PLCY 110 MIDTERM EXAM
QUESTIONS WITH 100% CORRECT
ANSWERS.
1) Compensation principle -- Answer ✔✔ states that since free trade
causes the sum of the gains to exceed the sum of the losses in
the economy as a whole, it is possible to redistribute income so
that everyone benefits
2) Environmental Kuznets Curve -- Answer ✔✔ suggests that as
countries first industrialize they experience environmental
degradation, but as incomes continue to grow environmental
quality improves
3) Increasing barriers to imports almost always results in an overall
____ for a country's economy because consumer losses are ___
than producer gains -- Answer ✔✔ Loss; greater
4) Individuals may fail to do things that could have benefits for them
in the future due to time _____, a human tendency to care more
about costs and benefits in the present than consequences in the
future -- Answer ✔✔ Inconsistency
5) Which of the following is NOT a path to household income growth
in Sachs' model? -- Answer ✔✔ children!
6) People may not buy more high-quality food if they have
additional money due to lack of info and the difficulty of learning
about the impact of nutrition from ____ -- Answer ✔✔ Experience
7) _____ ________ is the condition in which an individual's habitual
food consumption is insufficient to provide the amount of dietary
QUESTIONS WITH 100% CORRECT
ANSWERS.
1) Compensation principle -- Answer ✔✔ states that since free trade
causes the sum of the gains to exceed the sum of the losses in
the economy as a whole, it is possible to redistribute income so
that everyone benefits
2) Environmental Kuznets Curve -- Answer ✔✔ suggests that as
countries first industrialize they experience environmental
degradation, but as incomes continue to grow environmental
quality improves
3) Increasing barriers to imports almost always results in an overall
____ for a country's economy because consumer losses are ___
than producer gains -- Answer ✔✔ Loss; greater
4) Individuals may fail to do things that could have benefits for them
in the future due to time _____, a human tendency to care more
about costs and benefits in the present than consequences in the
future -- Answer ✔✔ Inconsistency
5) Which of the following is NOT a path to household income growth
in Sachs' model? -- Answer ✔✔ children!
6) People may not buy more high-quality food if they have
additional money due to lack of info and the difficulty of learning
about the impact of nutrition from ____ -- Answer ✔✔ Experience
7) _____ ________ is the condition in which an individual's habitual
food consumption is insufficient to provide the amount of dietary
