Question 1

Government transfer payments, such as welfare payments, redistribute income and

Accepted Answer

A) increase the incentive to work. 
B) improve economic efficiency. 
C) increase tax receipts. 
D) decrease the incentive to work. 
E) push the Lorenz curve further away from the line of equality. 
A) increase the incentive to work. 
B) improve economic efficiency. 
C) increase tax receipts. 
D) decrease the incentive to work. 
E) push the Lorenz curve further away from the line of equality.

Question 2

Use the figure below to answer the following questions.
   
Figure 19.3.1
-Refer only to the information in Figure 19.3.1.At any given wage rate,

Accepted Answer

A) more hours of low-skilled labour will be demanded than high-skilled labour. 
B) more hours of high-skilled labour will be demanded than low-skilled labour. 
C) more hours of low-skilled labour will be supplied than high-skilled labour. 
D) more hours of high-skilled labour will be supplied than low-skilled labour. 
E) both B and C are correct. 
A) more hours of low-skilled labour will be demanded than high-skilled labour. 
B) more hours of high-skilled labour will be demanded than low-skilled labour. 
C) more hours of low-skilled labour will be supplied than high-skilled labour. 
D) more hours of high-skilled labour will be supplied than low-skilled labour. 
E) both B and C are correct.

Question 3

Policies that result in a redistribution of income toward the poor include all of the following except

Accepted Answer

A) public provision of elementary education. 
B) public provision of high school education. 
C) public provision of health-care services. 
D) public excise taxes. 
E) public provision of subsidized university education. 
A) public provision of elementary education. 
B) public provision of high school education. 
C) public provision of health-care services. 
D) public excise taxes. 
E) public provision of subsidized university education.

Question 4

Consider the factors of production.The price in a(n)________ market is a rental rate.

Accepted Answer

A) capital 
B) housing 
C) entrepreneurship 
D) labour 
E) capital services 
A) capital 
B) housing 
C) entrepreneurship 
D) labour 
E) capital services

Question 5

Use the figure below to answer the following question.
   
Figure 19.3.4
-Refer to Figure 19.3.4.At an employment level of 30 hours per week, the compensation required for the cost of acquiring human capital is

Accepted Answer

A) $0. 
B) $2 an hour. 
C) $4 an hour. 
D) $6 an hour. 
E) cannot be determined without knowing the demand for labour. 
A) $0. 
B) $2 an hour. 
C) $4 an hour. 
D) $6 an hour. 
E) cannot be determined without knowing the demand for labour.

Question 6

A welfare trap occurs when the marginal tax rate is

Accepted Answer

A) negative. 
B) zero. 
C) 100% or more. 
D) positive. 
E) less than the average tax rate. 
A) negative. 
B) zero. 
C) 100% or more. 
D) positive. 
E) less than the average tax rate.

Question 7

Mr.Shaw has a small factory in Estevan, Saskatchewan.He will continue hiring labour as long as the value of marginal product of labour ________ the wage rate.

Accepted Answer

A) is greater than 
B) is less than 
C) is less than or equal to 
D) determines 
E) maximizes 
A) is greater than 
B) is less than 
C) is less than or equal to 
D) determines 
E) maximizes

Question 8

The value of marginal product of oil is the ________ influence on demand.The greater the quantity of oil used, the ________ is the value of marginal product of oil.

Accepted Answer

A) speculative; greater 
B) fundamental; greater 
C) fundamental; smaller 
D) speculative; smaller 
E) none of the above 
A) speculative; greater 
B) fundamental; greater 
C) fundamental; smaller 
D) speculative; smaller 
E) none of the above

Question 9

Redistribution of income from the rich to the poor will lead to a reduction in total output.This is known as the

Accepted Answer

A) market distribution. 
B) Robin Hood principle. 
C) inheritance principle. 
D) big tradeoff. 
E) capitalist dilemma. 
A) market distribution. 
B) Robin Hood principle. 
C) inheritance principle. 
D) big tradeoff. 
E) capitalist dilemma.

