Exam 4: Microeconomics - Assignment Essays

question

Which of these is not a difficulty with command-and-control environmental regulation?

answer

Command-and-control regulation is too flexible because it treats each producer differently

question

When negative externalities exist producers tend to ______________, leading to ____________ market outcomes.

answer

Overproduce; inefficient

question

Which of these describes a market failure?

answer

When the market outcome fails to allocate resources efficiently

question

Use the graph above to answer the following question. Point E0 represents _____________.

answer

The quantity of refrigerators that will be produced if producers bear only the private costs of production

question

Social cost is _____________.

answer

Equal to private costs plus external costs

question

When production of a good or service produces a negative externality, regulators want to ___________

answer

Encourage less production

question

A buyer and a seller engage in a market exchange. The market exchange affects a third party who does not participate in the market exchange. This market exchange has conferred a(n) ___________.

answer

Externality

question

Widget Manufacturing Co. emits pollution into the atmosphere when it produces widgets. The pollution from Widget Manufacturing Co. is a(n) _______.

answer

Negative externality

question

Which of these is not a potential solution for pollution?

answer

Subsidies

question

_______________ developed a famous theory that said the externality problem could potentially be solved if property rights were better defined.

answer

Ronald Coase

question

When production of a good or service produces a positive externality, regulators want to ____________.

answer

Encourage more production

question

Public goods are _________.

answer

Nonexcludable and non-rival

question

Which of these is not a positive externality of education?

answer

Education helps people become popular.

question

The free rider problem tends to result in ___________.

answer

The under production of public goods

question

The tragedy of the commons demonstrates ____________.

answer

How goods that are rival and nonexcludable will be overused

question

Which of these is not a way government can encourage innovation?

answer

Marketable permits for research and development

question

Which of the following best illustrates the free rider problem?

answer

Your neighbor pays for mosquito control and you benefit from fewer mosquitos in your yard without having to pay.

question

Because the ocean is vast, a private fisherman cannot keep others from fishing the same waters that he/she fishes. This means that the fish in the ocean are _____________.

answer

Nonexcludable

question

You order a pizza to split with your friends. When you eat a piece of pizza, there is less pizza for your friends to eat. This means that pizza is _________.

answer

Rival

question

Inoculating children against contagious diseases creates __________.

answer

Positive externalities because vaccinating children reduces the risk of transmitting the disease to others

question

What will happen to wages of low-skilled workers in the United States if there is an increase in the number of low-skilled workers immigrating into the United States?

answer

Wages for low-skilled workers will decrease

question

Which of these has not contributed to the United State's decline in union membership since the 1950s?

answer

The shift from service industries to manufacturing industries

question

The offering of different opportunities to similarly skilled individuals who differ only by race, ethnic group, sex, age, or other personal characteristics is ___________.

answer

Discrimination

question

Relative to a competitive labor market, a monopsony hires ___________

answer

Fewer workers at lower wages

question

What is the first rule of labor markets?

answer

A profit-maximizing firm will never pay more for a worker than the value of their marginal productivity to the firm.

question

The NFL Players Association, the labor union for NFL football players, negotiates working conditions with NFL owners. This negotiation is called ____________.

answer

Collective bargaining

question

In a _____________ labor market, firms can hire all the labor they want at the going wage rate.

answer

Perfectly competitive

question

Which of the following statements about union membership is not true?

answer

The rate for unionization is higher for whites than for African Americans or for Hispanics

question

A small community in Arkansas has a single school, but many residents who would like to be employed as a teacher. This labor market is considered ___________.

answer

A monopsony

question

Union wage rates are ____________ than equilibrium wage rates, which leads to a _________ of labor.

answer

Higher; surplus

question

Lesley is a single mother with 2 children. She can earn $10 per hour and can work up to 1,800 hours per year. However, if she does not earn any income at all, she will receive government benefits totaling $18,000 per year. For every $1 of income she earns, her level of government support is reduced by $1. Lesley

answer

has no monetary incentive to work, though she may still choose to work

question

If the poverty trap were made even more difficult to overcome because a working mother will have extra expenses like transportation and child care that a nonworking mother will not face, then

answer

the working mother's economic gains from working will be even smaller.

question

From the Great Depression of the 1930s until 1996, the United States' most visible antipoverty program was Aid to Families with Dependent Children, which provided cash payments to

answer

all mothers with children who were below the poverty line.

question

In the United States, the official definition of the poverty line traces back to a single person: _________________________, whose idea was to _________________________.

answer

Mollie Orshansky; define a poverty line based on the cost of a healthy diet

question

To address a common poverty trap problem for many low-paid Americans whose jobs pay enough that a family could lose its eligibility for _________________________, yet those jobs don't offer _________________________ either, some states guaranteed that children would not lose their coverage if their parents worked.

answer

Medicaid; health insurance benefits

question

Antipoverty programs that are set up so that the amount of government benefits will decline substantially as poor people earn more income typically create _________________________.

answer

A poverty trap

question

Government developed a method called an _______________ to assist the working poor through the tax system. The amount of the tax break _________________________ with the amount of income earned, _________________________.

answer

earned income credit; increases; up to a point

question

When reference is made to the _________________________ , it means the specific amount of income needed for a basic standard of living.

