Multiple choice questions:
Question 1
"Present value" refers to the:
value today of some amount of money to be received in the future.
current value of money held in a bank account.
amount to which some current amount of money will grow over time.
interest rate specified when a loan contract is signed.
Question 2
1- W < MIRP; W < MIRC
2- W = MIRP; W < MIRC
3- W = MIRP; W = MIRC
4- W > MIRP; W >MIRC
Refer to the above list. The outcome in a monopsony labor market is shown by:
1.
2.
3.
4.
Question 3
(Last Word) According to Yale University's Environmental Performance Index (EPI):
countries with lower GDP per person tend to have healthier environments.
countries with higher GDP per person tend to have healthier environments.
there is no correlation between GDP per person and environmental quality.
growth in GDP per person initially improves environmental quality and then gradually reduces it.
Question 4
A BTU is the amount of energy needed to:
raise the temperature of one pound of water by one degree Fahrenheit.
boil one gallon of water for one minute.
raise the air temperature one degree Celsius for one hour.
raise the temperature of one pint of water by one degree Celsius.
Question 5
A monopsonist's wage cost in hiring an additional worker is the:
worker's wage rate.
worker's wage rate plus the wage increases paid to all workers already employed.
worker's wage rate adjusted for the lower price that must be charged for the extra output.
marginal wage cost less the wage rate.
Question 6
A profit-maximizing firm employs resources to the point where:
MRC = MP.
Resource price equals product price.
MRP = MRC.
MP = product price.
Question 7
About half of U.S. electricity is generated from:
hydroelectric.
petroleum.
nuclear energy.
coal.
Question 8
According to international comparisons, which nation had the highest hourly wages in U.S. dollar terms in 2007?
United States
Germany
Denmark
Sweden
Question 9
According to some supporters of the minimum wage, it has very small or even nonexistent negative employment effects because:
the demand for minimum wage labor is highly elastic.
it reduces turnover among minimum wage workers, prompts employers to use them more efficiently, and thus raises their average productivity.
it encourages teenagers to stay in school.
employers substitute lower fringe benefits for higher pay, keeping their compensation costs the same.
Question 10
By reducing labor turnover, unions may increase productivity because a lower turnover rate:
results in a less-experienced work force.
increases the incentive for firms to provide training to their workers.
allows firms to employ a greater number of younger, more energetic workers.
increases the incentive for firms to substitute labor for capital in the production process.
Question 11
Capitalist income (corporate profits, interest, and rent) has:
declined sharply since 1900 because of the growing strength of labor unions.
remained approximately constant since 1900.
increased significantly because of rising rents.
fallen since 1900 because of the declining importance of corporations.
Question 12
Compensating differences in wages:
compensate workers for differences in their human capital.
are wage differences that compensate for differences in the desirability of jobs.
describe the tendency for the wages of all occupations to adjust to the median level.
do not exist if jobs have different nonmonetary characteristics.
Question 13
Compensation paid in proportion to the number of units of personal output best describes:
royalties.
profit-sharing.
bonuses.
piece rates.
Question 14
Craft unions:
attempt to organize workers at all skill levels in a firm or industry.
have been declared illegal by Federal legislation.
only organize workers who have a particular skill.
attempt to increase the supply of their particular type of labor.
Question 15
Critics of minimum-wage legislation argue that it:
keeps inefficient producers in business.
reduces employment.
undermines incentives to work.
is deflationary.
Question 16
Critics of the minimum wage argue that as an antipoverty device it is "poorly targeted." By this they mean that:
the minimum wage only applies to a small percentage of the labor force.
many who benefit from the minimum wage are not poor.
the government has been unable to enforce the minimum wage.
the average level of wages in the economy is considerably higher than the minimum wage.
Question 17
Defined narrowly as wages and salaries, labor's share of the national income is about:
70 percent.
53 percent.
42 percent.
89 percent.
Question 18
Economic or pure rent is:
a payment made for the use of housing, factory buildings, or capital goods.
a payment for resources used in the production of "free goods."
a payment for the use of those resources whose supply is perfectly elastic.
the price paid for the use of land and other nonreproducible resources.
Question 19
Elasticity of resource demand is measured by the:
absolute change in resource quantity demanded divided by the absolute change in resource price.
percentage change in resource quantity demanded divided by the percentage change in resource price.
absolute change in resource price divided by the absolute change in resource quantity demanded.
percentage change in resource price divided by the percentage change in resource quantity demanded.
