ECON 1000 Test 3 Quizlet
C
7. Jim lives in a country in which military output is not provided by the government, but rather is supplied by profit maximizing firms and purchased by individual consumers in a free market. Jim chooses to enjoy the benefits of national security which result from military output purchased by others in society, while purchasing "zero units of military output" of his own. This example illustrates a. Joseph Schumpeter's account of a "gale of creative destruction." b. the "Coasian Solution" to the problem of externalities. c. the Free Rider Problem. d. Adam Smith's "Invisible Hand."
C
7. The "Incidence of a Tax" refers to A. which level of government is imposing the tax. B. which individual is legally responsible for writing a check to pay the tax. C. who bears the burden of the tax in terms of decreased welfare. D. the amount of corruption or kleptocracy in the tax system.
D
1. The phase of the business cycle that refers to the point in time at which overall economic activity reaches its minimum is the a. Recovery. b. Peak. c. Recession. d. Trough.
B
10. Consider the following two proposed taxes: "Tax A" is a $1.00 per unit tax imposed on buyers; "Tax B" is a $2.00 per unit tax imposed on sellers. We can infer that A. the quantity of trade would be identical under "Tax A" and "Tax B." B. producers would prefer "Tax A" over "Tax B." C. Deadweight-Loss would be larger under "Tax A" than under "Tax B." D. More than one (perhaps all) of the above answers is correct.
B
10. Consider the following two statements: (1) "Inflation is caused primarily by too much growth in the money supply" and (2) "Fiscal Policy can never have any stimulative impact on the macroeconomy." Most economist would a. agree with Statement (2) but not Statement (1). b. agree with Statement (1) but not Statement (2). c. disagree with both statements. d. agree with both statements.
A
10. If the efficient level of trade were to take place, this society would incur a Total External Cost equal to (i.e., the "optimal amount of the negative externality is") A. "areas (a)+(b)." B. "areas (a)+(b)+(c)+(d)+(e)+(f)." C. "areas (c)+(d)+(e)+(f)+(g)." D. zero.
A
11. A per unit tax of $6.00 imposed on sellers would generate tax revenue for the government of A. $0. B. $13,200. C. more than $13,200 but less than $18,600. D. $18,600.
D
11. The ____________ Coefficient provides a measure of the degree of progressivity of a tax, defined as the ratio of the area between the Lorenz Curve and the Tax Concentration Curve to the entire area below the Lorenz Curve. A. Pechman-Okner B. Coase C. Gini D. Stroup
A
12. "Market Failure" can be described as a situation in which A. the "free market outcome" is NOT efficient. B. a single seller of a good has substantial control over the price of the good. C. government intervention leads to a greater Deadweight-Loss than does the "free market outcome." D. None of the above answers are correct.
A
12. One of the "7 Determinants of Productivity, Income, and Wealth" is "acquired skills," which refers to the recognition that differences in income or wealth across individuals could result from differences in A. the abilities and experiences that people obtain through education, training, and work experience. B. the amount of money that individuals receive as inheritances during their lifetime. C. how hard individuals choose to work. D. the natural talents that people are endowed with at birth.
D
12. The arguments made by John Maynard Keynes suggest that during an economic downturn, the government should A. run a budgetary surplus, so that we do not accumulate a tremendous amount of debt that will ultimately burden future generations. B. increase income tax rates for all households, thereby indirectly forcing households to consume less. C. deploy the military in order to conquer and colonize other countries with valuable natural resource deposits (e.g., African countries with large diamond reserves). D. run a budgetary deficit, in order to stimulate the economy by replacing missing private spending with government spending.
C
13. Examining how Real (i.e., inflation adjusted) Household Incomes have changed between 1974 and 2004, mean household income of the "bottom 5th of all households" ____________ while the mean household income of the "top 5th of all households" ____________ between these years. A. decreased from $10,927 to $7,361; increased from $256,489 to $567,243. B. decreased from $29,912 to $19,521; decreased from $46,993 to $44,092. C. increased from $12,053 to $12,839; increased from $123,542 to $189,802. D. increased from $21,145 to $43,237; decreased from $87,519 to $84,118.
