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Economics MCQs 1-25




Question;1. Voluntary migration of skilled craftworkers from;low-paying to high-paying nations is most likely to be opposed by: (Points: 2);business groups;in the high-paying nations.;craft workers;who stay in the low-paying nations.;industrial;unions in the high-paying nations.;craft unions in;the high-paying nations.;3. Labor market discrimination creates a: (Points: 2);redistribution;of a larger domestic output.;larger domestic;output but no redistribution.;smaller;domestic output but no redistribution.;redistribution;of a smaller domestic output.;7. The fact that people prefer present consumption to future;consumption results in: (Points: 2);a downsloping;demand for loanable funds curve.;an upsloping;supply of loanable funds curve.;a downsloping;supply of loanable funds curve.;an upsloping;demand for loanable funds curve.;9. In the real world, specialization is rarely complete;because: (Points: 2);nations;normally experience increasing opportunity costs in producing more of the;product in which they are specializing.;production;possibilities curves are straight lines rather than curves bowed outward as;viewed from the origin.;one nation's;imports are necessarily another nation's exports.;international;law prohibits monopolies.;12. The idea of efficiency wages is that: (Points: 2);the wages of;each type of labor must be proportionate to their marginal products.;the wages of;each type of labor must be equal to their marginal products.;firms might get;greater work effort by paying above-equilibrium wage rates.;workers are;more diligent when paid below-equilibrium wages.;14. Independent unions: (Points: 2);have greater;combined membership than the AFL-CIO.;are not;affiliated with the AFL-CIO.;include the United Autoworkers and;Carpenters Union.;have about the;same combined membership as the AFL-CIO.;17. The Lorenz curve portrays: (Points:2[B1]).;the functional;distribution of income.;the ratio of;labor to capitalist income.;the personal;distribution of income.;income equality.;21. The lifetime distribution of income is more equal than;the annual distribution. This statement is: (Points: 2);true, because;the rich have gotten richer and the poor have gotten poorer.;true, because;there is considerable income mobility over time.;false, because;people tend to stay in the same income quintile over extended periods of time.;false, because;the rich have gotten richer and the poor have gotten poorer.;22. Supporters of offshoring claim that its benefits;include: (Points: 2);increased;demand for workers in complementary jobs.;keeping U.S.;firms profitable by lowering production costs.;reduced prices;for consumers.;all of these.;25. The demand for airline pilots results from the demand;for air travel. This fact is an example of: (Points: 2);resource;substitutability.;rising marginal;resource cost.;elasticity of;resource demand.;the derived;demand for labor.;26. The availability of health insurance tends to: (Points;2);decrease the;demand for health care and cause an underallocation of resources to the health;care industry.;increase the;quantity of health care demanded and cause an underallocation of resources to;the health care industry.;increase the;quantity of health care demanded and cause an overallocation of resources to;the health care industry.;decrease the;quantity of health care demanded and cause an overallocation of resources to;the health care industry.;28. Henry George advocated a single tax on: (Points: 2);real capital.;entrepreneurial;profits.;land.;labor income.;29. The crowding of women and minorities into a restricted;number of occupations: (Points: 2);has no impact;on the size of the domestic output or its distribution in the long run.;will increase;the size of the domestic output and make its distribution more equal.;will decrease;the size of the domestic output and make its distribution less equal.;will increase;the size of the domestic output, but make its distribution less equal.;30. Renewable resources: (Points: 2);can never be;exhausted permanently.;can be;exhausted if harvest rates exceed replenishment rates for an extended period.;can be;exhausted if replenishment rates exceed harvest rates for an extended period.;will tend to be;over-harvested when they are private property.;33. In the United States, the rate of unionization is;(Points: 2);higher in;mining than in government.;lower in;transportation than agriculture.;higher in;transportation than in retail trade.;lower in;government than in finance, insurance, and real estate.;34. Two of the implications of large U.S. trade deficits for;the United States are: (Points: 2);decreased;current consumption and decreased indebtedness to foreigners.;reduced budget;deficits and decreased indebtedness to foreigners.;reduced current;consumption and higher saving.;increased;current consumption and increased indebtedness to foreigners.;35. Statistical discrimination: (Points: 2);can persist in;the long run if differences in average characteristics among groups continue.;will tend to;diminish in the long run, because nondiscriminating firms will drive out;discriminating firms.;requires that;employers have discrimination coefficients greater than zero.;is also known;as occupational segregation.;36. Employers will hire more units of a resource if: (Points;2);the price of;the resource increases.;the productivity;of the resource increases.;the price of;the good being produced declines.;the price of a;complementary resource rises.;40. If a U.S. importer can purchase 10,000 pounds for;$20,000, the rate of exchange is: (Points: 2);$1 = 2 pounds;in the United States.;$2 = 1 pound in;the United States.;$1 = 2 pounds;in Great Britain.;$.5 = 1 pound;in Great Britain.;41. Given the availability of the Medicaid program, why are;so many poor people uninsured? (Points: 2);Because only a;fixed percentage of the population can participate in Medicaid at any time.;Because many;poor people earn enough that they do not qualify for Medicaid.;Because;nonincome requirements screen many poor people from the program.;Because only;native-born Americans are eligible for the program.;43. The parity ratio: (Points: 2);compares worker;productivity in the farm and nonfarm sectors.;is the ratio of;per capita farm income to per capita nonfarm income.;is the ratio of;prices received by farmers to prices paid by farmers.;is the ratio of;prices paid by farmers to prices received by farmers.;45. Defensive medicine refers to the idea that: (Points: 2);it is more;cost-efficient to prevent illnesses than to cure them.;physicians may;require unnecessary testing as a means of protecting themselves against;malpractice suits.;doctors know;much more about diagnosing and treating illnesses than do health care;consumers.;physicians do;not advertise their services or fees.;48. A major implication of asymmetric information is that;(Points: 2);health care;suppliers may reduce the supply of health care.;health care;suppliers may increase the demand for health care.;collusion;between health care suppliers and purchasers may accelerate the rise in costs.;resources may;be underallocated to the health care industry.;49. An example of a social insurance program is;whereas an example of public assistance program is _______.;(Points: 2);Temporary;Assistance for Needy Households, unemployment compensation;Supplemental;Security Income, unemployment compensation;Social;Security, food stamps;Medicaid;Medicare;50. A lower equilibrium interest rate: (Points: 2);increases;saving, reduces total spending, and increases total output.;decreases;saving, increases total spending, and decreases total output.;increases;investment, increases total spending, and increases total output.;decreases;investment, decreases total spending, and increases total output.;[B1]


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