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ECON 1002 Microeconomics Unit 4 Milestone
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1
Where the supply curve is more inelastic than the demand curve, who bears more of the burden of a tax?
•
There is not enough information to answer this question
•
Both consumers and producers share the burden equally
•
Producers
•
Consumers
Taxation and Subsidy
2
Which statement below applies to a pure command economy?
•
The level of government involvement must change with society.
•
The government is responsible for all production, resulting in potential allocation inefficiencies.
•
Public goods tend to be over-provided.
•
The government does not interfere in the market.
Comparative Economic Systems
3
Which of the following scenarios relates to both natural and frictional employment?
•
Chip lost his job due to a massive slowdown in the economy and cannot find a job in the current recession.
•
Mikhal just moved with his family from Miami to Chicago and is looking for work.
•
Michelle is unemployed because she doesn't have the technology skills needed in the current job market.
•
Linda lost her job in manufacturing due to her company moving all manufacturing out of the country.
Assessing Costs of Unemployment--Labor Economics
4
Which of the following is an example of the "tragedy of the commons?"
•
It is difficult to keep people from polluting the air because it is rivalrous but not exclusive.
•
It is difficult to keep people from watching the same movie because it is not rivalrous.
•
It is difficult to keep people from watching a fireworks display even if they don't pay because it is not rivalrous and not exclusive.
•
It is difficult to keep common people out of private gardens because they are rivalrous and excludable.
Public Goods, Private Goods, and the “Tragedy of the Commons”
5
The following is a list of methods used to gather information on the burden pollution places on society.
Which of these is used to analyze how regulation affects market prices?
•
Healthcare outcomes
•
Hedonic pricing
•
Contingent valuation
•
Cost-benefit analysis
Assessing Costs of Waste and Pollution--Environmental Economics
6
Which of the following is an example of moral hazard?
•
A congresswoman voting for additional fracking rights to bring more money to her local district
•
Secondhand smoke costs that result in higher health insurance premiums
•
Continuance of unemployment benefits that act as a disincentive for people to find jobs
•
The monopoly granted by the government to a power company
Details on Regulatory Intervention and Market Failure
7
When a business owner uses process mapping, an activity is marked by __________.
•
an oval
•
a box or rectangle
•
a circle
•
a diamond
Process Mapping--Efficiency
8
Which of the following is NOT related to government failure?
•
Information failure
•
Externalities
•
Moral failure
•
Principal-agent problems
Details on Regulatory Intervention and Market Failure
9
CEO "say on pay" was a result of __________.
•
greater CEO involvement in "green initiatives"
•
CEO involvement in selection of mutual funds in which to place their companies
•
CEOs deciding what type of stock options to issue their executive employees
•
closer investor scrutiny of CEO pay
Sustainable Returns--Investor Impact
10
Which statement below is NOT true regarding process mapping?
•
Almost all business practices and decisions have been documented in some way or another.
•
A process map is a visual representation of the stages in a process.
•
Process mapping is used for evaluating sustainable business solutions.
•
Process mapping forms a foundation for efficiency evaluation.
Process Mapping--Efficiency
11
When do producers benefit from an inelastic supply?
•
When a tax is imposed
•
When a subsidy is provided
•
When input costs increase
•
When quotas are placed on goods
Taxation and Subsidy
12
Which of the following situations has revealed the level of influence that investors have in defining public company behavior?
•
Increasing awareness of the holistic connection between social sustainability, investment returns and climate change
•
Investor vigilance regarding compensation for CEOs
•
The US not signing the Kyoto Protocol
•
Investors becoming increasingly aware of the immediacy related to climate change mitigation activities
Sustainable Returns--Investor Impact
13
Which of the following explains why the S & P 500 is considered a leading economic indicator?
•
It predicts consumption behavior in the future.
•
Changes in stock prices reflect investors' expectations for the future of the economy and interest rates.
•
It indicates what consumer decision making will look like in the short term.
•
It shows where the economy is with respect to the business cycle.
Key Leading Indicators
14
What is contingent valuation as it relates to alternative methods for estimating the value of environmental regulations?
•
Using the change in property values in response to a change in pollution to provide an estimate of the cost of pollution
•
Multiplying the amount of people who are willing to pay for trips to natural resources by the number of citizens to construct an estimate on the value of environmental goods
•
Comparing how much it costs to clean waste sites to the cost of regulation
•
Linking the amount of pollution to healthcare costs to estimate the cost of regulation
Assessing Costs of Waste and Pollution--Environmental Economics
15
Which one of the answers listed is NOT a reason why businesses have been slow to adopt sustainable practices in regard to unemployment?
