Econ Final Exam
The poverty thresholds in the United States are largely based on an adjusted measure of prices of which category or categories of goods?
food
If the marginal damage curve is above the marginal abatement cost curve at the current quantity of emissions, the socially optimal amount of emissions
will be less than the current amount.
Jeff owns a small business installing home security systems priced at $1,000 each. By himself, he can install four systems per month. If he hires an assistant, a total of ten systems can be installed. If he hires two assistants, a total of fifteen systems can be installed. Assuming that the price stays the same, what is the marginal revenue product of the first assistant and the marginal revenue product of the second assistant?
$6,000; $5,000
Gini Coefficient
(A/A+B)
Which Gini coefficient corresponds to a Lorenz curve that is bowed furthest away from the 45-degree line?
0.71
in 2021, what % of americans were living in poverty?
12.8%
a person in poverty spends at least________% of income on food
30%
the poverty level is $13,590. If chester makes $10,590/year, his income deficit is...
3000
An equal distribution of income would yield a Lorenz curve that was a
45‐degree line between 0 and 100%.
Perfect equality
A=0 (0/0+B)=(0/B)=0
Which of the following is true regarding the tragedy of the commons?A) The activity that leads to the tragedy of the commons is individually irrational but collectively inefficient.B) The activity that leads to the tragedy of the commons is individually rational but collectively inefficient.C) The activity that leads to the tragedy of the commons is both individually rational and collectively efficient.D) The tragedy of the commons does not impact surplus in society.
B) The activity that leads to the tragedy of the commons is individually rational but collectively inefficient.
Which of these is NOT a cause of income inequality?A) differences in human capitalB) an increase in the number of manufacturing jobsC) economic discriminationD) number of earners per household
B) an increase in the number of manufacturing jobs
perfect inequality
B=0 (A/A+0)= (A/A)=1
Vaccinating people against a communicable disease such as influenza not only reduces the chances that the person vaccinated will catch the disease but also reduces the probability that an epidemic of the disease will occur. Which of the following statements is true?A) Reducing the chances that the person vaccinated will catch the disease is a private cost while reducing the probability of an influenza epidemic is a social benefit.B) Vaccinating people against communicable diseases yields private benefits in excess of social benefits.C) Reducing the chances that the person vaccinated will catch the disease is a private benefit while reducing the probability of an influenza epidemic is a social benefit.D) The benefits of the influenza vaccination outweigh the costs.
C) Reducing the chances that the person vaccinated will catch the disease is a private benefit while reducing the probability of an influenza epidemic is a social benefit.
Public goods represent a market failure becauseA) they are provided by firms with market power.B) positive externalities are created through their production.C) by their very nature they are nonexcludable and nonrival which makes it difficult for the private sector to supply them profitably.D) there is incomplete information regarding their quality.
C) by their very nature they are nonexcludable and nonrival which makes it difficult for the private sector to supply them profitably.
In the United States: A) wealth distribution and income distribution are approximately equal.B) income distribution is less equal than wealth distribution.C) wealth distribution is less equal than income distribution.D) income distribution plus tax incentives are equal to wealth distribution.
C) wealth distribution is less equal than income distribution.
Which of these is the MOST significant determinant of income disparity in the United States?A) inheritanceB) discriminationC) immigration statusD) individual investment in human capital
D) individual investment in human capital
To be effective, an environmental policy must do all of the following, EXCEPT:A) be enforceableB) be efficientC) provide incentives for improvement in the environmentD) reduce pollution to zero
D) reduce pollution to zero
When Ronald's hourly wage increased from $12 to $15, this allowed him to reduce the number of hours worked so that he can spend more time studying. What is TRUE about Ronald's individual labor supply at this point?
His income effect is stronger than his substitution effect.
Which statement(s) is(are) true?I. A major source of income inequality in the United States stems from differences in education levels.II. Differences in the number of earners in a household is not a source of income inequality in the United States.III. Differences in spending habits is a major factor in explaining income inequality.
I only
Which of these is(are) true?I. The tragedy of the commons is MOST associated with pure private goods.II. Highway congestion is an example of the tragedy of the commons because a new driver fails to consider the external costs of his using the road.III. The tragedy of the commons is NOT an example of market failure.
