Test 1 Flashcards
According to the Planet Money podcast on BB Learn, the estimated value of a human life by the Environmental Protection Agency (EPA) and other agencies is about: Answers: $2 million. $10 million. $500,000. $50 million.
$10 million.
The Keynesian school believes the most economic problems are caused by (Lesson 2): Answers: government failure. market failure. liberals. globalization.
market failure.
Suppose that you are willing to pay $500 for a seat belt and it reduces your chance in death in 1 in 10,000. Following the value of statistical life analysis, your life is worth is: Answers: infinite $10 million $5 million $15 million
$5 Million
According to the Economic Impact of Vandal Athletics, presented in class,, each permanently filled seat at the Answers: No jobs as they are unrelated. 0.10 jobs and $10,000 in output 0.70 jobs and $50,000 in output. 10 jobs and $300,000 in output.
0.70 jobs and $50,000 in output.
The classical school supports which function of government? (Lesson 2)
Answers:
none of the functions of government
all four functions of government
only the redistribution function of government
the first function of government (i.e. providing competition and a system of laws, courts and justice)
the first function of government (i.e. providing competition and a system of laws, courts and justice)
Per the Brexit Video and class discussion, Brexit will likely be: Answers: mildly harmful the United Kingdom economy slowing future growth. slightly beneficial to the United Kingdom economy. very beneficial to the United Kingdom economy. very harmful and cause a depression to the United Kingdom economy.
mildly harmful the United Kingdom economy slowing future growth.
In the Commanding Heights video, the conservative leader of Great Britain that was allied with Ronald Reagan was: Answers: Margaret Thatcher John Major Tony Blair Elton John
Margaret Thatcher
Keynesian economists believe the economy is analogous to (Lesson 2): Answers: a Swiss watch. an old Idaho pickup. Dallas Cowboys football team. a perfect machine.
an old Idaho pickup.
The iron law of price is that it must rise before it can fall when a shortage occurs (Lesson 2).
True or False
true
According to the pod cast, the “cost of death” was about:
Answers:
$900,000 in 1982 or $1.7 million today.
$2 million in 1982 or $5 million today.
infinite …you cannot put a value on life.
$300,000 in 1982 or $800,000 today.
$300,000 in 1982 or $800,000 today.
The “legs” of the Keynesian social safety net in the U.S. include (Notes 3):
Answers:
none of the above.
tax cuts, government spending cuts, government regulation cuts.
Great Society (1930s), New Deal (1960s), and Great Regulation (1990s).
New Deal (1930s), Great Society (1960s), and Great Regulation (1970s).
New Deal (1930s), Great Society (1960s), and Great Regulation (1970s).
Which of the following government programs existed before the start of the Great Depression (Class discussion)? Answers: Social Security unemployment insurance federal welfare payments Medicare none of these
none of these
The two main economists in the Commanding Heights video (EP.1) was: Answers: Joan Robinson, Nicholas Kaldor John Maynard Keynes, Fredrich Von Hayek Paul Krugman, Eugene Fama John Cochrane, Noah Smith
John Maynard Keynes, Fredrich Von Hayek
According to the environmental Protection agency (EPA), the value of a statistical life is about: Answers: \$\$3.5 million $1.5 million $9.5 million $950 million
$9.5 million
The video on Brexit presented in class concludes that the European Union (EU):
Answers:
slowed economic growth among its member nations.
recommended dissolving the EU.
was a disaster for its member nations.
increased economic growth among its member nations.
increased economic growth among its member nations.
The inability of the government and government agencies to efficiently allocate resources is called (Lesson 2): Answers: federalism. communism. market failure. government failure.
government failure.
The economic school of thought that emphasizes the role of government failure in today's economic problems is called the \_\_\_\_\_\_\_\_\_\_\_ school (Lesson 2) Answers: Classical Federalist Conservative Keynesian.
Classical
According to your instructor , the “bounce” theory of economics is supported by (Lesson 2):
Answers:
classical economists and many Republicans
Keynesian economists and many Democrats
neither classical economists or Keynesians
both classical economists or Keynesians
classical economists and many Republicans
A normative statement is (Lesson 2)
Answers:
one that does not use the ceteris paribus clause.
about what is.
always true.
about what ought to be.
about what ought to be.
