Question 1

Globalization means that firms recruit top talent from the global talent pool.As a result, the payoffs won by the contest winners

Accepted Answer

A) are increasing. 
B) are decreasing. 
C) are remaining relatively constant. 
D) are paid in U.S. dollars. 
E) are limited by the number of people in a given competition. 
A) are increasing. 
B) are decreasing. 
C) are remaining relatively constant. 
D) are paid in U.S. dollars. 
E) are limited by the number of people in a given competition.

Question 2

If each household made the same amount of income, then the Lorenz curve would be

Accepted Answer

A) not defined, because it measures income inequality not income equality. 
B) the line of poverty. 
C) the line of equality. 
D) a right angle. 
E) horizontal. 
A) not defined, because it measures income inequality not income equality. 
B) the line of poverty. 
C) the line of equality. 
D) a right angle. 
E) horizontal.

Question 3

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

Accepted Answer

A) 10 percent 
B) 30 percent 
C) 40 percent 
D) 60 percent 
E) 100 percent 
A) 10 percent 
B) 30 percent 
C) 40 percent 
D) 60 percent 
E) 100 percent

Question 4

Incomes in China and India are a small fraction of incomes in Canada.But incomes in China and India are growing at more than twice the rate of those in Canada.As a result, the inequality in income between the people in China and India and people in Canada is ________ and the world Gini ratio is ________.

Accepted Answer

A) staying relatively constant; remaining constant 
B) increasing in some years and decreasing in other years; remaining constant 
C) decreasing; decreasing 
D) increasing; increasing 
E) decreasing; increasing 
A) staying relatively constant; remaining constant 
B) increasing in some years and decreasing in other years; remaining constant 
C) decreasing; decreasing 
D) increasing; increasing 
E) decreasing; increasing

Question 5

Use the figure below to answer the following questions.
   
Figure 18.3.2
-Refer to Figure 18.3.2.This figure illustrates a monopsonist in the labour market.The profit-maximizing wage rate is ________ and the quantity of labour hired is ________.

Accepted Answer

A) $4 per hour; 800 hours 
B) $4 per hour; 400 hours 
C) $7 per hour; 600 hours 
D) $9 per hour; 400 hours 
E) $2 per hour; 150 hours. 
A) $4 per hour; 800 hours 
B) $4 per hour; 400 hours 
C) $7 per hour; 600 hours 
D) $9 per hour; 400 hours 
E) $2 per hour; 150 hours.

Question 6

The Hotelling Principle states that

Accepted Answer

A) hotels will tend to be built next to major highways. 
B) equilibrium in natural resource markets occurs when the expected increase in the price of the resource over time is equal to the interest rate. 
C) the resource will be depleted at a rate equal to the rate of interest. 
D) natural resources should be depleted only for the production of goods that would help maintain environmental quality. 
E) we should conserve nonrenewable natural resources. 
A) hotels will tend to be built next to major highways. 
B) equilibrium in natural resource markets occurs when the expected increase in the price of the resource over time is equal to the interest rate. 
C) the resource will be depleted at a rate equal to the rate of interest. 
D) natural resources should be depleted only for the production of goods that would help maintain environmental quality. 
E) we should conserve nonrenewable natural resources.

Question 7

Use the information below to answer the following questions.
Fact 18.5.1
The Burning Belly Taco Stand is considering buying some new special ovens. Each oven will cost $1,000, and will last for 2 years before it wears out. The ovens will be used to make the Taco Stands famous "Burning Ring of Fire" tacos, and will generate a value of marginal product of $600 for the first oven, $570 for the second oven, and $530 for the third oven. (Assume all revenues are earned at the end of the year.)
-Refer to Fact 18.5.1.If the rate of interest is 5 percent, how many ovens will the Burning Belly Taco Stand buy?

Accepted Answer

A) zero 
B) 1 
C) 2 
D) 3 
E) insufficient information to answer 
A) zero 
B) 1 
C) 2 
D) 3 
E) insufficient information to answer

Question 8

Market income equals

Accepted Answer

A) the wages, interest, rent, and profit earned in factor markets after paying income taxes. 
B) the wages, interest, and profit earned in factor markets before paying income taxes. 
C) the wages, interest, and rent earned in factor markets before paying income taxes. 
D) the wages, interest, rent, and profit earned in factor markets before paying income taxes. 
E) the wages, rent, and profit earned in factor markets before paying income taxes. 
A) the wages, interest, rent, and profit earned in factor markets after paying income taxes. 
B) the wages, interest, and profit earned in factor markets before paying income taxes. 
C) the wages, interest, and rent earned in factor markets before paying income taxes. 
D) the wages, interest, rent, and profit earned in factor markets before paying income taxes. 
E) the wages, rent, and profit earned in factor markets before paying income taxes.

Question 9

In 2011, the middle 20 percent of households received what percentage of total Canadian after-tax income?

