TEST 1

Question 1

Karl Marx Said

Answer 1

from each according to his ability to each according to his need

Question 2

In the 1950s, socialists changed their emphasis in advocating socialism in capitalist countries, why?

Answer 2

Because marx’s predictions about the labor markets did not materialize

Question 3

Darius chose to buy a new car rather than to get a college education. From this we conclude that he valued the new car more than he valued an education. Our conclusion is based on…

Answer 3

The theory of reveal preference

Question 4

Ramona is willing to accept a minimum of $35 to mow her neighbors yard. This means that Ramona’s cost of mowing the neighbor’s yard is…

Answer 4

$35

Question 5

The cost of pizza is

Answer 5

The value that someone must sacrifice in order to obtain a pizza

Question 6

a new law restricts danger to workers in the workplace. Which is true?

Answer 6

some workers may object because it would lower their salaries

Question 7

Compared to a situation where the government gives no support for a university education, if the government gives grants of $4000 per year to each student

Answer 7

there would be a social loss because the value of education to the newly enrolled students would be less than the cost of the education to those students

Question 8

scientists have discovered how to make previously harmless bacteria able to infect humans, causing discomfort, but not death, they have also found a was to quickly cure an infected person. it is true that

Answer 8

people will not better off because people do not actually profit from destruction

Question 9

The value of something is

Answer 9

the most one is willing to sacrifice to obtain something

Question 10

In the UK, one does not have to pay in order to visit a doctor, how does this pertain to the no free lunch principle

Answer 10

this is NOT a violation of the no free lunch priciple

Question 11

The reason oil companies would spend more on exploration as world oil supplies run low is

Answer 11

the price of oil is high

Question 12

“Good results arise when things are let alone,” is a statement

Answer 12

made by an ancient philosopher regarding spontaneous order

Question 13

Rational ignorance theory says the benefit of voting is trivially small because

Answer 13

the likelihood that one vote will change the election is trivially small

Question 14

the government affects the ethanol market by

Answer 14

mandating that it be used in gasoline

paying subsidies to ethanol manufacturers

restricting ethanol imports

Question 15

In 2009 expensive testing for the metal, lead, in toys…

Answer 15

was welcomed by large toy manufacturers

Question 16

“If CAFE regulations were repealed, no fuel efficient cars would be built.” this is an example of

Answer 16

status quo minus fallacy

Question 17

The direct costs of regulation include

Answer 17

business employees and programs for reporting, planning and administering compliance with regulation

wasteful activities such as hiring lobbyists

Question 18

Sam Peltzman has pointed out that due to safety improvements on automobiles…

Answer 18

There are more accidents and more pedestrian deaths

Question 19

Bastiat says that the main argument his opponents make in favor of taxes is that…

Answer 19

they provide income for public officials, who make purchases which give others income

Question 20

for individuals and for entire economies, having more income and wealth depend on having…

Answer 20

higher quality resources

Question 21

Bastiat says that if government transported grain, rather than the private market that…

Answer 21

government costs would be higher due to the lack of competition

Question 22

the Law of Increasing Opportunity Costs comes from…

Answer 22

the principle of optimal arrangement

the fact that resources are not identical

Question 23

Points inside the production possibilities frontier represent combinations…

Answer 23

such that there are unemployed resources

Question 24

The japanese government built an island in Osaka bay and put an airport on it. The island is…

Answer 24

capital

Question 25

according to Bastiat, in the manufacture of a coat….

Answer 25

everyone in the production process is a middleman

Question 26

Milton Friedman was once told that workers in an underdeveloped country used shovels instead of bulldozers in order to create more jobs. He recommended that they..

Answer 26

use spoons instead.

Question 27

Adam Smith said…

Answer 27

those who pursue self interest promote the public interest better than those who intended to promote public interests.

Question 28

Transactions costs are

Answer 28

resources used to find and complete exchanges

Question 29

When we add the balance of the current account and the balance of the capital account we get

Answer 29

zero. The current account is the negative of the capital account

Question 30

If foreigners want more US goods, we expect the dollar to…

Answer 30

Appreciate and exporting become harder

Question 31

People who work in the oil refining industry, which depends on foreign oil imports prefer a

Answer 31

a strong dollar.

Because a stronger dollar will purchase more oil imports

Question 32

When we restrict imports with a quota, the group who loses the most are….

Answer 32

domestic consumers of the goood

Question 33

The point of “The Petition of the Candlemakers” is…

Answer 33

to turn our back on trade is to turn our back on the enlightenment of reason

Question 34

Comparative advantage comes from…

Answer 34

differences in abilites

Question 35

in Bastiats story about buying French or Belgian iron, the Protectionists Law will…..

Answer 35

Make a french hat maker worse off, and a french publisher worse off