II only
In order for team managers to make a profit, most major league baseball players tend to earn wages:
Less than their marginal revenue product
_____ is when the consumption of a good or service by one person does not reduce the utility of that good or service to others.
Nonrivalry
Why isn't "zero emissions" generally an economically efficient level of pollution?
The marginal abatement cost would greatly exceed the marginal damage from emissions.
How do progressive taxation and redistribution policies affect the Lorenz curve and Gini coefficient?
The Lorenz curve becomes less curved and the Gini coefficient decreases.
If the market supply of labor decreases, which of the following events will occur?
The wage rate will increase and firms will decrease employment to the point where MRP equals the new wage rate.
Which policy would Rawls not support?
a reduction in capital gains taxes benefiting high-income earners
the price of reducing emission
abatement cost
If the income distribution becomes more equitable, the Lorenz curve moves _____ the line of equal distribution of income and the Gini coefficient _____.
closer to; declines
Government requirements that automobile companies improve gasoline mileage every year is an example of:
command and control policies.
coal
common property resource
drinks on a fraternities tab
common property resource
fish in the ocean
common property resource
the lorenz curve compares what?
comparing perfect income equality to income inequality
We assume that when a firm hires additional workers after diminishing returns to labor set in, the marginal physical product of labor will:
decrease because each worker now has less capital and other resources to work with.
public goods
do not have to pay (nonexcludable) does not affect another (nonrival)
common property resources
do not have to pay(nonexcludable) does affect another (rival)
excludable?
do you have to pay to use it?
rival?
does your use affect anothers use?
According to Gary Becker's theory on economic discrimination, employers who successfully discriminate in their hiring practices will
earn less profits because they must pay more for labor.
spotify
nonrival
Spotify Premium
excludable
a busy emergency room
excludable
Paying $5 on Amazon to stream a movie is an example of a service that is _____ in consumption.
excludable and nonrival
a law improving working conditions will cause the equilibrium wage rate to...
fall
the us spends more on healthcare and has the best healthcare outcomes in the world
false
______is how much you make in a year
income
Which factor is LEAST likely to shift the labor supply curve for web designers?
increase in the productivity of web designers as a result of improved software
what is the MOST important determinant of income inequality?
investment in human capital
economic returns to education are...
large and positive
in the US, wealth distribution is______than income distribution
less equal
a perfectly competitive firm will hire workers until the wage rate equals the...
marginal revenue product of labor
A perfectly competitive firm will hire workers up to the quantity at which the wage rate equals the:
marginal revenue product of labor.
The income deficit:
measures how far below the poverty threshold a household's income lies.
The higher the #= more what
more inequality
which of the following is a negative externality of mowing your lawn?
noise
firefighting services
nonexcludable
highways
nonexcludable
youtube
nonexcludable
admiring the beauty of a sunset
nonrival
2 things that fail in Knoxville
ozone, particulate matter
emissions?
pollution
taylor swift concert
private good
(sunlight) for solar power
public good
worlds fair park
public good
listening to taylor swift on spotify premium
public goods with exclusion
Suppose that a law passes that causes working conditions throughout the economy to improve. The labor supply curve should shift _____ and the number of workers available at any given wage rate will _____.
right; increase
a chick-fil-a sandwich
rival
a visit to the hospital
rival
dollywood
rival
education at UTK
rival
taylor swift concert
rival
If a negative externality exists in a market, the marginal:
social cost exceeds the marginal private cost.
If the marginal abatement costs outweigh the marginal benefits of the pollution abatement:
society is better off if emissions are increased.
All of the following are considered private goods, EXCEPT:A) streetlightsB) an ice cream coneC) a carD) a house
streetlights
As wages rise, if an employee works the same number of hours as before, then the:
substitution effect and the income effect are of equal magnitude.
if the marginal damage of pollution is $100 billion and the marginal abatement cost is $150 billion...
we should have more pollution
_______is the total value of your assets (net worth)
wealth
what is a market-based policy?
tradable permits
knoxville currently meets air quality standards
true
tradable permits reduced sulfur dioxide (acid rain) in the US
true
public goods with exclusion
you have to pay (excludable) does not affect another (nonrival)
private goods?
you have to pay(excludable) does affect another (rival)
