Consider a society consisting of only three people: Adam, Beth, and Chad. All three workers spend all day making clothing and food. At the start of each day, Chad tells each worker how many hours to devote to production of each good. The "basic economic question" that Chad is answering for this society is the

Question 1 options:

	Economic System Decision
	Absolute Advantage Decision
	Distributional Decision
	Resource Use Decision

Question 2(1 point)

Saved

Listen

______________ described the concept of the "Invisible Hand" in his book "An Inquiry into the Nature and Causes of the Wealth of Nations" (1776).

Question 2 options:

	Vernon Smith
	Karl Marx
	Adam Smith
	John Maynard Keynes

Question 3(1 point)

Listen

James recently won $10,000 betting on the Birmingham Stallions to win the USFL Championship. He has chosen to put this cash in a shoebox in his bedroom closet with the intention of increasing his consumption two years from now. He is able to plan on delaying the increase in his consumption in this manner since money serves as

Question 3 options:

	a store of value
	a unit of account
	a market equilibrium
	an Invisible Hand

Question 4(1 point)

Saved

Listen

For Questions 4 and 5, consider the following scenario. Barry and Donna spend their workdays producing apples and computers. The table below provides a summary of the number of units of each good that each worker could produce in a full day. Answer the following questions based upon these values

Barry's Opportunity Cost for producing a computer is _____ units of apples.

Question 4 options:

	10
	6
	360
	2

Question 5(1 point)

Listen

____________ has a Comparative Advantage in the production of apples, and ____________ has an Absolute Advantage in the production of apples.

Question 5 options:

	Barry; Donna
	Barry; Barry
	Donna; Barry
	Donna; Donna

Question 6(1 point)

Saved

Listen

Consider the continuum between the economic systems of Pure Socialism and Pure Capitalism illustrated above. Along the continuum illustrated above the economy of the United States currently would most accurately lie at

Question 6 options:

	Point D
	Point C
	Point B
	Point A.

Question 7(1 point)

Saved

Listen

Which of the following economic institutions is NOT a "decision-maker"?

Question 7 options:

	Households
	Government
	Markets
	Firms

Question 8(1 point)

Saved

Listen

For questions 8 through 11, refer to the graph below which illustrates the supply and demand for "Good Y" in 2020. Suppose that there are no external effects in this market, so that the efficient quantity in 2020 is 405.

There would be __________ at a price of $16.00.

Question 8 options:

	excess supply
	excess demand
	both excess demand and excess supply
	neither excess demand nor excess supply

Question 9(1 point)

Listen

At the market equilibrium in 2020,

Question 9 options:

	Total Producers' Surplus is equal to areas c+d+e+g+h
	Total Consumers' Surplus is equal to areas a+b+f
	Total Social Surplus is equal to areas f+g+h
	More than one (perhaps all) of the above answers is correct

Question 10(1 point)

Listen

Suppose that a per unit tax of $10.25 were imposed on buyers in this market. This tax would result in

Question 10 options:

	a Deadweight Loss equal to areas f+g+h
	a Deadweight Loss that is positive but smaller than f+g
	a Deadweight Loss equal to area i
	a Deadweight Loss that is positive and greater than f+g+h

Question 11(1 point)

Listen

Suppose Good Y is a normal good and that between 2020 and 2021 there was an increase in consumer income (with no other significant changes in market conditions). As a result, between 2020 and 2021 there would have been

Question 11 options:

	an increase in equilibrium price but decrease in equilibrium quantity
	an increase in both equilibrium price and equilibrium quantity
	a decrease in both equilibrium price and equilibrium quantity
	a decrease in equilibrium price but increase in equilibrium quantity

Question 12(1 point)

Listen

Alex recently saw the comedian Ron White perform at the Topeka Performing Arts Center in Topeka, KS. His Total Benefits from seeing this show were $ 250, while his total Costs were $50. From this information, it follows that his Economic Surplus

Question 12 options:

	from attending the show was ($50) +($250) = ($300).
	would have been greater if he had instead spent the $250 on Ron White DVDs
	from attending the show was ($250)- ($50) = ($200).
	from attending the show was ($50)- ($200) = ($-200) (i.e., negative $200).

