Question 1

Which of the following will NOT prevent a mutually beneficial transaction from occurring?

Accepted Answer

A)  a market where buyers and sellers have internalized all benefits and costs of their transactions 
B)  ignorance about availability of a service or product 
C)  a law against overtime work 
D)  a tax on labor services 
A)  a market where buyers and sellers have internalized all benefits and costs of their transactions 
B)  ignorance about availability of a service or product 
C)  a law against overtime work 
D)  a tax on labor services

Question 2

A policy by which some parties gain and others lose,but for which the gainers fully compensate the losers is

Accepted Answer

A)  Pareto improving. 
B)  equitable but inefficient. 
C)  easily implemented in most circumstances. 
D)  both inefficient and inequitable. 
A)  Pareto improving. 
B)  equitable but inefficient. 
C)  easily implemented in most circumstances. 
D)  both inefficient and inequitable.

Question 3

Minimum wage laws often block transactions between employers and workers that would otherwise occur at wage rates below the minimum.As a result,minimum wage laws tend to

Accepted Answer

A)  improve equity at the expense of efficiency. 
B)  improve efficiency at the expense of equity. 
C)  improve both equity and efficiency. 
D)  reduce both equity and efficiency. 
A)  improve equity at the expense of efficiency. 
B)  improve efficiency at the expense of equity. 
C)  improve both equity and efficiency. 
D)  reduce both equity and efficiency.

Question 4

Omitted variable bias exists if the omitted variable is

Accepted Answer

A)  unrelated to the dependent variable or the independent variable. 
B)  related to the dependent variable, but unrelated to the independent variable. 
C)  related to the independent variable, but unrelated to the dependent variable. 
D)  related to both the independent variable and the dependent variable. 
A)  unrelated to the dependent variable or the independent variable. 
B)  related to the dependent variable, but unrelated to the independent variable. 
C)  related to the independent variable, but unrelated to the dependent variable. 
D)  related to both the independent variable and the dependent variable.

Question 5

It has been said that "Paul will rarely complain about a plan that takes money from Peter to pay Paul." This suggests that redistributional transactions are usually

Accepted Answer

A)  mutually beneficial transactions. 
B)  the result of government mandates. 
C)  voluntary transactions. 
D)  illegal transactions. 
A)  mutually beneficial transactions. 
B)  the result of government mandates. 
C)  voluntary transactions. 
D)  illegal transactions.

Question 6

Which of the following is a positive statement?

Accepted Answer

A)  Mutually beneficial trade is good. 
B)  Minimum wage laws are not Pareto efficient. 
C)  All workers should earn, at a minimum, a living wage. 
D)  All persons who cannot produce enough to earn a living wage should not be allowed to work. 
A)  Mutually beneficial trade is good. 
B)  Minimum wage laws are not Pareto efficient. 
C)  All workers should earn, at a minimum, a living wage. 
D)  All persons who cannot produce enough to earn a living wage should not be allowed to work.

Question 7

A regression estimates that Q = 35 - 0.1*X,where Q is the quit rate,X is the number of employees at the firm.Both t-statistics are greater than two,and the firm sizes range from 50 to 100.This indicates that doubling the number of employees from 50 to 100 will reduce the quit rate by

Accepted Answer

A)  50% points. 
B)  5% points. 
C)  35% points. 
D)  10% points. 
A)  50% points. 
B)  5% points. 
C)  35% points. 
D)  10% points.

Question 8

In Job X,the employer gets a gross benefit of $600 a week from employing a worker (this is the highest wage the employer will pay).The worker is willing to work for the employer if paid $400 a week or more.Which of the following is Pareto efficient?

Accepted Answer

A)  a law mandating a minimum wage of $650 a week 
B)  a law mandating a maximum wage of $300 a week 
C)  a law allowing the employer to pay whatever wage they want 
D)  a law mandating a chauffeured car, costing $250 a week and valued by the worker at $10, be provided by the employer 
A)  a law mandating a minimum wage of $650 a week 
B)  a law mandating a maximum wage of $300 a week 
C)  a law allowing the employer to pay whatever wage they want 
D)  a law mandating a chauffeured car, costing $250 a week and valued by the worker at $10, be provided by the employer

Question 9

Which of the following best illustrates an externality?

Accepted Answer

A)  A worker agrees to work in a dangerous job because it is the best job the worker can get. 
B)  A job is so dangerous that the employer cannot attract workers, resulting in a good not being produced despite the fact that it is valued by consumers. 
C)  A local government imposes a payroll tax of $5 per hour on employers causing some jobs, that would have existed in the absence of the tax, to be lost. 
D)  An employer and worker agree to produce a good with a production method that emits pollution on the nearby community. 
A)  A worker agrees to work in a dangerous job because it is the best job the worker can get. 
B)  A job is so dangerous that the employer cannot attract workers, resulting in a good not being produced despite the fact that it is valued by consumers. 
C)  A local government imposes a payroll tax of $5 per hour on employers causing some jobs, that would have existed in the absence of the tax, to be lost. 
D)  An employer and worker agree to produce a good with a production method that emits pollution on the nearby community.