Question 20
Empirical studies suggest that the efficiency loss associated with the misallocation of labor caused by the union wage advantage is:
$6 billion per year.
about 2 percent of domestic output.
less than one-half of one percent of domestic output.
about 4 percent of domestic output.
Question 21
Extraction costs of a non-renewable resource include the:
cost of removal from the ground only.
cost of removal from the ground plus the cost of preparation for sale.
cost of removal from the ground, the cost of preparation for sale, and the cost of not being able to extract and sell the resource in the future.
cost of removal from the ground plus replanting costs.
Question 22
Forestry companies typically harvest and replant an area when trees are:
very young and growing slowly.
middle aged and growing rapidly.
near the end of their rapid growth period.
extremely old and about to die anyway.
Question 23
Henry George advocated a single tax on:
real capital.
entrepreneurial profits.
land.
labor income.
Question 24
In fisheries management, a fishery is defined as:
an operation that breeds and releases fish and other marine animals into the wild.
a stock of fish or other marine animals that can be thought of as a logically distinct group.
a company that harvests fish or other marine animals.
a government organization that regulates the harvesting of fish and other marine animals.
Question 25
In his book Progress and Poverty, Henry George argued that:
poverty is associated with the personal characteristics of individuals and therefore cannot be remedied by government antipoverty programs.
economic rent could be heavily taxed without impairing the supply of land or therefore the productive capacity of the economy.
rents should not be taxed because rental income is the basic source of saving, which ultimately permits a high level of investment and economic growth.
taxes on rents are undesirable because they have a severe disincentive effect on landlords.
Question 26
In the United States, the rate of unionization is:
higher in mining than in government.
lower in transportation than agriculture.
higher in transportation than in retail trade.
lower in government than in finance, insurance, and real estate.
Question 27
In the United States:
whites have higher unionization rates than African-Americans.
men have higher unionization rates than women.
managers have higher unionization rates than transportation workers.
workers in mining have higher unionization rates than workers in government.
Question 28
In the context of labor markets, shirking refers to:
the nonmonetary disadvantages of certain jobs.
the neglecting or evading of work.
the elimination of monitoring costs.
any scheme where pay is directly related to worker output.
Question 29
Interest is the:
price paid for the use of money.
opportunity cost of time.
expectation of a future return on investment.
reward for consuming rather than saving.
Question 30
Marginal product is:
the output of the least skilled worker.
a worker's output multiplied by the price at which each unit can be sold.
the amount an additional worker adds to the firm's total output.
the amount any given worker contributes to the firm's total revenue.
Question 31
Marginal resource cost is:
the increase in total resource cost associated with the production of one more unit of output.
the increase in total resource cost associated with the hire of one more unit of the resource.
total resource cost divided by the number of inputs employed.
the change in total revenue associated with the employment of one more unit of the resource.
Question 32
Marginal revenue product measures the:
amount by which the extra production of one more worker increases a firm's total revenue.
decline in product price that a firm must accept to sell the extra output of one more worker.
increase in total resource cost resulting from the hire of one extra unit of a resource.
increase in total revenue resulting from the production of one more unit of a product.
Question 33
Occupational licensing:
functions essentially the same as inclusive unionism.
attracts large numbers of workers and therefore depresses wages.
often restricts occupational entry and raises the incomes of license holders.
has been declared illegal in the majority of states.
Question 34
Other things equal, biodiesel becomes economically viable (as or less costly than using oil) when oil prices reach _____ or more per barrel.
$60
$80
$100
$120
Question 35
Other things equal, ethanol made from corn becomes economically viable (as or less costly than using oil) when oil prices reach _____ or more per barrel.
$60
$80
$100
$120
Question 36
Over the past two decades, total and per capita water use in the United States have:
both increased.
leveled off and fallen, respectively.
fallen and leveled off, respectively.
increased and fallen, respectively.
Question 37
Power plants with the lowest operating costs tend to:
have the lowest fixed costs in terms of construction.
have the highest fixed costs in terms of construction.
operate on the smallest scale of energy production.
generate the cleanest energy.
Question 38
Productive inputs that are actually or virtually fixed in supply are known as:
renewable natural resources.
natural capital.
non-renewable natural resources.
alternative fuels.
