Question 1

If the supply of labour decreases, which of the following events will occur?

Accepted Answer

A) The wage rate will decrease and firms will increase the number of workers to the point at which the value of marginal product equals the new wage rate. 
B) The wage rate will decrease and firms will decrease the number of workers to the point at which the value of marginal product equals the new wage rate. 
C) The wage rate will increase and firms will decrease the number of workers to the point at which the value of marginal product equals the new wage rate. 
D) The wage rate will increase and firms will decrease the number of workers to the point at which the value of marginal product is greater than the new wage rate. 
E) The wage rate will increase and firms will decrease the number of workers to the point at which the value of marginal product is less than the new wage rate. 
A) The wage rate will decrease and firms will increase the number of workers to the point at which the value of marginal product equals the new wage rate. 
B) The wage rate will decrease and firms will decrease the number of workers to the point at which the value of marginal product equals the new wage rate. 
C) The wage rate will increase and firms will decrease the number of workers to the point at which the value of marginal product equals the new wage rate. 
D) The wage rate will increase and firms will decrease the number of workers to the point at which the value of marginal product is greater than the new wage rate. 
E) The wage rate will increase and firms will decrease the number of workers to the point at which the value of marginal product is less than the new wage rate.

Question 2

Coal is an example of

Accepted Answer

A) a nonrenewable natural resource. 
B) a renewable natural resource. 
C) a public resource. 
D) a common resource. 
E) capital. 
A) a nonrenewable natural resource. 
B) a renewable natural resource. 
C) a public resource. 
D) a common resource. 
E) capital.

Question 3

Use the figure below to answer the following questions.
   
Figure 19.1.1
-Refer to Figure 19.1.1.The poorest 20 percent of households receive what share of total income?

Accepted Answer

A) 40 percent 
B) 60 percent 
C) 20 percent 
D) 5 percent 
E) 10 percent 
A) 40 percent 
B) 60 percent 
C) 20 percent 
D) 5 percent 
E) 10 percent

Question 4

Use the figure below to answer the following questions.
   
Figure 18.3.2
-Refer to Figure 18.3.2.Suppose this industry is initially in a monopsony situation and then the government introduces a minimum wage of $8 per hour.Choose the correct statement.

Accepted Answer

A) The wage rate rises, but employment decreases. 
B) The wage rate rises, but employment stays the same. 
C) The wage rate rises to $8 per hour, and employment increases to 800 hours. 
D) The wage rate rises to $8 per hour, and employment increases to 600 hours. 
E) The wage rate rises to $8 per hour, and employment increases to 500 hours. 
A) The wage rate rises, but employment decreases. 
B) The wage rate rises, but employment stays the same. 
C) The wage rate rises to $8 per hour, and employment increases to 800 hours. 
D) The wage rate rises to $8 per hour, and employment increases to 600 hours. 
E) The wage rate rises to $8 per hour, and employment increases to 500 hours.

Question 5

The present value of the $50 that will be received next year is $40.What is the interest rate?

Accepted Answer

A) 10 percent 
B) 8 percent 
C) 20 percent 
D) 50 percent 
E) 25 percent 
A) 10 percent 
B) 8 percent 
C) 20 percent 
D) 50 percent 
E) 25 percent

Question 6

Use the figure below to answer the following questions.
   
Figure 19.3.1
-Refer to Figure 19.3.1.At any given employment level, the vertical distance between the demand curves of the high-skilled and low-skilled workers

Accepted Answer

A) is equal to the difference in the value of marginal product of the workers. 
B) is equal to the difference in the work ethic of the workers. 
C) is caused by discrimination against minorities. 
D) is caused by discrimination against women. 
E) equals the cost of acquiring the skills. 
A) is equal to the difference in the value of marginal product of the workers. 
B) is equal to the difference in the work ethic of the workers. 
C) is caused by discrimination against minorities. 
D) is caused by discrimination against women. 
E) equals the cost of acquiring the skills.

Question 7

In the short run, the market supply of land is

Accepted Answer

A) relatively elastic. 
B) relatively inelastic. 
C) perfectly elastic. 
D) perfectly inelastic. 
E) either elastic or inelastic depending on the productivity of the land. 
A) relatively elastic. 
B) relatively inelastic. 
C) perfectly elastic. 
D) perfectly inelastic. 
E) either elastic or inelastic depending on the productivity of the land.

Question 8

Choose the correct sentence.

Accepted Answer

A) Inherited wealth does not change income inequality because debts can't be forced onto the next generation. 
B) Inherited wealth can increase income inequality because debts can't be forced onto the next generation, but it can also decrease income inequality. 
C) Inherited wealth decreases income inequality because debts are forced onto the next generation. 
D) Inherited wealth decreases income inequality because on average most people inherit the same amount of money. 
E) Inherited wealth always increases income inequality because of assortative mating. 
A) Inherited wealth does not change income inequality because debts can't be forced onto the next generation. 
B) Inherited wealth can increase income inequality because debts can't be forced onto the next generation, but it can also decrease income inequality. 
C) Inherited wealth decreases income inequality because debts are forced onto the next generation. 
D) Inherited wealth decreases income inequality because on average most people inherit the same amount of money. 
E) Inherited wealth always increases income inequality because of assortative mating.

