EC 252 Final Exam

Under current U.S. copyright legislation, works produced on a for-hire basis and owned by companies enjoy monopoly protection for

95 years from the date of publication

The refundable charge of 5 or 10 cents for returning recyclable cans and bottles works like

A pollution tax incentive to avoid littering.

If a market for a product has no external impacts, then the market supply accounts for ________ of the marginal costs to society of producing this product.

All

Command-and-control regulation is a body of law that?

Can both specify allowable quantities of pollution and detail which pollution-control technologies must be used.

If a company's research and development project succeeds, then

Competitors may find a way to adapt and copy the underlying idea without incurring R&D costs

Market-oriented environmental tools ______ for firms to take social costs of pollution into account and ________ in reacting to these incentives.

Create incentives; allow firms some flexibility.

What is an item that would not be an example of a negative externality?

Going to college

A pollution charge gives the trucking industry an incentive to reduce its emissions, as long as the _______ of reducing the emissions is ________

Marginal cost; less that the tax.

In the United States, the official definition of the poverty line traces back to a single person: _______________, whose idea was to______________.

Mollie Orshansky; define a poverty line based on the cost of a healthy diet

Once its patent application has been accepted, a firm is able to earn ______ on its product, which ________

Monopoly profits; offers an incentive for research and development to take place

A public good is a good that is _______, and thus is difficult for market producers to sell to individual consumers

Non excludable and nonrivalrous

Education creates ___________ for a society

Positive externalities

There is a skating rink in your city that open to anybody to use at any time. they even provide skates for people who don't own any. This is an example of a good that is

Rivalrous and nonexcludable

A highly innovative firm operating in a competitive market will usually have

Some time before competitors catch up to its innovations

What is a situation where a free rider problem occurs

Someone who benefits from a good who does not have to pay for it

The decline in union membership in the U.S. has been contributed to all of the following except:

Steadily increasing average wages leading to less desire for bargaining power.

If a government chooses a system of marketable permits as its environmental managing tool, the reduction in pollution will

Take place in the firms where it is least expensive to do so.

Market failure occurs when:

The market does not provide the socially optimal amount of a good.

If a metal stamping plant produces negative externalities, then who tends to benefit?

The metal stamping firm and its customers.

If positive externalities exist for a good:

The private market produces too little of the good

An assumption of the competitive market for labor is:

The workers are all equally productive

What is most likely to be identified as being the ultimate goal of public policies that pertain to technology

To encourage a stream of invention that benefits the whole society.

One difficulty with direct government support of R&D is that it inevitably involves government decisions about _________

Which of the proposed projects are most worthwhile.

Compared to a competitive labor market, a bilateral monopoly will result in:

a lower level of employment and indeterminate wages.

Negotiations between unions and a firm or firms is called______________________.

collective bargaining

Reasons for market failure include

common resources, public goods, and products or services that create externalities

If immigration consists of mainly high-skilled workers, then a(n)____________in immigration will _______________the wages of high-skilled workers.

decrease, increase

Suppose that new high-technology farming equipment is developed. These new machines are substitutes for low-income workers such as farm laborers, but they are complements for high-income workers such as farm technicians and farm owners. This new technology will _________wages in for low-income workers and_____________income inequality.

decrease, increase

Compared with a competitive labor market, a monopsonist hires _____________ workers and pays __________wages.

fewer; lower

Assume that the going wage for a worker at a competitive firm is $50 a day. If the marginal revenue product for the sixth worker is $45 a day, the:

firm should hire fewer than six workers.

The earnings gap in the U.S. labor market between black and white workers_________________.

has diminished since 1960, but a gap still remains

If a firm's efforts to be technologically innovative will create a positive externality, then that firm will likely

have less incentive to innovate to the extent that the whole of society desires.

A Lorenz curve refers to a graphic illustration of the share of population on the_____________and the cumulative percentage of total income received on the_______________.

horizontal axis; vertical axis

In a perfectly competitive labor market model, an increase in the minimum wage would lead to what response in the labor supplied to the market, ceteris paribus?

increase the number of workers seeking work.

A situation of__________arises when one group receives a higher share of total income or wealth than others.

inequality

With respect to market forces and/or labor markets that determine peoples' wages, which of the following is a true statement?

labor markets create considerable inequalities relating to income

The _______ shows the amount of time an individual is willing to work at various wage rates:

labor supply curve

A firm will hire workers up to the quantity at which the wage rate equals the:

marginal revenue product of labor.

Policies designed to improve equality:

may either improve or reduce incentives for economic output.

In the town of Micro City, a single employer dominates the labor market. This is an example of:

monopsony

In order for a good to be classified as _______, when one person uses the good, others are also able to use it.

non rivalrous

Examples of market-based environmental policy are

permits, taxes, and pollution charges.

The market labor supply curve is:

positively sloped

When reference is made to the___________, it means the specific amount of income needed for a basic standard of living.

poverty line

In circumstances dealing with poverty, the term______________means taking income from those with higher incomes and providing income to those with lower incomes.

redistribution

If a society decides to reduce the level of economic inequality, which of the following would not be a tool that would help it meet this goal?

reduce spending on the social safety net.

The tragedy of the commons applies to goods that are:

rival and nonexcludable

The group of government programs that provide assistance to the poor and the near-poor is synonymous with which of the following?

safety net

Which of the following is a key requirement imposed under the 1996 Welfare Reform Act's antipoverty program?

states receiving TANF grants must impose work or school attendance requirements

The demand for labor is considered a derived demand, since it depends on:

the consumer demand for the output produced.

If Congress voted every few years to redefine completely what poverty means,

then it would be difficult to compare poverty rates over time.

If incomes rise for both low-income and high-income workers, but rise less for the high- income workers,__________________.

then poverty will fall and inequality will fall.

Collective bargaining in a union sector is expected to cause wages:

to be higher but employment to be lower in the nonunion sector.

When negative externalities exist, an unregulated market will produce ______ of the good and the price will be ______ when compared to the efficient level of production.

too much; too low

In the United States:

wealth distribution is less equal than income distribution.

Which of the following is NOT a measure of income?

your assets as of April 1, 2018