Question 1

-In Figure 22.1, which area represents total value to the drug addict?

Accepted Answer

A) 0ACQ* 
B) BP*C 
C) 0BCQ* 
D) 0P*CQ* 
A) 0ACQ* 
B) BP*C 
C) 0BCQ* 
D) 0P*CQ*

Question 2

-In Figure 22.1, which area represents total expenditure by the drug addict?

Accepted Answer

A) ABC 
B) BP*C 
C) 0ACQ* 
D) 0P*CQ* 
A) ABC 
B) BP*C 
C) 0ACQ* 
D) 0P*CQ*

Question 3

Which of the following reasons for making drugs sales illegal do economists generally see as potentially legitimate, but beyond their area of expertise?

Accepted Answer

A) Drugs are immoral and allowing them to be sold is immoral. 
B) The harm they do to innocent victims. 
C) That addictive drugs do not allow for people to learn from the mistake of taking them. 
D) The harm that addictive drugs do to innocent victims and that they do not allow for people to learn from the mistake of taking them. 
A) Drugs are immoral and allowing them to be sold is immoral. 
B) The harm they do to innocent victims. 
C) That addictive drugs do not allow for people to learn from the mistake of taking them. 
D) The harm that addictive drugs do to innocent victims and that they do not allow for people to learn from the mistake of taking them.

Question 4

An example of an externality associated with prostitution is

Accepted Answer

A) the increased likelihood that the prostitute will contract a disease. 
B) the increased likelihood that a client will contract a disease. 
C) the increased likelihood that a client's partner will contract a disease. 
D) the costs of protection for clients of the prostitute. 
A) the increased likelihood that the prostitute will contract a disease. 
B) the increased likelihood that a client will contract a disease. 
C) the increased likelihood that a client's partner will contract a disease. 
D) the costs of protection for clients of the prostitute.

Question 5

Which of the following reasons for making drug sales illegal do economists generally endorse?

Accepted Answer

A) The harm they do to people who knowingly take them. 
B) The harm they do to innocent victims. 
C) The risks associated with selling them. 
D) The harm they do to people who knowingly take them and the risks associated with selling them. 
A) The harm they do to people who knowingly take them. 
B) The harm they do to innocent victims. 
C) The risks associated with selling them. 
D) The harm they do to people who knowingly take them and the risks associated with selling them.

Question 6

When a good is illegal, the supply curve is likely to be inelastic because

Accepted Answer

A) extra costs associated with avoiding capture. 
B) the difficulty of expanding operations as price rises because of the increased likelihood of capture. 
C) the ease with which sellers can expand operations into new territory when price rises. 
D) the ease of finding new buyers without getting caught. 
A) extra costs associated with avoiding capture. 
B) the difficulty of expanding operations as price rises because of the increased likelihood of capture. 
C) the ease with which sellers can expand operations into new territory when price rises. 
D) the ease of finding new buyers without getting caught.

Question 7

In 2015, the fraction of fatal traffic accidents involving at least one person with blood alcohol level above the legal limit is approximately

Accepted Answer

A) 5%. 
B) 10%. 
C) 20%. 
D) 31%. 
A) 5%. 
B) 10%. 
C) 20%. 
D) 31%.

Question 8

When a good is illegal, the demand curve is likely to be inelastic because

Accepted Answer

A) extra costs associated with avoiding capture. 
B) the difficulty the buyer faces in getting their dealer to sell them more. 
C) the fact that when a good is illegal, addicts make up a greater percentage of users. 
D) price dramatically impacts usage. 
A) extra costs associated with avoiding capture. 
B) the difficulty the buyer faces in getting their dealer to sell them more. 
C) the fact that when a good is illegal, addicts make up a greater percentage of users. 
D) price dramatically impacts usage.

Question 9

The cost to taxpayers of smoking include

Accepted Answer

A) the increased cost of Medicaid patients who smoke. 
B) the cigarette taxes that are collected. 
C) decreased Social Security benefits to those who die prematurely from a smoking related illness. 
D) decreased long-term care costs for those who die prematurely from a smoking related illness. 
A) the increased cost of Medicaid patients who smoke. 
B) the cigarette taxes that are collected. 
C) decreased Social Security benefits to those who die prematurely from a smoking related illness. 
D) decreased long-term care costs for those who die prematurely from a smoking related illness.

Question 10

The elasticity of demand for cigarettes by children is such that an increase in cigarette taxes to one dollar would

Accepted Answer

A) have absolutely no effect of childhood smoking. 
B) actually increase adult smoking. 
C) cut adult smoking by around 10%. 
D) cut adult smoking by 25%. 
A) have absolutely no effect of childhood smoking. 
B) actually increase adult smoking. 
C) cut adult smoking by around 10%. 
D) cut adult smoking by 25%.

Question 11

-In Figure 22.1, which area represents consumer surplus to the drug addict?

Accepted Answer

A) AP*C 
B) 0ACQ* 
C) 0BCQ* 
D) 0P*CQ* 
A) AP*C 
B) 0ACQ* 
C) 0BCQ* 
D) 0P*CQ*

Exam 22: The Line Between Legal and Illegal Goods

-In Figure 22.1, which area represents total value to the drug addict?

-In Figure 22.1, which area represents total expenditure by the drug addict?

Which of the following reasons for making drugs sales illegal do economists generally see as potentially legitimate, but beyond their area of expertise?

An example of an externality associated with prostitution is

Which of the following reasons for making drug sales illegal do economists generally endorse?

When a good is illegal, the supply curve is likely to be inelastic because

In 2015, the fraction of fatal traffic accidents involving at least one person with blood alcohol level above the legal limit is approximately

When a good is illegal, the demand curve is likely to be inelastic because

The cost to taxpayers of smoking include

The elasticity of demand for cigarettes by children is such that an increase in cigarette taxes to one dollar would

-In Figure 22.1, which area represents consumer surplus to the drug addict?

Economics: the Study of Opportunity Cost

Supply and Demand

The Concept of Elasticity and Consumer and Producer Surplus

Firm Production, Cost, and Revenue

Perfect Competition, Monopoly, and Economic Versus Normal Profit

Every Macroeconomic Word You Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession, Depression

Interest Rates and Present Value

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Policy

Federal Spending

Federal Deficits, Surpluses, and the National Debt

The Housing Bubble

The Recession of 2007-2009: Causes and Policy Responses

Is Economic Stagnation the New Normal

Is the Fiscalsky Falling: An Examination of Unfunded Social Security, Medicare, and State and Local Pension Liabilities

International Trade: Does It Jeopardize American Jobs

International Finance and Exchange Rates

The European Debt Crisis

Economic Growth and Development

Nafta, Gatt, Wto: Are Trade Agreements Good for Us

Natural Resources, the Environment, and Climate Change

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Government-Provided Health Insurance: Medicaid, Medicare, and the Child Health Insurance Program

The Economics of Prescription Drugs

So You Want to Be a Lawyer: Economics and the Law

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Income and Wealth Inequality

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Head Start

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If We Build It, Will They Come and Other Sports Questions

The Stock Market Crashes

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Walmart: Always Low Prices and Low Wages- Always

The Economic Impact of Casino Gambling

The Economics of Terrorism

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