answer

Poverty line

question

If incomes rise for both low-income and high-income workers, but rise less for the high- income workers,

answer

then poverty will fall and inequality will fall.

question

In circumstances dealing with poverty, the term _________________________ means taking income from those with higher incomes and providing income to those with lower incomes.

answer

Redistribution

1 of 40

question

Which of these is not a difficulty with command-and-control environmental regulation?

answer

Command-and-control regulation is too flexible because it treats each producer differently

question

When negative externalities exist producers tend to ______________, leading to ____________ market outcomes.

answer

Overproduce; inefficient

question

Which of these describes a market failure?

answer

When the market outcome fails to allocate resources efficiently

question

Use the graph above to answer the following question. Point E0 represents _____________.

answer

The quantity of refrigerators that will be produced if producers bear only the private costs of production

question

Social cost is _____________.

answer

Equal to private costs plus external costs

question

When production of a good or service produces a negative externality, regulators want to ___________

answer

Encourage less production

question

A buyer and a seller engage in a market exchange. The market exchange affects a third party who does not participate in the market exchange. This market exchange has conferred a(n) ___________.

answer

Externality

question

Widget Manufacturing Co. emits pollution into the atmosphere when it produces widgets. The pollution from Widget Manufacturing Co. is a(n) _______.

answer

Negative externality

question

Which of these is not a potential solution for pollution?

answer

Subsidies

question

_______________ developed a famous theory that said the externality problem could potentially be solved if property rights were better defined.

answer

Ronald Coase

question

When production of a good or service produces a positive externality, regulators want to ____________.

answer

Encourage more production

question

Public goods are _________.

answer

Nonexcludable and non-rival

question

Which of these is not a positive externality of education?

answer

Education helps people become popular.

question

The free rider problem tends to result in ___________.

answer

The under production of public goods

question

The tragedy of the commons demonstrates ____________.

answer

How goods that are rival and nonexcludable will be overused

question

Which of these is not a way government can encourage innovation?

answer

Marketable permits for research and development

question

Which of the following best illustrates the free rider problem?

answer

Your neighbor pays for mosquito control and you benefit from fewer mosquitos in your yard without having to pay.

question

Because the ocean is vast, a private fisherman cannot keep others from fishing the same waters that he/she fishes. This means that the fish in the ocean are _____________.

answer

Nonexcludable

question

You order a pizza to split with your friends. When you eat a piece of pizza, there is less pizza for your friends to eat. This means that pizza is _________.

answer

Rival

question

Inoculating children against contagious diseases creates __________.

answer

Positive externalities because vaccinating children reduces the risk of transmitting the disease to others

question

What will happen to wages of low-skilled workers in the United States if there is an increase in the number of low-skilled workers immigrating into the United States?

answer

Wages for low-skilled workers will decrease

question

Which of these has not contributed to the United State's decline in union membership since the 1950s?

answer

The shift from service industries to manufacturing industries

question

The offering of different opportunities to similarly skilled individuals who differ only by race, ethnic group, sex, age, or other personal characteristics is ___________.

answer

Discrimination

question

Relative to a competitive labor market, a monopsony hires ___________

answer

Fewer workers at lower wages

question

What is the first rule of labor markets?

answer

A profit-maximizing firm will never pay more for a worker than the value of their marginal productivity to the firm.

question

The NFL Players Association, the labor union for NFL football players, negotiates working conditions with NFL owners. This negotiation is called ____________.

answer

Collective bargaining

question

In a _____________ labor market, firms can hire all the labor they want at the going wage rate.

answer

Perfectly competitive

question

Which of the following statements about union membership is not true?

answer

The rate for unionization is higher for whites than for African Americans or for Hispanics

question

A small community in Arkansas has a single school, but many residents who would like to be employed as a teacher. This labor market is considered ___________.

answer

A monopsony

question

Union wage rates are ____________ than equilibrium wage rates, which leads to a _________ of labor.

answer

Higher; surplus

question

answer

has no monetary incentive to work, though she may still choose to work

question

If the poverty trap were made even more difficult to overcome because a working mother will have extra expenses like transportation and child care that a nonworking mother will not face, then

answer

the working mother's economic gains from working will be even smaller.

question

From the Great Depression of the 1930s until 1996, the United States' most visible antipoverty program was Aid to Families with Dependent Children, which provided cash payments to

answer

all mothers with children who were below the poverty line.

question

In the United States, the official definition of the poverty line traces back to a single person: _________________________, whose idea was to _________________________.

answer

Mollie Orshansky; define a poverty line based on the cost of a healthy diet

question

answer

Medicaid; health insurance benefits

question

Antipoverty programs that are set up so that the amount of government benefits will decline substantially as poor people earn more income typically create _________________________.

answer

A poverty trap

question

answer

earned income credit; increases; up to a point

question

When reference is made to the _________________________ , it means the specific amount of income needed for a basic standard of living.

answer

Poverty line

question

If incomes rise for both low-income and high-income workers, but rise less for the high- income workers,

answer

then poverty will fall and inequality will fall.

question

In circumstances dealing with poverty, the term _________________________ means taking income from those with higher incomes and providing income to those with lower incomes.

answer

Redistribution

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