QUESTION 6

Which of the following is not an example of a "workfare" component in a welfare program?

	a.	required participation in training programs
	b.	required job searches
	c.	required work in paid or unpaid jobs
	d.	tougher child support laws
	e.	on-the-job training

1 points

QUESTION 7

Which of the following is true of Medicaid?

	a.	The proportion of poor people covered by Medicaid is determined by the federal government.
	b.	Medicaid beneficiaries do not receive Medicare.
	c.	Medicaid has been replaced by Medicare in recent years.
	d.	The proportion of poor people covered by Medicaid varies across states.
	e.	States do not receive any grants from the federal government to cover their Medicaid budget.

1 points

QUESTION 8

Mary can qualify for benefits under a means-tested transfer payment program if _____

	a.	she is totally disabled.
	b.	she is the head of her household and holds a job.
	c.	her household income is below a certain level.
	d.	she has worked and contributed to the program.
	e.	she is able to repay the cash transfer at a later date.

1 points

QUESTION 9

The number of people in poverty in 2015 was _____, and the poverty rate was _____.

	a.	43.1 million; 13.5 percent
	b.	45.0 million; 13.5 percent
	c.	40 million; 5 percent
	d.	45.0 million; 15.5 percent
	e.	40 million; 10 percent

1 points

QUESTION 10

The same households do not necessarily remain rich or poor over time because _____

	a.	an economy experiences fluctuations in the level of economic activities.
	b.	the normal life cycle pattern of income changes over time.
	c.	the productivity of workers varies with on-the-job training.
	d.	an economy experiences changes in inflation rates over time.
	e.	technological changes influence the income earned by workers.

1 points

QUESTION 11

Currently, union membership in the United States is _____

	a.	increasing as a percentage of the labor force.
	b.	declining as a percentage of the labor force.
	c.	decreasing among government employees.
	d.	constant.
	e.	increasing in the service sector.

1 points

QUESTION 12

People make mistakes in allocating their time _____

	a.	because acquiring information is costly.
	b.	despite always having expectations fulfilled.
	c.	because they always act irrationally.
	d.	more often when the cost of making a mistake is high.
	e.	only when leisure is a normal good.

1 points

QUESTION 13

The source of power for a labor union is its ability to _____

	a.	increase the quantity supplied of labor.
	b.	decrease the demand for capital.
	c.	increase the supply of labor.
	d.	decrease the supply of labor.
	e.	decrease the quantity supplied of labor.

1 points

QUESTION 15

Abby maximizes utility by allocating her time among leisure, market work, and nonmarket work so that the _____

	a.	total utility of each is equal.
	b.	maximum amount of goods and services can be acquired.
	c.	total utility per hour of each is equal.
	d.	marginal utility per hour of each is equal.
	e.	average utility of each is equal.

1 points

QUESTION 16

The income effect of a decrease in the wage rate causes the quantity of labor supplied to _____

	a.	always increase.
	b.	increase only if the substitution effect outweighs the income effect.
	c.	always decrease.
	d.	increase only if the individual desires more leisure time.
	e.	decrease only if the substitution effect is weaker than the income effect.

1 points

QUESTION 17

Union membership rates in the United States are _____

	a.	highest among women.
	b.	highest among agricultural sector workers.
	c.	increasing at a faster rate than the labor force.
	d.	highest among government employees.
	e.	highest among industrial sector employees.

1 points

QUESTION 19

Other things equal, the supply of labor will be greater for a job that _____

	a.	requires hard physical labor.
	b.	requires advanced education and training.
	c.	requires working on weekends.
	d.	allows the employee greater discretion in the use of his or her time.
	e.	has a higher probability of injury or death.

1 points

QUESTION 20

An industry with a strong union _____

	a.	will increase employment for union workers when wages increase.c
	b.	can increase the demand for union workers by increasing turnover and reducing productivity.
	c.	will increase wages in the nonunion sector of the industry.
	d.	can bargain for wages that are greater than the market's equilibrium wage.
	e.	can force employers to hire all union members regardless of the wage.

