Exam 4 MicroEconomics; Thurman, Tarrant County College

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59. A drug company is deciding how much to invest in Research and Development into finding a cure for the common cold. The table below shows the company's demand for financial capital for R&D of this cold drug, based on its expected rates of return from selling the cure. Every investment has an additional 4% social return: that is, an investment that pays at least a 5% return to the drug company will create at least a 9% return for society as a whole. If the opportunity cost of financial capital for the drug company is 7%, the drug company will invest ___ in R&D if it receives both the private and the social benefits of this investment. A. $308 B. $264 C. $250 D. $228

64. The SaferGlass Co. makes windshields for the automotive industry. It wants to develop a new product with shatterproof glass to increase safety. The development of the new glass requires them to change their production process significantly. The company has developed a list of possible ways of implementing the production process changes, along with estimates of how each would affect the production and sales costs. Based on these estimates, the table below shows the value of R&D projects that provide at least a certain social rate of return. Every investment in R&D would have an additional 3% social return: that is, an investment that pays at least a 4% return to the glass company will pay at least 7% return for society as a whole. If the opportunity cost of financial capital for SaferGlass Co. is 9%, the company will invest ______ in R&D if it receives both the private and social benefits of this investment. A. $400 B. $450 C. $500 D. $550

66. ToasterOvensInc. is developing technology to make a toaster oven than uses less electricity. If successful, the technology will significantly reduce the amount of energy that is wasted due to product inefficiencies. If the firm sells only in response to the market price, the quantity shown in the third column is supplied. If the firm were also to receive the broader social benefits of the new technology, the willingness to supply is shown in the fourth column. If the firm were to receive a price based on both private and social benefits, the equilibrium price and quantity would be A. $16, 740 b. $17, 770 c. $18, 800 d. $19, 830

79. The supply and demand conditions facing a firm that makes widgets and generates a negative externality by dumping a highly toxic sludge in a nearby river is given in the table below. The equilibrium price and quantity when social costs are taken into account are A. Price = $55, Quantity = 30 B. Price = $40, Quantity = 55 C. Price = $30, Quantity = 20 D. Price = $30, Quantity = 80

84. Four companies, Alpha, Beta, Gamma and Delta, are burning coal to produce electricity. As a result, they also produce emissions. In the table below, the first row of shows the total pounds of emissions currently produced by each firm. The other rows of the table show the cost for each firm of reducing emissions by the first 50 tons, the second 50 tons, and so on. The total cost of requiring each firm to reduce its garbage by one third is A. $167 B. $137 C. $187 D. $127

87. Michigan (MI) and Wisconsin (WI) both border Lake Michigan. Both states pollute Lake Michigan and both states suffer the consequences of the pollution. However, the two states face a prisoner's dilemma of the sort studied in Chapter 12. Each country must decide whether to protect or not to protect Lake Michigan from pollution. The payoffs from the choices are shown in the table below. From the table, we know that the outcome of this game will be A. neither state choosing to protect the lake B. Wisconsin choosing to not protect the lake, Michigan choosing to protect the lake C. Wisconsin choosing to protect the lake, Michigan choosing to not protect the lake D. both states choosing to protect the lake

94. Bulgaria primarily produces two goods, nesting dolls and grapes. The production of both goods primarily requires labor. The following table shows possible combinations of nesting dolls and grapes. Which of the following points is more likely to represent a market-oriented policy? A. E B. C C. all points D. none

A government has decided to phase out its antipoverty program support payments more slowly to help the near-poor become self-sufficient. One criticism about this policy is likely to be A. that this antipoverty program costs the government more money. B. that the near-poor will not be required to pay back benefits. C. that the near-poor may still lack skills for menial jobs. D. that antipoverty programs shift wealth from the rich to the poor.

A pollution charge is a form of tax imposed on A. the quantity of pollution that a firm emits. B. pollution control technologies. C. every economy in the world. D. low-income market-orientated industries.

An economist is more likely to identify __________________ as a more efficient and flexible way for society to __________________________ . A. marketable permits; allow a limited, declining amount of pollution to occur B. better defined property rights; to address issues of allowable levels of pollution C. market-oriented environmental tools; enforce strict limits on emissions D. better defined property rights; to shrink pollution levels over time

Antipoverty programs that are set up so that the amount of government benefits will decline substantially as poor people earn more income typically create ______________. A. a poverty trap B. an income inequity C. a poverty line D. a safety net

Because of the nature of the comprehensive environmental laws adopted during the late 1960s and early 1970s by the United States government, these laws are typically referred to as ____________________ . A. positive regulations B. command and control regulations C. control and command regulations D. negative regulations

For a negative externality, the __________________________ than the costs imposed on society as a whole. A. private costs of an action are less B. social costs of an action are less C. private benefits of an action are more D. social benefits of an action are more

Government has a variety of policies that allow inventors to _____________________ , such as the granting patents and __________________ . A. receive an increased rate of return; subsidization of research and development B. protect their inventions; limited copyrights during the inventor's lifetime C. register their inventions; unlimited copyrights during the inventor's lifetime D. receive a reasonable rate of return; lifetime intellectual property rights.

Ideally, a patent should cover a long enough period of time for the inventor to _______________, but that period should not be so long that it allows the inventor to _____________________________. A. earn a hearty return; charge a high monopoly price permanently B. contribute to the social interest; only receive a slice of the social benefits C. earn a rate of return; prevent broad public access to classic works D. contribute to the social interest; prevent broad public access to inventions

If a glass manufacturer has only a few ________________ of reducing pollutants, it will ____________________ . A. costly ways; end up paying the pollution tax. B. inexpensive ways; incur the pollution tax instead. C. costly ways; do so to minimize its pollution taxes. D. inexpensive ways; buy the most expensive technology.

If a government chooses a system of marketable permits as its environmental managing tool, the reduction in pollution will A. take place in the firms where it is least expensive to do so. B. take place in every firm within the time set by the permit. C. be initiated at the household level. D. be rewarded with refundable charges.

If a rise in incomes for both low-income and high-income workers is higher for the high-income workers, A. then poverty will fall and inequality will rise. B. then poverty will rise and inequality will rise. C. then poverty will fall and inequality will fall. D. then poverty will rise and inequality will rise.

If a small electric automobile manufacturer is able to gain the social return generated by its electric motor, its demand for financial capital would A. shift to the left. B. shift to the right. C. decrease substantially. D. increase slightly.

If an alternative policy could encourage both _____________________, instead of ________________________, consumers would benefit. A. invention and competition; invention and monopoly B. invention and monopoly; invention and public funding C. invention and monopoly; invention and competition D. invention and competition; invention and public funding

If an externality of pollution exists for all manufacturers in a given industry, then all related social costs A. are no longer represented in their supply curves. B. continue to be represented in their supply curves. C. are no longer represented in their demand curves. D. continue to be represented in their demand curves.

If incomes rise for low-income workers but don't change for high-income workers, A. then poverty will fall and inequality will fall. B. then poverty will rise and inequality will fall. C. then poverty will rise and inequality will rise. D. then poverty will fall and inequality will rise.

If some of the products developed by I'mASoftwareCo. must face market competition that can very quickly produce either an identical product or a close substitute for it, then A. it may decide against R&D projects of this sort. B. it will have to figure out innovative ways to prevent adaptation and copying of its products. C. the other firms will all save on their R&D costs. D. it must charge more for its products to quickly compensate for the research and development costs.

If the government determines that the private sector does not have sufficient incentive to carry out research and development, which of the following is likely to be a reasonable response? A. government can use public funds to pay for the R&D activities directly. B. setting up government-run laboratories to ensure public benefits arise from public funding. C. direct all public R&D funding to colleges and universities to ensure public benefits arise from public funding. D. ensure that firms are not entering cooperative ventures to lessen competition, as well as b and c above.

In order for a good to be classified as ______________ , when one person uses the good, others are also able to use it. A. nonrivalrous B. unrivalrous C. unexcludable D. nonexcludable

In the U.S., comparisons of high and low incomes raise issues of economic ______________________. A. inequality and poverty B. equality and wealth distribution C. wealth distribution and poverty D. equality and inequality

In the United States, the official definition of the poverty line traces back to a single person: ___________________, whose idea was to ___________________________. A. Mollie Orshansky; define a poverty line based on the cost of a healthy diet B. Lawrence Ellison; define a range of government policies to reduce poverty C. Molly Orshansky; define a range of government policies to reduce poverty D. Max Lorenz; define the Lorenz curve to illustrate the poverty line

Lesley is a single mother with 2 children. She can earn $10 per hour and can work up to 1,800 hours per year. However, if she does not earn any income at all, she will receive government benefits totaling $18,000 per year. For every $1 of income she earns, her level of government support is reduced by $1. Lesley A. has no monetary incentive to work, though she may still choose to work B. has a monetary incentive to work and will maximize her income if she works for 300 hours C. has a monetary incentive to work and will maximize her income if she works for 600 hours D. has a monetary incentive to work and will maximize her income if she works for 900 hours

Many residents of a particular town enjoy taking their dogs with them when they go to their local park for recreation and picnics. Everybody enjoys the park more when each group cleans up after themselves and their pets, but nobody enjoys the act of cleaning up after themselves or their dogs. We can expect the park to be _______, due to a _________ . A. dirty, prisoner's dilemma B. clean, prisoner's dilemma C. dirty, positive externality D. clean, positive externality

Market competition may sometimes encourage a firm to innovate out of fear because of the perception that A. they will inevitably fall behind other competitors seeking out innovations. B. the firm will only have a very temporary edge over its competitors. C. the ability to earn above-normal profits is also available to its competition. D. higher profits can only be earned by finding less expensive ways to produce.

Market-oriented environmental policies are ________, and __________ will work better in some situations than in others. A. a tool-kit; specific tools B. productive policies; some policies C. inflexible; incentives to protect endangered species D. flexible; the command-and-control approach

Medicaid is a federal-state joint program enacted in 1965 that provides medical insurance for A. the near-poor and the low-income elderly. B. all those below the poverty line. C. low-income mothers, but not their spouses. D. the disabled and all of the above.