A
13. The Labor Theory of Value, which states that the value of a commodity depends upon only the amount of labor required to produce the commodity, is most closely associated with the ideas of A. Karl Marx. B. Ronald Coase. C. Max Lorenz. D. John Rawls.
A
13. These curves provide a graphical illustration of the A. distribution of income within each country. B. external benefits realized in each country from positive externalities. C. severity of typical recessions in each country. D. level of corruption in each country.
A
13. ___________________ refers to the time that it takes for the enacted policy to have an impact on macroeconomic outcomes. a. An Implementation Lag b. Decision Lag c. A Recognition Lag d. An Information Lag
A
14. Imposing a per unit tax of $10.00 on sellers in this market would generate tax revenue of A. less than $60,000. B. exactly $60,000. C. more than $60,000 but less than $100,000. D. more than $400,000 but less than 125,000.
D
14. Suppose (Area A)=(.17), (Area B)=(.06), and (Area C)=(.04). It follows that the value of the Gini-Coefficient is A. .08 in "Country X" and .12 in "Country Y." B. .21 in "Country X" and .23 in "Country Y." C. .29 in "Country X" and .27 in "Country Y." D. .42 in "Country X" and .46 in "Country Y."
A
14. The views held by the Monetarists is that if the money supply is drastically increased, then in the long run a. prices will increase but the level of real output will not increase. b. both prices and the level of real output will increase. c. neither prices nor the level of real output will increase. d. the level of real output will increase but prices will not increase.
D
15. Consider a per unit tax of $7.00 imposed on sellers in this market. This tax would A. not change Consumers' Surplus but decrease Producers' Surplus by "areas (d)+(e)." B. decrease Consumers' Surplus by "areas (a)+(b)+(d)" but not change Producers' Surplus. C. decrease Consumers' Surplus by "area (b)" and decrease Producers' Surplus by "area (c)." D. decrease Consumers' Surplus by "areas (b)+(d)" and decrease Producers' Surplus by "areas (c)+(e)."
B
15. The magnitude of the "% decline in Real GDP" during the most recent recession in the U.S. was tied for the largest such decline since WW-II. During this recession GDP declined by _____. A. 0.6% B. 4.1% C. 12.7% D. None of the above answers are correct (since Real GDP has not declined during any recession after WW-II).
A
15. Which of the following is NOT one of the seven sources of government failure discussed in lectu a. Externalities. b. Corruption. c. Regulatory Capture. d. Logrolling.
B
16. Consider the following two proposed taxes: "Tax A" is a $6.00 per unit tax imposed on sellers; "Tax B" is a $8.00 per unit tax imposed on buyers. We can infer that A. the quantity of trade would be identical under "Tax A" and "Tax B." B. sellers would prefer "Tax A" over "Tax B." C. Deadweight-Loss would be larger under "Tax A" than under "Tax B." D. More than one (perhaps all) of the above answers is correct.
C
16. Focusing on the "Average Tax Rate" of the "Bottom 50% of Income Earners," this figure ______________ between 1980 and 2010 and then ______________ between 2010 and 2013. A. increased from 1.24% up to 3.64%; increased more from 3.64% up to 5.19% B. increased from 23.85% up to 28.22%; decreased from 28.22% down to 19.73% C. decreased from 6.10% down to 2.37%; increased from 2.37% up to 3.30% D. decreased from 10.02% down to 8.49%; decreased more from 8.49% down to 3.98%.
B
16. Within our discussion of Logrolling, we noted that _______________ argued that politicians in a democracy often act to maximize the probability of their own re-election. a. Jeremy Bentham b. James Buchanan c. Gordon Tullock d. Ronald Coase
B
17. Imposing a per unit tax of $2.00 on buyers in this market would generate tax revenue of A. more than $40,500 but less than $51,500. B. more than $27,000 but less than $40,500. C. exactly $27,000. D. less than $27,000.
