1) Many economists are critical of the minimum wage because they believe that it:
A.hurts the efforts of labor unions.
B.reduces the number of available job opportunities.
C.conflicts with policies designed to equalize the distribution of income.
D.causes labor shortages in affected markets.
2) Exclusive unionism attempts to increase wage rates by:
A.decreasing the supply of labor.
B.setting a minimum or standard wage above the competitive level.
C.increasing the supply of labor.
D.increasing the demand for labor through lobbying for more government projects
employ union workers.
3) according to the concept of comparative advantage, a good should be produced in
that nation where:
a.its domestic opportunity cost is greatest.
b.money is used as a medium of exchange.
c.its domestic opportunity cost is least.
d.the terms of trade are maximized.
4) In the 1990s, Congress passed legislation that:
A.will eventually replace the $1 bill with a $1 coin.
B.allows non-bank firms such as Chrysler and IBM to own large commercial banks or
thrifts.
C.replaces the twelve Federal Reserve Banks with a single Central Bank.
D.ends the legal separation of the banking industry and securities firms.
5) As applied to gender discrimination, the crowding model of occupational
segregation:
A.helps explain why women earn more than men.
B.predicts that men’s wages would fall and women’s wages would rise if occupational
segregation was eliminated.
C.predicts that domestic output would decline if occupational segregation was ended.
D.predicts that competition will eventually totally end discrimination.
6) suppose we find that the price elasticity of demand for a product is 3.5 when its price
is increased by 2 percent. we can conclude that quantity demanded:
a.increased by 7 percent.
b.decreased by 7 percent.
c.decreased by 9 percent.
d.decreased by 1.75 percent.
7) (Consider This) In the market for superstars:
A.earnings reflect pricing power rather than marginal revenue product.
B.small differences in talent get magnified into huge differences in pay.
C.entry and exit rarely occur.
D.product demand is typically highly elastic.
8) the demand for most products varies directly with changes in consumer incomes.
such products are known as:
a.complementary goods.
b.competitive goods.
c.inferior goods.
d.normal goods.
9) the functional distribution of income refers to the:
a.division of income between personal taxes, consumption expenditures, and saving.
b.division of income on the basis of industry sources, for example, agriculture,
transportation, mining, etc.
c.distribution of income to basic resource classes, that is, wages, rents, interest, and
profits.
d.way income is distributed among specific households or spending units.
10) Payment of interest on the U.S. public debt:
A.increases the current domestic standard of living in the United States.
B.has no effect on the distribution of income.
C.is thought to decrease income inequality.
D.is thought to increase income inequality.
11) “beaten paths” from one country to another:
a.discourage migration to that country because of a perception that all of the good jobs
have already been taken.
b.discourage migration by increasing the cost of moving.
c.encourage migration by providing employment contacts and job information.
d.are more prevalent the greater the distance between the two countries.