Final Exam

A  then a substantial share of the U.S. population will subsist in dire poverty.

B  then it will set two poverty lines that it applies to welfare and the near-poor.

C  then it would be difficult to compare poverty rates over time.

D  it will be useful to have a poverty line whose basic definition changes a lot.

A  A redistribution tax

B  A death tax

C  An inheritance tax

D  An estate tax

A  equality and inequality

B  inequality and poverty

C  wealth distribution and poverty

D  equality and wealth distribution

A  AFDC

B  TANF

C  TNAF

D  ADFC

A  poverty trapped

B  near-poor

C  illiterate poor

D  working poor

A  an increased standard of living; EIC

B  a tax break; having earned income

C  a tax refund; having earned income

D  a reduced standard of living; TANF

A  only those orphans who were living 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  married men with families who were below the poverty line.

A  a tax imposed on the value of inheritances

B  trying to assure that a ladder of opportunity is widely available

C  redistribution from those with high incomes to those with low incomes

D  the three mains sets of tools it can use include all of the above

A  “rules of origin”

B  export quota

C  dumping

D  import quota

A  protectionism provides a barrier to entry to the job markets that the low-wage earners want entry to.

B  protectionism will encourage foreign workers to apply for American jobs.

C  protectionism forces them to pay higher prices for basic necessities like clothing and food.

D  protectionism will prevent them from applying for those jobs in other industries.

A  General Association for Trade and Tariffs.

B  General Agreement on Tariffs and Trade.

C  General Accounting for Tariff and Trade.

D  General Association on Technology and Trade.

A  $7.25/hour

B  $6.25/hour

C  $9.25/hour

D  $8.25/hour

A  Companies seek the lowest market prices on products in order to gain market share, resulting in inferior goods and increased waste and pollution.

B  Companies seek to influence environmental legislation standards are set to the lowest possible standards in the USA in order to maximize profits.

C  Companies seek to reduce their costs of operations on plant and equipment design and this results in higher levels of pollution.

D  Profit-seeking multinational companies shift their production from countries with strong environmental standards to countries with weak standards, thus reducing their costs and increasing their profits.

A  Import Limitation Argument

B  Anti-Dumping Argument

C  Buy-American Argument

D  National Interest Argument

A  surplus goods

B  hazardous goods

C  imported products

D  exported products

A  a government bureaucracy

B  a non-tariff barrier

C  an import quota

D  a quota

A  firms will be protected from subsidized foreign competition.

B  domestic producers can attain the economies of scale to allow them to compete in world markets.

C  it will not be subjected to a takeover from a foreign competitor.

D  there will be adequate supplies of crucial resources in case they are needed for national defence.

A  limit voluntary exchanges.

B  protect domestic consumers of goods.

C  protect foreign producers of goods.

D  protect domestic producers of exported goods.

A  25%; 50%

B  75%; 90%

C  50%; 75%

D  10%; 25%

A  decrease; increase

B  decrease; decrease

C  increase; decrease

D  increase; increase

A  Georgeland has a comparative advantage, but not an absolute advantage, in producing clothing.

B  Georgeland has both a comparative and absolute advantage in producing clothing.

C  Alland has a comparative advantage, but not an absolute advantage, in producing food.

D  Alland has an absolute advantage in producing food but will not trade with Georgeland.

A  opportunity cost

B  relative cost

C  comparative advantage

D  absolute advantage

A  30%; 30%

B  10%; 10%

C  60%; 60%

D  90%; 90%

A  specialization

B  economies of scale

C  worker productivity

D  lower opportunity costs

A  it is in the interest of Beta to grow oranges and trade for apples.

B  it is in the interest of both countries to specialize and trade with one another.

C  there are no incentives for Alpha to specialize and trade with Beta.

D  there are no incentives for Beta to engage in international specialization and trade of apples and oranges.

A  it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if it produced it domestically.

B  it cannot gain from international trade in the commodity.

C  it can gain from international trade in that commodity only if it has an absolute advantage in that commodity.

D  it cannot gain from international trade unless it has an absolute advantage in every other commodity.

A  China has a comparative advantage in the production of rice.

B  India has a comparative advantage in the production of rice.

C  India has an absolute advantage in the production of rice.

D  China has both an absolute and comparative advantage in the production of rice.

A  absolute cost

B  relative cost

C  opportunity cost

D  comparative cost

A  Canada has an absolute advantage in the production of maple syrup.

B  Germany has a comparative advantage in the production of hockey sticks.

C  Germany has an absolute advantage in the production of maple syrup.

D  Canada has a comparative advantage in the production of hockey sticks.

A  may be able to produce something at a lower opportunity cost than another party.