Question 13(1 point)

Listen

	OneDigital Camera	Wheat (per pound)
China	100 hours	4 hours
South Korea	60 hours	3 hours

Does either China or South Korea have an absolute advantage and if so, in what product?

Question 13 options:

	South Korea has an absolute advantage in both products
	China only has an absolute advantage in wheat.
	South Korea only has an absolute advantage in wheat
	China only has an absolute advantage in digital cameras

Question 14(1 point)

Listen

China has a comparative advantage in the production of

Question 14 options:

	digital cameras
	neither product
	both products
	wheat.

Question 15(1 point)

Listen

If the two countries specialize and trade, who should export digital cameras?

Question 15 options:

	There is no basis for trade between the two countries
	China
	They should both be importing digital cameras
	South Korea

Question 16(1 point)

Listen

Suppose your expenses for this term are as follows: tuition: $14,000, room and board: $8,000, books and other educational supplies: $2,000. Further, during the term, you can only work part-time and earn $4,000 instead of your full-time salary of $18,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?

Question 16 options:

	28,000
	24,000
	30,000
	18,000

Question 17(1 point)

Listen

If the economy is currently producing at point Y, what is the opportunity cost of moving to point W?

Question 17 options:

	zero
	16 million tons of paper
	9 million tons of paper
	2 million tons of steel

Question 18(1 point)

Listen

Tim owns 160 acres of land in middle Tennessee. He has decided to build a golf course on this land. When doing so, Tim is exercising a ________________ in regard to his property

Question 18 options:

	right to restitution
	right to transfer
	right to consumption
	right to control

Question 19(1 point)

Listen

Price per Bushel	Quantity Demanded (bushels)	Quantity Supplied (bushels)
$3	36,000	0
6	30,000	3,000
9	24,000	6,000
12	19,000	10,000
15	15,000	15,000
18	10,000	21,000
21	7,000	28,000
24	4,000	36,000

What is the equilibrium price and quantity of corn?

Question 19 options:

	$15 and 15,000
	$25 and 7,000
	$6 and 3000
	$18 and 21,000

Question 20(1 point)

Listen

How many bushels will be sold if the market price is $9 per bushel?

Question 20 options:

	6,000
	19,000
	24,000
	4,000

Question 21(1 point)

Listen

If the market price is $9 per bushel, what must happen to restore equilibrium in the market?

Question 21 options:

	Price must fall to $6
	Price must rise to $21
	Price must rise to $18
	Price must rise to $15

Question 22(1 point)

Listen

At what price will suppliers be able to sell 24,000 bushels of corn?

Question 22 options:

	$2
	$9
	$7
	$5

Question 23(1 point)

Listen

Suppose the market price is $21 per bushel. Is there a shortage or a surplus in the market?

Question 23 options:

	Surplus
	Shortage

Question 24(1 point)

Saved

Listen

What is the quantity of the shortage or surplus?

Question 24 options:

	24,000
	15,000
	21,000
	22,000

Question 25(1 point)

Listen

How many bushels will be sold if the market price is $21 per bushel?

Question 25 options:

	10,000
	3,000
	7,000
	4,000

Question 26(1 point)

Listen

According to the depiction provided by the Expanded Circular Flow Diagram, government collects taxes from

Question 26 options:

	both domestic households and domestic firms (but not from any foreign sources)
	domestic households, domestic firms, foreign households, and foreign firm
	domestic and foreign firms (but not any households)
	domestic and foreign households (but not any firms).

Question 27(1 point)

Listen

Suppose that a farmer grows rice, which she sells to a miller for $25. The miller turns the rice into rice flour, which she sells to a baker for $60. The baker turns the flour into gluten free bread, which she sells to consumers for $200. Consumers eat the bread. What is GDP in this economy?

Question 27 options:

	$60
	$25
	$285
	$200

Question 28(1 point)

Listen

Which one of the reasons is not applicable for catch-up effect?

