Question

1

Suppose that wages paid to both factory workers and construction workers in a perfectly competitive factor market is $15 per hour. If the market for factory workers becomes unionized, you would expect:

a. an increase in the wage rate for construction workers.

b. an increase in the supply of factory workers.

c. an increase in the wage rate for factory workers.

d. no change in the wage rate for either factory workers or construction workers.

2

Marginal cost is the change in:

a. total cost resulting from a 1-unit change in average cost.

b. average cost resulting from a 1-unit change in quantity.

c. total cost resulting from a 1-unit change in a variable input.

d. total cost resulting from a 1-unit change in quantity.

3

Among the determinants of the demand for labor are:

a. the slope of the demand for labor curve.

b. substitute availability.

c. the supply of labor.

d. the wage rate.

4

An evaluation of centrally planned economies reveals that they:

a. were unsuccessful in attaining economic efficiency.

b. put a premium on technological innovation.

c. experienced lower rates of employment than most capitalist countries.

d. achieved a nearly equal distribution of income.

5

A resource for which consumption of its services necessarily reduces the stock of the resource is a(n):

a. unknown resource.

b. independent resource.

c. renewable natural resource.

d. exhaustible natural resource.

6

According to Eleanor Fox, a professor at New York University who was cited in the Case in Point on the differences between antitrust policy in the United States and European Union:

Sa. U.S. antitrust policy primarily emphasizes the unfair competitive advantages of dominant firms.

b. U.S. antitrust policy is primarily consumer-oriented.

c. European Union antitrust policy is primarily consumer-oriented.

d. European Union antitrust policies are concerned about unfair competitive advantages gained by smaller firms and therefore do not consider the interests of consumers.

7

According to the Case in Point titled "Trading Pollution Rights," the 1990 Clean Air Act Amendments:

a. imposed strong fines for any individual or firm that generated air pollution emissions without a permit.

b. had failed to implement incentive approaches to pollution control, and so they had to be repealed and replaced in the late 1990s.

c. established the first large-scale pollution control program that relied on tradable pollution permits.

d. increased the level of pollution permitted in the continental United States and then sold rights to the higher levels.

8

Studies indicate that the labor market for baseball players before the late 1970s was best represented by:

a. monopoly.

b. duopoly.

c. perfect competition.

d. monopsony.

9

The Case in Point on oil extraction implies that the environmental damage associated with future oil extraction is likely to :

a. rise because speculators are likely to be increasingly active in the future.

b. fall as new oil fields are discovered.

c. rise because more environmentally invasive procedures will be required to extract oil.

d. fall because of improving technology.

Answer 1

Ans 1 an increase in the wage rate of factory workers.

Ans 2 total cost change resulting from 1 unit change in variable input.

Ans 3 wage rate

Ans 4 experienced lower rate of unemployment than most of the capitalist countries