•
Businesses might lay off people in order to meet profitability in a given quarter.
•
Sustainable business practices mean larger profits in the long run.
•
Employment levels follow the business cycle.
•
Sustainable business practices often seem counterintuitive.
Assessing Costs of Unemployment--Labor Economics
16
Which of the following is a result of anthropomorphic climate change?
•
Damage caused by weather-related disasters has increased.
•
Insurance claims have been turned over to government committees.
•
Emissions gasses have decreased.
•
Insurance is more readily available to consumers.
Assessing Costs of Anthropomorphic Climate Change--Regulatory Intervention
17
Which indicators show change at the same time as the economy and thus give a sense of where the economy is in relation to the business cycle?
•
Leading indicators
•
Lagging indicators
•
Coincident indicators
•
All of the given answer choices are correct
Coincident Indicators
18
A public good is considered which of the following?
•
Non-rivalrous and exclusive
•
Rivalrous and exclusive
•
Rivalrous and non-exclusive
•
Non-rivalrous and non-exclusive
Public Goods, Private Goods, and the “Tragedy of the Commons”
19
Which of the following statements best describes the minimum wage?
•
It is a price floor that decreases consumer surplus as compared to the free market equilibrium price and output.
•
It is a price ceiling that decreases consumer surplus as compared to the free market equilibrium price and output.
•
It is a price ceiling that decreases producer surplus as compared to the free market equilibrium price and output.
•
It is a price floor that decreases producer surplus as compared to the free market equilibrium price and output.
Welfare Analysis
20
A good that a producer can prevent a consumer from using by charging a price is __________.
•
a public good that is non-rivalrous
•
a private good that is excludable
•
a public good that is excludable
•
a private good that is non-rivalrous
Public Goods, Private Goods, and the “Tragedy of the Commons”
1
In a pure market economy, public goods ___________.
•
are sold at a higher price than private goods
•
tend to be under-provided
•
are over-provided, because the government is not involved in the economy
•
are provided by the government
Comparative Economic Systems
2
CEOs are limited in making policy changes regarding climate change by all of the following EXCEPT __________.
•
investor support which is linked directly to profits
•
the necessity to think in the long term rather than the short term
•
his/her fiduciary responsibility to the company
•
needing support from the Board of Directors
Sustainable Returns--Investor Impact
3
Which of the following situations has revealed the level of influence that investors have in defining public company behavior?
•
Investors becoming increasingly aware of the immediacy related to climate change mitigation activities
•
Increasing awareness of the holistic connection between social sustainability, investment returns and climate change
•
Investor vigilance regarding compensation for CEOs
•
The US not signing the Kyoto Protocol
Sustainable Returns--Investor Impact
4
Which of the following statements is NOT true regarding process mapping?
•
Symbols are used to guide the process map.
•
It is a pictorial representation of a process.
•
It is an established procedure, developed in the 1930s.
•
It is used to document processes.
Process Mapping--Efficiency
5
Which of the following is an example of moral hazard?
•
Secondhand smoke costs that result in higher health insurance premiums
•
A congresswoman voting for additional fracking rights to bring more money to her local district
•
The monopoly granted by the government to a power company
•
Continuance of unemployment benefits that act as a disincentive for people to find jobs
Details on Regulatory Intervention and Market Failure
6
Which of the following is true regarding contingent valuation?
•
An examination of healthcare costs that are incurred as a result of pollution
•
An approach used to compare expenses and value-added when making a decision relative to the environment
•
Used to evaluate individual preferences in order to place a value on the environment
•
Seen when houses located in areas of less pollution have greater value
Assessing Costs of Waste and Pollution--Environmental Economics
7
Patricia decides whether or not she can afford to travel to Africa to meet with vendors in person.
Which of the following shapes in a process map would this scenario correspond with?
•
Oval
•
Rectangle
•
Circle
•
Diamond
Process Mapping--Efficiency
8
A public good is considered which of the following?
•
Non-rivalrous and exclusive
•
Rivalrous and non-exclusive
•
Rivalrous and exclusive
•
Non-rivalrous and non-exclusive
Public Goods, Private Goods, and the “Tragedy of the Commons”
9
Which of the following corresponds with unemployment insurance claims?