One common way of measuring income inequality is to rank all households by income, from lowest to highest, and then A. to divide all households into quintiles. B. comparing the groups. C. to divide all households by size. D. comparing the share of the population.

Paddy has lots of cousins. With a family reunion in the near future, Paddy decides to collect income information for himself and all his cousins. He obtains the following data points: $52,000, $22,000, $92,000, $8,000, $118,000, $62,000, $38,000, $14,000, $132,000, $46,000, $26,000, $96,000, $54,000, $110,000, $80,000. The share of income received by the highest quintile of this income distribution is ______, which is _____ than that for the highest quintile of the U.S. income distribution in 2005. A. 37.9%, lower B. 39.7%, lower C. 37.9%, higher D. 39.7%, higher

Paddy has lots of cousins. With a family reunion in the near future, Paddy decides to collect income information for himself and all his cousins. He obtains the following data points: $52,000, $22,000, $92,000, $8,000, $118,000, $62,000, $38,000, $14,000, $132,000, $46,000, $26,000, $96,000, $54,000, $110,000, $80,000. The share of income received by the second-to-bottom quintile of this income distribution is A. 11.6% B. 12.6% C. 13.6% D. 14.6%

The International Ecotourism Society estimates that international tourists interested in seeing nature or wildlife spend over A. $450 billion per year. B. $550 billion per year. C. $250 billion annually. D. $200 billion annually.

The comprehensive environmental laws adopted during the late 1960s and early 1970s by the United States government A. stipulated mandatory use of particular pollution-control technologies. B. allowed pollution credits to be traded between polluters to avoid bearing social costs. C. stipulated exemptions for industries that lobbied politicians hard to avoid regulation. D. allowed industries to determine pollution levels based on profit margins.

The greater inequality of wages can be viewed as a sign that A. demand for skilled labor is increasing faster than supply. B. supply for skilled labor is decreasing faster than demand. C. demand for skilled labor is decreasing faster than supply. D. supply for skilled labor is increasing faster than demand.

The group of government programs that provide assistance to the poor and the near-poor is synonymous with which of the following? A. safety net B. safety quintiles C. poverty net D. antipoverty net

The number of people served by advanced wastewater treatment plants doubled between 1968 and the mid-1990s, but because the treatment plants _______________________, the quantity of waste emitted into the water after treatment ___________________ . A. became so much more effective; decreased by about one-third B. became so much less effective; increased by about one-third C. remained ineffective; remained the same D. moderately improved; increased by 10%

The term "basic research" applies specifically to research pertaining to fundamental scientific breakthroughs that may offer commercial applications in the ______________. A. distant future B. near future C. immediate future D. short run

There is a skating rink in your city that is 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 A. rivalrous and nonexcludable B. nonrivalrous and excludable C. rivalrous and excludable D. nonrivalrous and nonexcludable

Tom, Mary and Jill have apartments in the same building. A security system for their building costs $750. Tom is willing to pay $100 for the security system, Mary is willing to pay $300 and Jill is willing to pay $300. They have a meeting to vote on whether to pay $250 each for the security system. At least two of them must vote for the system to be installed before the vote is passed. The efficient outcome is to have the security system installed. After the meeting the security system will __________, which illustrates ___________. A. be installed, the free rider problem B. not be installed, the free rider problem C. be installed, a negative externality D. not be installed, a negative externality

Using the term "spillover" is a less formal means of describing A. an externality. B. social costs. C. private costs. D. market failure.

When a firm invests in new technology, the ________________ that the firm receives are _____________________________ . A. private benefits; only a portion of the overall social benefits B. social benefits; only a portion of the overall private benefits C. private benefits; about three-quarters of the economic benefits D. social benefits; about one-third of the overall private benefits

Which of the following has become the least willing to sacrifice their environmental quality for some additional economic output? A. the European Union B. China C. Ohio D. command economies

Which of the following is a key requirement imposed under the Welfare Reform Act's new antipoverty program? A. states receiving TANF grants must impose work or school attendance requirements B. no one can receive TNAF benefits for more than 3 years while attending school C. no one can receive AFDC benefits for more than 5 years over their lifetime D. states receiving ADFC benefits must impose work or school attendance requirements

Which of the following represents one of the methods that the government uses to promote technology? A. protection of intellectual property B. provision of a greater number of public goods C. maintenance of stable regulated financial markets D. creation of public colleges and universities

Which of the following would an economist identify as a difficulty relating to environmental command-control regulations? A. high degree of inflexibility B. clear distinctions drawn between firms C. lack of incentive to reduce pollution D. obvious lack of loopholes

Which of the following would be classified as a situation where a third party benefits from a market transaction by others? A. City buying 10,000 trees for green space renewal projects. B. Increased levels of air pollution in neighborhoods near a football stadium. C. Allowing a mining company to use a natural lake to discharge waste. D. Two firms trading pollution credits to avoid cutting their toxic emissions.

While the traditional approach of U.S. government policies for environmental protection has had some level of success, some economists are proposing a change to A. a range of more flexible, market-oriented pollution control policies. B. a range of polices stipulating set limits governing pollutant emissions. C. stringent polices balance industry profit goals and environmental quality. D. stringent polices that will return the environment to its former pristine quality.

Why was the Clean Air Act amended in 1990? A. to reduce sulfur dioxide emissions from electric power plants to half of 1980 levels B. so flat fees for excessive pollution could be determined by the federal government C. to reduce sulfur dioxide emission through command-and-control regulations D. to reduce sulfur dioxide emissions from electric power plants to half of 1970 levels

With respect to the benefits of clean air and water, which of the following would most likely be classified as being relatively easy to value in economic terms? A. gains in farming, fishing and tourism B. gains from lower levels of corrosion C. gains in environmental enjoyment D. all of the above are correct answers

_______________ include both the private costs incurred by firms and also costs incurred by third parties outside the production process. A. Social costs B. Private costs C. Market costs D. External costs

____________________ describes a situation where a third party, outside the transaction, suffers from a market transaction by others. A. Negative externality B. Positive externality C. A spillover D. A market failure

The percentage of workers belonging to a union is higher in the A. 45-64 age range. B. 25-45 age range. C. 40 -65 age range. D. 30-50 age range.

A. 45-64 age range.

A labor union seeks to __________________ between employers and workers. A. change the balance of negotiations B. change the economic balance C. force employers to deal with individual workers D. lobby government for changes

A. change the balance of negotiations

The U.S. government strongly encouraged unions to be formed in the early 1940s because they held the view that unions would help to A. co-ordinate the all-out production efforts needed during World War II. B. develop uniform procedures for forming unions across the country. C. raise the standard of living of the American people during World War II. D. end the racial discrimination that was prevalent in American workplaces.

A. co-ordinate the all-out production efforts needed during World War II.

Negotiations between unions and a firm or firms is called __________________ . A. collective bargaining B. cooperative bargaining C. united bargaining D. organized bargaining

A. collective bargaining

Although the earnings gap between men and women in the U.S. labor market ___________ in the 1970s, it has _________________________ . A. did not change much; been declining since 1980 B. did not change much; been on the increase since 1980 C. increased, ; been declining since 1980 D. declined, been increasing since 1980

A. did not change much; been declining since 1980

As a result of the American workers' ability to sell their labor though a union, profit-making firms must pay wages A. exceeding the equilibrium wage those firms would otherwise have selected. B. at the intersection of the demand and supply labor curves. C. below the equilibrium wage level those firms would otherwise be able to pay. D. that match the preferred equilibrium wage these firms have selected.

A. exceeding the equilibrium wage those firms would otherwise have selected.

Which of the following industries is the least likely to employ a unionized labor force? A. finance, insurance and real estate B. transportation and public utilities C. government D. precision, production, and repair

A. finance, insurance and real estate

Any government policy that provides __________________ and _________________ deserves to be looked at twice, or even three times. A. gains to those with higher incomes; imposes costs on those with lower incomes B. gains to those with lower incomes; imposes costs on those with higher incomes C. public schooling; welfare benefits D. local tax revenue; state tax revenue

A. gains to those with higher incomes; imposes costs on those with lower incomes

The presence of organized labor in the U.S. labor market creates a situation that resembles a A. government acting as a negotiator between workers and employers. B. union official acting like lawyers negotiating legal agreements. C. for profit-firm acting cooperatively to reduce unequal wealth distribution. D. union acting as a monopoly in selling labor to firms.

A. government acting as a negotiator between workers and employers.

There is little evidence that countries with high union membership _______________________________, and also very little evidence that the reduction in U.S. union membership over time has brought ___________________ for the U.S. economy as a whole. A. tend to suffer economic damage as a result; broad benefits or costs B. have economically benefited; economics benefits C. have broader benefits as a result; economic damage D. tend to enjoy economic benefits as a result; harmful economic costs

A. tend to suffer economic damage as a result; broad benefits or costs

Factors that contributed to the current level of the earnings gap in the U.S. labor market between black and white workers include: A. the combination of changes in law and changes in social attitudes B. changes in production techniques made white workers unproductive C. a large decline in the average education levels for white workers D. a vast increase in the number of well-educated black workers and a

A. the combination of changes in law and changes in social attitudes

The proportion of workers in a number of the world's high-income economies who belong to unions, when compared to unionized workers in the U.S., is A. very high. B. very low. C. about the same, compared to Canada. D. high, compared to France and Spain.