Question 10

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 $5 a unit, what is the profit-maximizing number of workers if the wage rate is $30?

Accepted Answer

A) 1 
B) 3 
C) 5 
D) 6 
E) 7 
A) 1 
B) 3 
C) 5 
D) 6 
E) 7

Question 11

Use the table below to answer the following questions.
Table 19.4.1
  
-In Table 19.4.1, which tax plan is progressive?

Accepted Answer

A) Plan A 
B) Plan B 
C) Plan C 
D) Plan D 
E) impossible to calculate without additional information 
A) Plan A 
B) Plan B 
C) Plan C 
D) Plan D 
E) impossible to calculate without additional information

Question 12

Use the figure below to answer the following questions.
   
Figure 19.1.2
-Consider the Lorenz curves in Figure 19.1.2.Which point indicates that the richest 20 percent of families earn 60 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 13

The larger the gap between the Lorenz curve and the line of equality,

Accepted Answer

A) the greater is the equality in the income distribution. 
B) the less is the inequality in the income distribution. 
C) the poorer are the top 50 percent of households. 
D) the richer are the lowest 50 percent of households. 
E) the greater is the inequality in the income distribution. 
A) the greater is the equality in the income distribution. 
B) the less is the inequality in the income distribution. 
C) the poorer are the top 50 percent of households. 
D) the richer are the lowest 50 percent of households. 
E) the greater is the inequality in the income distribution.

Question 14

If the average tax rate increases as income increases, the income tax is

Accepted Answer

A) progressive. 
B) proportional. 
C) negative. 
D) regressive. 
E) excessive. 
A) progressive. 
B) proportional. 
C) negative. 
D) regressive. 
E) excessive.

Question 15

The distribution of annual income

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 16

Use the information below to answer the following questions.
Fact 19.4.1 Income Gap Growing
In 2009, people in the highest quintile had 24.6 times as much market income as those in the lowest quintile, but after taxes and transfers the people in the highest quintile had 9.1 times as much income as those in the lowest quintile. In 1989, the people in the highest quintile had 7.2 times more income after taxes and transfers than those in the lowest quintile. In 1990, 82.9 percent of the unemployed received unemployment benefits. In 2009, 47.8 percent of the unemployed received unemployment benefits.
Source: Conference Board of Canada, July 13, 2011
-Refer to Fact 19.4.1.Changes in employment insurance ________ the income gap between the richest and the poorest Canadians.

Accepted Answer

A) decreased 
B) increased 
C) had no effect on 
D) sometimes increased but mostly decreased 
E) eliminated 
A) decreased 
B) increased 
C) had no effect on 
D) sometimes increased but mostly decreased 
E) eliminated

Question 17

Suppose the interest rate is 5 percent per year.What is the present value of the $210 that will be received two years from today?

Accepted Answer

A) $210 
B) $190.48 
C) $231.53 
D) $200 
E) $42 
A) $210 
B) $190.48 
C) $231.53 
D) $200 
E) $42

Question 18

Use the table below to answer the following questions.
Table 18.2.2
Wendy owns an apple orchard and she employs students
to pick the apples. In an hour they can pick the following amounts:
  
-Refer to Table 18.2.2.If the price of apples is $0.50 per kilogram, the value of marginal product of the 5th student is

Accepted Answer

A) $0.50 an hour. 
B) $72.50 an hour. 
C) $14.50 an hour. 
D) $12.50 an hour. 
E) $10 an hour. 
A) $0.50 an hour. 
B) $72.50 an hour. 
C) $14.50 an hour. 
D) $12.50 an hour. 
E) $10 an hour.

Question 19

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 $10 a unit, what is the profit-maximizing number of workers if the wage rate is $30?

