26. If a U.S. importer can purchase 10,000 pounds for $20,000, the rate of exchange is: (Points : 2)        $1 = 2 pounds in the United States.        $2 = 1 pound in the United States.        $1 = 2 pounds in Great Britain.        $.5 = 1 pound in Great Britain.

27. The fact that people prefer present consumption to future consumption results in: (Points : 2)        a downsloping demand for loanable funds curve.        an upsloping supply of loanable funds curve.        a downsloping supply of loanable funds curve.        an upsloping demand for loanable funds curve.

28.    The individual firm in a purely competitive labor market faces: (Points : 2)        a perfectly elastic labor supply curve and a downsloping labor demand curve.        a perfectly elastic labor demand curve and an upsloping labor supply curve.        labor demand and labor supply curves both of which are perfectly elastic.        a downsloping labor demand curve and an upsloping labor supply curve.

29. The crowding of women and minorities into a restricted number of occupations: (Points : 2)        has no impact on the size of the domestic output or its distribution in the long run.        will increase the size of the domestic output and make its distribution more equal.        will decrease the size of the domestic output and make its distribution less equal.        will increase the size of the domestic output, but make its distribution less equal.

30. Henry George advocated a single tax on: (Points : 2)        real capital.        entrepreneurial profits.        land.        labor income.

31. Employers will hire more units of a resource if: (Points : 2)        the price of the resource increases.        the productivity of the resource increases.        the price of the good being produced declines.        the price of a complementary resource rises.

32. Supporters of offshoring claim that its benefits include: (Points : 2)        increased demand for workers in complementary jobs.        keeping U.S. firms profitable by lowering production costs.        reduced prices for consumers.        all of these.

33. Defensive medicine refers to the idea that: (Points : 2)        it is more cost-efficient to prevent illnesses than to cure them.        physicians may require unnecessary testing as a means of protecting themselves against malpractice suits.        doctors know much more about diagnosing and treating illnesses than do health care consumers.        physicians do not advertise their services or fees.

34. The managerial-opposition hypothesis suggests that: (Points : 2)        employers are less opposed to unions now than they were two or three decades ago.        employers are more reluctant to hire minorities and women than they were two or three decades ago.        employers are increasingly resistant to unions because they impose higher wage costs on firms.        unions increase worker turnover and thereby increase productivity.

35. Supporters of farm subsidies have: (Points : 2)        argued that farmers are comparatively poor and therefore should receive public help.        contended that the family farm is an American “way of life” and should be protected.        argued that farmers are at a disadvantage because they buy inputs in monopolized markets and sell their output in competitive markets.        made all of these arguments.

36. The structural-change hypothesis suggests that: (Points : 2)        the structure of industry has changed so as to encourage union growth.        in the past two decades management has more aggressively opposed unionization.        labor market discrimination has decreased because of the changing composition of the labor force.        changes in the structure of industry have contributed to the decline of union membership.

37. An example of a social insurance program is ____________, whereas an example of public assistance program is _______. (Points : 2)        Temporary Assistance for Needy Households; unemployment compensation        Supplemental Security Income; unemployment compensation        Social Security; food stamps        Medicaid; Medicare

38. The parity ratio: (Points : 2)        compares worker productivity in the farm and nonfarm sectors.        is the ratio of per capita farm income to per capita nonfarm income.        is the ratio of prices received by farmers to prices paid by farmers.        is the ratio of prices paid by farmers to prices received by farmers.

39. By reducing labor turnover, unions may increase productivity because a lower turnover rate: (Points : 2)        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.

40. In the market for superstars: (Points : 2)        earnings reflect pricing power rather than marginal revenue product.        small differences in talent get magnified into huge differences in pay.        entry and exit rarely occur.        product demand is typically highly elastic.

41. A major implication of asymmetric information is that: (Points : 2)        health care suppliers may reduce the supply of health care.        health care suppliers may increase the demand for health care.        collusion between health care suppliers and purchasers may accelerate the rise in costs.        resources may be underallocated to the health care industry.

42. As it relates to international trade, dumping: (Points : 2)        is a form of price discrimination illegal under U.S. antitrust laws.        is the practice of selling goods in a foreign market at less than cost.        constitutes a general case for permanent tariffs.        is defined as selling more goods than allowed by an import quota.

43. An excise tax on an imported good that helps shield domestic producers of the good is called a: (Points : 2)        protective tariff.        import quota.        revenue tariff.        voluntary export restriction.

44. The lifetime distribution of income is more equal than the annual distribution. This statement is: (Points : 2)        true, because the rich have gotten richer and the poor have gotten poorer.        true, because there is considerable income mobility over time.        false, because people tend to stay in the same income quintile over extended periods of time.        false, because the rich have gotten richer and the poor have gotten poorer.

45. Renewable resources: (Points : 2)        can never be exhausted permanently.        can be exhausted if harvest rates exceed replenishment rates for an extended period.        can be exhausted if replenishment rates exceed harvest rates for an extended period.        will tend to be over-harvested when they are private property.

46. The demand for airline pilots results from the demand for air travel. This fact is an example of: (Points : 2)        resource substitutability.        rising marginal resource cost.        elasticity of resource demand.        the derived demand for labor.

47. “Farm products” are generally produced in more ___________ markets, while “food products” tend to be sold in markets that are more ____________. (Points : 2)        monopolistic; competitive        competitive; oligopolistic        oligopolistic; competitive        oligopolistic; monopolistic

48. Voluntary migration of skilled craftworkers from low-paying to high-paying nations is most likely to be opposed by: (Points : 2)        business groups in the high-paying nations.        craft workers who stay in the low-paying nations.        industrial unions in the high-paying nations.        craft unions in the high-paying nations.

49. Statistical discrimination: (Points : 2)        can persist in the long run if differences in average characteristics among groups continue.        will tend to diminish in the long run, because nondiscriminating firms will drive out discriminating firms.        requires that employers have discrimination coefficients greater than zero.        is also known as occupational segregation.

50. In the real world, specialization is rarely complete because: (Points : 2)        nations normally experience increasing opportunity costs in producing more of the product in which they are specializing.        production possibilities curves are straight lines rather than curves bowed outward as viewed from the origin.        one nation’s imports are necessarily another nation’s exports.        international law prohibits monopolies.


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