A. very high

62. CleanAir Motors Inc. wants to build electric cars with no emissions. However, electric motors require innovative battery technology for adequate energy storage to meet basic daily commuting needs. The company has several possibilities for alternative battery technology, along with estimates of how these approaches would affect their costs of producing the cars and their sales of the cars. Based on these estimates, the table below shows the value of R&D projects that provide at least a certain private rate of return. Every investment would have an additional 2% social return: that is, an investment that pays at least a 6% return to the car company will pay at least an 8% return for society as a whole. If the opportunity cost of financial capital for CleanAir Motors Inc. is 10%, CleanAir Motors Inc. will invest ___ in R&D if it receives both the private and social benefits of this investment. A. $2000 B. $1500 C. $1000 D. $500

63. The SaferGlass Co. makes windshields for the automotive industry. It wants to develop a new product with shatterproof glass to increase safety. The development of the new glass requires them to change their production process significantly. The company has developed a list of possible ways of implementing the production process changes, along with estimates of how each would affect the production and sales costs. Based on these estimates, the table below shows the value of R&D projects that provide at least a certain social rate of return. Every investment in R&D would have an additional 3% social return: that is, an investment that pays at least a 4% return to the glass company will pay at least 7% return for society as a whole. If the opportunity cost of financial capital for SaferGlass Co. is 9%, the company will invest ______ in R&D if it receives only the private benefits of this investment. A. $400 B. $450 C. $500 D. $550

67. YummyCandiesCo. has developed a new candy bar that contains a full recommended daily allowance of vitamins and minerals. This invention will provide considerable spillover benefits to society. The table below shows the demand for the candy bars, the supply of candy bars if the company receives only the private benefits, and the supply of candy bars if the firm also receives the full social benefits. If the new candy bar were sold based only on private benefits, the equilibrium price and quantity would be A. $4, 100,000 b. $3, 150,000 c. $2, 200,000 d. $1, 250,000

80. Kip and Yale run separate mining companies in the same forest. Both pollute the river flowing through the forest with debris from their work. In the table below, the first row shows the current level of debris that makes its way into the river from their work. The following table set out information that shows how much it would cost each company to reduce its pollution by additional increments of 10 pounds. If each mining company is forced to cut its debris in half, the respective cost to Kip and Yale will be A. $5, $2 B. $10, $4 C. $30, $20 D. $30, $12

83. Carl and Don run separate chemical fertilizer manufacturing companies in the same industrial park. Both pollute the river flowing through the industrial park with debris and waste from their manufacturing processes. In the table below, the first row shows the current level of debris and waste each produces that makes its way into the river. The information in the table also indicates how much it would cost each manufacturer to reduce its pollution by additional increments of 10 pounds. If the government imposes a pollution tax of $7 for each 10 pounds of debris, total pollution will fall by ____ pounds, at a total cost of ____. A. 40; $28 B. 40; $17 C. 40; $22 D. 60; $30

85. Four companies, Alpha, Beta, Gamma and Delta, are burning coal to produce electricity. As a result, they also produce emissions. The first row of the table below shows the total pounds of emissions currently produced by each firm. The other rows of the table show the cost for each firm of reducing emissions by the first 50 tons, the second 50 tons, and so on. The government wants to reduce emissions by one third, and does so by issuing marketable permits based on the current level of emissions where the permits will shrink the allowable amount of pollution by one third. Alpha will reduce emissions by ____ tons, Beta will reduce emissions by ____ tons, Gamma will reduce emissions by ____ tons, Delta will reduce emissions by ____ tons, for a total cost of ____. A. 50, 150, 50, 250, $130 B. 50, 200, 0, 250, $150 C. 0, 200, 50, 250, $120 D. 50, 200, 50, 200, $100

88. Two logging companies are deciding whether or not to cut down a significant portion of a particular forest that both have access too. Both companies understand the environmental consequences of their actions, knowing that they are trading off higher profits for a better outcome from society's point of view. The payoffs facing these companies are given in the table below.From the table, we know that if Company 2 chooses to cut, Company 1 will choose to ______ the forest. If Company 2 chooses to not cut, Company 1 will choose to ______ the forest. A. cut, do not cut B. cut, cut C. do not cut, do not cut D. do not cut, cut

93. Bulgaria primarily produces two goods, nesting dolls and grapes. The production of both goods primarily requires labor. The following table shows possible combinations of nesting dolls and grapes. Suppose Bulgaria prefers grapes. Which of the following points is better? A. A B. B C. C D. E

A beekeeper decides to locate her business on a plot of land that is between an apple orchard and an elementary school. A negative externality that can result is A. the cost of the bee hives to the beekeeper. B. the possibility of the bees stinging the students at the school. C. the bees helping to pollinate the orchard, leading to more fruit. D. the honey the bees produce.

A government program guarantees $18,000 in income, even for those who do not work at all. If the recipient earns income by working, then the $18,000 benefit is reduced by 50 cents for each $1 earned. Will this program eliminate the poverty trap? A. Yes, enacting such a program will eliminate the poverty trap. B. No, enacting such a program may still reduce the incentive to work. C. Yes, and enacting such a program will cost the government less money. D. Yes, enacting such a program will create adequate incentive to work.

A method often used by economists to look at distribution of income in a society's economy involves A. programs for wealth redistribution. B. quintiles, or dividing a whole group into fifths. C. imposing taxes to redistribute wealth. D. quads, or dividing a whole group into fourths.

A public good is a good that is ____________________ , and thus is difficult for market producers to sell to individual consumers. A. excludable or rivalrous B. nonexcludable and nonrivalrous C. excludable and rivalrous D. unexcludable or unrivaled

A situation of __________ arises when one group receives a higher share of total income or wealth than others. A. poverty B. inequality C. poverty entrapment D. quintiles

A study by the Environmental Protection Agency looked at the costs and benefits of the Clean Air Act from 1970 to 1990. This study found that a middle-range estimate of the health and other benefits from cleaner air was $22 trillion. This amount was about __________________ than the costs of reducing the pollution. A. 10 time lower B. 44 times higher C. 10 times higher D. 44 times lower

Both Wisconsin and Illinois border Lake Michigan. The lake is becoming polluted and both states are deciding whether or not to clean it. If Wisconsin decides to clean the lake it will cost 1200 and generate social benefits of 1500 - however, Wisconsin will receive only 1100 of those social benefits while neighbor Illinois will receive the other 400. If Illinois cleans the lake, it will cost them 700 and generate social benefits of 900 - however, Illinois will receive only 600 of those benefits, Wisconsin will receive the remaining 300. If a state does not clean the lake, it experiences a cost of $0. If both states clean the lake, the payoffs will be A. Wisconsin gains 100, Illinois gains 200 B. Wisconsin gains 200, Illinois gains 300 C. Wisconsin gains 200, Illinois loses 100 D. Wisconsin gains 100, Illinois loses 100

Bringing the nations of the world to act together in addressing environmental issues that spill over national borders requires _______________ between countries with _________________ . A. a different approach to negotiations; similar income levels and sets of priorities B. a difficult set of negotiations; different income levels and sets of priorities C. a different approach to negotiations; low and middle-income levels. D. deliberate negotiations; high-income levels and similar sets of priorities.

Bruce is a single father with 1 child. He can work as a bagger at the local grocery store for $6 per hour up to 1,200 hours per year. He is eligible for welfare, and if he does not earn any income, he will receive $15,000 a year. If Bruce works, the government policy is to deduct 60 cents from his welfare stipend for every $1 that he earns in income. With this policy in place, if Bruce works 600 hours, his income will be A. $3,600 B. $16,440 C. $15,000 D. $12,840

Cathy can take either of two separate roads to drive to work. The first is a lightly used new toll road that is rarely congested. The second road is a local road with no tolls, but it is often congested and has many potholes. In this instance, the toll road is A. nonrivalrous and excludable B. rivalrous and nonexcludable C. nonrivalrous and nonexcludable D. rivalrous and excludable

Certain schools of economic thought suggest that a _____________ would reduce pollution in a __________________, when compared to command-and-control regulation. A. marketable permit; less cost-effective way B. pollution tax; flexible, more cost-effective way C. marketable permit; less flexible manner D. pollution tax; less cost effective, but flexible way

Economic inequality compares the share of the ____________ in society that is received by different groups; such as comparing the share of income received by the _________ to the share of income received by the _____________ . A. total wealth; top 10%; bottom 10% B. answers a and c are correct. C. total income; bottom 10%; top 10% D. none of the above are correct.

Environmentalist groups tend to prefer ________________ to ___________________. A. command-and-control regulations; marketable permits B. marketable permits; pollution charges C. pollution taxes; marketable permits D. marketable permits; monetary refunds

Every Lorenz curve diagram begins with a line __________________ . A. sloping down at a 45-degree angle B. sloping up at a 45-degree angle C. upward sloping U-shape D. downward sloping hump shape

Government developed a method called __________________ to assist the working poor through the tax system. The amount of the tax break ____________ with the amount of income earned, ________________ . A. eligible income credit; decreases; and by age of child B. earned income credit; increases; up to a point C. eligible income credit; increases; and by age of child D. earned income credit; decreases; up to a point

How does the cost of financial capital influence innovative research and development activities in a competitive market? A. at a high cost, firms demand a large quantity, as R&D projects return high rates. B. at a low cost, firms demand a large quantity, as R&D projects will likely return a higher rate. C. financial capital at a high cost means more projects are likely to pay a much higher return rate. D. at a low cost, the firm receives only small private benefits from investing in R&D.

If I'MSmartCo's research and development project succeeds, then A. market competition will ultimately discourage commercialization of the new technology. B. competitors may find a way to adapt and copy the underlying idea without incurring R&D costs. C. their success will be temporary because they will inevitably fall behind other innovative competitors. D. they will need to find a less expensive way to add even more desirable characteristics.

If a steel manufacturer considers the costs of labor and materials, as well as the broader costs of environmental injuries resulting from its manufacturing processes, A. its supply curve will be based on perceived benefits of maximizing utility. B. it is factoring in the social costs of the pollution it generates. C. its demand curve will be based on production choices relating to marginal costs. D. its costs will be the same as society's costs and all of the above.

If large numbers of individuals choose to behave as free riders, A. more of the public good will be available for paying riders. B. the public good may never be provided. C. public goods will quickly be privatized. D. public domain technologies become more difficult to obtain.

If the 2014 poverty line is based on the amount of money an individual has earned as income, then A. the poverty line will be adjusted to take the value of non-cash government assistance into account. B. government programs that provide non-cash assistance to the poor are not considered. C. the concept of what poverty means in the 21st century should be rethought from scratch. D. it will be difficult to compare poverty rates over time in a market-driven economy.

If the level of incomes rises for high-income workers but doesn't change for low-income workers, A. then poverty will not change and inequality will fall. B. then poverty will not change and inequality will rise. C. then poverty will rise and inequality will fall. D. then poverty will fall and inequality will rise.