Question 28 options:

	Replicate technology from other countries.
	Law of diminishing returns
	Globalization and movement of labor and capital
	Rich countries donate money to poor countries

Question 29(1 point)

Listen

Why we have different measures for economic development and economic growth?

Question 29 options:

	Because growth is measured by monetary terms and development in non-monetary terms
	Because development indicates standard of living which cannot be just captured by GDP per capita

Question 30(1 point)

Listen

What kind of good will be a movie rented on Amazon prime video?

Question 30 options:

	Public good
	Private good
	Club good
	Common good

Question 31(1 point)

Listen

Based upon this graph, it appears as if production and consumption of this good generates

Question 31 options:

	a positive externality (but no negative externality).
	neither a positive externality nor a negative externality
	both a positive externality and a negative externality
	a negative externality (but no positive externality).

Question 32(1 point)

Listen

The free market level of trade is __________; the efficient level of trade is __________.

Question 32 options:

	70 units; 84 units
	84 units; 70 unit
	70 units; 58 units
	58 units; 102 units

Question 33(1 point)

Listen

The city of Murfreesboro has a governmental agency that randomly inspects pubs to make sure that they are serving drinks in compliance with local health codes. The agency assigns each pub a numeric score/grade which must be displayed for potential customers to see. This government intervention in this market is most likely justified to reduce a deadweight loss associated with a market failure due to

Question 33 options:

	lack of information by market participants
	a positive externality
	profit maximization by a firm with market power
	a negative externality

Question 34(1 point)

Listen

Which of the following is an example of a common resource?

Question 34 options:

	catfish in a private pond in Mississippi
	impounded dogs in a dog pound
	shrimp in the coastal waters of the Pacific Ocean
	public health care services in the United States

Question 35(1 point)

Listen

Consider a situation in which representatives from nine legislative districts need to consider two proposals. The surplus realized by constituents in each legislative district for each project is as follows:

First suppose that each proposal is considered separately, with representatives voting for/against each based upon surplus realized by constituents of his/her own district. Under this procedure, "Proposal I" would be __________and "Proposal II" would be __________.

Question 35 options:

	approved; approved
	approved; defeated.
	defeated; approved
	defeated; defeated

Question 36(1 point)

Listen

Now suppose that the representatives from District 1 and District 9 agree to "trade votes" - the representative from District 1 votes against "Proposal II" in exchange for the representative from District 9 voting against "Proposal I." Continue to suppose that the other representatives vote truthfully (i.e., in the best interest of their own constituents) and that there is a separate vote on each proposal. When these representatives trade votes in this manner,

Question 36 options:

	both proposals are rejected, and the realized value of total social surplus is increased (i.e., realized total social surplus is larger than it would be if no vote trading took place).
	both proposals are rejected, and the realized value of total social surplus is decreased (i.e., realized total social surplus is smaller than it would be if no vote trading took place
	both proposals are approved, and the realized value of total social surplus is increased (i.e. realized total social surplus is larger than it would be if no vote trading took place).
	both proposals are approved, and the realized value of total social surplus is decreased (i.e., realized total social surplus is smaller than it would be if no vote trading took place).

Question 37(1 point)

Listen

To maximize profit, this monopolist would sell __________ and charge a price of __________.

Question 37 options:

	6,560 units of output; $28.40 per unit
	2,800 units of output; $28.40 per unit
	5,050 units of output; $44.60 per unit
	2,800 units of output; $67.00 per unit

Question 38(1 point)

Listen

When the monopolist chooses price and quantity to maximize profit, Deadweight Loss

Question 38 options:

	is equal to "areas (a)+(b)."
	is equal to "areas (a)+(b)+(c)+(d)+(e)."
	is equal to "areas (e)+(f)."
	is equal to "area (g)."

