Fred Ramirez is a farmer who charts the relationship between number of acres planted in corn and number of bushels of corn harvested. Which marginal concept can Fred measure with this data?

Fred Ramirez is a farmer who charts the relationship between number of acres planted in corn and number of bushels of corn harvested. Which marginal concept can Fred measure with this data?

a

marginal utility

b

marginal product

c

marginal cost

d

marginal revenue product

e

marginal factor cost

Question 15(2 points)Special-interest legislation that imposes costs broadly over many taxpayers can be enacted because

a

taxpayers benefit from this type of legislation

b

taxpayers remain rationally ignorant of the legislation

c

only the wealthy pay these taxes

d

these taxes are actually borne by a minority of taxpayers

e

the Constitution requires special-interest legislation

Question 16(2 points)A limit on special-interest contributions to national political campaigns

a

would give challengers an edge over incumbents

b

is usually supported by special-interest groups as a way of saving money

c

would involve widespread costs and concentrated benefits

d

would reduce the extent of rent seeking

e

is an example of competing-interest legislation

Question 17(2 points)An increase in the marginal rate of return on bread-mixing machines would

a

reduce the supply of loanable funds and reduce the equilibrium market interest rate

b

reduce the supply of loanable funds and increase the equilibrium market interest rate

c

increase the supply of loanable funds and reduce the equilibrium market interest rate

d

increase the supply of loanable funds and increase the equilibrium market interest rate

e

increase the demand for loanable funds and increase the equilibrium market interest rate

Question 18(2 points)A metal-stamping factory moves next to a day care center. Noise from the factory makes it impossible for the kids to nap. It would cost the factory $5 million to move; it would cost $1 million for the day care center to move. Sound insulation for the factory costs $1 million; insulation for the day care center costs $200,000. The court determines that the day care center has the property right. What would be the optimal solution to this problem?

a

The factory should install sound insulation because that is cheaper than moving.

b

The factory should pay the day care center to move.

c

The factory should buy insulation for the day care center.

d

The day care center should buy its own insulation.

e

The day care center should move.

Question 19(2 points)Because of the rise of global competition and free trade,

a

antitrust policy serves no purpose

b

antitrust policy may be less necessary than previously thought

c

U.S. industrial concentration poses more of a threat to consumers

d

U.S. markets are becoming less contestable

e

U.S. manufacturers are seeking fewer trade barriers

Question 20(2 points)A relaxation of U.S. immigration laws and regulations would

a

further reduce wages in poorer countries

b

turn some permanent resource differentials into temporary ones

c

increase the demand for labor in the United States

d

turn some temporary resource differentials into permanent ones

e

increase the supply of labor in poorer countries

Question 21(2 points)There are six firms in the cresset industry. The market shares of the four largest firms are 50 percent, 20 percent, 10 percent, and 7 percent. The Herfindahl index is

a

87

b

4,149

c

10,000

d

3,081

e

impossible to calculate because data for the fifth and sixth firms are not given

Question 22(2 points)One result of asymmetric information in the market for used cars is that

a

few used cars are offered on the market

b

few lemons are sold

c

more lemons may be offered for sale than good cars

d

buyers benefit at the expense of sellers

e

good cars will sell for more than they are worth

Question 23(2 points)Private firms and public bureaus differ in the sense that public bureaus

a

sometimes have top-level managers chosen by shareholders

b

sell most of their output on a per unit basis

c

receive most of their revenues through a budget appropriation rather than through the sales of goods or services

d

are sometimes inefficient

e

hire consultants to solve difficult problems

Question 24(2 points)The more elastic the supply of a resource,

a

the greater is economic rent as a proportion of total earnings

b

the greater is opportunity cost as a proportion of total earnings

c

the fewer alternative uses the resource has

d

the greater the derived demand for the resource

e

the lower the derived demand for the resource

Question 25(2 points)The federal government has major assistance programs aimed at providing all of the following goods, except one. Which is the exception?

a

housing

b

energy

c

school lunches

d

clothing

e

food

Question 26(2 points)Which of the following is a social insurance program?

a

Medicaid

b

food stamps

c

unemployment compensation

d

Temporary Assistance for Needy Families

e

general assistance

Question 27(2 points)Jack F. Altrades's decision whether to purchase a good from a firm or hire resources directly in the market will

a

depend, in part, on his production skill but not on his contract negotiation skill

b

depend, in part, on the opportunity cost of his time but not on his skill

c

not depend on the cost of identifying, measuring, and pricing inputs

d

not depend on the cost of negotiating contracts

e

depend, in part, on both his skill and the opportunity cost of his time

Question 28(2 points)Why is the principal-agent problem less likely when getting a haircut than when getting a car repaired?

a

Haircuts are less expensive than car repairs.

b

There are no hidden actions when getting your hair cut.

c

There are no hidden actions when getting your car repaired.

d

Auto mechanics are less honest than hair stylists.

e

There is no principal-agent relationship in car repair.