In circumstances involving millions of emitters of small amounts of pollution who have no strong interest in trading, _________________ will typically offer a better choice for achieving desired reductions of environmental pollution levels. A. marketable permits B. pollution charges C. enhanced property rights D. ecotourism

In the U.S., government support programs that are focused specifically on the poor include which of the following? A. Medicaid credits B. welfare C. income stamps D. food credits

Market competition can provide _______________ for _________________ , A. unsustained profits; firms with marketable patents B. the needed incentive; discovering new technologies C. time; competitors to catch up with other's inventions D. an opportunity; competitors seeking out innovations

Marketable permits can be viewed as a form of improved _______________. A. command-and-control regulations B. property rights C. refundable tax credits D. flat fee pollution tax

One difficulty with direct government support of R&D is that it inevitably involves government decisions about ___________________. A. whether it can agree on the amount of social benefit conferred to private firms B. which of the vast number of proposed projects are worthwhile C. the location of the congressional district receiving the research funding. D. quantifying the social benefit conferred on a private firm by an R&D tax reduction.

One reason some economists doubt that patent protection encourages innovation is that economic studies show that inventors receive only __________________ of the total economic value of their inventions in countries that ______________ . A. one-half to two-thirds; previously had few patents B. one-third to one-half; already had patents C. one-third to one-half; previously had no patents D. one-half to two-thirds; had existing patents

Rather than arguing over whether the ultimate goal is zero pollution or a reasonable level of pollution, the immediate focus should be to tackle the environmental issues where the _____________________ and the __________________ . A. marginal benefits are least; marginal costs are greatest B. marginal benefits are greatest; marginal costs are least C. environmental benefits are greatest; social costs are least D. social costs are greatest; environmental benefits are least

Raven Farms raises a substantial number of bees and uses the honey to produce its own skin healing cream. Raven Farms is situated next to the Oakcreek Apple Orchard. The bees from Raven Farms pollinate Oakcreek's apple trees. In this instance, Raven Farms A. derives more private benefits and provides less social benefit. B. provides more social benefits than it derives in private benefits. C. provides a marginal social benefit and derives a complete private benefit. D. provides a complete social benefit and derives a marginal private benefit.

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 ______ employment and _____ wages for high-income workers. A. increase, decrease B. increase, increase C. decrease, decrease D. 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 shift the demand curve for low-income workers to the ______ while shifting the demand curve for high-income workers to the _____. A. left, left B. left, right C. right, left D. right, right

The main categories of market-oriented approaches to pollution control are A. redefined property rights; pollution permits; marketable charges. B. marketable permits; better-defined property rights; pollution charges. C. pollution charges; extended property rights; marketable permits. D. pollution permits; defined property rights; marketable charges.

The term ____________ refers to a market exchange that affects a third party who is outside or external to the exchange. A. social costs B. spillover C. market failure D. private costs

Those firms in the oil refining industry that can reduce pollution __________________ will do so _______________________ . A. for a flat charge; at the industrial level B. cheaply and easily; to minimize their pollution taxes C. for a flat charge; with the most expensive technologies D. cheaply and easily; with the most expensive technologies

To address a common poverty trap problem for many low-paid Americans whose jobs pay enough that a family could lose its eligibility for____________ , yet those jobs don't offer ______________________ either, some states guaranteed that children would not loose their coverage if their parents worked. A. food stamps; retirement benefits B. Medicaid; health insurance benefits C. Medicaid; drug insurance benefits D. food stamps; Medicaid benefits

Traditionally, policies for environmental protection in the U.S. have focused on __________________ pollutant could be emitted. A. eliminating the risk that any B. setting limits for how much of each C. avoiding the risk that any air D. eliminating the risk that a toxic

Under which of the following antipoverty programs does the federal government give a fixed amount of money to each state? A. ADFC B. TANF C. AFDC D. TNAF

When technology is advancing so quickly, even a patent from, say, two years ago may be ___________________, because __________________________ . A. somewhat outdated; few firms are relying on the technology B. completely outdated; no firm is relying on that technology any longer C. irrelevant; inventors are only receiving a slice of the social value. D. irrelevant; not every idea can remain under patent protection forever.

Which of the following have historically been more willing to sacrifice their environmental quality for some additional economic output? A. high-income, market-oriented economies B. low incomes and command economies C. the United States D. European Union

Which of the following is the most appropriate response of public policy to a negative externality like pollution? A. modernize, update, and restore homes in run down neighborhoods to decrease littering B. find ways to account for the social costs of the negative externality in economic decisions C. encourage high standards of public education to increase innovation capability of youth D. assist the private party creating the negative externality to receive more social benefits

Which of the following is used to describe the full spectrum of animal and plant genetic material? A. ecodiversity B. biodiversity C. envirodiversity D. duodiversity

Which of the following legislation was enacted in 1998 to allow copyright to be extended from 50 to 70 years after an author's death? A. Thomas Edison Patent Restoration Act B. Sonny Bono Copyright Term Extension Act C. Sonny Bono Patent Restoration Act D. Thomas Edison Copyright Term Extension Act

Which of the following will need to strike some balance between economic output and environmental quality as a prominent climate change priority? A. countries with high-incomes B. every country C. market-oriented countries D. command-oriented countries

Why did Gordon Gould have to endure a lengthy legal battle in order to receive a patent for his innovative laser idea concocted in 1957? A. by 1957, several other scientists had filed patents ahead of him, but none of their laser inventions worked B. he delayed applying to patent his idea, mistakenly believing he needed to have a working laser to apply C. by 1957, his laser was no longer the inspiration of a single person. D. by 1957, his laser technology overlapped previous laser patents.

__________________ involves active efforts to improve the job opportunities or outcomes of minority groups or women. A. Meritorious action B. Affirmative action C. Anti-discriminative action D. Aligned action

B. Affirmative action

What Act was passed to allow American workers to opt out of the union in their workplace? A. Labor Relations Act of 1947 B. Taft-Hartley Act of 1947 C. National Labor-Management Relations Act of 1935 D. National Workers' Rights Act of 1940

B. Taft-Hartley Act of 1947

Of the many available policies to reduce discrimination by race and gender in the U.S. labor market, the most controversial is likely to be A. laws prohibiting discrimination B. affirmative action goals and quotas C. increased access to child care D. improved educational opportunities

B. affirmative action goals and quotas

Members of labor unions are able to use their ________________ to achieve better economic outcomes. A. cooperative nature B. bargaining power C. secret ballot votes D. excess supply of labor

B. bargaining power

. In recent years, the U.S. labor market has experienced a __________ in the earnings gap between men and women. One of the main factors behind this is ____________________ . A. big decline; men have steadily been less productive and their wages have fallen B. decline; women's' career focus and rewards gained with top-level job expertise C. increase; women are getting married and having children earlier in life D. big increase; an increase in gender-based discrimination in labor markets

B. decline; women's' career focus and rewards gained with top-level job expertise

Once the U.S. government opened its domestic markets to international trade, the competition from imported cars, steel, and other products caused demand for similar U.S. goods to A. continually increase leading to an overall increase in union membership. B. fall, leading to lower output, fewer workers, and an overall decline in union membership. C. decline, causing workers to call upon governments to pass indexed wage protection laws. D. rise, but laws made it difficult for new workers to become union members.

B. fall, leading to lower output, fewer workers, and an overall decline in union membership.

The earnings gap in the U.S. labor market between black and white workers __________ in the 1960s and 1970s, but, since 1980, the gap _______________. A. rose substantially; has not changed much B. fell substantially; is pretty well unchanged C. rose substantially, has declined substantially D. fell substantially, has substantially increased

B. fell substantially; is pretty well unchanged

There is sufficient evidence showing that union workers in the manufacturing sector generally A. tend to hold those jobs for less time than non-union workers. B. have higher productivity than non-union workers. C. have fewer years of experience than non-union workers, D. have lower productivity than non-union workers

B. have higher productivity than non-union workers.

In the United States, the number of unionized government jobs has __________________. A. increased dramatically B. increased modestly C. modestly declined D. dramatically declined

B. increased modestly

The Taft-Hartley Act made the legal climate ____________________ , and union membership levels ___________________ . A. more encouraging to women seeking to unionize; increased B. less encouraging to union movements; soon started declining C. friendlier to blacks seeking to form unions; increased sharply D. less friendly for firefighters wanting to unionize; stagnated.

B. less encouraging to union movements; soon started declining

With regard to labor unions, which of the following is an accurate statement? A. percentage of members is higher for women than men B. membership is lower for agriculture or service-oriented jobs C. membership is lower in government and manufacturing D. membership is higher for blacks or Hispanics than for whites

B. membership is lower for agriculture or service-oriented jobs

In the United States, the share of wage and salary for workers who belong to unions A. declined sharply in the 1930s and 1940s. B. rose sharply in the 1930s and 1940s. C. rose sharply in the 1950s and 1960s. D. declined sharply in the 1940s and 1950s.

