Question 1

Economists are:

Accepted Answer

A)  more likely than are politicians to take into account the preferences of foreigners when devising immigration policies. 
B)  less likely to take into account the preferences of foreigners when devising immigration policies than are politicians. 
C)  opposed to foreign aid because it comprises a significant amount of the debt. 
D)  opposed to foreign aid because there are still poor people in the United States that need help. 
A)  more likely than are politicians to take into account the preferences of foreigners when devising immigration policies. 
B)  less likely to take into account the preferences of foreigners when devising immigration policies than are politicians. 
C)  opposed to foreign aid because it comprises a significant amount of the debt. 
D)  opposed to foreign aid because there are still poor people in the United States that need help.

Question 2

Which is a positive economic statement?

Accepted Answer

A)  Shortages in the kidney trade are a necessary phenomenon. 
B)  Animal rights activists are to blame for the high prices of real furs. 
C)  We should encourage the importation of kidneys from the less-developed countries. 
D)  A government-imposed price of zero for kidneys helps create a black market in kidneys. 
A)  Shortages in the kidney trade are a necessary phenomenon. 
B)  Animal rights activists are to blame for the high prices of real furs. 
C)  We should encourage the importation of kidneys from the less-developed countries. 
D)  A government-imposed price of zero for kidneys helps create a black market in kidneys.

Question 3

Many people argue in favor of the U.S. government sending money to the poorest Americans. Such individuals are rarely as enthusiastic about sending money to the poorest people worldwide, many of whom are much poorer than the poorest Americans. Of the topics discussed in Cowen and Tabarrok's chapter on ethics, which one is closest to this apparent paradox?

Accepted Answer

A)  immigration 
B)  income distribution 
C)  cultural goods 
D)  meddlesome preferences 
A)  immigration 
B)  income distribution 
C)  cultural goods 
D)  meddlesome preferences

Question 4

Nozick argues that voluntary peaceful trades that lead to income inequality are to be condemned as unjust actions.

Accepted Answer

A) True 
 B)False

Question 5

Opponents of kidney sales argue that:

Accepted Answer

A)  paying someone to donate a kidney is exploitative. 
B)  poor people would benefit from a market in kidneys. 
C)  rich people would be exploited by paying large sums of money to the poor. 
D)  Opponents of kidney sales make all three of these arguments. 
A)  paying someone to donate a kidney is exploitative. 
B)  poor people would benefit from a market in kidneys. 
C)  rich people would be exploited by paying large sums of money to the poor. 
D)  Opponents of kidney sales make all three of these arguments.

Question 6

According to Nozick:

Accepted Answer

A)  there is no difference between forced kidney donation and redistributing wealth-both actions violate an individual's rights. 
B)  capitalist production methods need to be constrained, especially if they lead to gross differences in wealth. 
C)  wealth created from capitalism is unjustly acquired and thus deserving of taxation. 
D)  it is natural for inequities in wealth to be eliminated by trade. 
A)  there is no difference between forced kidney donation and redistributing wealth-both actions violate an individual's rights. 
B)  capitalist production methods need to be constrained, especially if they lead to gross differences in wealth. 
C)  wealth created from capitalism is unjustly acquired and thus deserving of taxation. 
D)  it is natural for inequities in wealth to be eliminated by trade.

Question 7

Table: Distribution of Income
 
Refer to the table. Using the maximin principle, identify the societies that rank the highest and the lowest.

Accepted Answer

Society C ranks lowest because

Question 8

According to the maximin principle, societies should be ranked according to how well-off the poorest members of their society are.

Accepted Answer

A) True 
 B)False

Question 9

Presidential campaign speeches about economic policy are largely filled with:

Accepted Answer

A)  poor economics. 
B)  normative economics. 
C)  positive economics. 
D)  false promises. 
A)  poor economics. 
B)  normative economics. 
C)  positive economics. 
D)  false promises.

Question 10

Which statement is TRUE?

Accepted Answer

A)  Economists treat all market demands equally, regardless of race, sex, sexual orientation, and ethnicity. 
B)  Economists weight consumer surplus more heavily than producer surplus. 
C)  Economists weight producer surplus more heavily than consumer surplus because supply creates demand. 
D)  Economists treat the market demands of educated people as more important than the market demands of noneducated people. 
A)  Economists treat all market demands equally, regardless of race, sex, sexual orientation, and ethnicity. 
B)  Economists weight consumer surplus more heavily than producer surplus. 
C)  Economists weight producer surplus more heavily than consumer surplus because supply creates demand. 
D)  Economists treat the market demands of educated people as more important than the market demands of noneducated people.