•
Leading indicators that firms might use to predict which part of the business cycle an economy is in
•
Indicators collected by states for tax purposes
•
Coincident indicators that lets people know which industries might be hiring
•
Lagging indicator that firms might use to analyze what labor costs will be in the future
Key Leading Indicators
10
Which one of the following is NOT an example of a practice that contributes to anthropomorphic climate change?
•
Emissions of greenhouse gases
•
Change in migration patterns
•
Deforestation and use of pesticides
•
Overuse and grazing of lands
Assessing Costs of Anthropomorphic Climate Change--Regulatory Intervention
11
Determine which example represents a coincidence indicator.
•
The S & P 500
•
Building permits
•
Consumer Confidence Index
•
Unemployment rate
Coincident Indicators
12
Sarah is a great teacher; however, she struggles with the technology used by potential students and school districts, and thus is not able to find work.
Sarah's type of unemployment is considered __________.
•
structural
•
seasonal
•
cyclical
•
frictional
Assessing Costs of Unemployment--Labor Economics
13
A good that a producer can prevent a consumer from using by charging a price is __________.
•
a public good that is non-rivalrous
•
a public good that is excludable
•
a private good that is non-rivalrous
•
a private good that is excludable
Public Goods, Private Goods, and the “Tragedy of the Commons”
14
Which of the following best describes externalities?
•
The result of information failure and hamper cost-benefit analysis
•
The result of politicians acting as utility maximizers
•
An example of a moral hazard
•
Third party costs or benefits that skew the correct market equilibrium
Details on Regulatory Intervention and Market Failure
15
Which statement below regarding welfare analysis is NOT true?
•
It gives us clear-cut rules for knowing when costs outweigh benefits.
•
It allows us to analyze the effects of public policy by evaluating consumer and producer surplus.
•
We still need to exercise our judgment when analyzing these effects.
•
We can use it to determine potential benefits of certain policies.
Welfare Analysis
16
The "tragedy of the commons" occurs with goods that are __________.
•
rival and non-excludable
•
non-rival and excludable
•
non-rival and non-excludable
•
rival and excludable
Public Goods, Private Goods, and the “Tragedy of the Commons”
17
The price at which the consumer purchases the taxed good increases by less than the amount of the tax.
Who of the following bears more of the burden of this tax, assuming that demand is more elastic than supply?
•
Both consumers and producers would equally share this tax burden
•
Based on the given information, this is unclear
•
Consumers
•
Producers
Taxation and Subsidy
18
Which one of the answers listed is NOT a reason why businesses have been slow to adopt sustainable practices in regard to unemployment?
•
Employment levels follow the business cycle.
•
Sustainable business practices mean larger profits in the long run.
•
Sustainable business practices often seem counterintuitive.
•
Businesses might lay off people in order to meet profitability in a given quarter.
Assessing Costs of Unemployment--Labor Economics
19
An estimate of the money and paperwork spent complying with environmental regulations could be compared to the advantages of cleaning up pollution.
This method of determining the value of the environment is known as __________.
•
cost-benefit analysis
•
hedonic pricing
•
contingent valuation
•
healthcare costs
Assessing Costs of Waste and Pollution--Environmental Economics
20
Which of the following always occurs when a tax is imposed?
•
The quantity sold of the good will increase.
•
The price of the good will increase.
•
Producers pay more of the tax than consumers.
•
Consumers pay more of the tax than producers.
Taxation and Subsidy
1
Which of the following best describes externalities?
•
The result of information failure and hamper cost-benefit analysis
•
An example of a moral hazard
•
The result of politicians acting as utility maximizers
•
Third party costs or benefits that skew the correct market equilibrium
Details on Regulatory Intervention and Market Failure
2
Which of the following corresponds with unemployment insurance claims?
•
Lagging indicator that firms might use to analyze what labor costs will be in the future
•
Leading indicators that firms might use to predict which part of the business cycle an economy is in
•
Indicators collected by states for tax purposes
•
Coincident indicators that lets people know which industries might be hiring
Key Leading Indicators
3
Which of the following scenarios relates to both natural and frictional employment?
•
Chip lost his job due to a massive slowdown in the economy and cannot find a job in the current recession.
•
Mikhal just moved with his family from Miami to Chicago and is looking for work.
•
Michelle is unemployed because she doesn't have the technology skills needed in the current job market.
•
Linda lost her job in manufacturing due to her company moving all manufacturing out of the country.
Assessing Costs of Unemployment--Labor Economics
4
A public good is considered which of the following?