1 points

QUESTION 21

Which of the following involves signaling?

	a.	requiring the sales staff to work strictly on commission
	b.	high-wage rates attracting a larger pool of applicants for a job
	c.	reporting one's college GPA on a rsum
	d.	firms taking advantage of outsourcing when transactions costs are low
	e.	paying higher wages to workers who produce more

1 points

QUESTION 22

Wendy's restaurants must decide whether to grow their own potatoes for French fries or buy them. If they buy rather than grow, then they have opted to _____

	a.	internalize the production of inputs.
	b.	form an authority relation.
	c.	allow hierarchical control to guide resource allocation.
	d.	integrate horizontally.
	e.	integrate vertically.

1 points

QUESTION 23

A company that produces furniture wax branches out into producing a dusting product called Lemon Dust-Away. This expansion can be called efficient if the company_____

	a.	benefits from horizontal integration.
	b.	benefits from vertical integration.
	c.	incurs zero transaction cost.
	d.	experiences economies of scale.
	e.	experiences economies of scope.

1 points

QUESTION 25

If the minimum efficient scale in the production of rubber exceeds the quantity of rubber any individual tire producer buys, _____

	a.	tire companies should switch their resources to fiberglass production.
	b.	tire producers should pay a low price for rubber.
	c.	tire producers should be charged a price that is above the cost of producing rubber.
	d.	tire producers should not integrate backward into rubber production.
	e.	tire producers should increase the usage of rubber in production.

1 points

QUESTION 27

In order to focus on its area of core competency, a firm relies on _____

	a.	the market price and the minimum efficient scale of production.
	b.	the vertical integration of its production process.
	c.	government intervention and the bounded rationality of its managers.
	d.	the division of labor and the law of comparative advantage.
	e.	economies of scope.

1 points

QUESTION 29

One reason a computer manufacturer may make its own microchips rather than buy them is that _____

	a.	there are a large number of microchip suppliers in the market.
	b.	all the microchip suppliers offer identical or homogenous products.
	c.	the managers working in computer-manufacturing firms place a high value on their time.
	d.	the total cost of components is the same as the price of microchips purchased from a microchip manufacturer.
	e.	it can maintain control over the quality of microchips during production.

1 points

QUESTION 30

Which of the following is likely to limit the extent of a firm's vertical integration?

	a.	the presence of a large number of suppliers of the firm's inputs
	b.	a small minimum efficient scale of producing inputs relative to the firm's input requirements
	c.	the fact that the quality of inputs is easily determined at the time of purchase
	d.	a managers' bounded rationality
	e.	a high transaction cost of contracting with resource suppliers

1 points

QUESTION 31

Which of the following does not affect the interest rate on a loan?

	a.	the retirement plans of a borrower
	b.	the duration of the loan
	c.	the risk of default on the loan
	d.	the administrative cost of the loan
	e.	the tax treatment of the loan

1 points

QUESTION 32

If Arnold has a positive rate of time preference, he prefers to _____

	a.	invest in stocks and bonds.
	b.	save now to protect himself from inflation.
	c.	plan for retirement.
	d.	consume now rather than save.
	e.	invest in education.

1 points

QUESTION 33

A newly incorporated company issues 1,000,000 shares of stock and the entrepreneur takes 100,000 shares and sells the rest to the public at $10 a share. How much does that raise for the company?

	a.	$10
	b.	$10,000,000
	c.	$90,000
	d.	$9,000,000
	e.	$100,000

1 points

QUESTION 34

Other things constant, the interest rate usually _____

	a.	decreases as risk increases.
	b.	is constant and does not float.
	c.	decreases with the duration of the loan.
	d.	increases as risk decreases.
	e.	increases with the duration of the loan.

1 points

QUESTION 35

The interest earned on loans to state and local governments is _____

	a.	higher than the interest rate firms pay.
	b.	subject to federal income taxes.
	c.	higher than the interest rate similar borrowers pay.
	d.	higher than the interest rate foreign households pay.
	e.	notsubject to federal income taxes.

1 points

QUESTION 36

You buy a bond for $1,000 from the federal government at an interest rate of 7 percent. Suppose immediately after you buy the bond, the market rate of interest increases to 10 percent. The market value of your bond _____

	a.	will first increase to $1,070 and then decrease to $1,007.
	b.	will be $1,100.
	c.	will be less than $1,000.
	d.	will be more than $1,700.
	e.	will remain unchanged at $1,000.