Free market economists (classical) are more likely to be allied with Democrats than are Keynesian economists who are more likely to be allied with the republicans (Lesson 2).
True or False
False
The political party that emphasizes the role of market failure in today's economic problems is called the \_\_\_\_\_\_\_\_\_\_\_ Party (Lesson 2) Answers: Democratic Federalist Conservative Republican
Democratic
Milton Friedman (Lesson 2) was a: Answers: Republican. Classical economist. Nobel Prize winning economist. All of the answers in this question are true. Libertarian
All of the answers in this question are true.
In a liquidity trap (Lesson 2): Answers: inflation is low. all of the answers are true. interest rates are near zero. expansionary monetary policy is ineffective.
all of the answers are true.
Keynesian economists support: (Lesson 2):
Answers:
expanded social safety net.
expanded fiscal policy.
expanded monetary policy.
expanded regulation of the financial markets.
all of the answers in this question.
all of the answers in this question.
According to class discussion, the Commanding Heights discussed two major topics or dimensions:
Answers:
Globalization and the debate between Keynesian and Classical schools.
macroeconomics versus microeconomics.
Marxism versus free markets.
productivity and income distribution.
Globalization and the debate between Keynesian and Classical schools.
Excluding the COVID-19 recession, the 2007-2009 recession: (Class Discussion)
Answers:
was worst than the Great Depression 1929-1933.
was the worst recession since 1937-1938 recession.
was not as severe as the 1980-82 recession.
was mild by historical standards.
was the worst recession since 1937-1938 recession.
The economic school of thought that emphasizes the role of market failure in today's economic problems is called the \_\_\_\_\_\_\_\_\_\_\_ school (Lesson 2) Answers: Conservative Federalist Keynesian. Classical
Keynesian.
John Maynard Keynes (Lesson 2):
Answers:
was true for all of these questions.
supported greater government intervention in the economy.
helped elevate macroeconomics in importance.
was the most famous economist of the 20th century.
was supported by most Democratic Party presidential candidates.
was true for all of these questions.
Classical economists believe the economy is analogous to (Lesson 2): Answers: Dallas Cowboys football team. a perfect machine. an old Idaho pickup. a Swiss watch.
a Swiss watch.
The inability of the government and government agencies to efficiently allocate resources is called (Lesson 2): Answers: federalism. government failure. market failure. communism.
government failure.
According to the Planet Money podcast and the NYT article (both posted on BB Learn), a government’s decision to shut down an economy due to COVID-19 (likely):
failed a benefit-cost analysis by a wide margin.
failed a benefit-cost analysis by a narrow margin.
passed a benefit -cost analysis by a wide margin.
passed a benefit-cost analysis by a narrow margin.
passed a benefit -cost analysis by a wide margin.
When a bank failed in the Great Depression (Class discussion)
Answers:
depositors were protected from the liquidation of bank assets.
depositors were refunded their money by the states.
depositors were protected by deposit insurance.
depositors usually lost all of their money.
depositors usually lost all of their money.
According to your instructor, the “bounce” theory (Lesson 2) of economics is supported by:
Answers:
neither classical economists or Keynesians
classical economists and many Republicans
Keynesian economists and many Democrats
both classical economists or Keynesians
classical economists and many Republicans
The 2007-2009 recession: (Class Discussion)
Answers:
was not as severe as the 1980-82 recession.
was worst than the Great Depression 1929-1933.
was the worst recession since 1937-1938 recession.
was mild by historical standards.
was the worst recession since 1937-1938 recession.
Factors of production include (Lesson 3)
Answers:
the economic system.
labor and capital (not land, which is fixed).
land, labor, capital and entrepreneurship.
only capital, land, and labor.
land, labor, capital and entrepreneurship.
All economic questions arise because (Lesson 3) Answers: production possibilities are unlimited. we want more than we can get. people are greedy. people are irrational.
we want more than we can get.
Marginal cost is the cost (Lesson 3)
Answers:
that arises from an increase in an activity.
that arises from the secondary effects of an activity.
that your activity imposes on someone else.
of an activity that exceeds its benefit.
that arises from an increase in an activity.