Accepted Answer

A) 10.6 percent 
B) 16.3 percent 
C) 25 percent 
D) 43 percent 
E) 52 percent 
A) 10.6 percent 
B) 16.3 percent 
C) 25 percent 
D) 43 percent 
E) 52 percent

Question 10

Use the information below to answer the following questions.
Fact 18.3.1 In Modern Rarity, Workers Form Union at Small Chain
In New York's low-income neighbourhoods, labour unions have virtually no presence. But after a year-long struggle, 95 workers at a chain of 10 sneaker stores have formed a union. After months of negotiations, the two sides signed a three-year contract that sets the wage rate at $7.25 an hour.
Source: The New York Times, February 5, 2006
-Refer to Fact 18.3.1.The winners from this contract are ________.The losers from this contract are ________.

Accepted Answer

A) workers who keep their jobs; owners of the firms, consumers, and workers who are fired 
B) workers who keep their jobs and consumers; owners of the firms and workers who are fired 
C) the government; owners of the firms, consumers, and workers who are fired 
D) workers who keep their jobs and owners of the firms; workers who are fired 
E) workers who keep their jobs and owners of the firms; the government 
A) workers who keep their jobs; owners of the firms, consumers, and workers who are fired 
B) workers who keep their jobs and consumers; owners of the firms and workers who are fired 
C) the government; owners of the firms, consumers, and workers who are fired 
D) workers who keep their jobs and owners of the firms; workers who are fired 
E) workers who keep their jobs and owners of the firms; the government

Question 11

Choose the statement that is incorrect.

Accepted Answer

A) Entrepreneurship is a factor of production. 
B) Entrepreneurs receive the profit or bear the loss that results from their business decisions. 
C) Entrepreneurship consists of all the gifts of nature. 
D) Entrepreneurial services are traded in markets. 
E) Both C and D are incorrect. 
A) Entrepreneurship is a factor of production. 
B) Entrepreneurs receive the profit or bear the loss that results from their business decisions. 
C) Entrepreneurship consists of all the gifts of nature. 
D) Entrepreneurial services are traded in markets. 
E) Both C and D are incorrect.

Question 12

In the absence of government policies to redistribute income, the income distribution will be the

Accepted Answer

A) market distribution. 
B) unfair distribution. 
C) capitalist distribution. 
D) efficient distribution. 
E) line of equality. 
A) market distribution. 
B) unfair distribution. 
C) capitalist distribution. 
D) efficient distribution. 
E) line of equality.

Question 13

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:
  
-Consider Table 18.2.2.If the price of apples is $0.50 per kilogram, and the wage rate for apple pickers is $7.50 per hour, then the number of pickers that Wendy will hire is

Accepted Answer

A) 1. 
B) 3. 
C) 5. 
D) 7. 
E) 8. 
A) 1. 
B) 3. 
C) 5. 
D) 7. 
E) 8.

Question 14

Use the figure below to answer the following questions.
   
Figure 19.3.6
-Refer to Figure 19.3.6.If this is the market for a group of workers who are discriminated in favour of by consumers and point A represents the equilibrium without discrimination, which point represents the equilibrium for the workers who receive favourable discrimination?

Accepted Answer

A) D 
B) B 
C) I 
D) C 
E) H 
A) D 
B) B 
C) I 
D) C 
E) H

Question 15

Table 19.4.2
  
-Refer to Table 19.4.2.The table shows three tax payment schemes.Which tax payment plan reduces inequality?

Accepted Answer

A) Plan A 
B) Plan A and Plan C 
C) Plan C 
D) Plan B 
E) Plan A, Plan B, and Plan C 
A) Plan A 
B) Plan A and Plan C 
C) Plan C 
D) Plan B 
E) Plan A, Plan B, and Plan C

Question 16

Use the figure below to answer the following questions.
   
Figure 19.3.1
-The vertical distance between the two supply curves in Figure 19.3.1

Accepted Answer

A) is the compensation for the cost of acquiring human capital. 
B) is the VMP of skill. 
C) is the result of discrimination against low-skilled workers. 
D) is the result of subsidies for high-skilled workers. 
E) will disappear if there is free entry in the high-skilled market. 
A) is the compensation for the cost of acquiring human capital. 
B) is the VMP of skill. 
C) is the result of discrimination against low-skilled workers. 
D) is the result of subsidies for high-skilled workers. 
E) will disappear if there is free entry in the high-skilled market.

Question 17

A firm that discriminates has ________ a firm that does not discriminate and ________.