Question 11

Entitlement theory argues for equality:

Accepted Answer

A)  of process. 
B)  of outcome. 
C)  of both process and outcome. 
D)  of neither process nor outcome. 
A)  of process. 
B)  of outcome. 
C)  of both process and outcome. 
D)  of neither process nor outcome.

Question 12

Politicians that oppose same sex marriage are conveying a meddlesome preference.

Accepted Answer

A) True 
 B)False

Question 13

Which one takes the most market-based approach to the distribution of income?

Accepted Answer

A)  Rawls' maximin principle 
B)  utilitarianism 
C)  Nozick's entitlement theory 
D)  Friedman's monetary approach 
A)  Rawls' maximin principle 
B)  utilitarianism 
C)  Nozick's entitlement theory 
D)  Friedman's monetary approach

Question 14

Economists are very supportive of voluntary trade because:

Accepted Answer

A)  they believe trade can make everybody rich. 
B)  trade will ultimately lead to an equal distribution of wealth. 
C)  they take into account economic ethics. 
D)  they believe people know their own preferences and can make decisions. 
A)  they believe trade can make everybody rich. 
B)  trade will ultimately lead to an equal distribution of wealth. 
C)  they take into account economic ethics. 
D)  they believe people know their own preferences and can make decisions.

Question 15

Utilitarians try to maximize the benefits going to society's most disadvantaged class.

Accepted Answer

A) True 
 B)False

Question 16

Why does economic efficiency not always result in fair and equal treatment?

Accepted Answer

A)  Efficiency demands cost-minimization, which may cause the nonproduction of expensive items or adjustments designed to ensure that disadvantaged members of society are catered for. 
B)  Market efficiency requires that only profitable goods be produced in order to maximize the return from using scarce resources, and some goods for the disadvantaged may not always yield profits. 
C)  Market efficiency does not always allow firms to hire disadvantaged members of society so labor and governments sometimes have to step in to demand hiring of some of these individuals. 
D)  All of these explanations are correct. 
A)  Efficiency demands cost-minimization, which may cause the nonproduction of expensive items or adjustments designed to ensure that disadvantaged members of society are catered for. 
B)  Market efficiency requires that only profitable goods be produced in order to maximize the return from using scarce resources, and some goods for the disadvantaged may not always yield profits. 
C)  Market efficiency does not always allow firms to hire disadvantaged members of society so labor and governments sometimes have to step in to demand hiring of some of these individuals. 
D)  All of these explanations are correct.

Question 17

Robert Nozick's entitlement theory of justice is also known as a libertarian theory of justice.

Accepted Answer

A) True 
 B)False

Question 18

Robert Nozick is more concerned about:

Accepted Answer

A)  equality of income than equality of opportunity. 
B)  equality of opportunity than equality of income. 
C)  redistributing income than economic growth. 
D)  the rich not paying their fair share in taxes than the disincentive effect of high taxes. 
A)  equality of income than equality of opportunity. 
B)  equality of opportunity than equality of income. 
C)  redistributing income than economic growth. 
D)  the rich not paying their fair share in taxes than the disincentive effect of high taxes.

Question 19

List the six practical problems of economic reasoning that need to be examined.

Accepted Answer

1) the problem of exploitation
2) meddle

Question 20

Rawl's laid out the minamax principle, namely that a government should maximize the benefits going to society's most disadvantaged group.

Accepted Answer

A) True 
 B)False

Exam 21: Economics, Ethics, and Public Policy

Economists are:

Which is a positive economic statement?

Nozick argues that voluntary peaceful trades that lead to income inequality are to be condemned as unjust actions.

Opponents of kidney sales argue that:

According to Nozick:

Table: Distribution of Income Refer to the table. Using the maximin principle, identify the societies that rank the highest and the lowest.

According to the maximin principle, societies should be ranked according to how well-off the poorest members of their society are.

Presidential campaign speeches about economic policy are largely filled with:

Which statement is TRUE?

Entitlement theory argues for equality:

Politicians that oppose same sex marriage are conveying a meddlesome preference.

Which one takes the most market-based approach to the distribution of income?

Economists are very supportive of voluntary trade because:

Utilitarians try to maximize the benefits going to society's most disadvantaged class.

Why does economic efficiency not always result in fair and equal treatment?

Robert Nozick's entitlement theory of justice is also known as a libertarian theory of justice.

Robert Nozick is more concerned about:

List the six practical problems of economic reasoning that need to be examined.

Rawl's laid out the minamax principle, namely that a government should maximize the benefits going to society's most disadvantaged group.

The Big Ideas

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Elasticity and Its Applications

Taxes and Subsidies

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters