Microeconomics final

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Which of the following is considered to be non-rivalrous in consumption?

Above

A minimum wage is a price floor on wages that must be set __________ the equilibrium wage in order for it to be binding or effective.

the share of income that the top 10% receive is drastically higher than the share of income that the bottom 10% receive

Income inequality is significant when:

the point where the supply curve and demand curve cross

Market equilibrium is defined as ___________________.

Innovator

One way to increase new technology is to guarantee the ______________ an exclusive right to that new product or process.

Decreased

Since the mid- to late-twentieth century in the United States, gains in education and experience for women have _________ the wage gap.

-Some employees being given less work hours -An increase in income for some employees

Suppose Springfield, Illinois implements a 5% increase in the minimum wage. What are some possible effects of this change?

Interest rate

The money paid in addition to what is owed on a loan is called _______.

Lessened

Unions supported the passage of laws to protect the workers, as a result, this has ____________ the need for unions.

efforts made by the government to promote minority employment and advancement

Affirmative action is:

new technologies that have helped to encourage globalization the rising impact of foreign trade in the U.S. economy lower-skilled workers have to compete with a larger supply of similarly skilled workers around the globe

All of the following are factors that can cause the demand for high-skilled labor in the U.S. to rise relative to the demand for lower-skilled labor in the U.S.,

The tragedy of the commons can only occur when goods are excludable and non-rivalrous.

All of the following are true regarding the tragedy of the commons, except:

a significant technological innovation that makes production much cheaper

All of the following impact labor supply except _______________.

A nation can protect biodiversity around the world on its own.

All of the following statements about biodiversity are true

A nation can protect biodiversity within its own borders. Biodiversity is an example of an international externality. Biodiversity includes the full spectrum of animal and plant genetic material.

All of the following statements about biodiversity are true

Quantity demanded will increase.

Considering all other things are held constant, suppose an increase in supply in the market for savings leads to a fall in the savings rate from 5% to 1%. How will this impact the quantity demanded in the market for savings?

True

Education has both positive private rates of return and positive social rates of return.

True

In much of the United States, if a living wage were set as a price floor in the unskilled labor market by either the federal or local government, then it would be a binding price floor.

usually requires the same standard for all polluters, and often the same pollution-control technology as well

In the context of limiting pollution, command-and-control regulation _______.

-a shortage of credit cards -a shortage of people saving money

Of the following outcomes, which two would result from a government intervention that sets a maximum interest rate that is below the equilibrium rate in the market for credit cards?

True

Price controls can cause more harm than good because they do nothing to affect the underlying forces of demand and supply.

marginal benefits are greatest; marginal costs are least

Rather than arguing over whether the ultimate goal is zero pollution or a reasonable level of pollution, a society's immediate focus should be to tackle the environmental issues where the _____________________ and the __________________ .

True

According to the free-rider problem, if all individuals reasoned like free-riders, public goods would never get built

There is no threat that ecotourism could have negative effects on wildlife habitats.

All of the following statements about ecotourism are true,

Public health programs that require immunizations prevent spillovers of illness to others in addition to helping the person immunized. Systems for providing clean water and disposing of human waste helped to prevent the transmission of many diseases and have contributed to the rise in life expectancy. Many important medical discoveries emerged from government or university-funded research and have contributed to improving health outcomes.

All of the following statements about positive externalities of public heath programs are true,

More households have two earners now when compared to earlier decades. It has become more common for one high-earner to marry another high-earner. More mothers with high-powered careers are returning to work while their children are young.

All of the following statements are true about the changing composition of American households

The supply of physicians is greater than the supply of cardiologists.

Cardiologists require extra years of education and residency compared to physicians. How does the supply of cardiologists compare to the supply of physicians?

non-excludable; rivalrous

Common resources are goods that are __________ and ______________.

an excess supply of labor

The disparity between wages for union labor and wages for non-union labor creates:

Poverty

The economic term used to describe the state of those who fall below a specific threshold of income to cover basic standard of living is:

Supplemental Nutrition Assistance Program (SNAP)

The federal program in the U.S. that provides food aid to low-income individuals in the form of a debit card that can be used to buy groceries, is called:

pollution from various industries damaging the atmosphere groundwater becoming contaminated destructive logging practices

The following are all examples of the tragedy of the commons,

Labor supply increases

The government mandates that all companies must provide employees with 12 weeks of paid maternity leave for females and 6 weeks of paid paternity leave for males. How does this impact labor supply?

True

The peak in the U.S. poverty rate was 15.9% in 2011. While this rate is very high, in the last four decades, the U.S. poverty rate has never been below 11%.

False, The point at which the quantity buyers are willing and able to purchase equals the quantity sellers will offer for sale is called equilibrium.

The point at which the quantity buyers are willing and able to purchase equals the quantity sellers will offer for sale is called the quantity price.

True

The share of U.S. workers who belong to a labor union has been steadily declining for 50 years

Rate of return

The simplest example of a ________________is the interest rate.

False, Because a union is the sole supplier of labor, it can act like a monopoly and ask for whatever wage rate it can obtain for its workers. If employers need workers, they have to meet the union's wage demand. Therefore, union wages are typically higher than the equilibrium wage in a perfectly competitive market.

Union wages are similar to those in a perfectly competitive market. The wage is determined by the going rate for the position.

income number of children

Which of the following are factors used to help determine the amount of aid that a household is eligible to receive through the SNAP program?

externalities that cross national borders and that a single nation acting alone cannot resolve

Which of the following best defines international externalities?

private rates of return

Which of the following best describe the estimated returns on education that go primarily to the individual worker?

the full spectrum of animal and plant genetic material

Which of the following best describes biodiversity?

the legal rights of ownership on which others are not allowed to infringe without paying compensation

Which of the following best describes property rights?

The credit will be reduced.

Under the Earned Income Tax Credit, as the income increases beyond it's threshold level, what happens to the credit.

The subsidy will decrease by $100.

Under the guaranteed income model, if a wage earner is guaranteed income and is receiving a government subsidy, what happens if her income increases by $100?

an international climate agreement where participating countries from around the world commit to significantly limiting CO2 emissions

Which of the following best describes the Paris Climate Agreement passed in 2016?

Social rates return

Which of the following best describes the positive externalities of education such as better health outcomes for the population and lower levels of crime?

A public good is a product that is difficult for market producers to sell to individual consumers because it is non-excludable and non-rivalrous.

Which of the following best describes the term public good?

the middle and upper-income households that purchase the services of unskilled, immigrant workers

Which of the following categories of people would most likely benefit from an increase in labor supply resulting from an influx of immigration?

Women are likely to bear a disproportionately large share of household responsibilities A mother of young children is more likely to drop out of the labor force for several years or work on a reduced schedule than is the father.

Which of the following factors could be expected to lower women's average wages?

The federal government has one of the lowest percentages of workers that belong to a labor union.

Which of the following facts is not true about union membership in the U.S. as of 2016?

A law that imposes an upper limit on the interest rate that lenders can charge.

Which of the following gives the definition of usury law?

Bob paints a nature scene on a large canvas at the park and people passing by stop to watch him paint.

Which of the following is an example of a positive externality?

The local government setting a limit on ground level ozone allowable within city limits.

Which of the following is an example of command-and-control regulation?

charging a fee to park a car at a public park charging a fee to rent a picnic table at a public park selling food at a refreshment stand in a public park

Which of the following is an example of how a government can help pay for a public good?

social pressures and personal appeals government intervention political processes, such as a public vote to require people to pay for a good

Which of the following is considered a possible way to overcome the free rider problem?

They provide no incentive for firms to do better than the bare minimum of staying within the pollution limits that the government sets.

Which of the following is considered a shortcoming of command-and-control regulations?

the depletion of common resources

Which of the following is considered the tragedy in the tragedy of the commons?

They often have politically motivated loopholes.

Which of the following is considered to be one of the shortcomings of command-and-control regulations?

a ceiling on the maximum interest rate

Which of the following is directly associated with usury law?

a decrease in the interest rates of savings accounts

Which of the following is not a result from a below-equilibrium interest rate for credit cards?

an individual using a highway that charges tolls

Which of the following is not an example of a free rider problem?

a privately-owned pasture

Which of the following is not considered a common resource?

lower crime rates in a society cleaner environment for everyone

Which of the following outcomes are considered social returns on education? Select the two correct answers below.

Price controls immobilize the price messenger and deprive everyone in the economy of critical information. Price controls do nothing to affect the underlying forces of demand and supply.

Which of the following provides a valid explanation for why price controls are often counterproductive?

Kyle's commute to work was cut in half after the city built a new bridge in his town that allows him to cross the river without going as far out of his way.

Which of the following scenarios involves a public good?

a neighbor playing loud music when you're trying to sleep

Which of the following situations is an example of a negative externality?

an increased presence of boats fishing for bluefin tuna

Which of the following situations is most likely to suffer from the tragedy of the commons?

Government spending can sometimes be directed more for political reasons than scientific reasons.

Which of the following statements about government spending on research is true?

A patent should cover a long enough period of time for the inventor to earn a good return.

Which of the following statements about the length of patents is true?

It was legal in many states to refuse to hire a black worker, regardless of the credentials or experience of that worker. Blacks were often denied access to educational opportunities, which in turn meant that they had lower levels of qualifications for many jobs.

Which of the following was true for black workers in the labor market until the passage of the Civil Rights Act of 1964?

an increase in wage in a particular labor market

Which of the following would not affect labor supply?

White

While poverty rates are higher among African-Americans, most people in the United States living below the poverty line are __________.

The government is trying to move the market level of output closer to the socially desirable level of output.

Why would a government want to provide a subsidy to any citizen who wishes to get vaccinated?

Getting something for free

Within the prisoners' dilemma model, what are free riders primarily motivated by?

positive externality

You are a birder (birdwatcher) and your neighbor has put up several birdhouses in her yard and also planted trees and flowers that attract birds. Is this an example of a negative or a positive externality?

negative externality

Your neighbor paints his house a hideous color. Is this an example of a negative externality or a positive externality?

Declined

Research shows that the gap between the earnings of women and men in the U.S. did not move much in the 1970s, but has __________ since the 1980s.

wages of the groups are very different from one another

A high wage ratio between high earners and low earners in a population implies that:

True

A consequence of a minimum wage set above the equilibrium wage rate in the market for unskilled retail workers will be a surplus of unskilled retail workers.

Poverty trap

A family of four receives government assistance that guarantees the family a certain level of income. As the family earns its own income, the assistance is reduced by the amount earned. Because there is no net gain for working, this is an example of:

sell a marketable permit allowing for 100 tons of emissions

A manufacturing firm has a marketable permit that currently allows for 1000 tons of emissions. However, the marketable permit is shrinkable and the firm will only be allowed 800 tons of emissions next year. The manufacturing firm projects that it's actual emissions next year will be 700 tons. Which of the following actions would be in the best interest of the manufacturing firm?

buy a marketable permit allowing for 50 tons of emissions

A manufacturing firm has a marketable permit that currently allows for 200 tons of emissions. However, the marketable permit is shrinkable and the firm will only be allowed 100 tons of emissions next year. The manufacturing firm projects that it's actual emissions next year will be 150 tons. Which of the following actions would be in the best interest of the manufacturing firm?

sell a marketable permit allowing for 100 tons

A manufacturing firm has a marketable permit that currently allows for 600 tons of emissions. However, the marketable permit is shrinkable and the firm will only be allowed 300 tons of emissions next year. The manufacturing firm projects that it's actual emissions next year will be 200 tons. Which of the following actions would be in the best interest of the manufacturing firm?

75

A manufacturing firm has a marketable permit that currently allows for 700 tons of emissions. However, the marketable permit is shrinkable and the firm will only be allowed 550 tons of emissions next year. The manufacturing firm projects that it's actual emissions next year will be 475 tons. It is the best interest of the manufacturing firm to sell permits worth _______ tons of emissions.

True

African Americans have the highest rate of poverty in the United States (as of 2013)

True

An increased level of required education decreases labor supply.

Decreases; Decreases

As consumer confidence __________, demand for financial capital __________.

Food

Based on what you've learned about public goods, which of the following least meets the criteria to be considered a public good?

True

Bob owns a piece of land that the Green Stream flows through. An industrial polluter dirties the Green Stream and Bob attempts to sue the polluter and get an injunction to stop the practice. This is an example of how property rights can affect individual incentives.

Price

Generally, __________ serve(s) as a mechanism for collecting, combining, and transmitting information that is relevant to a market, such as the relationship between supply and demand, and transmitting this information to buyers and sellers within the market.

The supply increase

How would a government subsidy to help fund education for children of employees impact the supply for labor?

Demand for labor would increase.

How would an increase in the high school graduation rate of a town impact the demand for labor?

the free market equilibrium quantity of dentists

If a minimum wage (a price floor) for dentists is set below the prevailing market wage rate, then this will result in _____________ .

False, An increased level of required education decreases labor supply because there are fewer workers who will meet the qualifications

If the government requires all teachers to have doctorate degrees, the labor supply of teachers will increase.

positive externality

If you love country music and hate rock music, would having a neighbor play country music so loud that you can hear it be considered a positive or a negative externality?

no net gain or net loss (earned $100 wage + government funding decreased by $100)

In a poverty trap, what is the net result for the wage earner when the amount of income earned through wages is reduced?

Fewer homes

In a recent study by the Housing and Urban Development (HUD) department, it was found that realtors show black homebuyers 18 percent ___________ compared to white homebuyers.

False, In financial markets, the interest rate is a form of a rate of return. Those who supply financial capital through saving expect to receive a rate of return on the financial capital they invest, while those who demand financial capital by receiving (borrowing) funds expect to pay interest on the funds they borrow.

In financial markets, those who demand financial capital by saving and investing expect to receive a rate of return, while those who supply financial capital by receiving funds expect to pay a rate of return.

The union workers believe that the union will negotiate to protect their jobs and wages, whereas non-union workers may be more concerned that the new technology will replace their jobs.

In some cases, union workers may be more willing to accept new technology than non-union workers. Why is this the case?