Accepted Answer

A) the same costs as; competes most often with firms from other countries 
B) the same costs as; can successfully maximize profit in a competitive industry 
C) lower costs than; drives other firms out of a competitive industry 
D) higher costs than; competes most often with firms from other countries 
E) higher costs than; cannot survive in a competitive industry 
A) the same costs as; competes most often with firms from other countries 
B) the same costs as; can successfully maximize profit in a competitive industry 
C) lower costs than; drives other firms out of a competitive industry 
D) higher costs than; competes most often with firms from other countries 
E) higher costs than; cannot survive in a competitive industry

Question 18

The Gini ratio in Brazil was over 0.6 in 1990 and fell to 0.5 in 2010.This change means that between 1990 and 2010, income inequality ________ and the Lorenz curve moved ________ the 45-degree line.

Accepted Answer

A) decreased; closer to 
B) decreased; further away from 
C) increased; closer to 
D) increased; further away from 
E) increased; so that it was the same as 
A) decreased; closer to 
B) decreased; further away from 
C) increased; closer to 
D) increased; further away from 
E) increased; so that it was the same as

Question 19

The present value of a future sum of money is the amount that, if invested today, will grow

Accepted Answer

A) as large as that future sum, given the interest rate. 
B) as large as that future sum. 
C) as large as that future sum, less taxes payable. 
D) as large as that future sum, if the rate of interest is zero. 
E) at a constant rate forever. 
A) as large as that future sum, given the interest rate. 
B) as large as that future sum. 
C) as large as that future sum, less taxes payable. 
D) as large as that future sum, if the rate of interest is zero. 
E) at a constant rate forever.

Question 20

The idea that the demand for tire workers stems from the demand for automobiles is

Accepted Answer

A) the value of the marginal product of labour. 
B) the value of the marginal product of tire workers. 
C) the value of the marginal product of auto workers. 
D) an output demand. 
E) a derived demand. 
A) the value of the marginal product of labour. 
B) the value of the marginal product of tire workers. 
C) the value of the marginal product of auto workers. 
D) an output demand. 
E) a derived demand.

Globalization means that firms recruit top talent from the global talent pool.As a result, the payoffs won by the contest winners

If each household made the same amount of income, then the Lorenz curve would be

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

Incomes in China and India are a small fraction of incomes in Canada.But incomes in China and India are growing at more than twice the rate of those in Canada.As a result, the inequality in income between the people in China and India and people in Canada is and the world Gini ratio is .

Use the figure below to answer the following questions. Figure 18.3.2 -Refer to Figure 18.3.2.This figure illustrates a monopsonist in the labour market.The profit-maximizing wage rate is and the quantity of labour hired is .

The Hotelling Principle states that

Market income equals

In 2011, the middle 20 percent of households received what percentage of total Canadian after-tax income?

Choose the statement that is incorrect.

In the absence of government policies to redistribute income, the income distribution will be the

Table 19.4.2 -Refer to Table 19.4.2.The table shows three tax payment schemes.Which tax payment plan reduces inequality?

Use the figure below to answer the following questions. Figure 19.3.1 -The vertical distance between the two supply curves in Figure 19.3.1

A firm that discriminates has a firm that does not discriminate and .

The Gini ratio in Brazil was over 0.6 in 1990 and fell to 0.5 in 2010.This change means that between 1990 and 2010, income inequality and the Lorenz curve moved the 45-degree line.

The present value of a future sum of money is the amount that, if invested today, will grow

The idea that the demand for tire workers stems from the demand for automobiles 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

Globalization means that firms recruit top talent from the global talent pool.As a result, the payoffs won by the contest winners

If each household made the same amount of income, then the Lorenz curve would be

Use the figure below to answer the following questions. Figure 19.1.1 -Refer to Figure 19.1.1.The richest 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.This figure illustrates a monopsonist in the labour market.The profit-maximizing wage rate is ________ and the quantity of labour hired is ________.

The Hotelling Principle states that

Market income equals

In 2011, the middle 20 percent of households received what percentage of total Canadian after-tax income?

Choose the statement that is incorrect.

In the absence of government policies to redistribute income, the income distribution will be the

Table 19.4.2 -Refer to Table 19.4.2.The table shows three tax payment schemes.Which tax payment plan reduces inequality?

Use the figure below to answer the following questions. Figure 19.3.1 -The vertical distance between the two supply curves in Figure 19.3.1

A firm that discriminates has ________ a firm that does not discriminate and ________.

The Gini ratio in Brazil was over 0.6 in 1990 and fell to 0.5 in 2010.This change means that between 1990 and 2010, income inequality ________ and the Lorenz curve moved ________ the 45-degree line.

The present value of a future sum of money is the amount that, if invested today, will grow

The idea that the demand for tire workers stems from the demand for automobiles 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

Use the figure below to answer the following questions. Figure 18.3.2 -Refer to Figure 18.3.2.This figure illustrates a monopsonist in the labour market.The profit-maximizing wage rate is and the quantity of labour hired is .

A firm that discriminates has a firm that does not discriminate and .

The Gini ratio in Brazil was over 0.6 in 1990 and fell to 0.5 in 2010.This change means that between 1990 and 2010, income inequality and the Lorenz curve moved the 45-degree line.