Question 10

Improvements in equity

Accepted Answer

A)  involve comparing the welfare lost by some against the welfare gained by others. 
B)  are impossible if the initial distribution is Pareto Optimal. 
C)  generally increase efficiency. 
D)  can be scientifically evaluated. 
A)  involve comparing the welfare lost by some against the welfare gained by others. 
B)  are impossible if the initial distribution is Pareto Optimal. 
C)  generally increase efficiency. 
D)  can be scientifically evaluated.

Question 11

A regression of Y = a + bX yields values of a = 4.0 and b = -2.7.This indicates that the slope of the regression line is

Accepted Answer

A)  4.0. 
B)  -4.0. 
C)  2.7. 
D)  -2.7. 
A)  4.0. 
B)  -4.0. 
C)  2.7. 
D)  -2.7.

Question 12

Public goods are

Accepted Answer

A)  goods donated by their owner for public use. 
B)  goods that are available to an additional consumer at no cost. 
C)  goods that are not scarce. 
D)  goods that can only be produced by the government. 
A)  goods donated by their owner for public use. 
B)  goods that are available to an additional consumer at no cost. 
C)  goods that are not scarce. 
D)  goods that can only be produced by the government.

Question 13

Economists generally assume that

Accepted Answer

A)  people both pursue their objectives in a consistent fashion and are forced to make choices due to scarcity. 
B)  people pursue their objectives in a consistent fashion. 
C)  people are forced to make choices due to scarcity. 
D)  habit-bound people are irrational. 
A)  people both pursue their objectives in a consistent fashion and are forced to make choices due to scarcity. 
B)  people pursue their objectives in a consistent fashion. 
C)  people are forced to make choices due to scarcity. 
D)  habit-bound people are irrational.

Question 14

A regression estimates that a worker's hourly productivity (P),measured in units of output,is related to hourly wage (W)as follows: Pi = 4.5 + 0.2Wi.This indicates that

Accepted Answer

A)  a firm raising their wage by $10 will reduce their productivity by 2 units. 
B)  a firm raising their wage by $10 will raise their productivity by 2 units. 
C)  a worker will produce 2 units when the firm pays a wage of $10. 
D)  a worker will produce 4.5 units. 
A)  a firm raising their wage by $10 will reduce their productivity by 2 units. 
B)  a firm raising their wage by $10 will raise their productivity by 2 units. 
C)  a worker will produce 2 units when the firm pays a wage of $10. 
D)  a worker will produce 4.5 units.

Question 15

Labor markets differ from most other markets because

Accepted Answer

A)  contracts exist between buyers and sellers. 
B)  price and quantity information must be exchanged. 
C)  resources are allocated. 
D)  labor services must be rented, not bought or sold. 
A)  contracts exist between buyers and sellers. 
B)  price and quantity information must be exchanged. 
C)  resources are allocated. 
D)  labor services must be rented, not bought or sold.

Question 16

Positive economics

Accepted Answer

A)  is a theory of behavior in which people are assumed to respond favorably to benefits and negatively to costs. 
B)  is a theory of behavior that only counts positive benefits as contributing to the social "good." 
C)  is a theory of economics that assumes that labor supply is directly (or positively) related to the level of compensation that employers are willing and able to pay. 
D)  closely resembles Newtonian physics in that it better describes the relationship between energy and motion in the economy. 
A)  is a theory of behavior in which people are assumed to respond favorably to benefits and negatively to costs. 
B)  is a theory of behavior that only counts positive benefits as contributing to the social "good." 
C)  is a theory of economics that assumes that labor supply is directly (or positively) related to the level of compensation that employers are willing and able to pay. 
D)  closely resembles Newtonian physics in that it better describes the relationship between energy and motion in the economy.

Question 17

An economic model based in positive economics should be judged

Accepted Answer

A)  by the quality and quantity of its underlying assumptions. 
B)  by its ability to accurately capture and describe the many complex details of the real economy. 
C)  by the accuracy of its predictions rather than by the accuracy of its assumptions. 
D)  on its ability to incorporate the idiosyncratic factors that typically characterize human interactions. 
A)  by the quality and quantity of its underlying assumptions. 
B)  by its ability to accurately capture and describe the many complex details of the real economy. 
C)  by the accuracy of its predictions rather than by the accuracy of its assumptions. 
D)  on its ability to incorporate the idiosyncratic factors that typically characterize human interactions.

Question 18

If all parties gain from a transaction,

Accepted Answer

A)  the government must mandate that transaction. 
B)  the transaction must be a Pareto improvement. 
C)  the transaction will not be voluntary for some parties. 
D)  the transaction will be redistributional. 
A)  the government must mandate that transaction. 
B)  the transaction must be a Pareto improvement. 
C)  the transaction will not be voluntary for some parties. 
D)  the transaction will be redistributional.