•
Rivalrous and non-exclusive
•
Non-rivalrous and non-exclusive
•
Non-rivalrous and exclusive
•
Rivalrous and exclusive
Public Goods, Private Goods, and the “Tragedy of the Commons”
5
Which statement below regarding welfare analysis is NOT true?
•
It allows us to analyze the effects of public policy by evaluating consumer and producer surplus.
•
We can use it to determine potential benefits of certain policies.
•
It gives us clear-cut rules for knowing when costs outweigh benefits.
•
We still need to exercise our judgment when analyzing these effects.
Welfare Analysis
6
Which statement below applies to a pure command economy?
•
The government does not interfere in the market.
•
Public goods tend to be over-provided.
•
The government is responsible for all production, resulting in potential allocation inefficiencies.
•
The level of government involvement must change with society.
Comparative Economic Systems
7
Patricia decides whether or not she can afford to travel to Africa to meet with vendors in person.
Which of the following shapes in a process map would this scenario correspond with?
•
Oval
•
Circle
•
Diamond
•
Rectangle
Process Mapping--Efficiency
8
Determine which example represents a coincidence indicator.
•
Building permits
•
Unemployment rate
•
Consumer Confidence Index
•
The S & P 500
Coincident Indicators
9
CEO "say on pay" was a result of __________.
•
CEO involvement in selection of mutual funds in which to place their companies
•
greater CEO involvement in "green initiatives"
•
CEOs deciding what type of stock options to issue their executive employees
•
closer investor scrutiny of CEO pay
Sustainable Returns--Investor Impact
10
What is contingent valuation as it relates to alternative methods for estimating the value of environmental regulations?
•
Linking the amount of pollution to healthcare costs to estimate the cost of regulation
•
Multiplying the amount of people who are willing to pay for trips to natural resources by the number of citizens to construct an estimate on the value of environmental goods
•
Comparing how much it costs to clean waste sites to the cost of regulation
•
Using the change in property values in response to a change in pollution to provide an estimate of the cost of pollution
Assessing Costs of Waste and Pollution--Environmental Economics
11
When do producers benefit from an inelastic supply?
•
When input costs increase
•
When a tax is imposed
•
When quotas are placed on goods
•
When a subsidy is provided
Taxation and Subsidy
12
Given the information above, which of the following is true?
•
Producers will bear a greater tax incidence because supply is inelastic.
•
Producers will bear a greater tax incidence because supply is elastic.
•
Consumers will bear a greater tax incidence because demand is elastic.
•
Consumers will bear a greater tax incidence because demand is inelastic.
Taxation and Subsidy
13
Which of the following describes the visual representation of the steps that form a process?
•
Every process needs to be constructed as a closed loop.
•
It is an established process that's been used for over a century.
•
It plays an important role in efficiency evaluation.
•
Almost all processes have been documented in this way.
Process Mapping--Efficiency
14
Which of the following is an example of the "tragedy of the commons?"
•
It is difficult to keep people from polluting the air because it is rivalrous but not exclusive.
•
It is difficult to keep people from watching a fireworks display even if they don't pay because it is not rivalrous and not exclusive.
•
It is difficult to keep people from watching the same movie because it is not rivalrous.
•
It is difficult to keep common people out of private gardens because they are rivalrous and excludable.
Public Goods, Private Goods, and the “Tragedy of the Commons”
15
Which of the following situations has revealed the level of influence that investors have in defining public company behavior?
•
The US not signing the Kyoto Protocol
•
Increasing awareness of the holistic connection between social sustainability, investment returns and climate change
•
Investors becoming increasingly aware of the immediacy related to climate change mitigation activities
•
Investor vigilance regarding compensation for CEOs
Sustainable Returns--Investor Impact
16
Which of the following examples would correspond with a principal-agent problem?
•
A company emitting pollution because it is cheaper than producing cleanly, but it is causing people in the area to get sick
•
The local electric company responding slowly to an outage because they don't have to worry that customers will switch providers
•
Purchasing a car then realizing it had been in previous accidents and required a lot of repairs you did not anticipate
•
A doctor recommending an unnecessary surgery because it generates income for her
Details on Regulatory Intervention and Market Failure
17
Which of the following is a result of anthropomorphic climate change?
•
Insurance claims have been turned over to government committees.
•
Insurance is more readily available to consumers.
•
Emissions gasses have decreased.
•
Damage caused by weather-related disasters has increased.
