Question 1

Which of the following is consistent with a Pareto improvement?

Accepted Answer

A)  a federal restriction on the hours an individual can work 
B)  there is an increase in the sales tax levied on particular goods 
C)  a trade that would make one party be?0??0?er off,and the other equally well off 
D)  a trade that would make one party be?0??0?er off,and the other party worse off 
E)  one party having incomplete information about the market 
A)  a federal restriction on the hours an individual can work 
B)  there is an increase in the sales tax levied on particular goods 
C)  a trade that would make one party be?0??0?er off,and the other equally well off 
D)  a trade that would make one party be?0??0?er off,and the other party worse off 
E)  one party having incomplete information about the market C

Question 2

When a rational choice model is applied,the individual

Accepted Answer

A)  is never selfish,spiteful,or altruistic. 
B)  has behavior that is not consistent over time. 
C)  is always selfish,spiteful,or altruistic. 
D)  maximizes his wellbeing subject to a constraint. 
E)  maximizes his utility but is not constrained. 
A)  is never selfish,spiteful,or altruistic. 
B)  has behavior that is not consistent over time. 
C)  is always selfish,spiteful,or altruistic. 
D)  maximizes his wellbeing subject to a constraint. 
E)  maximizes his utility but is not constrained. D

Question 3

Which of the following would cause a movement along the labor supply curve for the steel market?

Accepted Answer

A)  The federal government imposes a minimum wage law. 
B)  The hourly wage in the iron market increases. 
C)  Hundreds of immigrants enter the area. 
D)  A smallpox outbreak results in thousands of deaths. 
E)  Medical malpractice lawsuits cause doctors to have to pay more for insurance,thus decreasing their wage. 
A)  The federal government imposes a minimum wage law. 
B)  The hourly wage in the iron market increases. 
C)  Hundreds of immigrants enter the area. 
D)  A smallpox outbreak results in thousands of deaths. 
E)  Medical malpractice lawsuits cause doctors to have to pay more for insurance,thus decreasing their wage. A

Question 4

If the price of labor increases,the labor will.

Accepted Answer

A)  demand for,increase or decrease 
B)  demand for,increase 
C)  quantity demanded of,decrease 
D)  quantity demanded of,increase 
E)  quantity demanded of,increase or decrease 
A)  demand for,increase or decrease 
B)  demand for,increase 
C)  quantity demanded of,decrease 
D)  quantity demanded of,increase 
E)  quantity demanded of,increase or decrease

Question 5

An economic model examines how a(n)affects a(n).

Accepted Answer

A)  independent variable,dependent variable 
B)  endogenous variable,independent variable 
C)  exogenous variable,independent variable 
D)  endogenous variable,dependent variable 
E)  endogenous variable,exogenous variable 
A)  independent variable,dependent variable 
B)  endogenous variable,independent variable 
C)  exogenous variable,independent variable 
D)  endogenous variable,dependent variable 
E)  endogenous variable,exogenous variable

Question 6

An endogenous variable

Accepted Answer

A)  is the independent variable in an economic model. 
B)  is assumed to be determined by factors outside the scope of the model. 
C)  is the impulse that causes a change in the exogenous variable. 
D)  is the response to a change in the exogenous variable. 
E)  is the rental rate of capital in the labor demand equation. 
A)  is the independent variable in an economic model. 
B)  is assumed to be determined by factors outside the scope of the model. 
C)  is the impulse that causes a change in the exogenous variable. 
D)  is the response to a change in the exogenous variable. 
E)  is the rental rate of capital in the labor demand equation.

Question 7

Which is not a pillar of the neoclassical approach?

Accepted Answer

A)  Pareto efficiency 
B)  positive economics 
C)  methodological individualism 
D)  equilibrium 
E)  rational choice 
A)  Pareto efficiency 
B)  positive economics 
C)  methodological individualism 
D)  equilibrium 
E)  rational choice

Question 8

Normative economics is

Accepted Answer

A)  the prescriptive part of economics. 
B)  the branch of economics that describes and objectively explains economic phenomena. 
C)  the scientific branch of economics. 
D)  used to shed light on positive debates. 
E)  both A and D 
A)  the prescriptive part of economics. 
B)  the branch of economics that describes and objectively explains economic phenomena. 
C)  the scientific branch of economics. 
D)  used to shed light on positive debates. 
E)  both A and D

Question 9

If one party can gain from a transaction,without harming any other party,

Accepted Answer

A)  then the transaction must be a Pareto improvement. 
B)  then the transaction is not a Pareto improvement. 
C)  the government must intervene to make the transaction occur. 
D)  the transaction will be forced on one of the parties. 
E)  then the current economy is at the Pareto efficient outcome. 
A)  then the transaction must be a Pareto improvement. 
B)  then the transaction is not a Pareto improvement. 
C)  the government must intervene to make the transaction occur. 
D)  the transaction will be forced on one of the parties. 
E)  then the current economy is at the Pareto efficient outcome.