B. rose sharply in the 1930s and 1940s.

If U.S. immigration consists of mainly low-skilled workers, then an increase in immigration __________ the wages of low-skilled workers. A. will increase B. will reduce C. may increase or reduce D. will not affect

B. will reduce

58. A drug company is deciding how much to invest in Research and Development into finding a cure for diabetes. The table below shows the company's demand for financial capital for R&D based on its expected rates of return from selling the cure. Every investment provides an additional 4% social return: that is, an investment that pays at least a 5% return to the drug company will create at least a 9% return for society as a whole. If the opportunity cost of financial capital for the drug company is 7%, the drug company will invest ___ in R&D if it receives only the private benefits of this investment. A. $308 B. $264 C. $250 D. $228

61. CleanAir Motors Inc. wants to build electric cars with no emissions. However, electric motors require innovative battery technology for adequate energy storage to meet basic daily commuting needs. The company has several possibilities for alternative battery technology, along with estimates of how these approaches would affect their costs of producing the cars and their sales of the cars. These estimates are set out in the table below. Every investment has an additional 2% social return: that is, an investment that pays at least a 6% return to the drug company will pay at least an 8% return for society as a whole. If the opportunity cost of financial capital for Cleaner Motors Inc. is 10%, Cleaner Motors Inc. will invest ___ in R&D if it receives only the private benefits of this investment. A. $2000 B. $1500 C. $1000 D. $ 500

65. ToasterOvensInc. is developing technology to make a toaster oven than uses less electricity. If successful, the technology will significantly reduce the amount of energy that is wasted due to product inefficiencies. If the firm sells only in response to the market price, the quantity shown in the third column of the table below is supplied. If the firm were also to receive the broader social benefits of the new technology, the willingness to supply is shown in the fourth column. If the firm were to receive a price based only on private benefits, the equilibrium price and quantity would be A. $16, 740 B. $17, 680 C. $18, 620 D. $19, 660

81. Kip and Yale run separate mining companies in the same forest. Both pollute the river flowing through the forest with debris from their work. In the table below, the first row shows the current level of debris that makes its way into the river from their work. The following table set out information that show how much it would cost each company to reduce its pollution by additional increments of 10 pounds.If a system of tradable permits is introduced, the total cost of cutting current debris in half is A. $40 B. $45 C. $50 D. $55

82. Carl and Don run separate chemical fertilizer manufacturing companies in the same industrial park. Both pollute the river flowing through the industrial park with waste from their manufacturing processes. In the table below, the first row shows the current level of waste that makes its way into the river from their respective operations. The table also sets out information that indicates how much it would cost each manufacturer to reduce its pollution by additional increments of 10 pounds. If each company is required to reduce debris by exactly 20 pounds, the total cost will be A. $7 B. $14 C. $21 D. $30

90. A country is currently creating 40 million tons of toxic waste per year. The table below shows the marginal costs and benefits of reducing the amount of toxic waste to various amounts. What level of toxic waste should the country reduce to? A. 30 million tons B. 20 million tons C. 10 million tons D. 0 tons

92. Ireland and England both fish in the Irish Sea. If this sea is over-fished, the fish stocks will fall and fish will eventually become extinct. Both countries have to decide whether to fish a lot or a little. The payoffs are given in the table below. The outcome of this game is ________ , which illustrates the _________ . A. both countries choosing to fish a little, prisoners dilemma B. both countries choosing to fish a lot, externalities C. both countries choosing to fish a lot, prisoner's dilemma D. both countries choosing to fish a little, externalities

96. Two rubber companies, Boing and Twang, are currently producing along, and polluting, the same river. Both companies are considering whether to install pollution filters on their factories. These filters cost $15 million each. If a filter is installed, there is a benefit of $20 million, but this benefit is divided equally between the two companies. If both firms install the filters, then Boing will earn ________ and Twang will earn ________ . A. $0 million, $0 million B. -$5 million, -$5 million C. $5 million, $5 million D. $10 million, $10 million

A Lorenz curve graphs the _________________ received by everyone up to a certain quintile. A. unequal distribution over time B. normative shares of income C. cumulative shares of income D. total share of income

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 __________________ . A. left quintile; right quintile B. right quintile; left quintile C. horizontal axis; vertical axis D. vertical axis; horizontal axis

A ___________________ would lead a large greenhouse gas emitter to reduce emissions by less. A. flat charge B. higher pollution tax C. lower pollution tax D. pollution tax

A beekeeper decides to locate her business on a plot of land that is between an apple orchard and an elementary school. A positive externality that can result is A. the cost of the bee hives to the beekeeper. B. the possibility of the bees stinging the students at the school. C. the bees helping to pollinate the orchard, leading to more fruit. D. the honey the bees produce.

A complementary approach to supporting R&D that does not involve the government's close scrutiny of particular R&D projects is to give firms A. a permanent monopoly over all their inventions that never expires. B. the option to fund all R&D projects through colleges or universities. C. a reduction in corporate taxes based on amount of R&D performed. D. assurance that antitrust authorities challenge cooperative R&D efforts.

A pollution charge gives the trucking industry an incentive to reduce its emissions, as long as the _____________ of reducing the emissions is _______________ . A. total cost; less than the tax B. total cost; equal to the social cost C. marginal cost; less than the tax D. marginal cost; equal to the social cost

A positive externality arises in a situation where a third party, outside the transaction, A. fails to allocate resources efficiently. B. suffers from a market transaction by others. C. benefits from a market transaction by others. D. pays a pollution tax to balance social costs.

An individual who wants others to pay for public goods, but plans to use those goods for their own purposes, is often referred to as a ______________ . A. tax evader B. excludable C. free rider D. nonexcludable

An individual whose income level is just above the poverty line would most likely be classified as being a member of the _____________ . A. working poor B. poverty trapped C. near-poor D. illiterate poor

Around the world, the cities with the dirtiest air and water are typically found in ___________________________ . A. high-income countries like France and the U.S. B. in low-income African nations C. low-income countries in Africa and Asia D. in low-income East Asian nations

Because of the legal protection for intellectual property, such as patents, a firm has a better chance of recouping the costs of research if it pursues A. basic technological research B. technologically innovative research C. applied technological research D. technologically positive research

Both Wisconsin and Illinois border Lake Michigan. The lake is becoming polluted and both states are deciding whether or not to clean it. If Wisconsin decides to clean the lake it will cost 1200 and generate social benefits of 1500 - however, Wisconsin will receive only 1100 of those social benefits while neighbor Illinois will receive the other 400. If Illinois cleans the lake, it will cost them 700 and generate social benefits of 900 - however, Illinois will receive only 600 of those benefits, Wisconsin will receive the remaining 300. If a state does not clean the lake, it experiences a cost of $0. If Wisconsin does not clean the lake and Michigan does then the payoffs will be A. Wisconsin gains 200, Illinois gains 100 B. Wisconsin gains 200, Illinois loses 100 C. Wisconsin gains 300, Illinois loses 100 D. Wisconsin gains 300, Illinois gains 100

Both Wisconsin and Illinois border Lake Michigan. The lake is becoming polluted and both states are deciding whether or not to clean it. If Wisconsin decides to clean the lake it will cost 1200 and generate social benefits of 1500 - however, Wisconsin will receive only 1100 of those social benefits while neighbor Illinois will receive the other 400. If Illinois cleans the lake, it will cost them 700 and generate social benefits of 900 - however, Illinois will receive only 600 of those benefits, Wisconsin will receive the remaining 300. If a state does not clean the lake, it experiences a cost of $0. In the absence of any agreement, the outcome of this game will be A. neither state cleaning the lake B. Wisconsin cleaning the lake, Illinois not cleaning the lake C. Wisconsin not cleaning the lake, Illinois cleaning the lake D. both states cleaning the lake

Environmentalist groups act to directly reduce of emissions by A. allowing a limited amount of pollution to occur. B. allowing a declining amount of pollution to occur. C. buying marketable emission permits and not re-selling them. D. buying, trading, and re-selling marketable emission permits.

For a positive externality, _________________________than the social benefits. A. private benefits of an action are more B. social benefits of an action are more C. private benefits of an action are less D. social costs of an action are less

From the Great Depression of the 1930s until 1996, the United States' most visible antipoverty program was Aid to Families with Dependent Children, which provided cash payments to A. married men with families who were below the poverty line. B. married women with families who were below the poverty line. C. all mothers with children who were below the poverty line. D. only those orphans who were living below the poverty line.

I'mAComputerCo. would likely be more willing to undertake an innovative research project to reduce the amount of electricity required to run its computers if there were some form of guarantee that if it succeeded, A. it will enjoy a small temporary advantage over the competition. B. it would be able to set price to compensate for development costs. C. it could sell the new computers as a monopoly for at least a few years. D. it would receive a government bailout if losses could drive it out of business.

If a firm's efforts to be technologically innovative will create a positive externality, then that firm will likely A. have more incentive to innovate to the extent that the whole of society desires. B. invest significantly more in its research and development activities. C. have less incentive to innovate to the extent that the whole of society desires. D. demand more financial capital investment to expand its R&D activities.

If a government wants to establish a marketable permit program, it must begin by determining A. how many permits will be issued in the overall market. B. the overall price to be charged for each permit. C. the overall quantity of a certain pollutant that will be allowed. D. whether or not permits will be issued free of charge.

If a rise in incomes is the same proportion for both low-income and high-income workers, A. then poverty will rise and inequality will remain unchanged. B. then poverty will rise and inequality will rise. C. then poverty will fall and inequality will remain unchanged. D. then poverty will fall and inequality will fall.

If market-oriented environmental tools offer a mechanism or providing either the same environmental protection at lower cost, or providing a greater degree of environmental protection for the same cost, then this ___________ will arise for ________________ . A. spillover; market-oriented countries B. trade-off; command-oriented countries C. trade-off; all countries around the globe D. spillover; only the high-income countries

If no externalities of pollution exist in a particular industry, the interaction of demand and supply _________________________ . A. is based on benefits individuals perceive while maximizing utility B. is based on choices about production relative to total average costs C. will coordinate social costs and benefits D. shifts so supply has no relation to social costs

If the government altered its invention patent policy from a monopolistic policy to a competitive policy, then consumers A. would face higher prices and less quantity in the long-run. B. would face lower prices and less quantity in the short-run C. would benefit from the lower price and greater quantity sold. D. would benefit from lower prices due to increased public investments

If the poverty trap were made even more difficult to overcome because a working mother will have extra expenses like transportation and child care that a nonworking mother will not face, then A. she will have a powerful incentive to work more than one job. B. the family better off than if she did not work at all. C. her economic gains from working will be even smaller. D. working now and in the future is even more attractive.

If you are highly asthmatic, then having high levels of industrial air pollutants waft over your house every day A. is a voluntary exchange. B. is positively a voluntary exchange. C. would be a negative externality. D. would be an external voluntary exchange.

In the U.S., the command-and-control environmental laws of the early 1970s, together with the ensuing amendments and updates that have been made to them over time, A. were necessary as US industries had zero incentive to control pollution. B. were an inexpensive incentive for industrial polluters to improve performance. C. are given considerable credit for cleaner air and water in recent decades. D. draws distinctions between the needs of firms and costly equipment upgrades.

