1) Which of the following would not be covered by Medicare? Payments for:
A.All reasonable costs for the first sixty days of inpatient care in a hospital per “benefit
period”
B.Post-hospital nursing services, home health care, and hospice care for the terminally
ill
C.Voluntary and subsidized medical insurance to cover physician services, lab tests, and
outpatient hospital services
D.Nonprescription drugs and travel to physician offices for normal medical treatment
2) The opportunity cost of borrowing funds to finance government deficits is:
A.greatest when the economy is doing well.
B.greatest when the economy is in a recession.
C.zero.
D.the same regardless of the state of the economy.
3) Blu-ray players and Blu-ray discs are:
A.complementary goods.
B.substitute goods.
C.independent goods.
D.inferior goods.
4) Defined narrowly as wages and salaries, labor’s share of the national income is about:
A.70 percent.
B.53 percent.
C.42 percent.
D.89 percent.
5) Which of the following is a demand-increasing factor in the health care market?
A.Rising incomes.
B.The aging of the population.
C.Asymmetric information.
D.All of these.
6) Elasticity of supply will increase when:
A.The number of producers selling a product decreases
B.Producers are given less time to respond to price changes
C.The number of consumers wanting to purchase a product increases
D.It becomes easier to substitute one factor of production for another in a
manufacturing process
7)
Refer to the above graph of the market for low-skilled labor. Sd is the supply of domestic
resident workers, and St is the total supply of labor including undocumented workers. If
there are illegal immigrants in the market, how many illegal immigrants will be employed?
A.15M
B.120M
C.135M
D.22M
8) Which of the following best reflects the ability-to-pay philosophy of taxation?
A.A tax on residential property.
B.A progressive income tax.
C.An excise tax on gasoline.
D.An excise tax on coffee.
9) The table below shows the output (either machines or wine) that each unit of input in
France and Germany can produce:
Refer to the table above. Based on the given information, we see that:
A.France has an absolute advantage over Germany in producing either output
B.Germany has an absolute disadvantage in producing wine
C.Germany has no absolute advantage over France in producing either output
D.France will see no economic basis for trading with Germany
10) Which of the following is characteristic of a purely competitive seller’s demand
curve?
A.Price and marginal revenue are equal at all levels of output.
B.Average revenue is less than price.
C.Its elasticity coefficient is 1 at all levels of output.
D.It is the same as the market demand curve.
11)
Refer to the diagram, in which solid arrows reflect real flows; broken arrows are
monetary flows. Flow (8) might represent:
A.personal income taxes.
B.automobile purchases by the state of Maine.
C.the services of firefighters.
D.subsidies to farmers.
12)
Recently the price of lentil beans increased. As a result Lincoln residents noticed that
their neighbor, Rasputin, increased his consumption of lentils and decreased his
consumption of steak. Rasputin said his utility had declined. Many citizens made
donations to the “Rasputin Relief Fund.” Rasputin was given a cash grant equal to the
amount he claimed to need to regain his initial utility level. Happy and thankful,
Rasputin rushed off to the store to make his new purchases. Each graph above shows
two indifference curves for Rasputin, I1 and I2, and the two budget constraints, B1 and
B2, that he faced. Let E1 represent Rasputin’s initial equilibrium, E2 equal his
equilibrium following the increase in the price of lentils, E3 his equilibrium after
receiving the cash from the relief fund. Which graph above is consistent with Rasputin’s
claims in the above story?
A.Graph A
B.Graph B
C.Graph C
D.Graph D
13) What is the World Bank? Explain its primary purpose.
14) Explain two important characteristics of indifference curves for two goods.
15) Why shouldnt Japan make its main production sector agriculture?
16) Why has agriculture become a declining industry over the past half century?
Explain.
17) Describe how health care insurance affects the market for health care in a simple
supply and demand model.
18) What are four market imperfections that prevent workers from moving from their
current jobs to take higher-paying jobs?