B  may be able to produce something at a lower dollar cost than another party.

C  with an absolute advantage in producing two different may export goods both of those goods to the other party.

D  may be able to produce everything relatively more efficiently than another party.

A  loss; exit; losses on their earnings

B  profit or loss; exit; economic profits

C  profit or loss; entry and exit; a zero-profit outcome

D  profit; entry; a price that lies at the very bottom of the AC curve

A  on the upward-sloping portion of the average cost curve.

B  at the very bottom of the AC curve.

C  at the very top of the AC curve.

D  on the downward-sloping portion of the average cost curve.

A  be environmentally responsible.

B  differentiate their product.

C  be perceived more favorably.

D  be socially responsible.

A  stand at the high point of the competition spectrum.

B  match price increases, but not price cuts.

C  match price cuts, but not price increases.

D  stand at opposite ends of the competition spectrum.

A  costs for all are driven up.

B  zero profits result for all.

C  they end up acting very much like imperfect competitors.

D  they end up acting very much like monopolistic competitors.

A  the price people are willing to pay is not more

B  a higher quantity of a good and charge a lower price

C  a lower quantity of a good and charge a higher price

D  the price that people are willing to pay is lower

A  average cost curve.

B  average variable cost curve.

C  total marginal cost curve

D  total cost curve.

A  they will be unable to earn higher-than-normal profits in the short run.

B  they will wish to cooperate to make decisions about what quantity to produce.

C  they will wish to cooperate to make decisions about what price to charge.

D  they will be unable to earn higher-than-normal profits in the long run.

A  $1.75 or less

B  $1.00 or less

C  $2.00 or less

D  $0.75 or less

A  to maximize profits in the long run.

B  to discourage short run competition.

C  to increase supply to benefit consumers.

D  to hire more staff to lower unemployment.

A  abnormally high profits will attract the entry of new firms.

B  surviving firms earn only a normal level of profit in the long run.

C  entry will be blocked even if firms are earning high profits.

D  the entry of new firms will eventually cause price to decline.

A  abnormally high sustained profits.

B  government deregulation.

C  irregularly high unsustainable profits.

D  elimination of barriers to entry

A  I, III and IV

B  I, II, III, IV, and VI

C  I, II, and III

D  all of the above

A  postal services sector

B  banking sector

C  telecommunications sector

D  nuclear power sector

A  local bathroom fixtures shop

B  local fast-food restaurant

C  local television broadcaster

D  local electricity distributor

A  setting output at MR = MC and setting price at the demand curve’s highest point.

B  producing output where MR = MC and charging a price along the demand curve.

C  producing maximum output where price is equal to its marginal cost.

D  setting the price at the level that will maximize its per-unit profit.

A  Trademark

B  Intellectual property

C  Copyright

D  Patent

A  have legal protection to prevent copying its methods of production for commercial use.

B  raise prices, cut production, and realize positive economic profits.

C  acquire rights for its investors to produce and sell their product.

D  have a patent giving it exclusive legal rights to make, use, and sell for a limited time.

A  the competitive actions of other business firms

B  whether consumers will spend on different products

C  barriers to entry and competitors’ patent protection

D  whether consumers will purchase its product

A  lowest when there are a large number of producers in the industry.

B  minimized at the output that maximizes the industry’s profitability.

C  lowest when a single firm generates the entire output of the industry.

D  lower for the smaller firms than for larger firms.

A  they can increase output without affecting quality

B  they are very small players in the overall market

C  price takers find market analysis is too costly

D  high degree of similarity to competitor’s products

A  marginal product is falling.

B  average product is falling.

C  average product is rising.

D  marginal product is rising.

A  derived demand.

B  market demand.

C  average demand.

D  marginal demand.

A  higher retained earnings from past profits

B  tax credits for physical capital investments

C  imposition of hurdle rates of interest

D  cost of financial capital paid by a firm

A  quality differences will be very perceptible and will play a major role in purchasers’ decisions.

B  it can increase or decrease its output without affecting overall quantity supplied in the market.

C  pressure from competing firms will force acceptance of the prevailing market price.

D  it must be a relatively small player compared to its competitors in the overall market.

A  realistic assumption.

B  hypothetical extreme.

C  realistic extreme.

D  hypothetical assumption.

A  is dictated by the forces of demand and supply.

B  can be set by management to maximize profits.

C  can be tailored to meet the price of its inputs.

D  can be tailored to exceed the price of its inputs.

A  short run; the quantity of output where profits are highest

B  long run; the quantity of output where profits are highest

C  short run; profits by ignoring the concept of total cost analysis

D  long run; methods to reduce production and shut down