The loss of the highest-valued alternative defines the concept of (Lesson 3) Answers: entrepreneurship. marginal benefit. scarcity. opportunity cost.
opportunity cost.
Which of the following government programs existed before the start of the Great Depression (Class discussion)? Answers: none of these Social Security unemployment insurance Medicare federal welfare payments
none of these
The Keynesian school generally holds to the “bounce” theory of recessions and financial panics (Notes 2).
Answers:
True
False
False
Keynes Law: Demand creates its own supply; implies there cannot be insufficient aggregate supply and implies demand-caused recessions (Lesson 2).
True or False
True
Issues in which Adam Smith's invisible hand may not hold include (Lesson 3): Answers: global climate change. natural resource depletion. all of the answers are true. economic instability. information age economy.
all of the answers are true.
In broad terms the difference between microeconomics and macroeconomics is that (Lesson 4)
Answers:
macroeconomics studies the effects of government regulation and taxes on the price of individual goods and services whereas microeconomics does not.
microeconomics studies the effects of government taxes on the national unemployment rate.
microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy.
they use different sets of tools and ideas.
microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy.
Economists believe that (Lesson 3):
Answers:
all human activity has an opportunity cost
all resources are scarce
consumer wants are unlimited
all of the answers in this question
none of the above
all of the answers in this question
According to Adam Smith (Lesson 3)
Answers:
politicians are well-equipped to regulate corporations and intervene in markets to improve market outcomes.
when big corporations pursue their self-interest of maximum profit, they will inevitably conflict with social interest.
in a market transaction buyers can either get what they want for less than they would be willing to pay or sellers can earn a profit, but both buyers and sellers can’t gain simultaneously.
government intervention in markets is not desirable because an invisible hand leads decisions made in pursuit of self-interest to unintentionally promote the social interest.
government intervention in markets is not desirable because an invisible hand leads decisions made in pursuit of self-interest to unintentionally promote the social interest.
Milton Friedman (Lesson 2) was a: Answers: Nobel Prize winning economist. Classical economist. Republican. Libertarian. All of the answers in this question are true.
All of the answers in this question are true.
The economic school of thought that emphasizes the role of market failure in today's economic problems is called the \_\_\_\_\_\_\_\_\_\_\_ school (Lesson 2) Answers: Conservative Keynesian. Classical Federalist
Keynesian.
Free market economists (classical) are more likely to be allied with Republicans than are Keynesian economists who are more likely to be allied with the Democrats (Lesson 2).
true or false
true
Because wants and desires are unlimited; in a well functioning economy there cannot be any substantial long-term involuntary unemployment (regardless of future productivity and technology increases) (Lesson 3)
true or false
true
As an economic concept, scarcity applies to (Lesson 3) Answers: time but not money. neither time nor money. both money and time. money but not time.
both money and time.
Which trade legislation likely worsened the Great Depression (Lesson 2)? Answers: Glass-Steagall Act of 1933 Federal Reserve Act of 1913 Dodd-Frank Bill of 2010 Smoot-Hawley Tariff Act of 1930
Smoot-Hawley Tariff Act of 1930
Paul Krugman is considered to be a \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ economist (Lesson 2). Answers: supply-side classical Keynesian monetarist
Keynesian
The “big” tradeoff is between efficiency and equity (fairness) in any economy (Lesson 3).
true or false
true
The fallacy of composition is the false belief that (Lesson 3)
Answers:
because event A occurred before event B, event A caused event B.
because event A occurred after event B, event A caused event B.
what is true for each part is also true for the whole.
the ceteris paribus condition does not apply.
what is true for each part is also true for the whole.
The benefit that arises from an increase in an activity is called (Lesson 3)
Answers:
the marginal benefit.
opportunity cost.
an incentive.
the marginal cost.
the marginal benefit.
In economics, the term "capital" refers to (Lesson 3) Answers: consumer goods. the money in one's pocket. buildings and equipment. mineral resources.
buildings and equipment.
The term ceteris paribus means (Lesson 2) Answers: the greatest good for all. the study of scarcity and choice. all other things remaining equal. value free and testable.
all other things remaining equal.
