1. Based on what we know about the issue of scarcity, if unemployed Americans chose to go back to work instead of continuing to reap the current financial benefits of not working: a. There would be in imbalance between the amount of leisure time most people desire and the amount of leisure time available. b. The extra income from working at a job would not end the problem of financial scarcity that exists across this country. c. The gap between the number of hours businesses need people to work and the number of hours actually worked would be reduced. d. There would be an increase in the amount of tax dollars available to the government to reallocate to other programs. e. All of the above. 2. Not working is a rational economic choice if and only if: a. The benefits of not working are lower than the direct cost and opportunity cost of not working. b. People make more than $25 from not working. c. The opportunity cost of not working equals zero because people have nothing to lose by staying home and living off their fellow taxpayer. d. The direct and opportunity cost of working exceeds the financial - and other benefits - of working. 3. Who would argue that the extra $300 in weekly benefits was Unconstitutional and what would they cite to defend this view? Who would support the increase in taxpayer expense for more unemployment based on their belief that government should manage more of the economy to begin with? a. James Madison; Article One, Section Eight, Clause One; Karl Marx b. Alexander Hamilton; Article One, Section Eight, Clause One; Adam Smith c. Alexander Hamilton; The Fifth Amendment: Leonard Read d. David Crockett and James Madison; The Sixteenth Amendment; Frederic Bastiat e. Frederic Bastiat; The Law; David Crockett and Adam Smith 4. Based on the law of unintended consequences, economists would predict which of the following results of recent stimulus checks and extra unemployment benefits? a. The erosion of productivity and skills of people who have opted to cash these checks rather than pursue full-time employment. b. Greater fairness in the economic system that tends to keep most people poor due to the years of following the teachings of Adam Smith, rather than the proven superior model of Karl Marx. c. A greater push by voters for more taxpayer support in the future as well as calls for laws that force businesses to increase hourly wages. d. The irrational push by politicians to provide even greater taxpayer support in the future. e. A and C only. 5. Which of the following is an economic fact? a. President Biden's decision to leave in place tariffs on Canadian soft wood lumber will not lead to greater efficiency in U.S. lumber regions, but it will keep lumber prices elevated for people building houses. b. Human beings are inherently irrational because they usually do not consider the opportunity cost of their decisions. c. No one individual knows how to make a smartphone, thus spontaneous order and self-interested strangers can be trusted to provide us with this product. d. Eminent domain laws are part of the foundation of capitalism since profit is a more important measure of our well-being that property rights. e. A and C only 6. Congresswoman Alexandria Ocasio-Cortez has sponsored legislation that calls for a 100% drop in CO2 emissions by 2030. Adam Smith would: a. Agree with her plan, arguing that self-interested businesses and consumers should not be left alone to deal with climate change. b. Agree with her, arguing along the same lines as Alexander Hamilton, that government needs to interfere to reduce CO2 emissions further. c. Argue that central-planning - the opposite of what we learned in "I, Pencil" would work more efficiently than allowing businesses to continue to pollute. d. Argue that profit-seeking businesses and self-interested consumers can be trusted to reduce CO2 emissions. e. None of the above. 7. Germany has a tremendous comparative advantage over Kenya in the production of medical equipment. This means that if Germany and Kenya want to promote efficient economic policies to help with the current pandemic: a. The Kenyan government should impose tariffs on medical equipment coming from Germany to protect jobs in this sector of its economy. b. Germany should use infant-industry tariffs to keep its advantage in this field or fight dumping by Kenyan companies. c. Kenya and Germany should seek reciprocal trade agreements in this area. d. Kenya should attempt to become more self-reliant in the production of medical equipment regardless of the opportunity cost of doing so. e. C and D only 8. Based on what we know about the economic impact of tariffs and quotas, which of the following is a historically flawed reason for a government to have restrictive trade policies? a. When concerns over human rights and the environment are used to increase tariffs. b. When a country becomes convinced that its trading partners are engaging in dumping or currency manipulation. c. When the value of the dollar fluctuates compared to foreign currency. d. When a government has decided that it needs to eliminate a balance of trade deficit with another nation. e. All the above. 9. The passage of NAFTA in 1994 led to a(n) _______in exports between the U.S., Canada, and Mexico. As a result, total job creation in each nation _______and wages for American factory workers __________. This is one reason why economists ________President Biden's recent executive order requiring government agencies to "Buy American." a. Decrease; decreased; decreased; supported b. Increase; increase; decreased; have not supported c. Decrease; no change in; decreased; supported d. Increase; increased; increased; have not supported 10. The post-World War II period represented the __________ era in U.S. tariff policy. This led to___________. 1930 was the year __________. a. Revenue; job creation and a healthier economy; NAFTA was passed. b. Restriction; the Great Depression; The Smoot-Hawley bill passed. c. Reciprocity; global economic growth; Congress reduced trade with other nations. d. Restriction; a more efficient approach to trade policy; the revenue era began. e. B and D only