Eco202 exam 3

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Question 1 (2 points)

Question 1 Unsaved

In a perfectly competitive labor market, the least-cost combination rule for resource use

Question 1 options:

A) assures the firm an economic profit.

B) requires that resources be used in combinations such that marginal products are equal.

C) requires that the marginal physical product per dollar spent for each resource is equalized.

D) assures the firm a normal profit.

Question 2 (2 points)

Question 2 Unsaved

A monopolist hires fewer workers than a perfectly competitive industry, other things being equal, because

Question 2 options:

A) the monopolist producer has to deal with unions and face higher wages than do competitive industries.

B) the monopolist substitutes more capital for labor when compared to a competitive industry.

C) a monopolist has to pay higher wages in order to attract additional workers.

D) the monopolist produces less output than a competitive industry.

Question 3 (2 points)

Question 3 Unsaved

A perfectly competitive firm will hire workers up to the quantity at which the wage rate equals the

Question 3 options:

A) marginal revenue product of labor.

B) marginal factor cost of labor.

C) price of the extra output produced.

D) average physical product of labor.

Question 4 (2 points)

Question 4 Unsaved

The change in total output due to the change in one variable input, while holding all other inputs constant, is the

Question 4 options:

A) marginal revenue product.

B) derived demand for labor.

C) marginal physical product.

D) market demand curve for labor.

Question 5 (2 points)

Question 5 Unsaved

When MFC < MRP, a firm in a competitive market will

Question 5 options:

A) stop hiring.

B) hire more workers.

C) earn fewer profits.

D) layoff workers.

Question 6 (2 points)

Question 6 Unsaved

The monopolist’s input demand curve is the

Question 6 options:

A) marginal factor cost.

B) marginal revenue curve.

C) marginal physical product curve.

D) marginal revenue product curve.

Question 7 (2 points)

Question 7 Unsaved

Refer to the above figure. Which panel represents what happens in the U.S. job market in the short-run when U.S. firms substitute labor outside of the U.S. for labor inside the U.S.?

Question 7 options:

A) Panel A

B) Panel B

C) Panel C

D) Panel D

Question 8 (2 points)

Question 8 Unsaved

The practice of outsourcing has been given a boost by

Question 8 options:

A) advances in telecommunications and computer networking.

B) firms that are becoming more risk-averse.

C) support from organized labor.

D) sharp increases in the cost of overseas labor.

Question 9 (2 points)

Question 9 Unsaved

Refer to the above table. Suppose the firm hires 5 workers and the price of the good sold is $3. The marginal factor cost of labor must be

Question 9 options:

A) $3.

B) $100.

C) $300.

D) $900.

Question 10 (2 points)

Question 10 Unsaved

Which of the following will cause a shift in the demand curve of labor?

Question 10 options:

A) An increase or decrease in the productivity of labor.

B) An increase or decrease in the demand for the product labor produces.

C) A decline in the price of a complementary input .

D) All of these

Question 11 (2 points)

Question 11 Unsaved

If the price of labor increases, the typical perfectly competitive firm in the short run will

Question 11 options:

A) produce more output.

B) hire less labor.

C) hire the same labor and produce the same output.

D) hire more labor.

Question 12 (2 points)

Question 12 Unsaved

The additional cost associated with the hiring of one more unit of labor is known as the

Question 12 options:

A) marginal physical product of labor.

B) marginal revenue product of labor.

C) marginal factor cost of labor.

D) marginal utility of labor.

Question 13 (2 points)

Question 13 Unsaved

A benefit of unions is that they

Question 13 options:

A) increase wage inequality.

B) increase firm profits.

C) increase the stability of the workforce.

D) restrict the labor market.

Question 14 (2 points)

Question 14 Unsaved

In the above figure, which wage rate will maximize union members’ income?

Question 14 options:

A) W1

B) W3-W1

C) W3

D) W2

Question 15 (2 points)

Question 15 Unsaved

Unions face a trade-off between higher wages and

Question 15 options:

A) fewer available positions.

B) equipment.

C) more available positions.

D) none of the above.

Question 16 (2 points)

Question 16 Unsaved

What is it called when the price paid for a variable input is less than its marginal revenue product?