Accepted Answer

A) 1 
B) 5 
C) 6 
D) 8 
E) 9 
A) 1 
B) 5 
C) 6 
D) 8 
E) 9

Question 20

The demand for low-skilled labour is derived from the

Accepted Answer

A) work left undone by the high-skilled workers. 
B) marginal cost of production. 
C) lower wage rate of the labour. 
D) supply of the high-skilled labourers. 
E) value of marginal product of low-skilled labour. 
A) work left undone by the high-skilled workers. 
B) marginal cost of production. 
C) lower wage rate of the labour. 
D) supply of the high-skilled labourers. 
E) value of marginal product of low-skilled labour.

Government transfer payments, such as welfare payments, redistribute income and

Use the figure below to answer the following questions. Figure 19.3.1 -Refer only to the information in Figure 19.3.1.At any given wage rate,

Policies that result in a redistribution of income toward the poor include all of the following except

Consider the factors of production.The price in a(n)________ market is a rental rate.

Use the figure below to answer the following question. Figure 19.3.4 -Refer to Figure 19.3.4.At an employment level of 30 hours per week, the compensation required for the cost of acquiring human capital is

A welfare trap occurs when the marginal tax rate is

Mr.Shaw has a small factory in Estevan, Saskatchewan.He will continue hiring labour as long as the value of marginal product of labour ________ the wage rate.

The value of marginal product of oil is the influence on demand.The greater the quantity of oil used, the is the value of marginal product of oil.

Redistribution of income from the rich to the poor will lead to a reduction in total output.This is known as the

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 $5 a unit, what is the profit-maximizing number of workers if the wage rate is $30?

Use the table below to answer the following questions. Table 19.4.1 -In Table 19.4.1, which tax plan is progressive?

Use the figure below to answer the following questions. Figure 19.1.2 -Consider the Lorenz curves in Figure 19.1.2.Which point indicates that the richest 20 percent of families earn 60 percent of the income?

The larger the gap between the Lorenz curve and the line of equality,

If the average tax rate increases as income increases, the income tax is

The distribution of annual income

Suppose the interest rate is 5 percent per year.What is the present value of the $210 that will be received two years from today?

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 $10 a unit, what is the profit-maximizing number of workers if the wage rate is $30?

The demand for low-skilled labour is derived from the

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

Government transfer payments, such as welfare payments, redistribute income and

Use the figure below to answer the following questions. Figure 19.3.1 -Refer only to the information in Figure 19.3.1.At any given wage rate,

Policies that result in a redistribution of income toward the poor include all of the following except

Consider the factors of production.The price in a(n)________ market is a rental rate.

Use the figure below to answer the following question. Figure 19.3.4 -Refer to Figure 19.3.4.At an employment level of 30 hours per week, the compensation required for the cost of acquiring human capital is

A welfare trap occurs when the marginal tax rate is

Mr.Shaw has a small factory in Estevan, Saskatchewan.He will continue hiring labour as long as the value of marginal product of labour ________ the wage rate.

The value of marginal product of oil is the ________ influence on demand.The greater the quantity of oil used, the ________ is the value of marginal product of oil.

Redistribution of income from the rich to the poor will lead to a reduction in total output.This is known as the

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 $5 a unit, what is the profit-maximizing number of workers if the wage rate is $30?

Use the table below to answer the following questions. Table 19.4.1 -In Table 19.4.1, which tax plan is progressive?

Use the figure below to answer the following questions. Figure 19.1.2 -Consider the Lorenz curves in Figure 19.1.2.Which point indicates that the richest 20 percent of families earn 60 percent of the income?

The larger the gap between the Lorenz curve and the line of equality,

If the average tax rate increases as income increases, the income tax is

The distribution of annual income

Suppose the interest rate is 5 percent per year.What is the present value of the $210 that will be received two years from today?

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 $10 a unit, what is the profit-maximizing number of workers if the wage rate is $30?

The demand for low-skilled labour is derived from the

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 value of marginal product of oil is the influence on demand.The greater the quantity of oil used, the is the value of marginal product of oil.