C
17. The "Economic Calculation Problem" refers to the argument that A. it is impossible to ever reduce the Deadweight-Loss associated with public goods. B. calculating the true economic value of a worker can only be done under a socialist system. C. a system of planning will never be able to achieve efficient outcomes, precisely because under such a system the planners do not have access to the information generated by market transactions. D. in order for economic outcomes to be fair, it is necessary to have a significant amount of redistribution in-kind and income support for poor people.
B
18. Consider a per unit tax of $3.50 imposed on sellers in this market. The incidence of this tax for buyers is A. illustrated by "areas (a)+(b)+(c)." B. illustrated by "areas (b)+(c)." C. illustrated by "areas (c)+(d)." D. zero.
C
18. Focusing on the 2,500th unit, the Marginal External Cost for society from producing/consuming this unit is equal to _____. A. $21.25 B. $16.20 C. $12.00 D. $9.25
B
18. Since becoming informed on matters of public policy has high costs and low benefits for individual voters, many people choose to remain uninformed about issues. This phenomenon is described as A. Rent Seeking. B. Rational Ignorance. C. The Economic Calculation Problem. D. Corruption.
A
19. Consider the following two proposed taxes: "Tax A" is a $4.00 per unit tax imposed on buyers; "Tax B" is a $4.00 per unit tax imposed on sellers. We can infer that A. the quantity of trade would be identical under "Tax A" and "Tax B." B. producers would prefer "Tax A" over "Tax B." C. Deadweight-Loss would be larger under "Tax A" than under "Tax B." D. More than one (perhaps all) of the above answers is correct.
B
19. The "free market level of trade" is __________, while the "efficient level of trade is __________. A. 12,250 units; 4,750units. B. 8,800 units; 4,750 units. C. 4,750 units; 8,800 units. D. 0 units; 8,800 units.
C
2. A good is "Non-Rival" if A. it is difficult (or very costly) to prevent consumption by those who do not pay for the good. B. it is easy (or relatively costless) to prevent consumption by those who do not pay for the good. C. consumption by one person does not diminish the quantity/quality of consumption by others. D. consumption by one person does diminish the quantity/quality of consumption by others.
C
2. Consider a good for which there is a positive externality. If this good were simply provided in a free market without any government intervention, then A. every single unit of the good for which any consumer has a positive reservation price would be traded. B. a negative deadweight loss would be realized. C. less than the efficient amount of the good would be traded. D. None of the above answers are correct.
B
2. The Business Cycle are periodic an irregular fluctuations that are best labeled as a. Subduction; Peak; Depression; Bottoming-out b. Expansion; Peak; Recession; Trough c. Hyperinflation, Depression; Peak; Through d. None of the options are appropriate
B
20. At the "free market outcome" there would be a Deadweight-Loss equal to A. "area (f)." B. "areas (a)+(b)." C. "areas (c)+(d)." D. "areas (a)+(b)+(c)+(d)+(e)."
B
20. _________________ wrote A Theory of Justice (1971), in which he argued that the institutions of an "ideal society" chosen behind a "veil of ignorance" would aim to "maximize the well-being of the worst-off member of society." A. Ronald Coase B. John Rawls C. Max Lorenz D. Jeremy Bentham
C
21. "Fiscal Policy" can be described as government policies A. aimed at reducing corruption or kleptocracy. B. aimed at increasing bureaucratic costs. C. related to spending and revenue generation. D. which determine a nation's money supply.
C
21. When Korea was split into North Korea and South Korea in 1953, the levels of Real Per Capita GDP in the two countries were $966 in North Korea and $1,072 in South Korea. By 2008, Real Per Capita GDP was ________ in North Korea and ________ in South Korea. A. $1,456; $983. B. $36,745; $4,089. C. $1,122; $20,454. D. $18,713; $17,396.