Question 39(1 point)

Listen

____________ refers to attempts by people to manipulate government action or influence government decisions in order to make themselves better off at the expense of others

Question 39 options:

	The Condorcet Paradox
	Government Failure
	Rent Seeking
	Rational Ignorance

Question 40(1 point)

Listen

A group of middle school teachers is trying to decide where to take their students on a field trip. They are considering three options: an art gallery, an amusement park, and an aquarium. When voting between only the art gallery and the amusement park, the art gallery receives more votes. When voting between only the aquarium and the art gallery, the aquarium receives more votes. When voting between only the amusement park and the aquarium, the amusement park receives more votes. These outcomes illustrate the

Question 40 options:

	Free Rider Problem
	Invisible Hand
	Law of Comparative Advantage
	Condorcet Paradox

Question 41(1 point)

Listen

This graph illustrates the Lorenz Curve in "Country X," along with two different Tax Concentration Curves in "Country X" - one for "Tax Code A" (its current tax policy) and one for "Tax Code B" (a proposed different tax policy). The value of: "Area (i)" is equal to .13; "Area (ii)" is equal to .09; "Area (iii)" is equal to .12; and "Area (iv)" is equal to .16.

The value of the Gini Coefficient in "Country X" is ______.

Question 41 options:

	0.26
	0.37
	0.13
	0.74

Question 42(1 point)

Listen

The value of the Stroup Coefficient is ___________ and would be ___________

Question 42 options:

	.09 under "Tax Code A"; .21 under "Tax Code B."
	.09 .50 = .18 under "Tax Code A"; .21 .50 = .42 under "Tax Code B."
	(.13 + .09) .50 = .44 under "Tax Code A"; (.13 + .09 + .12) .50 = .68 under "Tax Code B."
	.09 .37 .2432 under "Tax Code A"; .21 .37 = .5676 under "Tax Code B."

Question 43(1 point)

Listen

Suppose that the Lorenz Curve for the United States in 2020 lies completely below the Lorenz Curve for Sweden in 2020. This implies that

Question 43 options:

	the Unemployment Rate is higher in Sweden than in the United States
	Marginal Tax Rates are higher in Sweden than in the United States
	incomes are distributed more equally in Sweden than they are in the United States

Question 44(1 point)

Listen

This country experienced a recession from ______________________.

Question 44 options:

	March 2011 through July 2015
	May 2012 through June 2014
	April 2013 through July 2015
	June 2014 through March 2017

Question 45(1 point)

Listen

If there is pollution in producing a product, then the market equilibrium price

Question 45 options:

	is too low and equilibrium quantity is too high
	is too high and equilibrium quantity is too low
	and equilibrium quantity are too high
	and equilibrium quantity are too low

Question 46(1 point)

Listen

The country of Freedonia imposes an income tax which reduces the value of its Gini Coefficient from .29 to .27. This implies that the value of the Pechman-Okner Coefficient for this tax is ______.

Question 46 options:

	0.02
	0.28
	approximately .078
	approximately .069

Question 47(1 point)

Listen

Qihong was born in China. He always excelled academically. After earning a Master's degree from the China University of Mining and Technology in Beijing, he came to the United States to pursue a PhD. Upon completion of his PhD, he was hired by a prestigious research university in Oklahoma, where he works to this day. This story provides an illustration of the

Question 47 options:

	brain drain
	Condorcet Paradox
	vicious-cycle-of-poverty
	logrolling

Question 48(1 point)

Listen

_____________ describes an assessment of the production process which attributes all economic surplus generated from production to labor, an idea based upon the ideas of Karl Marx

Question 48 options:

	The Labor Theory of Value
	Utilitarian Justice
	The Economic Calculation Problem

Question 49(1 point)

Listen

"Market Failure" can be described as a situation in which

Question 49 options:

	None of the above answers are correct
	government intervention leads to a greater Deadweight-Loss than does the "free marketoutcome
	a single seller of a good has substantial control over the price of the good.
	the "free market outcome" is NOT efficient

Question 50(1 point)

Listen

Imposing a per unit tax of $10.00 on sellers in this market would generate tax revenue of

Question 50 options:

	exactly $60,000.
	more than $60,000 but less than $100,000
	less than $60,000