ECON 88644

To be eligible for Medicaid, pregnant woman and children under one year of age must live in a household with family income under
A) $10,000.
B) 133% of the poverty line for their family size.
C) 185% of the poverty line for their family size.
D) $35,000.

If you were to conclude, after carefully examining data and using proper evaluation techniques, that a tax credit for attending college benefits the poor more than a tax deduction (of equal total cost to the government) would, you would have engaged in _________ analysis to reach that conclusion.
A) contra-indicative
B) positive
C) normative
D) creative

During the 1999-2005 period gasoline prices
A) quintupled (went up 5 times) in price.
B) tripled in price.
C) remained relatively constant in inflation adjusted terms.
D) fell.

Figure 22.1
In Figure 22.1 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*

Figure 1.9
Referring to Figure 1.9, if a point is attainable it is in
A) AREA #1 but not on the curve.
B) AREA #1 or is on the curve.
C) AREA #2 but not on the curve.
D) AREA #2 or is on the curve.

If the market price for a crop is $4 a bushel and the price support is $3, then raising the price support to $3.50
A) will cause nothing to happen.
B) will cause the price received by farmers to rise.
C) will cause the price received by farmers to fall.
D) will cause the price paid by consumers to rise.

During the 1960s Japan grew at
A) roughly the same rate as the United States grew.
B) a slightly faster rate than the United States grew.
C) a slightly slower rate than the United States grew.
D) a much faster rate (more than twice) than the United States grew.

Suppose the price of gasoline has increased from $3 per gallon to $4 per gallon at the same time that the overall price index increased from 200 to 300 then you know that the inflation adjusted price of gasoline has
A) increased.
B) decreased.
C) remained constant.

The 1998 tobacco settlement requires that tobacco companies pay ___ to the states in the settlement over a period of twenty years.
A) $2.5 million
B) $250 million
C) $2.5 billion
D) $250 billion

The fact that we cannot operate at a point outside a production possibilities frontier indicates there is
A) scarcity.
B) constant opportunity cost.
C) unemployment.
D) increasing opportunity cost.

The portion of the Obama stimulus package that provided unemployment benefits for longer than the usual 26 weeks is best thought of as
A) nondiscretionary fiscal policy.
B) discretionary (and expansionary) fiscal policy.
C) discretionary (and contractionary) fiscal policy.
D) monetary policy.

If a firm’s marginal cost is greater than its average total cost, its average total cost is
A) increasing.
B) constant.
C) decreasing.
D) not U-shaped.

An increase in the subsidy paid to producers of tobacco
A) shifts the supply of tobacco to the right.
B) shifts the demand for tobacco to the left.
C) shifts the demand for tobacco to the right.
D) shifts the market price of tobacco.

Federal Reserve policies designed to counteract deflationary expectations in 2008 and 2010 included
A) keeping the Federal Funds Rate near zero.
B) deficit cutting.
C) increases in interest rates.
D) sale of U.S. Treasuries.

Exports from the United States (as a percentage of GDP) have
A) remained constant for the last 50 years.
B) increased over the last 50 years.
C) decreased over the last 50 years.
D) increased from 1960 to 1980 but has been steady since.

The pay differential between Walmart and unionized grocery stores is between
A) $1 and $2 per hour.
B) $5 and $10 per hour.
C) $4 and $5 per hour.
D) $10 and 15 per hour.

If with one unit of labor the U.S. can produce 20 units of computer software and 10 units of computer hardware and China can produce 6 units of software and 4 units of hardware then
A) the United States has a comparative and absolute advantage in both goods.
B) China has a comparative and absolute advantage in both goods.
C) China has a comparative advantage in hardware and the U.S. has a comparative advantage in software.
D) the United States has a comparative advantage in both goods.

Figure 32.2
Referring to Figure 32.2, the price that this promoter will choose will
A) sell out the facility.
B) be where the demand curve crosses the marginal cost curve.
C) will be such that there are many empty seats.
D) sell out the facility and will be where the demand curve crosses the marginal cost curve.

Since January 2002, while all prices increased by 24%, college tuition increased by
A) 8%.
B) 19%.
C) 62%.
D) 80%.

Suppose a firm can not figure out whether the demand for the good it sells is elastic or inelastic but discovers that every time it raises its price, its total revenue declines. Their
A) demand is unit elastic.
B) demand is inelastic.
C) demand is elastic.
D) demand is perfectly inelastic.

The efforts to revive the economy in 2009 through 2011 were drawn from
A) the traditional tools of monetary policy.
B) new tools of monetary policy.
C) discretionary fiscal policy.
D) all of the options are correct.

After accounting for externalities with a social cost curve, the new equilibrium would be such that equilibrium price is
A) lower than before and equilibrium quantity is higher than before.
B) higher than before and equilibrium quantity is higher than before.
C) lower than before and equilibrium quantity is lower than before.
D) higher than before and equilibrium quantity is lower than before.

Suppose as a reaction to terrorist attacks the U.S. government were to create a new branch of the military employing 1,000,000 new service men and women to monitor malls, large sporting events, and infrastructure (bridges, dams, refineries, etc.) Hiring and paying these people would likely
A) increase aggregate demand.
B) increase aggregate supply.
C) decrease aggregate demand.
D) decrease aggregate supply.

Points on the Production Possibilities Frontier are
A) attainable.
B) unattainable.
C) associated with some unemployment
D) both attainable and unattainable.

Every worker is better off making more money and having better benefits. If you concluded from that fact that all workers would be better off if a law were passed requiring a 25% increase in wages and benefits, then you would be
A) right.
B) wrong because causation and correlation are not the same.
C) wrong and have fallen victim to the fallacy of composition.
D) wrong because workers operate on jealousy.

Suppose you can get broadband only from your cable company or your phone company. This market would be described by
A) perfect competition.
B) monopolistic competition.
C) oligopoly.
D) monopoly.

One difference between the Japanese situation of the 1990s and the United States situation in 2007-2010 was
A) the United States Federal Reserve bought up the mortgages in the struggling real estate sector and the Japanese central bank did not.
B) there was no stock market plunge in Japan at the time
C) there were no major financial institutions affected in Japan at the time
D) the Japanese engaged in no major stimulus package

Goods and services which have relatively inelastic supplies in the short run are
A) fresh produce at the farmer’s market.
B) gasoline and other refined petroleum products.
C) lanes on a toll road.
D) all of these options are correct.

The United States current account typically runs as a
A) deficit of about $1 billion.
B) surplus of about $1 billion.
C) deficit of around $750 billion.
D) surplus of around $750 billion.

School voucher programs
A) are universally hailed by teachers unions.
B) have not been tried in the United States.
C) have had modest success in some experimental locations.
D) have had students perform much worse than equally-situated students in public schools.

Discretionary fiscal policies that increase aggregate demand tend to result in
A) lower Real GDP (“RGDP”) and a higher price level (“PI”).
B) higher Real GDP (“RGDP”) and a higher price level (“PI”).
C) lower Real GDP (“RGDP”) and a lower price level (“PI”).
D) higher Real GDP (“RGDP”) and a lower price level (“PI”).

The costs borne by an individual victim of theft can diverge from the social costs if the
A) stolen items were priceless.
B) stolen items were recovered for the victim by the police.
C) stolen items were destroyed by the thief.
D) all of the options are correct.

International comparisons of Gross National Income using the concept of purchasing power parity are based upon the
A) relative cost of purchasing a similar market basket of goods.
B) Gini Index of income disparity in the different countries.
C) relative stock market values in the different countries.
D) national unemployment rates in the different countries.