B
21. _____________ refers to the academic subfield which uses the tools and framework of economics to analyze issues that historically fall within the domain of political science. A. Microeconomics B. Public Choice C. Comparative Economic Systems D. Business Law
A
22. Between 1959 and 2014, the poverty rate in the United States has ranged between a A. minimum of 11.1% in 1973 and a maximum of 22.4% in 1959. B. minimum of 6.9% in 2002 and a maximum of 10.5% in 2014. C. minimum of 4.6% in 1959 and a maximum of 31.2% in 2009. D. minimum of 0% in 2012 and a maximum of 10.5% in 1984.
C
22. In every year between 1967 and 2007, Government Spending as a Percentage of GDP in the U.S. ranged between 30.57% and 38.67%. In contrast, the realized and projected values from 2008 through 2020 A. range from a low of 17.43% and a high of 21.12%. B. range from a low of 24.56% and a high of 28.77%. C. range from a low of 38.88% and a high of 45.13%. D. range from a low of 51.69% and a high of 56.84%.
B
22. In our discussion of the relation between money supply and inflation, we noted that ________________ experienced an inflation rate of 3,398% in 1989 and an inflation rate of 7,482% in 1990. A. Great Britain B. Peru C. Portugal D. Canada
C
23. In an election between all three candidates, __________ would receive the most votes. A. Donald B. Gary C. Hillary D. None of the above are correct (since the table does not provide enough information to answer this question).
A
24. Given these voter preferences, in a series of pairwise majority votes there is A. not a Condorcet Paradox. B. a Condorcet Paradox, since "Gary would beat Hillary," "Donald would beat Gary," but "Hillary would beat Donald." C. a Condorcet Paradox, since "Hillary would beat Gary," "Donald would beat Hillary," but "Gary would beat Donald." D. a Condorcet Paradox, since "Hillary would tie Gary," Donald would tie Hillary," and "Donald would tie Gary."
C
25. "Crowding Out" refers to A. the reduced incentive for people to earn income when marginal tax rates are relatively high. B. the reduced incentive for people to earn income when welfare benefits become more generous. C. decreases in private spending that occur following increases in government spending (thereby reducing the stimulative effectiveness of Fiscal Policy). D. a decrease in the money supply, intended to dampen overall economic activity.
D
26. For the United States, the value of the Gini-Coefficient __________ between 1974 and 1994 and then __________ between 1994 and 2014. A. decreased from .403 to .389; decreased further from .389 to .316. B. decreased from 1.356 to .994; increased from .994 to 1.002. C. increased from .272 to .467; decreased from .467 to .319. D. increased from .395 to .456; increased further from .456 to .480.
A
26. It appears as if production/consumption of this good generates A. a negative externality. B. a positive externality. C. neither a positive externality nor a negative externality. D. both a positive externality and a negative externality.
D
26. The "Stabilization Function of Government" refers to A. government policies which stabilize the level of government spending as a percentage of GDP in an economy over time. B. government production of goods or regulation of business, to ensure that the "right mix" of products are produced, each in the "ideal quantity" and at the "ideal quality." C. government policies aimed at altering the final levels of consumption of goods/services across consumers/households, usually with the intention of realizing a "fairer" apportionment of consumption/income/wealth. D. government policies aimed at minimizing fluctuations in overall macroeconomic activity.
C
27. A government policy that attempts to "Internalize an Externality" can be generally described as A. a policy which mandates the exact level of an activity that decision makers must choose. B. a policy which completely bans an activity that generates an externality. C. a policy which introduces a cost (or foregone gain) that would be realized by a decision maker who generates an externality. D. None of the above answers are correct.
B
27. For the United States, the value of the Gini-Coefficient __________ between 1974 and 1994 and then __________ between 1994 and 2014. A. increased from .412 to .564; decreased from .564 to .386. B. increased from .395 to .456; increased further from .456 to .480. C. decreased from .612 to .583; decreased further from .583 to .519. D. decreased from .549 to .296; increased from .296 to .794.
C
28. This country experienced a recession from A. February 2013 through June 2016. B. January 2012 through December 2014. C. March 2011 through February 2013. D. February 2010 through January 2012.