Question 39
Pure or economic profit is:
the amount by which accounting profits exceed normal profits.
determined by subtracting explicit costs from total revenue.
the return required to retain entrepreneurial talent in some particular line of production.
the return to any resource the supply of which is perfectly inelastic.
Question 40
Relative to 1800, today in the world there are:
more people but lower per-capita consumption.
more people but the same per-capita consumption.
more people and higher per-capita consumption.
the same number of people but higher per-capita consumption.
Question 41
Resource pricing is important because:
resource prices are a major determinant of money incomes.
resource prices allocate scarce resources among alternative uses.
resource prices, along with resource productivity, are important to firms in minimizing their costs.
of all of these reasons.
Question 42
Since 1850, the:
supply and demand for productive resources have grown at the same rate.
supply of productive resources has grown faster than the demand for those resources.
demand for productive resources has grown faster than the supply of those resources.
supply of productive resources has increased, while the demand has fallen.
Question 43
Since 1950, the energy efficiency of the United States economy in terms of producing goods and services has:
not changed.
more than doubled.
risen about 50 percent.
risen more than threefold.
Question 44
Since 1960, real hourly compensation in the United States has approximately:
remained the same.
risen by 40 percent.
doubled.
tripled.
Question 45
State right-to-work laws:
permit employers to hire nonunion workers only if union labor is unavailable.
prohibit employers from discriminating against minority groups in hiring workers.
prohibit unions from discriminating against minority groups in recruiting members.
make compulsory union membership (for example, a union shop) illegal.
Question 46
The "time-value of money" refers to the fact that:
a given amount of money becomes more valuable over time.
a given amount of money is more valuable the sooner it is obtained.
people expect monetary compensation for their labor time.
a given amount of money today is equivalent to a smaller amount of money in the future.
Question 47
The MRP curve for labor:
intersects the firm's labor demand curve from above.
is the firm's labor demand curve.
lies below the firm's labor demand curve.
lies above the firm's labor demand curve.
Question 48
The MRP curve for labor:
is downsloping and shows the relationship between wage rates and the quantity of labor demanded.
is perfectly elastic if the firm is selling its output competitively.
is upsloping and lies above the labor supply curve.
will shift location when the wage rate changes.
Question 49
The change in a firm's total revenue that results from hiring an additional worker is measured by:
marginal product.
marginal revenue.
marginal revenue product.
average revenue product.
Question 50
The demand for land is:
perfectly elastic.
perfectly inelastic.
upsloping.
downsloping.
Question 51
The elasticity of resource demand measures the:
responsiveness of workers to changes in wage rates.
responsiveness of producers to changes in resource prices.
ratio of marginal revenue product to resource price.
sensitivity of marginal revenue product to changes in product price.
Question 52
The incentive function of prices:
indicates that price increases bring forth more of a resource.
is the idea that competitive markets will always clear.
applies to all resources.
only applies to land.
Question 53
The marginal productivity theory of income distribution has been criticized because:
the resulting distribution of income is likely to be too equal to maintain production incentives.
income from inherited property is inconsistent with the theory.
purely competitive conditions characterize most resource markets.
it fails to recognize that resource demand is derived from product demand.
Question 54
The marginal productivity theory of income distribution suggests that:
government should subsidize the most productive workers through a system of transfer payments.
each individual should receive income based on his contribution to total output.
resource owners should receive income based on the idea of "from each according to his ability, to each according to his wants."
resource owners should receive income based upon their needs.
Question 55
The marginal revenue product schedule is:
the same whether the firm is selling in a purely competitive or imperfectly competitive market.
the firm's resource demand schedule.
the firm's resource supply schedule.
upsloping.
Question 56
The purely competitive employer of resource A will maximize the profits from A by equating the:
price of A with the MRP of A.
marginal productivity of A with the MRC of A.
marginal productivity of A with the price of A.
price of A with the MRC of A.
Question 57
The real interest rate can be estimated by:
subtracting the pure interest rate from the nominal interest rate.
dividing the nominal interest rate by the consumer price index.
subtracting the nominal interest rate from the rate of inflation.
subtracting the rate of inflation from the nominal interest rate.
Question 58
The real rate of interest is the interest rate:
charged on long-term government bonds.
associated with a riskless loan.
that large commercial banks charge their best customers.
after adjustment has been made for inflation.