Question 16 options:

A) Monopolistic exploitation

B) Monopsonistic exploitation

C) Bilateral monopoly

D) Featherbedding

Question 17 (2 points)

Question 17 Unsaved

Labor unions are organizations that

Question 17 options:

A) try to make labor markets more competitive.

B) try to secure economic improvements for all workers.

C) try to secure economic improvements for their members.

D) try to secure more opportunities for more workers in the economy.

Question 18 (2 points)

Question 18 Unsaved

Temporary or permanent workers hired to replace striking union workers are known as

Question 18 options:

A) strikebreakers.

B) strikeaiders.

C) backbreakers.

D) rationers.

Question 19 (2 points)

Question 19 Unsaved

If a union wishes to maximize the number of union members employed, it will

Question 19 options:

A) set a wage above the competitive wage.

B) accept the competitive wage.

C) set a wage where the elasticity of demand for labor equals one.

D) set a wage below the competitive wage.

Question 20 (2 points)

Question 20 Unsaved

If you want to become an actor, and you must join the Screen Actors Guild after your first job, the Screen Actors Guild is a(n)

Question 20 o

A) union shop.

B) agency shop.

C) closed shop.

D) open shop.

Question 21 (2 points)

Question 21 Unsaved

Labor unions that consist of workers from a particular industry, such as automobile manufacturing, are called

Question 21 options:

A) collective unions.

B) industrial unions.

C) craft unions.

D) closed unions.

Question 22 (2 points)

Question 22 Unsaved

The practice of forcing employers to use more labor than they would otherwise use is called

Question 22 options:

A) featherbedding.

B) bootstrapping.

C) railroading.

D) dumping.

Question 23 (2 points)

Question 23 Unsaved

The more bowed out the Lorenz curve, the

Question 23 options:

A) less the overall wealth in the economy.

B) greater the overall wealth in the economy.

C) less equal the income distribution.

D) more equal the income distribution.

Question 24 (2 points)

Question 24 Unsaved

What impact do private insurance companies and Medicare have on national medical costs?

Question 24 options:

A) Medical costs go down because the insurance company pays the bill.

B) Medical costs go up because insurance leads to an increase in the quantity demanded of medical services.

C) Medical cost are unaffected by insurance companies.

D) Medical costs go up because insurance will lead to the reduction in the supply of medical services due to the amount of paperwork required.

Question 25 (2 points)

Question 25 Unsaved

Wealth is measured as

Question 25 options:

A) only nonhuman wealth.

B) only tangible objects.

C) nonhuman and human wealth.

D) only buildings, machinery, land, cars, stocks and bonds.

Question 26 (2 points)

Question 26 Saved

A major benefit of a health savings account is that it

Question 26 options:

A) eliminates rising health care costs.

B) creates the incentive to see a doctor regularly.

C) combats moral hazard.

D) means more health care services will be demanded.

Question 27 (2 points)

Question 27 Unsaved

The incidence of absolute poverty is reduced by

Question 27 options:

A) the size of the budget deficit.

B) government welfare programs.

C) annual recalculations of the poverty line.

D) economic growth.

Question 28 (2 points)

Question 28 Unsaved

The Social Security system is financed by

Question 28 options:

A) a tax on luxury goods.

B) a tax on individual retirement accounts.

C) a payroll tax paid only by employers.

D) a payroll tax paid by both employers and employees.

Question 29 (2 points)

Question 29 Unsaved

The less bowed the Lorenz Curve, the

Question 29 options:

A) more equal the income distribution.

B) greater the number of low-income people.

C) greater the number of high-income people.

D) less equal the income distribution.

Question 30 (2 points)

Question 30 Unsaved

In general, as individuals undertake additional years of schooling,

Question 30 options:

A) their stock of human capital increases.

B) the marginal productivity of individuals as workers becomes negative.

C) the marginal productivity of individuals as workers declines.

D) the marginal benefit to society of the extra years of education increases.

Question 31 (2 points)

Question 31 Unsaved

Which of the following would NOT be considered a determinant of marginal productivity?

Question 31 options:

A) gender

B) training

C) experience

D) talent

Question 32 (2 points)

Question 32 Unsaved

The egalitarian principle of income refers to

Question 32 options:

A) each person receiving the same income.

B) each person working the same number of hours.

C) each person being paid differently.