C
28. To maximize profit, this monopolist would A. sell 9,120 units of output, each at a price of $34.20. B. sell 4,640 units of output, each at a price of $16.80. C. sell 2,720 units of output, each at a price of $24.00. D. sell 2,720 units of output, each at a price of $12.00.
D
29. The "Distribution Function of Government" refers to A. government policies which decrease Total Social Surplus. B. government production of goods or regulation of business, to ensure that the "right mix" of products are produced, each in the "ideal quantity" and at the "ideal quality." C. government policies aimed at minimizing fluctuations in overall macroeconomic activity. D. government policies aimed at altering the final levels of consumption of goods/services across consumers/households, usually with the intention of realizing a "fairer" apportionment of consumption/income/wealth.
B
29. When this monopolist chooses the price and quantity which maximizes profit, Total Consumers' Surplus is ________, Total Producers' Surplus is ________, and Deadweight Loss is ________. A. zero; zero; "areas (A)+(C)+(F)+(I)." B. "areas (A)+(B)"; "areas (C)+(D)+(F)+(G)+(I)"; "areas (E)+(H)." C. "areas (A)+(B)+(C)+(D)+(E)"; "areas (F)+(G)+(H)+(I)"; "area (J)." D. "areas (A)+(B)+(C)+(D)+(E)"; "areas (F)+(G)+(H)+(I)"; zero.
B
3. Based upon the World Bank's poverty threshold of income of $1.90 per day, between 1981 and 2015 the number of people living in poverty A. decreased from 5.2 billion down to 4.8 billion. B. decreased from 2 billion down to 700 million. C. increased from 125 million up to 900 million. D. increased from 4.5 billion up to 7.3 billion.
C
3. Darnell and Emily are registered to vote in Maine. They were recently discussing "Question 5," a ballot initiative that would establish ranked-choice voting for statewide elected positions. During their conversation Emily stated, "I haven't really researched the proposal. In order to do so properly I would have to invest a great deal of time, and, after all, the chance of my vote deciding the outcome is very small and I don't think the electoral process in the future will be that much different regardless of the outcome." Her statement is closely related to the issue of A. the Condorcet Paradox. B. the Coasian Solution to Externalities. C. rational ignorance. D. the Labor Theory of Value.
A
3. The Central Bank of the United States is referred to as the ________________ a. Federal Reserve b. Bank of America c. U.S. Congress d. None of the above answers are correct (since the U.S. Central Bank was abolished by President Reagan in 1982).
C
30. In the textbook, ______________ was described as "an ill-governed kleptocracy in which corruption is not a happy side-effect of power, but the core of the system." A. Great Britain during the 1980s B. Finland during the 1990s C. present day Russia D. the United States under President Donald Trump
C
30. Which of the following is NOT one of the three primary policy tools used by a central bank to alter the money supply? A. Setting the discount rate (i.e., the interest rate that the central bank charges other banks on short-term loans). B. Conducting open market operations (e.g., the buying/selling of U.S. Treasury debt securities to/from the public). C. Loaning money to low income households at below market interest rates, so that they have money available to purchase medical insurance. D. None of the above answers are correct (since each of the choices listed is one of the three primary policy tools used by a central bank).
B
5. Suppose that President Trump is concerned that the U.S. economy is not experiencing a sufficiently strong economic recovery. In light of this view, he argues that we should drastically decrease tax rates in 2017 for all income earners, in an attempt to further stimulate overall macroeconomic activity. This proposal could be described as a. Expansionary Monetary Policy. b. Expansionary Fiscal Policy. c. the setting of the reserve requirement. d. Crowding Out.
D
5. _________________ refers to a situation in which total social surplus is decreased as a result of government intervention in a market. A. The Economic Calculation Problem B. The Incidence of a Tax C. Market Failure D. Government Failure
B
6. Based upon the World Bank's poverty threshold of income of $1.90 per day, between 1981 and 2015 the global poverty rate A. decreased slightly from 8.4% down to 7.9%. B. decreased drastically from 44.3% down to 9.6%. C. increased drastically from 32.5% up to 62.2%. D. increased slightly from 12.1% up to 14.8%.
