Econ Midterm 1 Questions
US GDP was approximately $18.7 trillion in 2016 and $19.5 trillion in 2017. What was the approximate annual growth rate?
4.3%
Which of the following is a non-excludable public good?
A Sunset
According to Elinor Ostrom, which of the following statements about the tragedy of the commons is correct?
Communities sometimes govern common property resources effectively due to social preferences, repeated interactions, and formal and informal institutions.
In Britain from 1800 to 1870, both wages and work hours rose. From 1900 to 2000, wages continued to rise but work hours fell. Based on this information, which of the following statements is correct?
From 1800 to 1870, the substitution effect dominated the income effect, and from 1900 to 2000, the income effect dominated the substitution effect.
Which of the following variables has not followed a 'hockey-stick' trajectory - that is little to no growth for most of history followed by a sudden and sharp change to a positive growth rate?
Income Inequality
Which of the following statements describes the effect of technological progress (such as the discovery of an improved seed) in the Malthusian model?
Income initially rises but then falls back to the substance level.
Which of the following statements regarding Thomas Malthus is correct?
Malthus reasoned that population growth would erode productivity gains from technological progress.
The tragedy of the commons can be modeled as a
Prisoners' Dilemma.
Capitalism is an economic system based on
Private property, markets, and firms
Experimental economists find that subjects make large and consistent contributions in public good games that allow for
Repetition, Social Preferences, Peer Punishment
A common pool resource (like the shared pasture in the grazing game) is a
Rival and Non-Excludable Good
Which of the following statements regarding Adam Smith is correct?
Smith claimed that self-interested individuals can be guided by an invisible hand to promote the public good.
The process of requiring fewer inputs to produce the same output is referred to as
Technological Progress
The figure below shows a real wage index in England from 1260 and 2000, highlighting the period following the bubonic plagues of 1348 and 1351. Which of the following statements is correct?
The Malthusian model can explain the rise and fall in real wages from 1300 to 1600.
Consider a student whose final grade increases with the number of hours spent studying. Her choice is between more free time and higher grades, both of which are goods. Which of the following is the same as her marginal rate of substitution (MRS) between the two goods?
The number of points she is willing to give up for an additional hour of free time.
The model of technological choice presented in Unit 2 of The Economy suggests that the main reason the Industrial Revolution first occurred in Britain was that
The price of coal was low relative to the price of labor.
According to Garret Hardin, which of the following statements about the tragedy of the commons is correct?
The tragedy occurs when individuals pursue their self-interest without concern for others.
The top curve shows labor productivity (or the size of the pie) and the bottom curve shows real wages (or labor's share of the pie) from 1760 to 1930. Which of the following statements is true?
Workers earned the same real wage in 1847 as they did in 1760.
According to Thomas Malthus, which of the following is the cause of the diminishing average product of labor?
more labor devoted to a fixed quantity of land, or land of inferior quality
Average work hours declined in the US from 1900 to 2000, while average wages increased six- fold. If American workers chose to take more free time even though the opportunity cost of free time increased, then
the income effect dominated the substitution effect.
