) rose; greater equality 
E) rose; greater inequality

Question 14

A shift in a firm's demand curve for labour occurs for all of the following reasons except a change in

Accepted Answer

A) the prices of other factors of production. 
B) technology. 
C) the price of the firm's output. 
D) wage rate. 
E) marginal product of labour. 
A) the prices of other factors of production. 
B) technology. 
C) the price of the firm's output. 
D) wage rate. 
E) marginal product of labour.

Question 15

The inequality in the distribution of wealth is

Accepted Answer

A) less than the inequality in the distribution of income. 
B) decreased by the existence of assortative mating. 
C) a better measure of the inequality in the distribution of economic resources than is the inequality in the distribution of income. 
D) shown by a Lorenz curve that is farther away from the line of equality than the Lorenz curve for income. 
E) the result of an increasing Gini coefficient. 
A) less than the inequality in the distribution of income. 
B) decreased by the existence of assortative mating. 
C) a better measure of the inequality in the distribution of economic resources than is the inequality in the distribution of income. 
D) shown by a Lorenz curve that is farther away from the line of equality than the Lorenz curve for income. 
E) the result of an increasing Gini coefficient.

Question 16

If the present value of $500 to be received in one year is $463, the interest rate is

Accepted Answer

A) 5 percent per year. 
B) 8 percent per year. 
C) 10 percent per year. 
D) 20.8 percent per year. 
E) 37 percent per year. 
A) 5 percent per year. 
B) 8 percent per year. 
C) 10 percent per year. 
D) 20.8 percent per year. 
E) 37 percent per year.

Question 17

Use the figure below to answer the following questions.
   
Figure 19.1.3
-In Figure 19.1.3, the second richest 20 percent of all families receive what share of income?

Accepted Answer

A) 10 percent 
B) 20 percent 
C) 30 percent 
D) 40 percent 
E) 50 percent 
A) 10 percent 
B) 20 percent 
C) 30 percent 
D) 40 percent 
E) 50 percent

Question 18

In 2011, the mean household income in Canada was

Accepted Answer

A) $63,000. 
B) $50,700. 
C) $25,000. 
D) $48,300. 
E) $65,000. 
A) $63,000. 
B) $50,700. 
C) $25,000. 
D) $48,300. 
E) $65,000.

Question 19

If the value of marginal product of capital decreases as more capital is employed, then the

Accepted Answer

A) supply curve of capital is upward sloping. 
B) supply curve of capital is downward sloping. 
C) demand curve for capital is horizontal. 
D) demand curve for capital is downward sloping. 
E) demand curve for capital is upward sloping. 
A) supply curve of capital is upward sloping. 
B) supply curve of capital is downward sloping. 
C) demand curve for capital is horizontal. 
D) demand curve for capital is downward sloping. 
E) demand curve for capital is upward sloping.

Question 20

If the present value of the $1,000 to be received in one year is $800, the interest rate is

Accepted Answer

A) 25 percent per year. 
B) 8 percent per year. 
C) 10 percent per year. 
D) 12 percent per year. 
E) 125 percent per year. 
A) 25 percent per year. 
B) 8 percent per year. 
C) 10 percent per year. 
D) 12 percent per year. 
E) 125 percent per year.

The Hotelling Principle is the idea that the price of a is expected to rise at a rate equal to the .

A regressive income tax

Use the figure below to answer the following questions. Figure 18.3.2 -If a union and the monopsonist in Figure 18.3.2 agree to bargaining, the outcome is an hourly wage rate

Water from the Mackenzie River is an example of

Use the table below to answer the following questions. Table 18.2.1 -Refer to Table 18.2.1.If the firm can sell all the output it wants for the price of $4 a unit, what is the profit-maximizing number of workers if the wage rate is $12?

The income effect on labour supply refers to

When compared to a monopsony labour market with the same value of marginal product curve and labour supply curve, a perfectly competitive labour market will pay a

The distribution of wealth

Use the figure below to answer the following questions. Figure 19.1.3 -In Figure 19.1.3, the richest 20 percent of all families receive what share of all income?

Joe earns $100,000 per year.He pays a tax rate of 28 percent on the first $60,000 of income and a tax rate of 15 percent on income above $60,000.This tax system is an example of a ________ income tax.

If the annual rate of interest is 10 percent per year, what is the present value of $100 received one year from now?

Between 1970 and 2005, the world Gini ratio indicating in the world distribution of income.

A shift in a firm's demand curve for labour occurs for all of the following reasons except a change in

The inequality in the distribution of wealth is

If the present value of $500 to be received in one year is $463, the interest rate is

Use the figure below to answer the following questions. Figure 19.1.3 -In Figure 19.1.3, the second richest 20 percent of all families receive what share of income?

In 2011, the mean household income in Canada was

If the value of marginal product of capital decreases as more capital is employed, then the

If the present value of the $1,000 to be received in one year is $800, the interest rate is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Filters

Exam 18: Markets for Factors of Production

The Hotelling Principle is the idea that the price of a ________ is expected to rise at a rate equal to the ________.

A regressive income tax

Use the figure below to answer the following questions. Figure 18.3.2 -If a union and the monopsonist in Figure 18.3.2 agree to bargaining, the outcome is an hourly wage rate

Water from the Mackenzie River is an example of

Use the table below to answer the following questions. Table 18.2.1 -Refer to Table 18.2.1.If the firm can sell all the output it wants for the price of $4 a unit, what is the profit-maximizing number of workers if the wage rate is $12?

The income effect on labour supply refers to

When compared to a monopsony labour market with the same value of marginal product curve and labour supply curve, a perfectly competitive labour market will pay a

The distribution of wealth

Use the figure below to answer the following questions. Figure 19.1.3 -In Figure 19.1.3, the richest 20 percent of all families receive what share of all income?

Joe earns $100,000 per year.He pays a tax rate of 28 percent on the first $60,000 of income and a tax rate of 15 percent on income above $60,000.This tax system is an example of a ________ income tax.

If the annual rate of interest is 10 percent per year, what is the present value of $100 received one year from now?

Between 1970 and 2005, the world Gini ratio ________ indicating ________ in the world distribution of income.

A shift in a firm's demand curve for labour occurs for all of the following reasons except a change in

The inequality in the distribution of wealth is

If the present value of $500 to be received in one year is $463, the interest rate is

Use the figure below to answer the following questions. Figure 19.1.3 -In Figure 19.1.3, the second richest 20 percent of all families receive what share of income?

In 2011, the mean household income in Canada was

If the value of marginal product of capital decreases as more capital is employed, then the

If the present value of the $1,000 to be received in one year is $800, the interest rate is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Filters

The Hotelling Principle is the idea that the price of a is expected to rise at a rate equal to the .

Between 1970 and 2005, the world Gini ratio indicating in the world distribution of income.