In the case of technology, it can sometimes be quite difficult for ______________ to earn a ____________ rate of return from their inventions. A. individuals; high B. public investors; low C. private investors; reasonable D. the whole of society; high

In the framework of a Lorenz curve, the final entry in the cumulative income column needs to be _________. A. total income B. cumulative income C. 100% D. 45%

Lance is a single father with 1 child. He can work as a bagger at the local grocery store for $6 per hour up to 1,200 hours per year. He is eligible for welfare, and if he does not earn any income, he will receive $15,000 a year. If Lance works, the government policy is to deduct 60 cents from his welfare stipend for every $1 that he earns in income. When Lance works 1,200 hours, he receives _______ in government support and his total income is _______. A. $10,680, $15,000 B. $7,800, $15,000 C. $10,680, $17,880 D. $7,800, $17,880

Market failure describes a situation in which the market itself ______________________ in a way that balances social costs and benefits. A. remains outside the transaction B. incurs the costs outside the production process C. fails to allocate resources efficiently D. avoids externalities

Market-oriented environmental tools _______________ for firms to take the social costs of pollution into account and ____________________ in reacting to these incentives. A. draw distinctions; lower the social costs incurred B. lack incentives; prohibit firms from having flexibility C. create incentives; allow firms some flexibility D. specify particular technology; lower the social costs incurred

Measuring economic inequality involves comparing those with ________________ . A. high incomes and those below the poverty line B. high incomes and those with low incomes C. high incomes middle incomes, and low incomes D. high incomes and those near the poverty line

On average, it can cost _____________ and take ___________ to discover a new drug, perform the necessary safety tests, and bring the drug to market. A. $500 million; five years B. $100 million; a year C. $800 million; more than a decade D. $300 million; less than a decade

Once it's patent application has been accepted, a firm is able to earn ________ on its product, which ___________________________________ . A. an increased rate of return for investors; raises doubts further R&D activities B. more profit; will allow it to recover the biggest slice of the social value created C. monopoly profits; offers an incentive for research and development to take place D. competitive profits; creates incentive for continuing innovative R&D projects

One concern that environmentalists have is that market-oriented environmental tools are A. an inflexible took that won't reduce pollution levels. B. an excuse to implement strict limits on emissions. C. an excuse to allow pollution to be maintained or to grow. D. able to achieve desired reductions in pollution at a lower cost.

Paddy has lots of cousins. With a family reunion in the near future, Paddy decides to collect income information for himself and all his cousins. He obtains the following data points: $52,000, $22,000, $92,000, $8,000, $118,000, $62,000, $38,000, $14,000, $132,000, $46,000, $26,000, $96,000, $54,000, $110,000, $80,000. The share of income received by the bottom quintile of this income distribution is _____, which is ______ than that for the bottom quintile of the U.S. income distribution in 2005. A. 2.6%, lower B. 4.6%, lower C. 4.6%, higher D. 2.6%, higher

Since 1969, when the Cuyahoga River in Ohio was so polluted that it spontaneously burst into flame, the overall quality of water in the U.S. has A. steadily declined. B. remained unchanged. C. steadily improved. D. remained a non-issue.

Some studies done by economists have found that the original inventor receives _________________________________________________ from innovations, while other businesses and new product users receive the rest of the benefit. A. one-quarter to one-half of the social and economic benefits B. one-quarter to one-third of social and economic benefits C. one-third to one-half of the total economic benefits D. one-quarter to one-third of the total economic benefits

The concept of a poverty line raises a number of complex questions. Which of the following represents such a question? A. Should the poverty line be adjusted to take income equality into account? B. Do antipoverty programs belong in a command economy? C. Should the national poverty line be applied in all states? D. Why give cash and not just food stamps to the poor?

The federal government funds __________ of the nation's basic research, much of which ____________________________. A. more than half; carried out by private firms B. less than half; conducted in the labs of private firms C. about half; conducted at colleges and universities D. more than half; conducted a government run facilities

The food stamp benefit A. is a state funded program started in 1984. B. does not contribute to the poverty trap from an economic viewpoint. C. has time limits and is not a complete disincentive to work. D. is reduced by $35 for every $100 earned and a and c above.

The objective of imposing a higher pollution tax is to A. ensure firms have pollution charge credits for all reduced emissions. B. provide incentive for firms to maintain regulation emission levels. C. provide adequate incentive for firms to reduce their emissions by more. D. ensure firms must pay the pollution charge for all reduced emissions.

The problem of pollution typically arises in ______________ economies around the world. A. high-income B. low-income C. high or low-income D. middle income

The property rights approach to environmental issues often becomes highly relevant in cases involving __________________. A. greenhouse gas emissions B. harmful affects of acid rain C. endangered species D. fresh water resources

The term "applied research" refers to research that is focused on a particular product that promises A. to offer commercial applications in the short-term. B. to offer commercial applications in the long-term. C. an economic payoff in the short or medium-term. D. an economic payoff in the medium or long-term.

When a government establishes a marketable permit program to address environmental pollution, it is actually issuing a form of A. command-and-control regulation. B. pollution tax. C. permit to pollute. D. inflexible, costly regulation.

When making decisions about what safety systems should be required in cars or airplanes, the ___________________ will only approve rules where the estimated cost per life saved is __________ or less. A. U.S. Senate; $5 million B. U.S. Congress; $2 million C. Environmental Protection Agency; $3 million D. Environmental Regulation Agency; $7 million

Which of the following circumstances would encourage I'MaPharmaCo. to increase research and development activities? A. cost of financial capital is high B. patent term expires in 20 years C. cost of financial capital is low D. a low rate of return is likely

Which of the following would most likely be recognized as a defining characteristic of a public good? A. the good is nonrivalrous item B. the good is nonexcludable item C. the good is both a and b above D. the good is a separate and identifiable item

While the U.S. command-and-control environmental regulations initiated in the 1970s have been very effective at reducing pollution, some economists have difficulty with the legislation because A. it often requires different pollution-control technology for each polluter. B. it usually requires different standards for all current and potential polluters. C. it is full of fine print and exceptions, and costly for some firms to comply with. D. it is not subject to compromises in the political process and all of the above.

Why do U.S. economists commonly refer to externalities as an example of market failure? A. firms that are required to pay social costs of externalities produce more B. externalities present a case where markets consider all social costs C. externalities present a case where markets only consider some social costs D. firms avoid having to pay social costs of externalities by lowering prices

Why would a typical U.S. business fail to take the social costs of pollution into consideration during the development of their operating strategies? A. the range of flexible, market-oriented pollution control policies are flawed B. government regulated the limits for how much pollutant can be emitted C. it isn't required to pay any of the cost of cleaning up its pollution D. it is following the principle of voluntary exchange of benefits

______________ allows the government to collect wealth for redistribution based on the amount of stored wealth that is being passed on in the form of an inheritance. A. An inheritance tax B. A redistribution tax C. An estate tax D. A death tax

_________________ is the level where half of all families had more than that level and half had less. A. The first quintile B. The third quintile C. The median D. The quintile

If an economist were to disregard unionized government employees, then current U.S. labor market statistics would show that A. 10% of the workers employed by private firms work for a union. B. 98% of the workers employed by private firms aren't unionized. C. 8% of the workers employed by private firms work for a union. D. 80% of the workers employed by private firms aren't unionized.

C. 8% of the workers employed by private firms work for a union.

Union members earn ______________ than non-union members, even after adjusting for factors such as _____________________________ . A. about 10% more; racial discrimination and immigration. B. about the same; union dues and cost of lawyers for collective bargaining. C. about 20% more; years of work experience and education level. D. about 30% more; healthcare and retirement benefits.

C. about 20% more; years of work experience and education level.

Since 1960, the earnings gap between men and women in the U.S. labor market has A. steadily risen. B. been completely eliminated. C. continued to narrow. D. increased throughout the 1970s.

C. continued to narrow.

Say the average increase in pay for non-union workers in 2011 is 2% across the U.S. If a workers' union successfully negotiates a 3 year collective agreement that provides a 4.5% raise in 2011, and a 4.3% raise in 2013, then the for-profit employer will typically A. begin to fire its older union workers. B. replace union workers with non-union workers. C. curtail expansion of labor as a trade-off. D. replace union workers with foreign workers.

C. curtail expansion of labor as a trade-off.

Union membership has ____________ in the United States because of _________________________ . A. risen; the shift from service to manufacturing industries B. risen; increased global trade from U.S. manufacturers C. fallen; laws enacted making it more difficult to unionize D. fallen; laws making workplace protection more difficult

C. fallen; laws enacted making it more difficult to unionize

The earnings gap in the U.S. labor market between black and white workers ___________________. A. was completely eliminated by the end of the 1960s B. has not diminished at all since 1960 C. has diminished since 1960, but a gap still remains D. existed in the 1960s but was reversed throughout the 1970s

C. has diminished since 1960, but a gap still remains

In the U.S. manufacturing sector, unionized jobs have _________________ in recent years. A. increased modestly B. have trended up C. have trended down D. declined dramatically

C. have trended down

Measured in absolute numbers, the level of immigration during the 1990s into the United States was _________ compared with the levels of previous decades. When considered as a percentage of the population at the time, the level of immigration into the United States during the 1990s was ________ than the levels experienced during the earlier decades of the twentieth century. A. lower, higher B. lower, lower C. higher, lower D. higher, higher

C. higher, lower

A _____________ is an organization of workers that negotiates with employers as a group over wages and working conditions. A. affirmative union B. collective union C. labor union D. cooperative union

C. labor union

The costs that immigrants impose on governments arise mainly in terms of _________, which are primarily the responsibilities of the _________ government(s). A. administration, state and local B. administration, federal C. public schools and healthcare, state and local D. public schools and healthcare, federal

C. public schools and healthcare, state and local

The study of unions and their economic effects needs to focus on ___________________, not on _____________ . A. economic benefits; economic harms B. economic harms; economic benefits C. specific situations; generalities D. generalities; specific situations

C. specific situations; generalities

If a for-profit firm that has paid out record bonuses to its executive every year while underfunding contributions to unionized workers' pensions required under the collective agreement then attempts to reduce workers' pension entitlements, the union members will most likely A. enter into collective bargaining. B. be unable to defend against this action. C. take defensive strike action. D. receive higher wages instead.