Question 10

Which statement about economic models is not true?

Accepted Answer

A)  Analytical models consist of a clear set of assumptions and conclusions that are drawn from them. 
B)  Economic models simplify reality because the economic reality is too complicated. 
C)  Economic models consist of exogenous variables which are the response to changes in endogenous variables. 
D)  Models are used in both theoretical and empirical work. 
E)  Economic models must be coherent to be effective. 
A)  Analytical models consist of a clear set of assumptions and conclusions that are drawn from them. 
B)  Economic models simplify reality because the economic reality is too complicated. 
C)  Economic models consist of exogenous variables which are the response to changes in endogenous variables. 
D)  Models are used in both theoretical and empirical work. 
E)  Economic models must be coherent to be effective.

Question 11

What is the equilibrium wage?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
E)  5 
A)  1 
B)  2 
C)  3 
D)  4 
E)  5

Question 12

Pareto efficiency implies

Accepted Answer

A)  everyone in the economy is equally well off. 
B)  there are no trades that would make someone be?0??0?er off without making someone else worse off. 
C)  there are still trades that would make one party be?0??0?er off without making someone else worse off. 
D)  transactions are still taking place in the economy. 
E)  there is always only one outcome that is efficient. 
A)  everyone in the economy is equally well off. 
B)  there are no trades that would make someone be?0??0?er off without making someone else worse off. 
C)  there are still trades that would make one party be?0??0?er off without making someone else worse off. 
D)  transactions are still taking place in the economy. 
E)  there is always only one outcome that is efficient.

Question 13

What is the equilibrium level of employment?

Accepted Answer

A)  7 
B)  8 
C)  9 
D)  10 
E)  11 
A)  7 
B)  8 
C)  9 
D)  10 
E)  11

Question 14

If the price of capital decreases,the labor will.

Accepted Answer

A)  demand for,increase or decrease 
B)  demand for,increase 
C)  quantity demanded of,decrease 
D)  quantity demanded of,increase 
E)  quantity demanded of,increase or decrease 
A)  demand for,increase or decrease 
B)  demand for,increase 
C)  quantity demanded of,decrease 
D)  quantity demanded of,increase 
E)  quantity demanded of,increase or decrease

Question 15

When wages increase,the scale effect implies employment will,while the substitution effect implies employment will.

Accepted Answer

A)  decrease,increase 
B)  decrease,remain the same 
C)  remain the same,increase 
D)  increase,increase 
E)  decrease,decrease 
A)  decrease,increase 
B)  decrease,remain the same 
C)  remain the same,increase 
D)  increase,increase 
E)  decrease,decrease

Question 16

If an economy has reached the general equilibrium then

Accepted Answer

A)  the actions leading to it are not grounded in rational behavior. 
B)  one group is operating in isolation of all other groups. 
C)  all interconnected groups are included and their decision process is modeled. 
D)  the outcome is not necessarily feasible. 
E)  there is a transaction possible that would be a Pareto improvement. 
A)  the actions leading to it are not grounded in rational behavior. 
B)  one group is operating in isolation of all other groups. 
C)  all interconnected groups are included and their decision process is modeled. 
D)  the outcome is not necessarily feasible. 
E)  there is a transaction possible that would be a Pareto improvement.

Question 17

A mathematical model

Accepted Answer

A)  contains only exogenous variables. 
B)  treats endogenous variables as given. 
C)  seeks to explain exogenous variables. 
D)  does not clearly define the assumptions of the model. 
E)  reaches conclusions using logically sound methods. 
A)  contains only exogenous variables. 
B)  treats endogenous variables as given. 
C)  seeks to explain exogenous variables. 
D)  does not clearly define the assumptions of the model. 
E)  reaches conclusions using logically sound methods.

Question 18

Suppose the labor demand curve shifts downward.Which of the following could have caused the shift?