Assessing Costs of Anthropomorphic Climate Change--Regulatory Intervention
18
The cost of cleaning up pollution can be measured by all of the following EXCEPT ___________.
•
market prices and quantity of goods/services produced
•
healthcare costs associated with pollution
•
contingent valuation as measured by surveys
•
hedonic pricing as it relates to areas of pollution
Assessing Costs of Waste and Pollution--Environmental Economics
19
Which of the following statements below is true in terms of unemployment and a healthy economy?
•
Full employment in an economy means that the entire labor force is employed.
•
Full employment in an economy means that every adult who is not in school is employed.
•
The natural rate of unemployment is 5%, according to most economists.
•
Full employment means having some cyclical employment.
Assessing Costs of Unemployment--Labor Economics
20
A good that a producer can prevent a consumer from using by charging a price is __________.
•
a public good that is excludable
•
a public good that is non-rivalrous
•
a private good that is non-rivalrous
•
a private good that is excludable
Public Goods, Private Goods, and the “Tragedy of the Commons”
Which statement below does NOT describe the effect of climate change seen in insurance claim activities?
The damage from climate change is expected to influence the spread of vector-borne disease.
Global property and casualty insurers have paid out unprecedented sums related to natural disasters.
The limitation of insurance availability is expected to reduce economic growth.
Climate change has resulted in heightened weather volatility, which is reflected in insurance claims.
A club good, such as a movie theater, is __________.
excludable and non-rivalrous
excludable and rivalrous
non-excludable and non-rivalrous
non-excludable and rivalrous
Which statement below is NOT true regarding process mapping?
Process mapping forms a foundation for efficiency evaluation.
A process map is a visual representation of the stages in a process.
Process mapping is used for evaluating sustainable business solutions.
Almost all business practices and decisions have been documented in some way or another.
Joe owns an electrical company that specializes in work on custom homes.
Which of the following economic indicators would be most helpful in Joe's line of business for helping him to decide whether or not to add a permanent employee to payroll?
Building permits
The unemployment rate
The Conference Board Consumer Confidence Index
The S & P 500
Which of the following is true regarding contingent valuation?
An approach used to compare expenses and value-added when making a decision relative to the environment
Used to evaluate individual preferences in order to place a value on the environment
An examination of healthcare costs that are incurred as a result of pollution
Seen when houses located in areas of less pollution have greater value
Which of the following is an example of a sustainable business practice as it relates to employment?
Businesses lay off workers to keep costs down.
Businesses recognize the benefit of keeping skilled workers in the long run.
Businesses trade labor for capital during periods of economic growth.
Businesses lay off workers during downturns in the business cycle.
Which of the following occurs when a subsidy is provided?
The demand curve may shift to the left; price will decrease and quantity sold will increase.
The supply curve may shift to the right; price will increase and quantity sold will increase.
The demand curve may shift to the right; price will decrease and quantity sold will increase.
The supply curve may shift to the right; price will decrease and quantity sold will increase.
Which of the following is NOT one of the causes of unemployment?
Economic slowing
Natural separation of employees
Change in industry composition
The implementation of sustainable business practices
If William quit his office job and is now looking for a position teaching English overseas, what type of unemployment would he be experiencing?
Structural
Seasonal
Cyclical
Frictional
Which of the following corresponds with non-competitive market failure?
A tax on imported cotton that raises the price of cotton for consumers
Farmers unaware of market price for cotton
One international corporation with a monopoly on cotton seed production
Pesticide used to keep cotton free of insects makes people sick
Tania really enjoyed the salads sold at her local grocery store, so she purchased five of them to eat throughout the week. The first salad is delicious, and Tania eats it quickly, looking forward to the next one. The second day, the next salad is also good. By the third day, some of the ingredients in the next salad are starting to go bad, and by the fourth day, Tania cannot bring herself to eat any more and throws away the remaining salads.
Which statement would be unlikely in economic terms?
Tania's marginal benefit was higher for the first two salads than the third and fourth.
Tania would achieve higher marginal utility by eating something other than the fourth salad.
Tania would achieve higher marginal utility if she purchased fewer salads.
Tania achieved utility maximization with her purchase of five salads.
The additional income a company generates from selling one more unit due to this is called which of the following?
Price effect
Break even point
Output effect
Diseconomies of scale
A(n) __________ good is one that, when consumed by one person, cannot be consumed by another.
non-rivalrous
rivalrous
non-exclusive
exclusive