ECON 29904

Medicaid is
A) a private health insurance program for government employees.
B) a private health insurance program for the poor.
C) a public health insurance program for the poor.
D) a public health insurance program for the elderly.

In Figure 1 for a good with no externality, which area represents the total revenue to the producer?

A) 0ACQ*
B) BP*C
C) 0BCQ*
D) 0P*CQ*

When there is a decrease in the price of a good
A) the demand curve will shift to the right.
B) the demand curve will shift to the left.
C) the elasticity of demand will determine the degree to which quantity demanded rises.
D) the elasticity of demand will determine the degree to which quantity demanded falls.

Ebay does not qualify as a market for the good being sold because it is not a specific physical location.
A) True
B) False

Medicare costs are high and rising at rapid rates because
A) there are more and more elderly.
B) medical technology is advancing and raising costs.
C) medical technology is advancing and raising costs and at the same time there are more and more elderly.
D) the elderly have been shown to enjoy hospitals.

A political problem with discretionary fiscal policy is the
A) political business cycle.
B) split control of the legislative and judicial branches of government.
C) business cycle.
D) Federal Reserve.

Suppose a dyke is constructed in a river city to prevent floods from affecting the city. In this way all occupants are made equally safe regardless of whether they pay taxes. Which characteristics of goods hold or do not hold.
A) Rivalry holds but exclusivity does not.
B) Both rivalry and exclusivity hold.
C) Exclusivity holds but rivalry does not.
D) Neither rivalry nor exclusivity hold.

Crowding out is an example of
A) opportunity cost.
B) correlation is not necessarily causation.
C) fallacy of composition.
D) a lost cause.

M2 is the total amount of _________ in the economy.
A) coin and paper currency
B) coin, paper currency, and savings accounts
C) coin, paper currency, savings accounts, and small CDs
D) coin, paper currency, savings accounts, small CDs, and large CDs

Contractionary monetary policy would shift the
A) aggregate demand curve to the right.
B) aggregate demand curve to the left.
C) aggregate supply curve up and to the left.
D) aggregate supply curve down and to the right.

Rene Descartes realized that he could define the location of any point on the ceiling, relative to a corner of the room, by the distance of the point from two of the room’s
A. slopes.
B) windows.
C) doors.
D) walls.

In Table 17.1 the United States has

A) An absolute and comparative advantage in apples.
B) An absolute and comparative advantage in coffee.
C) An absolute and comparative advantage in both goods.
D) An absolute advantage but not a comparative advantage in coffee.

With deflation people will
A) buy goods earlier than they had originally planned.
B) feel compelled to borrow money.
C) delay their purchases of goods in hopes prices will fall further.
D) see their paycheck rise as bosses seek to reward high performers.

Using rate-of-return analysis to determine who benefits and who does not benefit from the current structure of Social Security is
A) embraced by all.
B) embraced not only by financial planners, but also by most economists.
C) rejected by everyone.
D) rejected by those that view the program as social insurance, rather than as an investment.

The Federal Reserve expanded their traditional tools set in the 2007-2009 recession to include
A) tax rate changes.
B) government spending policies.
C) labor regulations.
D) the purchase of corporate paper.

Which of the following environmental problems is among the most easily solved?
A) waste water treatment
B) a nation’s air pollution issues
C) a nation’s coastal water pollution issues
D) the world’s global warming issues

The Patient Protection and Affordable Care Act
A) increases the size of the Medicare part D (prescription drug) “donut hole”
B) reduces the size of the Medicare part D (prescription drug) “donut hole”
C) has no impact on Medicare
D) has no impact on Medicaid.

In Figure 2.1, Box 4 would be labeled

A) Q* for equilibrium quantity.
B) S for supply.
C) P for price.
D) D for demand.

In Figure 4.2, the reason that point A is not through the origin but starts up on the vertical axis is that

A) there are fixed outputs.
B) there are fixed costs.
C) there is no cost associated with producing no output.
D) there is waste.

The prospective gain per season to an owner from recruiting a new star play is that player’s
A) marginal cost.
B) marginal revenue product.
C) capital value.
D) reservation wage.

Publicly provided health insurance for the poor will
A) raise the price of health care to the non-poor.
B) raise the level of health care consumed by the non-poor.
C) decrease the total amount of health care consumed.
D) raise the price of health care to the non-poor and decrease the total amount of health care consumed.

The pattern of the 1930’s through the middle 1990’s was
A) deficits interspersed with a few years of surplus.
B) deficits each and every year.
C) surpluses each and every year.
D) surpluses interspersed with a few years of deficits.

The tax cuts of 2001 and 2003 that came in the form of tax rebate checks are good examples of
A) fiscal policy.
B) monetary policy.
C) the fallacy of composition.
D) the fallacy that causation and correlation are the same.

The use of the supply and demand model to analyze labor markets implicitly assumes that there is ____ governing the labor market.
A) perfect competition
B) monopoly
C) monopsony
D) bi-lateral monopoly

Health Care is not like other goods and services because
A) people go to the doctor to find out what is wrong whereas they get other services knowing more about what they need.
B) we tend to like to go to the doctor and do it for enjoyment whereas we hate going to the dentist.
C) if a newly discovered cure costs a lot we say, incorrectly, that its price has risen.
D) people go to the doctor to find out what is wrong whereas they get other services knowing more about what they need and if a newly discovered cure costs a lot we say, incorrectly, that its price has risen.

Suppose there are only two goods (Good A and Good B) and the average person buys 4 of Good A in a year and 3 of Good B. If the Price of Good A is $5 and the Price of Good B is $10, the price of the market basket
A) is 100.
B) is 20.
C) is 30.
D) is 50.

Which of the following will increase macroeconomic equilibrium real gross domestic product?
A) an increase in government spending.
B) a decrease in productivity.
C) an increase in taxes.
D) an increase in input prices.

It is difficult to directly compare outcomes at private schools with those at public schools because
A) private schools universally spend more per child than public schools.
B) private schools generally have children whose parents are more involved in their children’s education.
C) private schools generally have teachers with more advanced degrees.
D) private schools are generally religious and religious students do not do as well.

The “elasticity” rebuttal to the traditional analysis of the minimum wage, stating that employers’ demand for workers is unresponsive to wage changes, centers on the idea that
A) the rich consume less than the poor out of extra income, therefore an increase in the minimum wage increases aggregate demand.
B) the rich consume more than the poor out of extra income, therefore an increase in the minimum wage increases aggregate demand.
C) people work harder when they feel they are adequately compensated therefore an increase in the minimum wage may pay for itself.
D) in the short run, the demand elasticity of labor is such that business will not reduce the number of workers hired when the minimum wage increases.

If the reserve ratio is .20, the money multiplier can be as high as
A) 50.
B) 20.
C) 10.
D) 5.

Of the arguments for limiting trade which one is the most appealing to economists
A) helping an industry that is in trouble.
B) protecting the jobs of citizens.
C) protecting the profits of companies.
D) protecting an industry important to a nation’s identity or culture.