Question 19

A government contractor hires a worker to help build a road for an annual wage of $50,000.The worker's annual output is worth $60,000.If the worker did not have this job,the worker would have produced $40,000 a year in an alternative job and would have been paid $30,000 a year.The real cost of using this worker to build the road is

Accepted Answer

A)  $30,000. 
B)  $40,000. 
C)  $50,000. 
D)  $60,000. 
A)  $30,000. 
B)  $40,000. 
C)  $50,000. 
D)  $60,000.

Question 20

In a world without scarcity,

Accepted Answer

A)  there would be no costs. 
B)  there would be no benefits. 
C)  goods would have no value. 
D)  there would be no wants. 
A)  there would be no costs. 
B)  there would be no benefits. 
C)  goods would have no value. 
D)  there would be no wants.

Which of the following will NOT prevent a mutually beneficial transaction from occurring?

A policy by which some parties gain and others lose,but for which the gainers fully compensate the losers is

Minimum wage laws often block transactions between employers and workers that would otherwise occur at wage rates below the minimum.As a result,minimum wage laws tend to

Omitted variable bias exists if the omitted variable is

It has been said that "Paul will rarely complain about a plan that takes money from Peter to pay Paul." This suggests that redistributional transactions are usually

Which of the following is a positive statement?

A regression estimates that Q = 35 - 0.1*X,where Q is the quit rate,X is the number of employees at the firm.Both t-statistics are greater than two,and the firm sizes range from 50 to 100.This indicates that doubling the number of employees from 50 to 100 will reduce the quit rate by

In Job X,the employer gets a gross benefit of $600 a week from employing a worker (this is the highest wage the employer will pay).The worker is willing to work for the employer if paid $400 a week or more.Which of the following is Pareto efficient?

Which of the following best illustrates an externality?

Improvements in equity

A regression of Y = a + bX yields values of a = 4.0 and b = -2.7.This indicates that the slope of the regression line is

Public goods are

Economists generally assume that

A regression estimates that a worker's hourly productivity (P),measured in units of output,is related to hourly wage (W)as follows: Pi = 4.5 + 0.2Wi.This indicates that

Labor markets differ from most other markets because

Positive economics

An economic model based in positive economics should be judged

If all parties gain from a transaction,

In a world without scarcity,

Overview of the Labor Market

The Demand for Labor

Labor Demand Elasticities

Frictions in the Labor Market

Supply of Labor to the Economy: The Decision to Work

Labor Supply: Household Production, the Family, and the Life Cycle

Compensating Wage Differentials and Labor Markets

Investments in Human Capital: Education and Training

Worker Mobility: Migration, Immigration, and Turnover

Pay and Productivity: Wage Determination within the Firm

Gender,Race,and Ethnicity in the Labor Market

Unions and the Labor Market

Unemployment

Inequality in Earnings

The Labor-Market Effects of International Trade and Production Sharing

Filters

Exam 1: Introduction

Which of the following will NOT prevent a mutually beneficial transaction from occurring?

A policy by which some parties gain and others lose,but for which the gainers fully compensate the losers is

Minimum wage laws often block transactions between employers and workers that would otherwise occur at wage rates below the minimum.As a result,minimum wage laws tend to

Omitted variable bias exists if the omitted variable is

It has been said that "Paul will rarely complain about a plan that takes money from Peter to pay Paul." This suggests that redistributional transactions are usually

Which of the following is a positive statement?

A regression estimates that Q = 35 - 0.1*X,where Q is the quit rate,X is the number of employees at the firm.Both t-statistics are greater than two,and the firm sizes range from 50 to 100.This indicates that doubling the number of employees from 50 to 100 will reduce the quit rate by

In Job X,the employer gets a gross benefit of $600 a week from employing a worker (this is the highest wage the employer will pay).The worker is willing to work for the employer if paid $400 a week or more.Which of the following is Pareto efficient?

Which of the following best illustrates an externality?

Improvements in equity

A regression of Y = a + bX yields values of a = 4.0 and b = -2.7.This indicates that the slope of the regression line is

Public goods are

Economists generally assume that

A regression estimates that a worker's hourly productivity (P),measured in units of output,is related to hourly wage (W)as follows: Pi = 4.5 + 0.2Wi.This indicates that

Labor markets differ from most other markets because

Positive economics

An economic model based in positive economics should be judged

If all parties gain from a transaction,

In a world without scarcity,

Overview of the Labor Market

The Demand for Labor

Labor Demand Elasticities

Frictions in the Labor Market

Supply of Labor to the Economy: The Decision to Work

Labor Supply: Household Production, the Family, and the Life Cycle

Compensating Wage Differentials and Labor Markets

Investments in Human Capital: Education and Training

Worker Mobility: Migration, Immigration, and Turnover

Pay and Productivity: Wage Determination within the Firm

Gender,Race,and Ethnicity in the Labor Market

Unions and the Labor Market

Unemployment

Inequality in Earnings

The Labor-Market Effects of International Trade and Production Sharing

Filters