Question 9

The closer the Lorenz curve is to the line of equality,

Accepted Answer

A) the more equal is the distribution. 
B) the less equal is the distribution. 
C) the more unfair is the income distribution. 
D) the richer are the highest 5 percent of households. 
E) the poorer are the highest 5 percent of households. 
A) the more equal is the distribution. 
B) the less equal is the distribution. 
C) the more unfair is the income distribution. 
D) the richer are the highest 5 percent of households. 
E) the poorer are the highest 5 percent of households.

Question 10

One criticism of social security programs such as the Guaranteed Income Supplement is that

Accepted Answer

A) it promotes efficiency rather than equity. 
B) it helps equity but hurts efficiency. 
C) it gives too much money to the elderly. 
D) it gives too much money to the poor. 
E) it gives too much money to the rich. 
A) it promotes efficiency rather than equity. 
B) it helps equity but hurts efficiency. 
C) it gives too much money to the elderly. 
D) it gives too much money to the poor. 
E) it gives too much money to the rich.

Question 11

Use the figure below to answer the following questions.
   
Figure 18.3.1
-Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve.If this labour market is competitive, the quantity of labour employed is

Accepted Answer

A) zero hours. 
B) 50 hours. 
C) 75 hours. 
D) 100 hours. 
E) greater than 100 hours. 
A) zero hours. 
B) 50 hours. 
C) 75 hours. 
D) 100 hours. 
E) greater than 100 hours.

Question 12

The world distribution of income has become more equal since 1970 because

Accepted Answer

A) average incomes in poorer countries are rising much faster than average incomes in rich countries. 
B) the distribution of income within most countries has become more equal. 
C) foreign aid programs from rich nations have increased in size and especially in effectiveness. 
D) technology is used similarly in all countries. 
E) the world population is increasing. 
A) average incomes in poorer countries are rising much faster than average incomes in rich countries. 
B) the distribution of income within most countries has become more equal. 
C) foreign aid programs from rich nations have increased in size and especially in effectiveness. 
D) technology is used similarly in all countries. 
E) the world population is increasing.

Question 13

The Internet is ________ natural resource.Power generated by wind turbines is ________ natural resource.

Accepted Answer

A) not a; a nonrenewable 
B) a renewable; a renewable 
C) a renewable; a nonrenewable 
D) not a; a renewable 
E) not a; not a 
A) not a; a nonrenewable 
B) a renewable; a renewable 
C) a renewable; a nonrenewable 
D) not a; a renewable 
E) not a; not a

Question 14

The demand for the services of labour ________ a derived demand and the demand for the services of land ________ a derived demand.

Accepted Answer

A) is not; is not 
B) is not; is 
C) is; is not 
D) is; is 
E) sometimes is and sometimes is not; sometimes is and sometimes is not 
A) is not; is not 
B) is not; is 
C) is; is not 
D) is; is 
E) sometimes is and sometimes is not; sometimes is and sometimes is not

Question 15

A progressive income tax

Accepted Answer

A) taxes lower income people a larger percentage than higher income people. 
B) taxes income at an average rate that increases with income. 
C) receives more tax from rich people, but taxes them at the same rate as poor people. 
D) taxes everyone at the same rate. 
E) is rarely used in advanced economies. 
A) taxes lower income people a larger percentage than higher income people. 
B) taxes income at an average rate that increases with income. 
C) receives more tax from rich people, but taxes them at the same rate as poor people. 
D) taxes everyone at the same rate. 
E) is rarely used in advanced economies.

Question 16

The group that faces the weakest incentive to work are

Accepted Answer

A) those who pay the highest income tax rate. 
B) those who pay the lowest income tax rate. 
C) the middle class. 
D) households that benefit from welfare. 
E) all of the above 
A) those who pay the highest income tax rate. 
B) those who pay the lowest income tax rate. 
C) the middle class. 
D) households that benefit from welfare. 
E) all of the above

Question 17

Discrimination ________ workers in the group being discriminated against and ________ workers in the group being favoured.

Accepted Answer

A) decreases the supply of; increases the supply of 
B) decreases the demand for and the supply of; increases the demand for and the supply of 
C) does not change the demand for; increases the demand for 
D) decreases the demand for; increases the demand for 
E) decreases the demand for; does not change the demand for 
A) decreases the supply of; increases the supply of 
B) decreases the demand for and the supply of; increases the demand for and the supply of 
C) does not change the demand for; increases the demand for 
D) decreases the demand for; increases the demand for 
E) decreases the demand for; does not change the demand for

Question 18

Use the figure below to answer the following questions.
   
Figure 19.1.2
-Which point in Figure 19.1.2 indicates that the richest 20 percent of families earn 40 percent of the income?

Accepted Answer

A) a 
B) b 
C) c 
D) d 
E) the origin 
A) a 
B) b 
C) c 
D) d 
E) the origin

Question 19

Use the figure below to answer the following questions.
   
Figure 19.1.1
-Refer to Figure 19.1.1.The middle 20 percent of households receive what share of total income?

Accepted Answer

A) 20 percent 
B) 25 percent 
C) 35 percent 
D) 15 percent 
E) 60 percent 
A) 20 percent 
B) 25 percent 
C) 35 percent 
D) 15 percent 
E) 60 percent

Question 20

The main reason that wealth inequality persists across generations is that

Accepted Answer

A) people tend to marry within their own socioeconomic class. 
B) intergenerational transfers can only increase wealth inequality. 
C) there are differences between households in their degree of specialization. 
D) rich families have equal wealth over the life cycle. 
E) taxes are too high for the lower quintiles. 
A) people tend to marry within their own socioeconomic class. 
B) intergenerational transfers can only increase wealth inequality. 
C) there are differences between households in their degree of specialization. 
D) rich families have equal wealth over the life cycle. 
E) taxes are too high for the lower quintiles.

If the supply of labour decreases, which of the following events will occur?

Coal is an example of

Use the figure below to answer the following questions. Figure 19.1.1 -Refer to Figure 19.1.1.The poorest 20 percent of households receive what share of total income?

Use the figure below to answer the following questions. Figure 18.3.2 -Refer to Figure 18.3.2.Suppose this industry is initially in a monopsony situation and then the government introduces a minimum wage of $8 per hour.Choose the correct statement.

The present value of the $50 that will be received next year is $40.What is the interest rate?

Use the figure below to answer the following questions. Figure 19.3.1 -Refer to Figure 19.3.1.At any given employment level, the vertical distance between the demand curves of the high-skilled and low-skilled workers

In the short run, the market supply of land is

Choose the correct sentence.

The closer the Lorenz curve is to the line of equality,

One criticism of social security programs such as the Guaranteed Income Supplement is that

Use the figure below to answer the following questions. Figure 18.3.1 -Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve.If this labour market is competitive, the quantity of labour employed is

The world distribution of income has become more equal since 1970 because

The Internet is natural resource.Power generated by wind turbines is natural resource.

The demand for the services of labour a derived demand and the demand for the services of land a derived demand.

A progressive income tax

The group that faces the weakest incentive to work are

Discrimination workers in the group being discriminated against and workers in the group being favoured.

Use the figure below to answer the following questions. Figure 19.1.2 -Which point in Figure 19.1.2 indicates that the richest 20 percent of families earn 40 percent of the income?

Use the figure below to answer the following questions. Figure 19.1.1 -Refer to Figure 19.1.1.The middle 20 percent of households receive what share of total income?

The main reason that wealth inequality persists across generations is that

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

If the supply of labour decreases, which of the following events will occur?

Coal is an example of

Use the figure below to answer the following questions. Figure 19.1.1 -Refer to Figure 19.1.1.The poorest 20 percent of households receive what share of total income?

Use the figure below to answer the following questions. Figure 18.3.2 -Refer to Figure 18.3.2.Suppose this industry is initially in a monopsony situation and then the government introduces a minimum wage of $8 per hour.Choose the correct statement.

The present value of the $50 that will be received next year is $40.What is the interest rate?

Use the figure below to answer the following questions. Figure 19.3.1 -Refer to Figure 19.3.1.At any given employment level, the vertical distance between the demand curves of the high-skilled and low-skilled workers

In the short run, the market supply of land is

Choose the correct sentence.

The closer the Lorenz curve is to the line of equality,

One criticism of social security programs such as the Guaranteed Income Supplement is that

Use the figure below to answer the following questions. Figure 18.3.1 -Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve.If this labour market is competitive, the quantity of labour employed is

The world distribution of income has become more equal since 1970 because

The Internet is ________ natural resource.Power generated by wind turbines is ________ natural resource.

The demand for the services of labour ________ a derived demand and the demand for the services of land ________ a derived demand.

A progressive income tax

The group that faces the weakest incentive to work are

Discrimination ________ workers in the group being discriminated against and ________ workers in the group being favoured.

Use the figure below to answer the following questions. Figure 19.1.2 -Which point in Figure 19.1.2 indicates that the richest 20 percent of families earn 40 percent of the income?

Use the figure below to answer the following questions. Figure 19.1.1 -Refer to Figure 19.1.1.The middle 20 percent of households receive what share of total income?

The main reason that wealth inequality persists across generations is that

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 Internet is natural resource.Power generated by wind turbines is natural resource.

The demand for the services of labour a derived demand and the demand for the services of land a derived demand.

Discrimination workers in the group being discriminated against and workers in the group being favoured.