The birth of economics as an intellectual discipline can be dated fairly precisely in the eighteenth century with (Lesson 2)
Answers:
the opening of the London stock exchange.
the publication of the book, The Wealth of Nations.
the introduction of paper currency.
the development of the factory system.
the publication of the book, The Wealth of Nations.
Most economists believe that: (Lesson 2)
Answers:
prices are the best way to ration goods and services
prices are an unfair way to ration goods and services especially to the poor
markets are often unfair to the poor
necessities should not be rationed.
none of the above
prices are the best way to ration goods and services
Which legislation made it the official position of the U.S. government to promote a full-employment economy (Lesson 2)? Answers: Federal Reserve Act of 1913. Cochrane Act of 1970 Employment Act of 1946 Jobs Act of 1878
Employment Act of 1946
Factors of production are grouped into four categories (Lesson 3): Answers: land, capital, money, entrepreneurship labor, capital, money, entrepreneurship land, labor, capital, entrepreneurship land, labor, capital, money
land, labor, capital, entrepreneurship
When a country decides to produce fewer bombers and more public housing projects, it is answering the \_\_\_\_\_\_\_\_ part of one of the two big economic questions (Lesson 3). Answers: "defense" "how" "what" "for whom"
“what”
When a bank failed in the Great Depression (Class discussion)
Answers:
depositors were protected from the liquidation of bank assets.
depositors usually lost all of their money.
depositors were protected by deposit insurance.
depositors were refunded their money by the states.
depositors usually lost all of their money.
The economic school of thought that emphasizes the role of government failure in today's economic problems is called the \_\_\_\_\_\_\_\_\_\_\_ school (Lesson 2) Answers: Keynesian. Conservative Classical Federalist
Classical
Contactionary monetary policy (Lesson 2):
Answers:
fights the increase in the national debt.
fights recession.
fights communism.
fights inflation.
fights inflation.
In economics, many resources have no scarcity value…that is they are available to everyone free of charge ((Lesson 3)
true or false
false
When China builds a dam using few machines and a great deal of labor, it is answering the \_\_\_\_\_\_\_\_ question (Lesson 3). Answers: "how" "for whom" "where" "what"
“how”
When a firm decides to produce more electric cars and fewer gas guzzlers, it is most directly answering the \_\_\_\_\_\_\_\_ question (Lesson 3). Answers: "scarcity" "for whom" "how" "what"
“what”
Pareto optimality (Lesson 3)
Answers:
a condition in which you cannot make someone better off without making someone else worse off.
is a general measure of economic efficiency.
a focus of economic analysis.
all of the answers are true.
all of the answers are true.
A system of property rights (Lesson 3)
Answers:
encourages economic growth by creating incentives to invest in capital and to be innovative.
reduces the efficiency of government, which reduces the growth rate of the economy over time.
encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain.
discourages economic growth by discouraging the development of new ideas and ways of doing things.
encourages economic growth by creating incentives to invest in capital and to be innovative.
The political party that emphasizes the role of market failure in today's economic problems is called the \_\_\_\_\_\_\_\_\_\_\_ Party (Lesson 2) Answers: Democratic Republican Federalist Conservative
Democratic
The majority of economists in the U.S. support which of the following (Lesson 5)?
Answers:
dropping most if not all trade barriers
greater immigration to the U.S.
reducing or eliminating most agricultural subsidies
all of the above
none of the above
all of the above
According to your instructor, using marginal cost pricing (with excess capacity), the Western Undergraduate Exchange (WUE) tuition rates likely cover all of their marginal costs at the UI.
true or false
true
Productive or technical efficiency is achieved when
Answers:
producing one more unit of one good cannot occur without producing less of some other good.
producing inside the production possibilities frontier
The economy is on the production possibilities frontier (boundary).
None of the answers in the question are true.
producing one more unit of one good cannot occur without producing less of some other good.
According to the article: Governors’ shutdowns did not cause the pandemic jobs crisis
in the Washington Post (Week Three):
Answers:
there was greater economic damage in Red States as compared to Blue States.