National Labor-Management Relations Act of 1935

In the 1930s and 1940s, the U.S. government encouraged the formation of unions because they believed that it would help coordinate production efforts needed in World War II. In turn, they created this act to protect the right of workers to organize unions:

False, If a minimum wage is set above the market wage and is removed, the resulting wage will be at the equilibrium value, which is below the minimum wage.

In the market for fast-food workers a minimum wage exists that is above the market wage. If this minimum wage is removed, the wage of fast-food workers will increase.

Certain industries that rely on clean air and water may benefit. Property values may be higher. People may stay healthier and live longer.

Increasingly, societies are understanding the collective cost and the collective benefit of caring for the environment. There are many benefits to this way of understanding environmental protections. Which of the following is one of those benefits?

Increase

It is expected that workforce diversity in the U.S. will:

Living wage

Many local municipalities have mandated locally higher minimum wages than the federal government has called for as a result of the cost of living in these cities is so high, that the federally mandated minimum wage is insufficient to purchase the essentials of life. These locally higher minimum wages which are established around the idea that people should be able to purchase the essentials of life by working a forty hour work week is called a(n) __________.

Sally's consumer confidence is high.

Sally is a great employee that works for a prominent company that recently announced expansion. Sally decides to borrow financial capital to purchase a house. What could be one reason Sally is increasing her financial capital demand now?

Quantity demanded will decrease.

Suppose a decrease in the supply of savings causes the interest rate to rise from 4% to 6%. All else being equal, how will this impact the quantity of savings demanded?

-The interest rate on car loans will decrease. -The quantity of car loans will decrease.

Suppose the market for car loans is currently in equilibrium. Which of the following will result if there is a decrease in the demand for cars?

-The interest rate will decrease. -The quantity will increase.

Suppose the market for credit cards is initially in equilibrium. What will happen to price and quantity if there is an increase in the supply of credit cards?

-a shortage of people saving money -a surplus of banks supplying saving accounts

Suppose the market for savings accounts is currently in equilibrium. Of the following consequences, which would result from a government intervention that sets a maximum interest rate that is below the equilibrium rate in the market? Select the two correct answers below.

-A surplus of people looking to save money -A shortage of banks looking to supply bank accounts

Suppose the market for savings accounts is initially in equilibrium. If the government institutes a minimum interest rate on savings accounts that is above the current equilibrium, which of the following will result?

The Paris Climate Agreement is a transnational agreement where participating countries commit to significantly limiting CO2 emissions.

The Paris Climate Agreement is an international effort to deal with critical climate-based externalities. Which of the following best describes the function of the Paris Climate Agreement?

Two

The World Bank sets poverty levels for low-income countries around the world using _______ line(s) of poverty.

National Labor Management Relations Act of 1935

The act that specified that workers have a right to organize unions and that management must give them a fair chance to do so is known as the:

quintile.

The term used to define five groups of equal numbers of a population is known as:

The EITC's goal is to provide the low wage earners a tax break in efforts to increase their income in the future.

The ultimate goal of the Earned Income Tax Credit (EITC) is to:

Higher

The wage for union labor compared to non-union labor is:

throughout the entire economy—in all markets and market types

Theoretically, price controls are counterproductive in which of the following markets?

The vaccination helps create a healthier workforce. The vaccination helps create a more productive workforce. The vaccination helps create a larger national output.

Vaccinations are an important public health strategy. When a person chooses to get a flu shot, many positive externalities can result from this. Which of the statements below represents an example of a positive externality from a flu shot?

lower levels of crime a cleaner environment better health outcomes for the population

What do the positive externalities of education typically include?

This will shift the supply curve of mutual funds to the left.

What do you expect to happen to the supply curve of mutual funds (investment funds) if the interest rates for substitute investment, savings bonds, increase by a very significant amount?

research and experimentation (R&E) tax credit

What is the government policy that supports research and development (R&D), doesn't involve the government's close scrutiny of specific projects, and gives firms a reduction in taxes depending on how much R&D they do?

Because no one owns common resources, there is no incentive for individuals to protect or harvest them responsibly, leading to overharvesting.

What is the meaning of the phrase tragedy of the commons?

Higher wages may elicit higher productivity. Union workers tend to stay longer at a given job, reducing the employer's costs for training and hiring. Many unions also offer job training and apprenticeship programs that increase worker productivity.

What would cause union workers to have higher productivity than non-union workers?

return to its equilibrium price

When an effective price control is removed, we would suspect the price of the good to __________________.

There are a lot of cheap and easy ways to fight pollution and the marginal benefits of doing so are quite high.

When the quantity of environmental protection is low so that pollution is extensive, which of the following statements is most true?

The supply increases

When workers decide to save for retirement, rather than spend money now, how is the supply of the financial market affected?

threats to biodiversity around the world global warming

Which of the following are considered international externalities?

public schooling welfare benefits

Which of the following are examples of state and local municipal costs that result from immigration?