econ 2100 final exam
study guide with
complete verified
solutions
(T/F) Communist command economies are a feasible choice because
individuals in a command economy who work hard earn the same amount of
income as their lazy counterparts. - answer False
(T/F) The following is a positive statement from the article "Does Abortion
Lower the Crime Rate?":"The effect on crime, even if confirmed by further
study, would probably not moderate the views of prolifers, who view abortion
as murder." - answer False
(T/F) In a pure command economy privately owned firms will produce
whatever the government tells them to produce. - answer False
Which of the following refers to a resource market transaction:
a) The local government provided Toyota with a substantial tax break to
encourage the company to open a plant in Macon.
b) A Toyota dealership on North Columbia Street has a sale.
c) Toyota Corporation acquired a new technology for designing a new, more
fuel-efficient engine - answer c) Toyota Corporation acquired a new
technology for designing a new, more fuel-efficient engine
Johnny offers $125,000 for a house. The seller turns down the offer but says
that she will sell the house for $150,000. Johnny agrees to pay the higher
price. Since we assume Johnny is a rational decision maker this must mean
,that: - answer The marginal benefit of the house to Johnny must be equal to
or greater than $150,000
What is one of the key pieces of supporting evidence presented in the article
"Does Abortion Lower the Crime Rate?" We discussed at least three in class.
Explain one - answer The lower crime rates in low-income/poverty ridden
areas (other ans: · (1) the timing supported it because when abortion was
legalized crime rates were lowered. (2) places that legalized abortion first
showed lower crime rates)
(T/F) The Law of Increasing Marginal Opportunity Cost only applies to linear
PPFs. - answer False
(T/F) The slope in a PPF example represents the opportunity cost of the Y
variable - answer False
(T/F) If the price of a product decreases, the demand for that product is likely
to increase - answer False
(T/F) Based on our discussion of the article "When everything is made in
China", the primary reason industrial production is being relocated into China
is their high opportunity costs for industrial production - answer False
(T/F) The Law of Supply states that as price increases quantity supplied will
increase, all else constant. - answer True
Based on our discussion of the article "When everything is made in China",
what is the primary reason we should be concerned about industrial
production being relocated into China? - answer If something were to go
wrong in China (such as a natural disaster or the economy crashes) the rest
of the world would be messed up because the world could not get the goods
that China produced.
, (T/F) A demand increase is likely to cause a price increase and a quantity
increase - answer True
lighthouses are nonrival and nonexcludable (T/F) - answer true
fixes for lack of competition related market failures typically come in two
forms: breaking up companies and deregulating the market (T/F) - answer
false
what is the consequence of the free rider problem? - answer markets will
underprovide the affected item
what is the list of consequence caused by a tariff being implemented? -
answer price increase, quantity decrease, and tax revenue increases
we know that economists generally do not like tariffs or quotas. however, if a
politician is going to use one or the other, why should they choose a tariff
instead of a quota? - answer you do not get revenue from a quota but you
can still get some revenue from a tariff
the HOPE scholarship is an example of an In-Kind transfer (T/F) - answer true
a product with a negative externality will be overprovide (T/F) - answer true
heroin dealers are able to charge extremely high prices for their product
because the demand for heroin is highly elastic (T/F) - answer false
which of the following is not one of the fixes for asymmetric information?
a) government testing (FDA)
b) education qualifications and licensing (PhD, BAR exam)
c) acquiring additional information (Carfax)
study guide with
complete verified
solutions
(T/F) Communist command economies are a feasible choice because
individuals in a command economy who work hard earn the same amount of
income as their lazy counterparts. - answer False
(T/F) The following is a positive statement from the article "Does Abortion
Lower the Crime Rate?":"The effect on crime, even if confirmed by further
study, would probably not moderate the views of prolifers, who view abortion
as murder." - answer False
(T/F) In a pure command economy privately owned firms will produce
whatever the government tells them to produce. - answer False
Which of the following refers to a resource market transaction:
a) The local government provided Toyota with a substantial tax break to
encourage the company to open a plant in Macon.
b) A Toyota dealership on North Columbia Street has a sale.
c) Toyota Corporation acquired a new technology for designing a new, more
fuel-efficient engine - answer c) Toyota Corporation acquired a new
technology for designing a new, more fuel-efficient engine
Johnny offers $125,000 for a house. The seller turns down the offer but says
that she will sell the house for $150,000. Johnny agrees to pay the higher
price. Since we assume Johnny is a rational decision maker this must mean
,that: - answer The marginal benefit of the house to Johnny must be equal to
or greater than $150,000
What is one of the key pieces of supporting evidence presented in the article
"Does Abortion Lower the Crime Rate?" We discussed at least three in class.
Explain one - answer The lower crime rates in low-income/poverty ridden
areas (other ans: · (1) the timing supported it because when abortion was
legalized crime rates were lowered. (2) places that legalized abortion first
showed lower crime rates)
(T/F) The Law of Increasing Marginal Opportunity Cost only applies to linear
PPFs. - answer False
(T/F) The slope in a PPF example represents the opportunity cost of the Y
variable - answer False
(T/F) If the price of a product decreases, the demand for that product is likely
to increase - answer False
(T/F) Based on our discussion of the article "When everything is made in
China", the primary reason industrial production is being relocated into China
is their high opportunity costs for industrial production - answer False
(T/F) The Law of Supply states that as price increases quantity supplied will
increase, all else constant. - answer True
Based on our discussion of the article "When everything is made in China",
what is the primary reason we should be concerned about industrial
production being relocated into China? - answer If something were to go
wrong in China (such as a natural disaster or the economy crashes) the rest
of the world would be messed up because the world could not get the goods
that China produced.
, (T/F) A demand increase is likely to cause a price increase and a quantity
increase - answer True
lighthouses are nonrival and nonexcludable (T/F) - answer true
fixes for lack of competition related market failures typically come in two
forms: breaking up companies and deregulating the market (T/F) - answer
false
what is the consequence of the free rider problem? - answer markets will
underprovide the affected item
what is the list of consequence caused by a tariff being implemented? -
answer price increase, quantity decrease, and tax revenue increases
we know that economists generally do not like tariffs or quotas. however, if a
politician is going to use one or the other, why should they choose a tariff
instead of a quota? - answer you do not get revenue from a quota but you
can still get some revenue from a tariff
the HOPE scholarship is an example of an In-Kind transfer (T/F) - answer true
a product with a negative externality will be overprovide (T/F) - answer true
heroin dealers are able to charge extremely high prices for their product
because the demand for heroin is highly elastic (T/F) - answer false
which of the following is not one of the fixes for asymmetric information?
a) government testing (FDA)
b) education qualifications and licensing (PhD, BAR exam)
c) acquiring additional information (Carfax)