Blue states were found to have twice the economic damage as Red States.
there was greater economic damage in Blue States as compared to Red States.
there was virtually no economic difference between Red and Blue States.
there was virtually no economic difference between Red and Blue States.
Adjusted for inflation, the price of gasoline today:
Answers:
is the lowest in history.
near the highest in history.
is close to its historical average of about $225-$250 per gallon.
is far higher than its historical average of about $1.00 per gallon.
is close to its historical average of about $225-$250 per gallon.
Former California Governor Grey Davis was defeated in a recall election by: Answers: The Terminator, Arnold Schwarzenegger. Hayden Christensen. Hilary Clinton. Ronald Reagan.
The Terminator, Arnold Schwarzenegger.
The California Energy Crisis was most likely caused by:
Answers:
problems with several nuclear power plants.
federal government intervention.
energy speculators and Enron.
the normal forces of demand and supply.
energy speculators and Enron.
Economic growth can be pictured in a production possibilities frontier diagram by
Answers:
shifting the production possibilities frontier inward.
shifting the production possibilities frontier outward.
making the production possibilities frontier less bowed out.
making the production possibilities frontier more bowed out.
shifting the production possibilities frontier outward.
Most economists believe that :
Answers:
prices are an unfair way to ration goods and services especially to the poor
markets are often unfair to the poor
prices are the best way to ration goods and services
both b and c
none of the above
prices are the best way to ration goods and services
Professor Wenders believed that hunting licenses should be allocated by (Lesson 5):
Answers:
price… through auction markets.
a sliding scale according to a hunters ability to pay.
lotteries as a fairer approach.
first come, first serve.
price… through auction markets.
On the issue of agriculture price supports and subsidies, economists (on average):(Lesson 5) Answers: strongly oppose. are very divided. have no opinion. strongly support.
strongly oppose.
On the issue of immigration, economists (on average): (Lesson 5) Answers: strongly support. strongly oppose. have no opinion. are very divided.
strongly support.
If a university has excess capacity, the marginal (additional) cost of adding a student:
Answers:
can be substantially less than average cost or even zero if there are empty seats in every class.
higher than average cost in almost all cases.
cannot be calculated due to the complexity.
will be about double the cost of an existing student cost.
can be substantially less than average cost or even zero if there are empty seats in every class.
Employing a peak versus off-peak pricing system,the peak price (ceteris paribus) should be: Answers: zero. equal to the off-peak price. higher than the off-peak price. lower than the off-peak price.
higher than the off-peak price.
According to the article in Week Three: A Look at What’s in Biden’s $1.9 Trillion Stimulus Plan, President Biden is proposing: Answers: n additional $600 stimulus check. an additional $2,000 stimulus check. an additional $1,400 stimulus check. n additional $3,000 stimulus check.
an additional $1,400 stimulus check.
On the issue of free trade, economists (on average): (Lesson 5) Answers: strongly oppose. strongly support. are very divided. have no opinion.
strongly support.
The Smoot-Hawley Act (Lesson 5):
Answers:
was favorable to the U.S. economy, according to most economists.
enacted prohibitive tariffs that worsened the Great Depression.
was enacted during President Carter’s term in 1978.
was a free trade bill that was passed and signed by President Reagan in 1987.
enacted prohibitive tariffs that worsened the Great Depression.
Milton Friedman’:
Answers:
opposed illegal immigration (to the U.S.) but supported legal immigration.
believed that illegal immigration from Mexico was actually more valuable to the U.S. than legal immigration.
had no opinion on immigration.
opposed legal and illegal immigration.
believed that illegal immigration from Mexico was actually more valuable to the U.S. than legal immigration.
The production possibilities frontier
Answers:
once applied to U.S. technology but now refers to Japanese technology.
refers to the technology used in such goods as computers and military aircraft.
is also called the supply curve.
represents (the production of) all possible combinations of any two goods or services that are technically (productively) efficient.
represents (the production of) all possible combinations of any two goods or services that are technically (productively) efficient.
A study conducted by JP Morgan in 2019 concluded that the trade war with China had cost the average U.S. household (Lesson 5): Answers: $5,000 per year. $50 per year. $600 per year. $100 per year.
$600 per year.