Question 29(2 points)A monopoly or group of firms acting together as a monopoly

a

cannot perform the economic task of resource allocation

b

allocates resources in the most efficient way possible

c

misallocates resources by producing more output than a competitive industry would

d

misallocates resources by producing where the marginal benefit of the final unit produced exceeds its marginal cost

e

misallocates resources by producing where the marginal benefit of the final unit produced is less than its marginal cost

Question 30(2 points)Suppose research indicates that the effects of a one degree increase in Earths average temperature would be much more devastating than previously believed. Therefore, the greater the marginal benefit of reducing greenhouse gases, other things constant,

a

the lower the optimal level of emissions

b

the higher the optimal level of emissions

c

the likelier that the level of emissions would have no effect

d

the lower the optimal level of cleaner air

e

None of the answers is correct

Question 31(2 points)Production by a monopoly would result in the socially optimal allocation of resources if

a

price is set equal to marginal cost

b

marginal revenue is set equal to price

c

marginal revenue is set equal to marginal cost

d

price is set equal to average total cost

e

marginal revenue is set equal to average total cost

Question 32(2 points)According to current Justice Department guidelines, mergers in an industry are seldom challenged if the industry

a

would have a postmerger Herfindahl index greater than 1,800

b

would have a postmerger Herfindahl index less than 1,000

c

has a premerger Herfindahl index greater than 1,800

d

has a premerger Herfindahl index less than 1,000

e

has a premerger Herfindahl index equal to 10,000

Question 33(2 points)Which of the following is an example of an open-access resource?

a

a city subway system

b

a college education

c

an elementary school education

d

whales in the ocean

e

pandas in the zoo

Question 34(2 points)If a market is initially operating competitively and then the government imposes a price floor above the equilibrium price,

a

there will be more resources will be devoted to the production of this product

b

quantity demanded will rise

c

producer surplus will fall in the short run

d

imposition of the floor is probably a positive-sum game

e

consumer surplus will fall

Question 35(2 points)Intellectual property is

a

a special form of capital

b

a type of labor

c

a special type of service

d

cheap to produce, but expensive to transmit

e

a kind of entrepreneurial ability

Question 36(2 points)The demand for labor is likely to increase when

a

the supply of the good it produces falls

b

the demand for the good it produces rises

c

the supply of the good it produces rises

d

the demand for the good it produces falls

e

the real wage rate rises

Question 37(2 points)Which of the following would be considered tax evasion?

a

deducting charitable contributions when figuring income taxes

b

claiming your young children as tax exemptions

c

claiming your dog as a dependent on your tax form

d

buying a house in order to deduct interest payments

e

overestimating your income subject to taxes

Question 38(2 points)If you will receive $5,000 two years from today, what is its present value if the discount rate is 5 percent?

a

$5,025

b

$4,500

c

$3,429

d

$4,535

e

$4,762

Question 39(2 points)Control of water pollution from pesticide runoff in the United States is the responsibility of

a

the U.S. Department of Agriculture

b

the Environmental Protection Agency

c

state attorneys general

d

state departments of agriculture

e

state environmental protection agencies

Question 40(2 points)If a private market determines the quantity of smallpox vaccinations, which of the following is true?

a

The equilibrium quantity is too low for efficiency.

b

The equilibrium price and quantity are too high for efficiency.

c

The equilibrium price is efficient.

d

The equilibrium quantity is too high for efficiency.

e

The equilibrium price and quantity are efficient.

Question 41(2 points)Which of the following would not shift demand curve for union labor to the right?

a

increased demand for union-made goods

b

increased labor productivity by lowering quit rates

c

increased supply of products that compete with union-made products

d

increased labor productivity through better labor-management relations

e

appeals to consumers to buy only union-made products

Question 42(2 points)Which of the following is most likely to happen to open-access wildlife resources?

a

They will be used efficiently.

b

They will not be used at all.

c

It will be unprofitable to use them.

d

They will be used but will generate no profit.

e

They will become extinct.

Question 43(2 points)A firm hires labor in a perfectly competitive labor market. If the wage rate is $44, the firm should hire

a

44 workers

b

all units of labor whose marginal product is 44

c

all units of labor whose marginal revenue product is $44

d

all units of labor whose marginal revenue product is greater than or equal to $44

e

all units of labor whose marginal revenue product is less than or equal to $44

Question 44(2 points)Rent seekers are those who seek to

a

use the government to protect their existing property interests

b

use the government to change the rules of the market game in their favor

c

convert public land into private land

d

convert public resources into private resources

e

maximize their own private gains from trade

Question 45(2 points)Universities sometimes hire professors who are poor teachers but have good research skills because

a

research ability is more important in education than teaching ability

b

students don't listen to professors anyway

c

teaching can be learned; research ability cannot

d

research skills are easier to measure than teaching skills

e

research skills are difficult to measure

Question 46(2 points)By requiring that policyholders pay a deductible on a claim, insurers guard against

a

symmetrical information

b

adverse selection

c

natural selection

d

moral hazard

e

the winner's curse

Question 47(2 points)In most state-run lotteries,

a

the winner receives a single lump-sum payment

b

the present value of the winnings is less than the number of dollars won

c

the present value of the winnings exceeds the number of dollars won

d

winners are paid the present value of the total amount won

e

winners are paid only in the distant future

Question 48(2 points)The Clean Air Act of 1970

a

set up a depletion tax system

b

reduced air pollution standards

c

recognized air as a resource

d

established a system of transferable pollution rights

e

forbade producers to emit any pollutants into the air

Question 49(2 points)The union participation rate in the United States is

a

lowest among service workers in the private sector

b

highest among service workers in the private sector

c

lowest among service workers in the public sector

d

highest in heavy industry

e

highest in high-technology industries

Question 50(2 points)Compared to the United States, the income distribution in other major industrial nations tends to be

a

more concentrated

b

less concentrated

c

similar

d

impossible to calculate

e

not comparable because tax structures differ among countries