Suppose the United Auto Workers union successfully lobbies Congress to enact an import quota on all foreign
tutor4helpyouQuestion 1
Suppose the United Auto Workers union successfully lobbies Congress to enact an import quota on all foreign cars imported into the U.S. Which of the following is most likely to occur in the U.S.?
Answer
A fall in the price of imported cars and increase in the price of domestics
An increase in the demand for domestic cars
A decrease in American autoworker wages
Higher unemployment among American autoworkers
A fall in the demand for imports
Question 2
In a market economy,
Answer
Resources are allocated by the private parties who own the resources
Resources are allocated by the various local, state, and federal planning committees and zoning commissions
Shortages never exist
Surpluses never exist
Question 3
You receive a big raise at work. As a result of your now higher income, you stop bringing your lunch from home and start eating lunch at a nearby restaurant. Your homemade lunches must be
Answer
A substitute
A complement
Normal goods
Inferior goods
Standardized products
Question 4
If an increase in the price of bicycles leads to an increase in the demand for bus transportation, the bicycles and bus rides must be
Answer
Substitutes
Complements
Normal goods
Inferior goods
Standardized products
Question 5
A publicized report that finds orange juice prevents certain diseases will have what effect on the equilibrium price and quantity of orange juice?
Answer
Price will increase, quantity will decrease
Price will increase, quantity will increase
Price will decrease, quantity will decrease
Price will decrease, quantity will increase
The new equilibrium price and quantity can not be determined
Question 6
There is an increase in the quantity of pizza purchased but no change in the price of pizza. Which of the following is most likely to have occurred?
Answer
Supply increased while demand remained unchanged
Both supply and demand increased
Supply increased while the quantity demanded increased
Demand increased while supply remained unchanged
Both supply and demand decreased
Question 7
Two goods are said to be substitutes in consumption if
Answer
An increase in the price of one leads to a fall in the demand for the other
An increase in the price of one leads to an increase in the demand for the other
An increase in the price of one leads to an increase in the supply of the other
A fall in the price of one leads to an increase in the demand for the other
A decrease in the price of one leads to a decrease in the supply of the other
Question 8
As consumer incomes rise, the demand curve for Good X shifts to the right. Given this, Good X must be
Answer
Produced by a competitive firm
A high quality product
A substitute good
A normal good
An inferior good
Question 9
The Law of Demand states that price and
Answer
Demand are positively related
Quantity demanded are positively related
Demand are negatively related
Quantity demanded are negatively related
Question 10
If a consumer always eats cheese with macaroni, then for that consumer macaroni and cheese are examples of:
Answer
Substitutes
Complements
Normal goods
Inferior goods
Standardized products
Question 11
Markets that fall between pure competition and monopoly are called:
Answer
Anti-competitive
Imperfectly competitive
Command markets
Tweener markets
Monopsonistic
Question 12
As the baby boom generation continues to age, what will happen to the equilibrium price and quantity of homes in retirement communities?
Answer
Price will increase, quantity will decrease
Price will increase, quantity will increase
Price will decrease, quantity will decrease
Price will decrease, quantity will increase
The new equilibrium price and quantity can not be determined
Question 13
Which of the following is least consistent with the pure market economy?
Answer
An established legal system that arbitrates contract disputes
An individual accepting a job for $1 per hour
The institution of private property rights
The existence of a minimum wage
Private property rights
Question 14
From a standpoint of resource allocation, a surplus of corn implies
Answer
Consumers would prefer some of the resources used to produce corn be used to produce something else
The market for agricultural products is failing
Government should purchase the surplus to protect the farmers
The price of corn is too low and should be increased
The quantity demanded of corn exceeds the quantity supplied
Question 15
China's growth has been a result of
Answer
Increased domestic demand
Rapidly increasing inflation
Investment in other economies
Trade deficits
Trade surpluses
Question 16
An increase in the wage from $6 per hour to $6.50 per hour causes a worker to increase her hours worked from 40 to 45 hours per week. For this worker, which effect dominates?
Answer
Substitution
Income
Wage
Wealth
Leisure
Question 17
A firm increases the number of workers it hires from 50 to 52, and as a result, output increases from 100 to 110. Each of the additional units of output can be sold for $2. What is the marginal revenue product of the 52nd
worker?
Answer
2
5
10
20
50
Question 18
The additional revenue that accrues to a firm when an additional worker is hired is
Answer
The marginal revenue product of labor
The marginal product of labor
The marginal revenue of labor
The marginal utility of labor
Question 19
Price ceilings may be used on a selective basis to
Answer
Control inflation in the economy
Make a good cheaper to produce
Boost the income of firms
Make a good accessible to all income levels
Increase workers' incomes
Question 20
A maximum allowable price for a good or service is a
Answer
Price ceiling
Price floor
Minimum wage
Market equilibrium
Price support
Question 21
If an increase in the wage rate from $6.00 per hour to $6.50 per hour causes a worker to decrease his hours worked from 40 to 35 hours per week, which effect dominates?
Answer
Substitution
Income
Wage
Wealth
Leisure
Question 22
One of the earliest known rent control laws was instituted in which city and when?
Answer
New York at the start of WWII
Washington D.C. during the Civil War
Paris in the 1700s
Rome in the 1400s
Chicago during the Great Depression
Question 23
A firm increases the number of workers it hires from 50 to 52 and, as a result, output increases from 100 to 110. Each of the additional units of output can be sold for $2. What is the marginal product of the 52nd worker?
Answer
2
5
10
20
50
Question 24
Owners of rent controlled property may attempt to increase profits by
Answer
Raising rents
Improving the quality of their rental units
Taking under-the-table payments
Converting commercial properties to rental properties
All of the above
Question 25
Which effect dominates if a workers supply curve for labor is negatively sloped?
Answer
Substitution
Income
Wage
Wealth
Leisure
Question 26
Which of the following measures the change in the hours of work that occurs when there is a change in income, other things equal?
Answer
The supply of labor curve
The substitution effect
The income effect
Marginal productivity
The wage effect
Question 27
The Law of Diminishing Returns states that, as additional units of a variable input are added to a given amount of a fixed input, increases in output will
Answer
Increase
Decline
Stay the same
Accelerate
Become erratic
Question 28
In 1981, the U.S. federal minimum wage was increased to
Answer
$2.00 per hour
$2.50 per hour
$3.35 per hour
$4.00 per hour
$5.15 per hour
Question 29
Price floors are often instituted for which of the following purposes?
Answer
To prevent inflation
To make goods and services accessible to all income levels
To increase the income of sellers
To increase the wages of workers
Question 30
Rent control laws will _____________ the search costs of potential renters.
Answer
Increase
Decrease
Eliminate
Mitigate
Reimburse
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