D
6. In 2016 the federal government of the small island nation of Keyneslandia generated revenues of €950,000,000 and expenditures of €800,000,000 from coconut cultivation.This means that in 2016 Keyneslandia a. realized a budget deficit of €150,000,000. b. ealized a budget deficit of €1,750,000,000. c. realized a budget surplus of €1,750,000,000. d. realized a budget surplus of €150,000,000.
D
6. Qihong was born in China. He always excelled academically. After earning a Master's degree from the China University of Mining and Technology in Beijing, he came to the United States to pursue a PhD. Upon completion of his PhD he was hired by a prestigious research university in Oklahoma, where he works to this day. This story provides an illustration of the A. Condorcet Paradox. B. vicious-cycle-of-poverty. C. logrolling. D. brain drain.
C
7. Under the current U.S. Federal Income Tax, the "Top 1% of wage earners" pay A. about 9.12% of all taxes collected, an amount which is less than half of their share of total adjusted gross income (of 19.04%). B. about 19.04% of all taxes collected, an amount exactly equal to their share of total adjusted gross income earned (since President Forbes established a proportional income tax for the United States immediately after assuming office in January 1997). C. about 37.80% of all taxes collected, an amount which is almost twice as large as their share of total adjusted gross income earned (of 19.04%). D. 100% of all taxes collected, due to the fact that nobody with adjusted gross income below $500,000 per year pays any income taxes.
D
8. Focusing on the 17,600th unit, the Marginal External Cost for society from producing/consuming this unit is equal to _____. A. $5.80 B. $7.30 C. $10.00 D. $13.10
D
8. In 1950, 10% of all U.S. households had a television. In contrast, by 1997, _____ of U.S. households below the poverty line had a television. A. 7% B. 10% C. 27% D. 95%
A
9. At the "free market outcome" there would be a Deadweight-Loss equal to A. "areas (c)+(d)." B. "areas (e)+(f)." C. "area (g)." D. "area (h)."
B
9. Imposing a per unit tax of $1.50 on buyers in this market would result in a Deadweight Loss equal to A. "area (e)." B. "area (d)." C. "areas (b)+(d)." D. "areas (a)+(b)+(c)."
D
30. Which of the following was discussed in lecture to illustrate how something akin to the "Coasian Solution to Externalities" has been implemented in practice? A. How kids at "Chuck E. Cheese's" will often try to ride the carousel for free after another child pays a token to start the ride. B. How "informational problems" (such as not being able to observe the cleanliness of a kitchen at a restaurant) can lead to inefficient outcomes in markets. C. How differences in the costs of doing business and complying with government bureaucracy across different countries can lead to drastically different outcomes in regards to the level of entrepreneurial activity. D. How the "Defenders of Wildlife" established the "Bailey Wildlife Wolf Compensation Trust" in order to facilitate the re-introduction of the gray wolf into the wild in the western United States.
A
31. Examining how Real (i.e., inflation adjusted) Household Incomes have changed between 1974 and 2004, mean household income of the "middle 5th of all households" ____________ while the mean household income of the "top 5th of all households" ____________ between these years. A. increased from $48,282 to $55,661; increased from $123,542 to $189,802. B. increased from $36,149 to $57,512; decreased from $71,519 to $68,118. C. decreased from $86,927 to $78,361; increased from $356,489 to $489,202. D. decreased from $19,884 to $15,523; decreased from $96,993 to $80,079.
C
31. It appears that the income tax in Country A is a ____________ tax and the income tax in Country B is a ____________ tax. A. regressive; progressive. B. proportional; proportional. C. progressive; regressive. D. progressive; progressive.
B
31. ________________ is defined as the process by which a legislator votes to approve one bill in exchange for favorable votes from other legislators on other bills. A. Kleptocracy B. Logrolling C. The Condorcet Paradox D. Rational ignorance
B
32. A group of teachers at a middle school is trying to decide where to take their students on a field trip. They are considering three options: an art gallery, an amusement park, and a zoo. When voting between only the art gallery and the amusement park, the art gallery receives more votes. When voting between only the zoo and the art gallery, the zoo receives more votes. When voting between only the amusement park and the zoo, the amusement park receives more votes. These outcomes illustrate the A. Economic Calculation Problem. B. Condorcet Paradox. C. Costs of Complying with Government Bureaucracy. D. Incidence of a Tax.
