Answer Options:
a. Rise
b. Fall
c. Stay the same
d. Change, but the direction cannot be anticipated
Answer: a. Rise
Question: The Soviet Union never produced very many automobiles. This was primarily due to:
Answer Options:
A lack of sufficient resources
A lack of knowledge
A planner’s decision to not devote resources to consumer goods
The ability to import all of the automobiles that they needed
A lack of demand for automobiles in the country
Answer: A planner’s decision to not devote resources to consumer goods
Question: An increase in the minimum wage will increase unemployment. This statement is:
Answer Options:
a positive statement (or positive analysis)
a normative statement (or normative analysis)
Answer: a positive statement (or positive analysis)
Question: Which law requires workers to be paid minimum wage and possibly overtime?
Answer Options:
OSHA
ADA
ADEA
FLSA
Answer: FLSA
Question: Court cases involving price discrimination are rare today. However, dry cleaners seem to always be in court over price discrimination. Why?
Answer Options:
a. dry cleaners are not very good at price discriminating in a manner that avoids law suits
b. dry cleaners are especially aggressive in price discriminating and their price differences are too high
c. dry cleaners are price discriminating, but women customers have interpreted this as gender discrimination and have filed law suits
d. dry cleaners have ruthlessly prevented arbitrage which has angered the public
e. men customers have chosen to boycott dry cleaners to protest price discrimination
Answer: c. dry cleaners are price discriminating, but women customers have interpreted this as gender discrimination and have filed law suits
Question: According to Friedman, voluntary exchange transactions tend to be
Answer Options:
Zero-sum transactions
Illegal transactions
Win-win transactions
Good for the buyer or the seller, but never good for both
Only beneficial to society if they are licensed
Answer: Win-win transactions
Question: Ceteris paribus is an analytical assumption that means that when you consider a relationship:
Answer Options:
you always must remember that what goes around comes around
you must remember that the ones with the money make the rules
you assume that all other factors and variables are constant and do not change
you assume that all other variables are changing at the same time
Answer: you assume that all other factors and variables are constant and do not change
Question: Which law requires workers to be paid minimum wage and possibly overtime?
Answer Options:
FLSA
OSHA
ADA
None of these responses are correct.
Answer: FLSA
Question: Why did Thomas Malthus argue that food production could never keep up with population growth?
Answer Options:
a. Land was wearing out and was losing its fertility or productivity
b. There was a labor shortage that limited food production
c. Capital was in short supply
d. The Law of Demand limited food productivity
Answer: a. Land was wearing out and was losing its fertility or productivity
Question: Satisfaction occurs when people have everything they need or want. Many economists have been fascinated with satiation. Which of the following is correct regarding satiation?
Answer Options:
a. We have reached satiation many times
b. Capitalist economists have claimed that it is possible, but socialists have never made this mistake
c. There has been no indication that we have ever reached satiation, or are about to reach satiation
d. We have never reached satiation, but it is clear that we are nearing it
Answer: c. There has been no indication that we have ever reached satiation, or are about to reach satiation
Question: The Great Depression affected virtually all countries around the world except one. Which country managed to escape the Great Depression?
Answer Options:
The United States
The Soviet Union
Brazil
Jamaica
Answer: The Soviet Union
Question: According to Milton Friedman, no one person today can make a pencil, but pencils are efficiently produced because:
Answer Options:
a. Government planners effectively organize production
b. Everyone is usually looking out for one another in order to get things done
c. The “golden rule,” with Smith called “sentimentality,” always applied
d. The price system effectively created the incentives for people to produce without the need for government planning
e. Pencil production has gone on for so long that there is no reason for coordinating and planning production
Answer: d. The price system effectively created the incentives for people to produce without the need for government planning
Question: Which country was the first to break the 90-10 rule?
Answer Options:
The Soviet Union
China
Great Britain
Answer: Great Britain
Question: Ceteris paribus is an analytical assumption that means that when you consider a relationship:
Answer Options:
you always must remember that what goes around comes around
you must remember that the ones with the money make the rules
you assume that all other factors and variables are constant and do not change
you assume that all other variables are changing at the same time
Answer: you assume that all other factors and variables are constant and do not change
Question: In court, the legal requirements for proving “price discrimination” requires that:
Answer Options:
a. the products be identical
b. the customers be identical
c. discrimination occurred without any regard for motive (i.e., the reason) for price discrimination
d. the products be similar, but not identical
e. the products be substitutable
Answer: d. the products be similar, but not identical