SOPHIA MICROECONOMICS EXAM QUESTIONS WITH CORRECT ANSWERS

SOPHIA MICROECONOMICS EXAM QUESTIONS WITH CORRECT ANSWERS Considering how much money will be involved in cleaning up a polluted site as well as what it will take for a business to comply with government regulations is an aspect of which of the following methods? - CORRECT ANSWER Cost-benefit analysis The decrease in drugs used to treat asthma, cancer and other illnesses due to air-borne pollution is an example of ___________. - CORRECT ANSWER healthcare costs Amy recently graduated from college and has not been able to find a job in her chosen field of fashion design yet. Her type of unemployment is __________. - CORRECT ANSWER frictional unemployment Sally was recently laid off from the travel agency where she worked. Due to the sluggish economy, people were no longer taking vacations. Her type of unemployment is __________. - CORRECT ANSWER cyclical unemployment The local art critic for the newspaper in the city was let go as the newspaper cut about half of its staff in order to avoid closing completely. The paper had been suffering revenue short-falls related to increased Internet competition. The critic's type of unemployment is __________. - CORRECT ANSWER structural unemployment What is the negative effect that natural disasters have had on the insurance market? - CORRECT ANSWER An increase in costs of cleanup and payout to insurers has led to volatility in the market. Which of the following statements regarding climate change is FALSE? - CORRECT ANSWER Climate change has resulted in decreased weather volatility. Which of the following statements regarding businesses and environmental impact is true? - CORRECT ANSWER Many investors are mainly interested in profitability rather than environmental impact. 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 __________. - CORRECT ANSWER cost-benefit analysis 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? - CORRECT ANSWER Producers Determine which example represents a coincidence indicator. - CORRECT ANSWER Consumer Confidence Index Which of the following statements best describes the minimum wage? - CORRECT ANSWER It is a price floor that decreases consumer surplus as compared to the free market equilibrium price and output. Which of the following corresponds with unemployment insurance claims? - CORRECT ANSWER Leading indicators that firms might use to predict which part of the business cycle an economy is in Which of the following is NOT related to government failure? - CORRECT ANSWER Externalities The "tragedy of the commons" occurs with goods that are __________. - CORRECT ANSWER rival and non-excludable Which of the following is true regarding contingent valuation? - CORRECT ANSWER Used to evaluate individual preferences in order to place a value on the environment Which statement below is correct? - CORRECT ANSWER Common goods are rival and nonexcludable. Which of the following occurs when a subsidy is provided? - CORRECT ANSWER The supply curve may shift to the right; price will decrease and quantity sold will increase.