C
32. _____________ describes an assessment of the production process which attributes all economic surplus generated from a production process to labor, an idea based upon the ideas of Karl Marx. A. Kleptocracy B. The Economic Calculation Problem C. The Labor Theory of Value D. Utilitarian Justice
B
33.
B
33. On April 29, 2017, former heavyweight boxing champion Wladimir Klitschko will fight Anthony Joshua at Wembley Stadium in London, England in an attempt to regain the IBF, IBO, and WBA Super Heavyweight Championships of the world. This fight will only be available in the U.S. on "Pay Per View TV." The broadcast of this bout on "Pay Per View TV" will be excludable but non-rival, and is therefore best described as a A. Common Good. B. Club Good. C. Private Good. D. Public Good.
A
33. Suppose that the representatives from District 4 and District 5 agree to "trade votes," with the representative from District 4 voting in favor of Proposal II in exchange for the representative from District 5 voting in favor of Proposal I. Continue to suppose that the other representatives vote truthfully (i.e., in the best interest of their own constituents) and that there is a separate vote on each proposal. When the representatives from Districts 4 and 5 trade votes in this manner, A. both proposals are now approved, resulting in a decrease in realized total social surplus (i.e., realized total social surplus is smaller than it would be if no vote trading took place). B. both proposals are now approved, resulting in an increase in realized total social surplus (i.e., realized total social surplus is larger than it would be if no vote trading took place). C. both proposals are now approved, but the realized value of total social surplus is unchanged (i.e., realized total social surplus is the same at it would be if no vote trading took place). D. both proposals are still rejected.
B
4. Chris' income is higher than Pat's income. Two of the notable differences between their jobs are that Pat gets to work in a climate controlled office building year-round and Chris runs a greater risk of being severely injured on the job. Based upon this information, it would seem reasonable to infer that at least part of the difference in incomes between the workers is due to A. gender discrimination. B. compensating differentials. C. the Labor Theory of Value. D. logrolling.
A
4. In the U.S., the Money Supply can be increased a. decreasing the discount rate. b. selling U.S. Treasury debt securities to the public. c. increasing the reserve requirement. d. More than one (perhaps all) of the above answers is correct.
A
4. The ____________ argument in favor of redistribution is based upon a claim that, so long as people have a diminishing marginal utility for money, total social welfare can be increased by transferring income/wealth from the rich to the poor. A. Utilitarian Justice B. Rawlsian Justice (a.k.a., Social Contract Theory) C. Labor Theory of Value D. Libertarian Justice
C
4. ____________________ were two of the central figures in the formulation of the ideas of Utilitarian Justice, which argues that total social welfare can be increased by income redistribution, so long as people have a diminishing marginal utility for money. A. Yair Tauman and Pradeep Dubey B. Max Lorenz and Corrado Gini C. Jeremy Bentham and John Stuart Mill D. Roanlad Coase and James Buchanan
B
5. As of 2012, government spending on welfare programs in the U.S. was A. $0, since all government welfare programs were abolished by President George W. Bush in January 2009, right before he left office. B. roughly $952 billion (about 6% of GDP). C. roughly $3,332 billion (about 21% of GDP). D. roughly $5,078 billion (about 32% of GDP).
D
5. Ray bought a widget from "Company X." His purchase was a voluntary transaction between himself and the seller, but generated a positive externality. As such, we can infer that A. Ray realized a negative Consumer's Surplus from his purchase. B. "Company X" realized a negative Producer's Surplus from their sale. C. some other person (or group of other people) realized a cost (or loss) as a result of the production/consumption of this widget. D. some other person (or group of other people) realized a benefit (or gain) as a result of the production/consumption of this widget.
