Archives: Quiz

ANSWER: b DIFFICULTY: Moderate REFERENCES: Political Economy LEARNING OBJECTIVES: ECON.MANK.134 – Explain why majority rule voting will always pick the choice most preferred by the median voter. KEYWORDS: BLOOM’S: Comprehension CUSTOM ID: 112.22.2 – MC – MANK08 113. Which voter […]

Percent of electorate 32 20 15 33 First choice D C A B Second choice C A D D Third choice B D B A Fourth choice A B C C 61. Refer to Table 22–9. The table shows the […]

1. The field of political economy a. casts aside most of the standard methods of economic analysis. b. is also referred to as the field of public choice. c. is also referred to as the field of macroeconomics. d. produces […]

c. moral hazard. d. screening. ANSWER: a DIFFICULTY: Easy REFERENCES: Asymmetric Information LEARNING OBJECTIVES: ECON.MANK.219 – Given a scenario, identify the presence of moral hazard or adverse selection. KEYWORDS: BLOOM’S: Comprehension CUSTOM ID: 063.22.1 – MC – MANK08 64. When […]

1. In economics, a difference in access to relevant knowledge is called a(n) a. relevancy frontier. b. knowledge gap. c. information asymmetry. d. information equilibrium. ANSWER: c DIFFICULTY: Easy REFERENCES: Asymmetric Information LEARNING OBJECTIVES: ECON.MANK.002 – Analyze how asymmetric information […]

1. Which of the following is not correct? a. Economics is a study of the choices that people make and the resulting interactions they have with one another. b. In areas it has already studied, economists have found perfect and […]

True / False 1. The science of economics is a finished jewel, perfect and unchanging. a. True b. False ANSWER: False DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.024 – Classify the different functions an economist may serve. KEYWORDS: BLOOM’S: Knowledge CUSTOM ID: […]

DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.088 – Evaluate how a consumer can maximize utility subject to budget limitations. TOPICS: Budget constraints Consumer theory KEYWORDS: BLOOM’S: Comprehension CUSTOM ID: 039.21 – SAE – MANK08 40. Refer to Figure 21–32. How much income […]

Subjective Short Answer Scenario 21-4 Frank spends all of his income of $240 per month on shirts and hats. The price of a shirt is $40 and the price of a hat is $30. 1. Refer to Scenario 21-4. If […]

105. Energy drinks and granola bars are normal goods. When the price of energy drinks decreases, the income effect causes a. the consumer to feel richer, so the consumer buys more granola bars. b. the consumer to feel richer, so […]

d. 6 ANSWER: b DIFFICULTY: Challenging REFERENCES: The Theory of Consumer Choice LEARNING OBJECTIVES: ECON.MANK.088 – Evaluate how a consumer can maximize utility subject to budget limitations. TOPICS: Consumer choice equilibrium Consumer theory KEYWORDS: BLOOM’S: Application CUSTOM ID: 053.21.3 – […]

Figure 21–16 1. Refer to Figure 21–16. The price of X is $20, the price of Y is $5, and the consumer’s income is $40. Which point represents the consumer’s optimal choice? a. A b. B c. C d. D […]

85. Consider the indifference curve map for nickels and quarters. Assume nickels are on the horizontal axis and quarters are on the vertical axis. The indifference curves for nickels and quarters are a. straight lines with slope of -1/5. b. […]

53. As long as a consumer remains on the same indifference curve, a. she is indifferent to all points that lie on any other indifference curve. b. her preferences will not affect the marginal rate of substitution. c. she is […]

1. Indifference curves illustrate a. a firm’s profits. b. a consumer’s budget. c. a consumer’s preferences. d. the prices of two goods. ANSWER: c DIFFICULTY: Easy REFERENCES: Preferences – What the Consumer Wants LEARNING OBJECTIVES: ECON.MANK.088 – Evaluate how a […]

LEARNING OBJECTIVES: ECON.MANK.189 – Given a scenario describing a consumer’s income level and the prices of two goods, derive this consumer’s budget constraint. TOPICS: Budget constraints Consumer theory KEYWORDS: BLOOM’S: Application CUSTOM ID: 077.21.1 – MC – MANK08 78. Suppose […]

Which of the following could explain the change in the budget line from A to B? a. a decrease in income and a decrease in the price of X b. a decrease in income and an increase in the price […]

Multiple Choice Figure 21-1 The downward-sloping line on the figure represents a consumer’s budget constraint. 1. Refer to Figure 21-1. If the consumer’s income is $140, then what is the price of a CD? a. $3 b. $5 c. $7 […]

1. Which of the following does not represent a tradeoff facing a consumer? a. choosing to purchase more of all goods b. choosing to spend more time on leisure and less time on work c. choosing to spend more now […]

True / False 1. The theory of consumer choice illustrates that people face tradeoffs, which is one of the Ten Principles of Economics. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy TOPICS: Consumer theory KEYWORDS: BLOOM’S: Knowledge CUSTOM […]

Subjective Short Answer 1. Who said “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries”? ANSWER: Winston Churchill DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.006 – Analyze the factors […]

1. The ancient Greek philosopher, Plato, concluded that in an ideal society the income of the richest person a. would be equal to the income of the poorest person. b. would be no more than four times the income of […]

TOPICS: Fiscal policy KEYWORDS: BLOOM’S: Application CUSTOM ID: 041.20.3 – MC – MANK08 42. A disadvantage associated with an Earned Income Tax Credit (EITC) program to reduce poverty is that it a. encourages illegitimate births because single women with children […]

1. Which of the following statements is not correct? a. Libertarians are opposed to redistributing income. b. Critics of the welfare system argue that it breaks up families. c. One of the problems with measuring income inequality is valuing in-kind […]

DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.039 – Contrast the prescription for the government’s role in redistribution income implied by the political philosophies of utilitarianism, liberalism, and libertarianism. TOPICS: Political economy Economic thinking KEYWORDS: BLOOM’S: Comprehension CUSTOM ID: 038.20.2 – MC – […]

1. Whether or not policymakers should try to make our society more egalitarian is largely a matter of a. economic efficiency. b. political philosophy. c. egalitarian principles. d. enhanced opportunity. ANSWER: b DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.039 – Contrast the […]

DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.067 – Determine the effect of an event on the loanable funds market. TOPICS: Permanent income hypothesis KEYWORDS: BLOOM’S: Comprehension CUSTOM ID: 152.20.1 – MC – MANK08 153. A typical worker’s normal or average income is […]

U.S. economy KEYWORDS: BLOOM’S: Knowledge CUSTOM ID: 116.20.1 – MC – MANK08 117. Based on U.S. data for 2011, the poverty rate is the highest for which group of people? a. children b. married couples c. female-headed households, no spouse […]

c. in-kind transfers only. d. income only. ANSWER: d DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.178 – Given a household’s size and income, determine if that household is living in poverty according to the U.S. poverty line. TOPICS: Economic thinking KEYWORDS: BLOOM’S: […]

1. Governments enact policies to a. make the distribution of income more efficient. b. make the distribution of income more equal. c. maximize the use of the welfare system. d. minimize the use of in-kind transfers. ANSWER: b DIFFICULTY: Easy […]

1. In the United States, labor earnings are about what percent of total income? a. 75 percent b. 70 percent c. 67 percent d. 50 percent ANSWER: c DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.006 – Analyze the factors contributing to income […]

True / False 1. The invisible hand of the marketplace acts to allocate resources efficiently, but it does not necessarily ensure that resources are allocated fairly. a. True b. False ANSWER: True DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.006 – Analyze the […]

Subjective Short Answer 1. The difference in wages that results from nonmonetary characteristics of different jobs is called the ANSWER: compensating differential. DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.196 – Given a scenario describing workers’ wages, identify the economic justification for this […]

TOPICS: Wage differentials Discrimination KEYWORDS: BLOOM’S: Analysis CUSTOM ID: 063.19.2 – MC – MANK08 64. A natural correction to employer discrimination in market economies is the a. threat of judicial review. b. profit motive. c. political process. d. union movement. […]

d. a tournament. ANSWER: a DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.121 – Explain the interaction of unionized and nonunionized states by determining the change in the labor market of a nonunionized state. TOPICS: Labor economics Unions KEYWORDS: BLOOM’S: Knowledge CUSTOM ID: […]

c. the superstar CPA will not earn as much as the superstar golfer because a superstar accountant can only work with a limited number of clients per day, whereas millions of fans can enjoy the services provided by a superstar […]

CUSTOM ID: 134.19.1 – MC – MANK08 135. Studies of wages by labor economists indicate that measurable variables such as age, job characteristics, years of education, and years of experience account for a. virtually none of the variation in wages […]

1. Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by a. race. b. level of education. c. attitudes toward risk. d. All of the above are forms of discrimination. ANSWER: a DIFFICULTY: Easy LEARNING […]

1. When the supply of workers is plentiful, one would predict that market wages would be a. determined outside the domain of economic theory. b. determined solely by factors that affect demand. c. low, other things equal. d. high, other […]

True / False 1. The economic theory of labor markets suggests that wages are determined by labor supply and labor demand. a. True b. False ANSWER: True DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.008 – Analyze the markets for the factors of […]

Subjective Short Answer 1. What are the three most important factors of production? ANSWER: The three most important factors of production are labor, land, and capital. DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.008 – Analyze the markets for the factors of production. […]

1. According to the neoclassical theory of distribution, the wages paid to workers a. reflect the market prices of the goods those workers produce. b. reflect the degree of market power held by the firms that pay those wages. c. […]

DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.008 – Analyze the markets for the factors of production. TOPICS: Factors of production Marginal product KEYWORDS: BLOOM’S: Application CUSTOM ID: 036.18.4 – MC – MANK08 37. Consider the market for land. Suppose the value of […]

1. In economics, the term capital refers to a. money. b. stocks and bonds. c. equipment and structures used in production. d. All of the above are correct. ANSWER: c DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.008 – Analyze the markets for […]

42. Refer to Figure 18-9. If the price of apples decreases, the equilibrium wage will a. increase, and more apple pickers will be hired. b. decrease, and more apple pickers will be hired. c. increase, and fewer apple pickers will […]

1. In a representative labor market, a. the wage adjusts to balance the supply and demand for labor. b. the wage equals the value of the marginal product of labor. c. an increase in the supply of labor increases the […]

d. Supply decreases from S2 to S1. ANSWER: b DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.073 – Determine if a change in the marginal product of labor or the output price causes a movement along or shift of the firm’s labor-demand curve. […]

DIFFICULTY: Difficult LEARNING OBJECTIVES: ECON.MANK.262 – Given data on production technology, calculate a firm’s value of the marginal product for an input. TOPICS: Marginal product Value of the marginal product KEYWORDS: BLOOM’S: Analysis CUSTOM ID: 129.18.1 – MC – MANK08 […]

of labor equals 35 units per week, then the marginal cost of producing an additional unit of output is a. $20. b. $35. c. $700. d. We do not have enough information to answer this question. ANSWER: a DIFFICULTY: Difficult […]

1. To say that a firm is competitive in the labor market is to say that the firm a. has little or no control over the number of workers it hires. b. has little or no control over the wage […]