C. take defensive strike action.

Which of the following arguments would most likely be presented by a critic of labor unions? A. unions oppose suppression of wages by profit-seeking firms B. unions have a tendency to gain as much as possible in the long-term C. unions can prohibit economic growth if new technology is blocked D. unions have a higher percentage of women members than men

C. unions can prohibit economic growth if new technology is blocked

60. A drug company is deciding how much to invest in Research and Development into finding a cure stomach cancer. The table below shows the company's demand for financial capital for R&D of this drug, based on its expected rates of return from selling the drug. Every investment has an additional 4% social return: that is, an investment that pays at least a 5% return to the drug company will create at least a 9% return for society as a whole. If the opportunity cost of financial capital for the drug company falls from 7% to 5%, the drug company will invest ___ more in R&D if it receives only the private benefits of this investment. A. $14 B. $16 C. $24 D. $30

68. YummyCandiesCo. has developed a new candy bar that contains a full recommended daily allowance of vitamins and minerals. This invention will provide considerable spillover benefits to society. The table below shows the demand for the candy bars, the supply of candy bars if the company receives only the private benefits, and the supply of candy bars if the firm also receives the full social benefits. If the firm's candy bars were sold on the basis of both private and social benefits, the equilibrium price and quantity would be A. $4, 100,000 B. $3, 150,000 C. $2, 200,000 D. $1, 250,000

78. The supply and demand conditions facing a firm that makes widgets and generates a negative externality by dumping a highly toxic sludge in a nearby river is given in the table below. The equilibrium price and quantity when only private costs are taken into account are A. Price = $55, Quantity = 30 B. Price = $40, Quantity = 55 C. Price = $30, Quantity = 20 D. Price = $30, Quantity = 80

86. Michigan (MI) and Wisconsin (WI) both border Lake Michigan. Both states pollute Lake Michigan and both states suffer the consequences of the pollution. However, the two states face a prisoner's dilemma of the sort studied in Chapter 12. Each country must decide whether to protect or not to protect Lake Michigan from pollution. The payoffs from the choices are shown in the table below. From the table, we know that if Wisconsin chooses to protect the lake, Michigan will choose to ______ the lake. If Wisconsin chooses to not protect the lake, Michigan will choose to ______ the lake A. protect, protect B. not protect, protect C. protect, not protect D. not protect, not protect

89. Two logging companies are deciding whether or not to cut down a significant portion of a particular forest that both have access too. Both companies understand the environmental consequences of their actions, knowing that they are trading off higher profits for a better outcome from society's point of view. The payoffs facing these companies are given in the table below. From the table, we know that the outcome of this game will be A. neither Company choosing to cut the forest B. Company 1 choosing to cut, Company 2 choosing not to cut C. Company 2 choosing to cut, Company 1 choosing not to cut D. both companies choosing to cut the forest

91. A country is currently creating 40 million tons of toxic waste per year. The table below shows the marginal costs and benefits of reducing the amount of toxic waste to various amounts. What number belongs in place of X? A. 700 B. 900 C. 1300 D. 1500

95. Bulgaria primarily produces two goods, nesting dolls and grapes. The production of both goods primarily requires labor. The following table shows possible combinations of nesting dolls and grapes. Which of the following points is not feasible? A. A B. B C. C D. D

97. Two rubber companies, Boing and Twang, are currently producing along, and polluting, the same river. Both companies are considering whether to install pollution filters on their factories. These filters cost $15 million each. If a filter is installed, there is a benefit of $20 million, but this benefit is divided equally between the two companies. In the absence of any government intervention or agreement between the firms, A. both firms will install filters B. Boing will install a filter, Twang will not C. Twang will install a filter, Boing will not D. neither firm will install a filter

A group of 10 golfing buddies have the following annual incomes: $32,000, $12,000, $56,000, $120,000, $10,000, $38,000, $70,000, $16,000, $20,000, $24,000. The share of income received by the lowest quintile of this income distribution is _______ than that for the bottom quintile of the U.S. income distribution in 2005. The share of income received by the highest quintile of this income distribution is _______ than that for the highest quintile of the U.S. income distribution in 2005. A. lower, lower B. lower, higher C. higher, higher D. higher, lower

A highly innovative firm operating in a competitive market will usually have A. a permanent edge over its competitors. B. a lack of ability to earn reasonable profits. C. vast numbers of competitors catching up to its innovations. D. some time before competitors catch up to its innovations.

As environmental protection increases, A. the biggest marginal benefits are achieved first, smaller marginal benefits follow. B. inexpensive and easy methods of reducing pollution begin to dwindle. C. the more costly and innovative methods can be readily avoided. D. in addition to a and b above, the quality of environmental protection increases.

Command-and-control regulation is a body of law that A. fails to consider private costs of firms. B. specifies allowable quantities of pollution. C. details which pollution-control technologies must be used. D. can include both b and c.

Crystal is a single mother with 2 children. She can earn $10 per hour and can work up to 1,800 hours per year. However, if she does not earn any income at all, she will receive government benefits totaling $18,000 per year. For every $1 of income she earns, her level of government support is reduced by $1. Crystal's labor-leisure opportunity set A. has doubled B. is smaller with the government support program C. is not affected by the government support program D. is larger with the government support program

Generally, market competition and technology can A. support each other. B. oppose each other. C. compliment each other. D. sometimes a or b.

How does being caught in a poverty tap affect an individual's future job prospects? A. it causes working in the future even less attractive B. it causes a lack of job experience and contacts C. it creates a powerful incentive to acquire skills training D. it creates the outcomes presented in both a and b

If Congress voted every few years to redefine completely what poverty means, A. it will be useful to have a poverty line whose basic definition changes a lot. B. then it will set two poverty lines that it applies to welfare and the near-poor. C. then a substantial share of the U.S. population will subsist in dire poverty. D. then it would be difficult to compare poverty rates over time.

If a society decides to reduce the level of economic inequality, which of the following sets of tools can it use? A. a tax imposed on the value of inheritances B. redistribution from those with high incomes to those with low incomes C. trying to assure that a ladder of opportunity is widely available D. the three mains sets of tools it can use include all of the above

If incomes rise for both low-income and high-income workers, but rise less for the high-income workers, A. then poverty will rise and inequality will fall B. then poverty will fall and inequality will rise. C. then poverty will rise and inequality will rise. D. then poverty will fall and inequality will fall.

If pollutants are emitted into the air and water, what costs might be incurred as a result? A. compromised recreation possibilities B. decreased property values C. loss from destruction of wildlife habitat D. health injuries and all of the above

If the income level falls for low-income workers, but remains unchanged for high-income workers, A. then poverty will rise and inequality will fall. B. then poverty will fall and inequality will fall. C. then poverty will fall and inequality will rise. D. then poverty will rise and inequality will rise.

If the maintenance fees for a lighthouse are paid in full each year by charging port fees, then the lighthouse is A. rivalrous and excludable B. nonrivalrous and excludable C. rivalrous and nonexcludable D. nonrivalrous and nonexcludable

If the research and development efforts of a firm have ended in failure, then A. the firm could be driven out of business. B. the firm will suffer losses. C. R & D projects rarely end in total failure. D. the firm could experience a and/or b.

In addition to the current levels of air and water pollution, a list of important environmental issues would most likely include: A. emissions of greenhouse gases B. safe disposal of hazardous waste materials C. destruction of wetlands and other habitats D. extinction of species and all of the above

In circumstances dealing with poverty, the term ______________ means taking income from those with higher incomes and providing income to those with lower incomes. A. safety net B. estate tax C. minimum wage D. redistribution

In economic terms, when I'mASoftwareCo. invests in new technology innovations, A. competitive externalities arise. B. potential externalities arise. C. negative externalities arise. D. positive externalities arise.

In the U.S., poverty rates are relatively low A. for the elderly B. for the well-educated C. for the male-headed households D. for whites and all of the above

It is commonly understood that every invention A. has its own story of discovery and development. B. often involved a parade of characters and firms. C. has a unique story that develops over years or decades. D. often results in new technology and all of the above.

Low and middle-income societies correctly point out that high-income countries have historically A. been the primary contributors to greenhouse warming. B. been the primary contributors to reduced biodiversity. C. failed to put environmental protection ahead of corporate profits. D. legitimately lacked moral standing in addition to all the above.

Many economists would view market competition as supporting the invention of new technology because it A. provides an competitive edge over competitors for the long-term. B. encourages methods of producing existing products at less cost. C. encourages creation of products with desirable characteristics. D. provides short-term above-normal profits, and b and c as well.

Marketable permits work best when there are _____________________ permit holders who are highly interested in trading. A. several dozen or a several hundred B. less than a hundred C. more than a thousand D. a few dozen or a few hundred

One reason that the welfare reform bill TANF worked as well as it did is that A. the EIC was greatly expanded in the early 1990s. B. the EIC was greatly expanded in the late 1980s. C. it was able to generate an increase in the returns to work for the poor. D. its worth about $2,500 per family with children and all of the above.

Paddy and Mick are the only two inhabitants of a small island off the coast of Ireland. They burn coal to keep their houses warm at night. However, this coal burning is harming the air quality on their island. Both Paddy and Mick could install air filters on their chimneys. These filters cost 50 each. Each filter provides a social benefit of 80, but those benefits are divided equally among Paddy and Mick. If both Paddy and Mick install the filters A. both will gain 10 B. both will gain 0 C. both will lose 30 D. both will gain 30

Poverty is measured by the number of people who fall below A. a certain level of income. B. the income needed for a basic standard of living. C. the nation's economic poverty line. D. all the above are correct.

Property rights are the legal rights of ownership on which others are A. allowed to infringe by paying the property owner's pollution tax. B. able to enforce use of pollution-control technologies. C. able to specify allowable quantities of pollution. D. not allowed to infringe without paying compensation.

Robert is a widower raising 5 year old twin boys. In 2013, after the plant where he had worked for 10 years shut down, he was able to obtain part-time work that paid him $13,000.00 a year. He receives the earned income tax credit. If Robert receives a raise, so that he will earn $16,350, the earned income credit will be A. reduced by 21 cents per dollar. B. reduced by 25 cents per dollar. C. phased out completely. D. will not be reduced.