Accepted Answer

A)  The wage in an alternative industry decreases. 
B)  The price of capital increased,and capital and labor are gross complements. 
C)  The price of capital decreased,and capital and labor are gross complements. 
D)  A hurricane causes thousands of people to leave New Orleans,decreasing the size of the labor force in the area. 
E)  none of the above 
A)  The wage in an alternative industry decreases. 
B)  The price of capital increased,and capital and labor are gross complements. 
C)  The price of capital decreased,and capital and labor are gross complements. 
D)  A hurricane causes thousands of people to leave New Orleans,decreasing the size of the labor force in the area. 
E)  none of the above

Question 19

After 9/11 there was an increase in the number of people who became police officers and firemen.What does this imply about the labor market?

Accepted Answer

A)  The quantity of labor supplied increased,and wages will increase. 
B)  The quantity of labor supplied increased,and wages will decrease. 
C)  The labor supply increased,and wages will increase. 
D)  The labor supply increased,and wages will decrease. 
E)  The labor supply increased,and wages will not change. 
A)  The quantity of labor supplied increased,and wages will increase. 
B)  The quantity of labor supplied increased,and wages will decrease. 
C)  The labor supply increased,and wages will increase. 
D)  The labor supply increased,and wages will decrease. 
E)  The labor supply increased,and wages will not change.

Question 20

Suppose an agent values the future but cannot accurately predict it.What is this called?

Accepted Answer

A)  rational choice 
B)  Pareto efficiency 
C)  marginal revenue 
D)  bounded rationality 
E)  new institutional economics 
A)  rational choice 
B)  Pareto efficiency 
C)  marginal revenue 
D)  bounded rationality 
E)  new institutional economics

Which of the following is consistent with a Pareto improvement?

When a rational choice model is applied,the individual

Which of the following would cause a movement along the labor supply curve for the steel market?

If the price of labor increases,the labor will.

An economic model examines how a(n)affects a(n).

An endogenous variable

Which is not a pillar of the neoclassical approach?

Normative economics is

If one party can gain from a transaction,without harming any other party,

Which statement about economic models is not true?

What is the equilibrium wage?

Pareto efficiency implies

What is the equilibrium level of employment?

If the price of capital decreases,the labor will.

When wages increase,the scale effect implies employment will,while the substitution effect implies employment will.

If an economy has reached the general equilibrium then

A mathematical model

Suppose the labor demand curve shifts downward.Which of the following could have caused the shift?

After 9/11 there was an increase in the number of people who became police officers and firemen.What does this imply about the labor market?

Suppose an agent values the future but cannot accurately predict it.What is this called?

The Uslabor Market

The Short Run Demand for Labor

The Supply of Labor

Human Capital

On-The-Job Training

Competitive Equilibrium

Policy Application: the Minimum Wage

Policy Application: the War on Poverty

Death and Injury in the Usworkplace-A Hedonic Analysis

Discrimination I: Theory

Discrimination Ii: Evidence and Policy

The Hiring Process

Incentives

Tasks,technologies,and Organizational Design

Careers and the Employment Relation

The Long Run Demand for Labor and Adjustment Costs

Filters

Exam 1: Introduction

Which of the following is consistent with a Pareto improvement?

When a rational choice model is applied,the individual

Which of the following would cause a movement along the labor supply curve for the steel market?

If the price of labor increases,the labor will.

An economic model examines how a(n)affects a(n).

An endogenous variable

Which is not a pillar of the neoclassical approach?

Normative economics is

If one party can gain from a transaction,without harming any other party,

Which statement about economic models is not true?

What is the equilibrium wage?

Pareto efficiency implies

What is the equilibrium level of employment?

If the price of capital decreases,the labor will.

When wages increase,the scale effect implies employment will,while the substitution effect implies employment will.

If an economy has reached the general equilibrium then

A mathematical model

Suppose the labor demand curve shifts downward.Which of the following could have caused the shift?

After 9/11 there was an increase in the number of people who became police officers and firemen.What does this imply about the labor market?

Suppose an agent values the future but cannot accurately predict it.What is this called?

The Uslabor Market

The Short Run Demand for Labor

The Supply of Labor

Human Capital

On-The-Job Training

Competitive Equilibrium

Policy Application: the Minimum Wage

Policy Application: the War on Poverty

Death and Injury in the Usworkplace-A Hedonic Analysis

Discrimination I: Theory

Discrimination Ii: Evidence and Policy

The Hiring Process

Incentives

Tasks,technologies,and Organizational Design

Careers and the Employment Relation

The Long Run Demand for Labor and Adjustment Costs

Filters