1 points

QUESTION 37

The interest rate lenders charge their most trustworthy business borrowers is called the_____

	a.	repo rate.
	b.	prime rate.
	c.	discount rate.
	d.	reverse repo rate.
	e.	mortgage rate.

1 points

QUESTION 38

Corporations can obtain investment funds by _____

	a.	purchasing more capital.
	b.	buying government securities.
	c.	buying back stock.
	d.	selling stock.
	e.	increasing dividends.

1 points

QUESTION 39

If you would ratherrisk burning your mouth rather than wait until your pizza cools, then you _____

	a.	value current and future consumption equally.
	b.	value future consumption more than present consumption.
	c.	value neither current nor future consumption.
	d.	are more likely to delay consuming pizza.
	e.	value current consumption more than future consumption.

1 points

QUESTION 40

As the duration of a loan increases, _____

	a.	lenders require a higher interest rate to compensate for the greater risk.
	b.	the federal income tax rate decreases.
	c.	the administration costs, as a proportion of the loan size, decrease.
	d.	lenders require a lower interest rate because of lower risk.
	e.	the administration costs, as a proportion of the loan size, increase.

1 points

QUESTION 41

Derived demand refers to _____

	a.	the demand curve derived from utility functions.
	b.	an individual demand curve derived from a market demand curve.
	c.	the demand for a resource derived from the demand for the product produced by that resource.
	d.	a market demand curve derived from individual demand curves.
	e.	the demand for a product derived from the demand for the resource used to make that product.

1 points

QUESTION 42

The change in total product from employing one more unit of the resource is the _____

	a.	marginal product.
	b.	marginal revenue.
	c.	marginal revenue product.
	d.	total revenue.
	e.	total product.

1 points

QUESTION 43

Table 11.4

Number of Workers	Total Product	Product Price ($)
0	0	4
1	15	4
2	29	4
3	42	4
4	54	4
5	65	4
6	75	4
7	84	4
8	92	4
9	99	4
10	105	4

Refer to Table 11.4, which shows data for a perfectly competitive firm. The first column shows the number of workers employed in production, the second column shows the total product of the firm, and the third column shows its product price.If the firm wants to hire nine workers, then the wage rate is _____

	a.	$28.
	b.	$396.
	c.	$198.
	d.	$4.
	e.	$14.

1 points

QUESTION 44

Resource price differentials that do not trigger the reallocation of resources are known as _____

	a.	temporary resource price differentials.
	b.	market resource price differentials.
	c.	permanent resource price differentials.
	d.	conditional resource price differentials.
	e.	selective resource price differentials.

1 points

QUESTION 45

As the price of a resource increases, _____

	a.	the demand for the final product produced by the resource decreases.
	b.	producers are more willing and able to hire that resource.
	c.	producers are less willing and able to hire that resource.
	d.	the quantity demanded of that resource decreases.
	e.	the supply of that resource increases.

1 points

QUESTION 46

Which of the following are complementary resources?

	a.	a teacher and a chalkboard
	b.	sugar and honey, used in cereals
	c.	a typewriter and a personal computer, used in an office
	d.	rye and wheat breads, used in a sandwich shop
	e.	margarine and butter, used in baking

1 points

QUESTION 47

If all of a resource's earnings reflect the opportunity costs of the resource, _____

	a.	the quantity of that resource is determined exclusively by demand.
	b.	the equilibrium price and quantity of that resource are determined by the intersection of the demand and supply curves in the product market.
	c.	the price of that resource is determined exclusively by demand.
	d.	the quantity of that resource is determined exclusively by supply.
	e.	the equilibrium price of that resource is zero.

1 points

QUESTION 48

For a firm hiring a resource in a perfectly competitive resource market, its demand curve for the resource is its _____

	a.	marginal resource cost curve.
	b.	total revenue curve.
	c.	marginal revenue curve.
	d.	marginal revenue product curve.
	e.	marginal product curve.

1 points

QUESTION 50

If the marginal revenue product of the fifth worker hired by a firm is $15 and the price of a unit of output is $5, regardless of how much is sold, then the marginal product of the fifth worker is _____

a. 75 units of output

b. 45 units of output.

c. 3 units of output.

d. 5 units of output

e. 15 units of output