D) each person receiving tax breaks.

Question 33 (2 points)

Question 33 Unsaved

The impact of technological change in the health-care area has been to

Question 33 options:

A) increase the monetary costs of health care and decrease the quality of health care.

B) increase both the quality of health care and the monetary costs of health care.

C) decrease the monetary costs of health care while decreasing the quality of health care.

D) increase longevity but decrease quality of life.

Question 34 (2 points)

Question 34 Unsaved

Social Security is a pure transfer program because

Question 34 options:

A) current payroll taxes are used to pay the eligible retirees.

B) the government subsidizes the medical bill of the poor.

C) the government transfers funds from middle-income workers to welfare recipients.

D) it transfers funds from current workers to the poor.

Question 35 (2 points)

Question 35 Unsaved

In theory, the Emissions Trading Scheme would

Question 35 options:

A) lower the production costs of all firms.

B) raise the production costs of all firms.

C) cause firms to generate more pollution than their allowed limits.

D) cause firms to generate less pollution than their allowed limits.

Question 36 (2 points)

Question 36 Unsaved

From an economic standpoint, the amount of pollution should be

Question 36 options:

A) at the point at which the marginal benefit from further reduction equals the marginal cost of further reduction.

B) zero.

C) the amount that allows firms to maximize profits.

D) the amount where firms are earning a normal rate of return on investment.

Question 37 (2 points)

Question 37 Unsaved

The optimal quantity of air pollution is

Question 37 options:

A) found by setting the quantity of air pollution equal to the quantity of water pollution.

B) a meaningless concept since monetary values cannot be attached to problems associated with pollution.

C) found by equating the marginal benefits from further reductions in pollution and the marginal costs of further reductions in pollution.

D) whatever amount of pollution is produced by the profit maximizing firm.

Question 38 (2 poin

Question 38 Unsaved

An individual who pays for personal auto repair has incurred a

Question 38 options:

A) social cost.

B) positive externality.

C) negative externality.

D) private cost.

Question 39 (2 points)

Question 39 Unsaved

To efficiently improve environmental quality, it is usually

Question 39 options:

A) better to focus on economic damages rather than physical quantities of pollution.

B) better to focus on the hardest areas to clean up first since these usually are the biggest problems.

C) best to set up stringent emission standards that must be followed by everyone.

D) more appropriate to concentrate on the physical quantities of pollution rather than on economic costs.

Question 40 (2 points)

Question 40 Unsaved

A social cost that is not fully paid by the individual using an automobile is

Question 40 options:

A) insurance.

B) traffic congestion.

C) depreciation of the vehicle.

D) gasoline and oil.

Question 41 (2 points)

Question 41 Unsaved

The total social cost of production is equal to

Question 41 options:

A) external cost minus internal cost.

B) internal cost plus opportunity cost.

C) external cost plus internal cost.

D) internal cost minus external cost.

Question 42 (2 points)

Question 42 Unsaved

Exclusive rights of ownership that allow the use, transfer, and exchange of property are called

Question 42 options:

A) common property rights.

B) public property rights.

C) private property rights.

D) nonexclusive property rights.

Question 43 (2 points)

Question 43 Unsaved

In general, pollution exists in situations in which

Question 43 options:

A) people are selfish.

B) there are poorly defined private property rights.

C) people refuse to take social responsibility seriously.

D) there exists public property.

Question 44 (2 points)

Question 44 Unsaved

A large farm uses fertilizer that nearby landowners complain may contaminate their water. Tests are conducted and contaminants are found. The costs resulting from this decision are referred to as

Question 44 options:

A) opportunity costs.

B) factor costs.

C) external costs.

D) implicit costs.

Question 45 (3 points)

Question 45 Unsaved

Distinguish between craft unions and industrial unions.

Question 45 options:

Spell check

Question 46 (3 points)

Question 46 Unsaved

Explain the implications of outsourcing for employment and wages in the domestic and foreign labor markets.

Question 46 options:

Spell check

Question 47 (3 points)

Question 47 Unsaved

What can cause the demand curve for labor to shift? Explain.

Question 47 options:

Spell check

Question 48 (3 points)

Question 48 Unsaved

What is the purpose of a strike? What are the costs to workers and to management?

Question 48 options:

Spell check

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