Some economists argue that if privately owned firms were required to pay the social costs of their pollution, the result would be: A. each would create less pollution B. each would lower production to decrease pollution levels C. their supply curves will represent all of those social costs D. the price of goods will rise and a and b above

Some of the leading ecotourism destinations include: A. Costa Rica and Panama in Central America B. Malaysia and the Galapagos Islands C. the Serengeti in Tanzania; the Amazon rain forests D. the Caribbean, New Zealand and all of the above

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. A. increase, decrease B. increase, increase C. decrease, decrease D. decrease, increase

Suppose that the government implements a new policy that provides free skills training to all low-skilled workers, which makes them more productive and turns them into high-skilled workers. This will ______ the supply of low-skilled workers and ______ the supply of high-skilled workers. A. increase, decrease B. increase, increase C. decrease, decrease D. decrease, increase

The arguments presented by economists regarding U.S. environmental command-and-control regulations generally A. accept the goal of reducing pollution. B. question the regulations as being the best policy tools for meeting reduction goals. C. assert that these laws are clear of the usual fine print, loopholes and exceptions. D. lack flexibility and a and b above.

The challenge of preserving biodiversity, A. any nation itself can reduce emissions to solve global warming. B. any nation acting alone can protect biodiversity around the world. C. includes the full spectrum of animal and plant genetic material. D. a nation can protect biodiversity within its own borders and c.

The difference between playing a board game and a playing a video game is the A. elimination of free riders B. involvement of fewer rivals C. involvement of free riders D. technology of the video game

The flexibility of marketable permits program developed for the oil refining industry is credited with achieving the reduction in lead pollution for __________ less cost than command-and-control regulation would have required. A. at least 50% B. 50% C. 20% D. at least 20%

The problem of pollution arises in primarily ______________ economies around the world. A. command-oriented B. market-oriented C. middle income D. both a and b

The refundable charge of 5 or 10 cents for returning recyclable cans and bottles works like A. an incentive to throw bottles and cans in the trash. B. command-and-control regulation. C. a market permit program. D. a pollution tax incentive to avoid littering.

The trick in graphing a Lorenz curve is that you must transform the shares of income ________________, which are shown in the first column of numbers in the table, into ___________, shown in the ________ column of numbers. A. for each distribution; total income; third B. for each distribution; total income; second C. for each specific quintile; cumulative income, third D. for each specific quintile; cumulative income; second

There seems to be little evidence that poor families experienced _______________ as a result of ____________ . A. a tax refund; having earned income B. a tax break; having earned income C. an increased standard of living; EIC D. a reduced standard of living; TANF

Tim is a single father with 1 child. He can work as a bagger at the local grocery store for $6 per hour up to 1,200 hours per year. He is eligible for welfare, and if he does not earn any income, he will receive $15,000 a year. If Tim works, the government policy is to deduct 60 cents from his welfare stipend for every $1 that he earns in income. This government policy provides a monetary incentive to work, because A. it pays the same amount, regardless of how much Tim works D. benefits are not phased out C. Tim receives a stipend regardless of whether he works or not D. Tim's income level increases the more he works

To be effective, U.S. command-and-control environmental regulation required A. social costs of industrial pollution to become unavoidable business costs. B. firms to take the social costs of pollution into account. C. firms to increase their costs by installing specified anti-pollution equipment. D. the EPA to oversee all environmental laws and all of the above.

Under current U.S. copyright legislation, works produced on a for-hire basis and owned by firms enjoy monopoly protection for A. 50 years after date of publication. B. 70 years after date of publication. C. 75 years from the date of publication. D. 95 years from the date of publication.

Under which of the following government programs would the federal government's welfare spending rise or fall depending on the number of poor people, and on how each state set its own welfare contribution? A. ADFC B. TANF C. TNAF D. AFDC

What type of environmental tool was adopted by the U.S. government in 1990, in order to reduce emissions of coal burning electricity-generating plants? A. shrinkable marketable permits B. free marketable permits C. command-and-control permits D. both a and b above

When it is costly or impossible to exclude someone who hasn't paid to use a particular good from using it, then that good is classified as being A. unexcludable B. free rider C. public good D. nonexcludable

When reference is made to the ____________, it means the specific amount of income needed for a basic standard of living. A. poverty trap B. income line C. income gap D. poverty line

When the quantity of environmental protection is low so that pollution is extensive, then there are usually ______________ to reduce pollution and the ______________ . A. a few inexpensive and easy ways; average benefit are slightly higher B. a lot of expensive and innovative methods; marginal benefits are quite high C. only a few expensive and innovative methods; average benefits are higher D. a lot of cheap and easy ways; marginal benefits of doing so are quite high

Which of the following is a safety net that could provide a decent standard of living and/or incentives to work? A. government-subsidized school lunches and breakfasts B. Low Income Home Energy Assistance Program C. the Special Supplemental Food Program for WIC D. Supplemental Security Income and the above

Which of the following is an example of economic output that can injure the environment? A. gold mine discharging arsenic into a natural lake it's using for a tailings pond B. paper mill discharging raw chemical waste into a river C. excessive clear cutting of wood resources by logging companies D. radio-active waste leaking into a river, and all of the above

Which of the following is viewed as a fundamental building block of the U.S. economic way of thinking? A. the principle of setting high toxic emission limits to preserve a healthy environment B. the belief that industry must be allowed to prevail over the environment C. the needs of both parties to a voluntary exchange must be completely satisfied D. the principle that a system of voluntary exchange benefits both parties

Which of the following mechanisms will increase the rate of return that can be earned by inventors of new technology? A. intellectual property rights B. government research and development grants C. cooperative research ventures between companies D. patents, copyrights, and each of the above

Which of the following would be classified as a positive externality? A. a surcharge for ambulance service is shifted to property taxes B. reselling outdated textbooks to under-funded public schools C. removing government education subsidies for public schools D. converting a derelict empty lot to a public vegetable garden

Which of the following would most likely be identified as being the ultimate goal of public policies that pertain to technology? A. to help inventors earn higher rates of return B. to help inventors earn reasonable returns C. to encourage a stream of inventions that monetarily benefit the inventor. D. to encourage a stream of invention that benefits the whole of society.

Which of the following would some economists be likely to perceive as the most appropriate public policy response to a positive externality created by the development of a highly innovative new technology? A. not taking into account the negative externality associated with social benefit B. not taking into account the positive externality associated with social benefit C. have reasonable rates of return not based on a notion of unearned social benefits D. develop ways to provide a greater share of the social benefits to the innovator

While the majority of economists acknowledge that intellectual property rights do provide a method for increasing the rate of return for inventors, some have suggested there are number of reasons to doubt whether patents provide A. sufficient benefits for society as a whole. B. completely appropriate benefits for the whole of society. C. completely appropriate incentives for innovation. D. sufficient incentives for innovation, as well as c.

Why did Thomas Edison vow that he would work only on ideas for things that people would buy? A. only things that people will buy produce a social benefit. B. only ideas that people will pay a high price for are protected by patents. C. he wanted to hold the record for registering the most patents. D. no government would buy his first patented invention.

Why did inequality of household income increase in the United States in recent decades? A. growth of single-parent families at the top end of the income distribution B. higher-earner couples near the top end of the income distribution C. increase in earnings received by high-skilled labor relative to low-skilled labor D. demand for high-skilled labor at higher wages increased and b and c

With respect to market forces and/or labor markets that determine peoples' wages, which of the following is a true statement? A. labor markets consider how much a family needs for health care B. market forces consider what happens to families in their business decisions C. labor markets consider how much a family needs for necessities D. labor markets create considerable inequalities relating to income

Discriminatory impulses in the labor market can emerge at a number of levels: A. among managers B. among workers C. among customers D. all of the above

D. all of the above

The existence of labor unions forces employers to deal with workers ________________________ . A. individually, rather than as a collective B. cooperatively, rather than uncooperatively C. equitably, rather than inequitably D. collectively, rather than as individuals

D. collectively, rather than as individuals

If immigration consists of mainly high-skilled workers, then a(n) ________ in immigration will ________ the wages of high-skilled workers. A. increase, increase B. increase, not affect C. decrease, decrease D. decrease, increase

D. decrease, increase

Of all the available policies to reduce discrimination by race and gender, the most costly is likely to be: A. affirmative action outreach B. affirmative action goals and quotas C. laws prohibiting discrimination D. improved educational opportunities

D. improved educational opportunities

From a competitive firms' point of view, the key question regarding the higher wages paid to union workers is whether the higher wage level A. is matched by non-union producers. B. can be passed on to its costumers. C. leads to workers with more experience. D. is matched with higher productivity.

D. is matched with higher productivity.

Unions can be perceived as being economically harmful when they A. strike infrequently B. successfully negotiate higher wages C. support modernization and new technology D. none of the above

D. none of the above

In order to provide its workforce with an alternative to forming a union, the U.S. government passed laws about work conditions, namely, A. minimum wage and employment insurance. B. regulation of workers' pensions. C. paid parental leave for workers. D. overtime and all of the above.

D. overtime and all of the above.

Which of the following is most likely to have a large union membership that experiences little import competition? A. telemarketing B. lawyers in the legal services sector C. the real estate industry D. police services

D. police services

Labor unions can: A. be a primary line of defense against suppressed wage levels. B. be controversial in a for-profit market driven economy. C. bring better economic gains for their memberships. D. protect workers' pensions and all of the above.

D. protect workers' pensions and all of the above.

In the Unites States, worker membership in labor unions has been A. steadily growing for 50 years. B. steadily growing in the last decade. C. steadily growing due to immigration. D. steadily declining for 50 years.

D. steadily declining for 50 years.

If unions help workers secure pension benefits, so that those workers are less dependent on government social assistance after their retirement, then A. the for-profit unionized industries will be less productive. B. the for-profit unionized industries will be harmed. C. the union is economically harmful. D. the union is economically beneficial.

D. the union is economically beneficial.

Discrimination in labor markets arises if _________________________, as measured by education, receive different pay because of their _______________________ . A. workers with different skill levels; race or gender B. workers with no experience; race or marital status C. workers with work experience; race or marital status D. workers with the same skill levels; race or gender

Exam 4 MicroEconomics; Thurman, Tarrant County College

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