Question 59
The substitution effect indicates that a profit-seeking firm will use:
more of an input whose price has fallen and less of other inputs in producing a given output.
more of all inputs if production costs fall.
more of those inputs whose marginal productivity is the greatest.
less of an input whose price has fallen and more of other inputs in producing a given output.
Question 60
The supply of land is:
almost perfectly inelastic.
negatively sloped.
relatively elastic.
perfectly elastic.
Question 61
The total fertility rate necessary to keep the population constant is approximately equal to:
1.0.
1.5.
2.1.
3.0.
Question 62
The total fertility rate:
measures the average number of children that a woman is expected to have during her lifetime.
measures the average number of children that each couple is expected to have during their lifetime.
equals the rate of population change over time.
rises as income rises.
Question 63
The user cost of extracting a non-renewable resource is:
the sum of the dollar expenditures incurred to extract the resource.
the cost of not being able to extract it in the future if it is extracted and sold in the present.
the selling price of the resource to the companies using it to produce goods and services.
directly proportional to how much of the non-renewable resource remains.
Question 64
The value today of a sum of money to be received in the future is referred to as:
the future value of that sum of money.
the present value of that sum of money.
compound interest.
the time-value of money.
Question 65
To say that land rent performs no incentive function means that:
higher rental payments will not bring forth a larger quantity of land.
rent is not a cost to specific firms but it is a cost from the standpoint of the economy as a whole.
rent does not allocate land in terms of productive efficiency.
rent tends to allocate land into the most productive uses.
Question 66
Usury laws:
allocate funds from low-productivity to high-productivity investments.
establish a legal ceiling on interest rates.
make more funds available to low-income borrowers.
create a surplus of loanable funds.
Question 67
What is the relationship between living standards and birthrates?
The relationship is negative at low levels of income, but becomes increasingly positive as incomes rise.
They are unrelated.
The relationship is positive (directly related).
The relationship is negative (inversely related).
Question 68
When the elasticity coefficient for resource demand is greater than one, resource demand is:
inelastic.
elastic.
unit-elastic.
perfectly inelastic.
Question 69
When the elasticity coefficient for resource demand is less than one, resource demand is:
inelastic.
elastic.
unit-elastic.
infinitely elastic.
Question 70
Which of the following bargaining tactics is illegal?
a lockout
a strike
refusal to meet with union representatives
hiring strikebreakers
Question 71
Which of the following is a market imperfection that might explain persistent wage differentials within an occupation?
geographical immobility of workers
readily available information about job opportunities and pay
principal-agent problems
compensating wage differentials
Question 72
Which of the following is considered a non-renewable natural resource?
Solar power.
Coal.
Oceans.
Aquifers.
Question 73
Which of the following is not a component of the demand for loanable funds?
household purchases of housing and durable consumer goods
business purchases of capital goods
government financing of the public debt
household saving
Question 74
Which of the following is not a source of loanable funds?
the saving of households
business saving
commercial bank lending
government budget deficits
Question 75
Which of the following is true about U.S. energy consumption and per capita real GDP since 1988?
Per capita energy consumption and per capita real GDP have both risen.
Per capita consumption of energy has been relatively constant, while per capita real GDP has risen.
Per capita energy consumption and per capita real GDP have both fallen.
Per capita energy consumption has fallen, while per capita real GDP has risen.
Question 76
Which of the following occupations is among the ten projected most rapidly declining U.S. occupations in terms of percentage increases?
medical assistants
veterinarians
college professors
postal service workers
Question 77
Which of the following occupations is not among the ten projected fastest growing U.S. occupations in terms of percentage increases?
school teachers
data communication analysts
athletic trainers
personal and home care aides
Question 78
Which of the following occupations is projected to be the fastest growing in the U.S. in terms of percentage increases?
medical assistants
biomedical engineers
home health aides
software engineers
Question 79
Which of the following statements is correct?
Economic profits can properly be regarded as the salaries received by the hired managers of corporations.
Economic rent is a price paid for productive land resources whose supply is perfectly inelastic.
Economic profits would be nonexistent in a dynamic, purely competitive economy.
Economic or pure profit is the minimum return which entrepreneurs must receive to continue in a particular line of production.
Question 80
Which of the following tactics is most associated with the demand-enhancement union model?
Reducing the price of inputs that are substitutes for union workers.
Lobbying for increases in public expenditures on the product it is producing.
Restricting the number of workers allowed to work in the industry.
Increasing the price of products that are complements for the one it is producing.