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- 1. Open EndedExamples of this concept include: getting a vaccine now to prevent illness in the future, buying a meal for a homeless person, and volunteering for agency committee to increase likelihood of future promotions. -Maximizing utility -Preferences -Demand Curve -Selfishness
- 2. Fill in the BlankThe definition of "cost" is __________. -the resources, money, time when comparing options -the money spent on an item -the amount of effort involved to purchase or obtain something -stock market relation to the economy
- 3. Fill in the BlankThe definition of a demand curve is __________. -as price increases then people are willing to pay more -graph showing that more items are produced the price goes down -as the price of gas increases then people stop buying Hummers -line graph showing the price of an item compared to what people are willing to pay
- 4. Open EndedWhile shopping at Macy's in different zip codes within Shelby County, consumers will find various prices for the same items. This is an example of: -Price discrimination -Market price -Demand curve -NASDAQ
- 5. Open EndedWhat does "the market is amoral" mean? -The market should tax the rich and pay for the poor -The market only provides for the rich -The market rewards hard work and education -It is not concerned about the value of things but rewards scarcity instead
- 6. Fill in the BlankThe field of behavioral economics is used to measure _____________. -How poorer people are exploited by the rich -How people have a refined sense of risk and probability -How people use their resources to make themselves better -How people make decisions about spending money
- 7. Open EndedA company or corporation needs to only be slightly better than the existing competition to make a profit. True False
- 8. Open EndedIn considering profit, a company often disregards pricing a product that will result in a quantity of sales that earns the company the most money. It is only concerned in pricing a product at a high level. True False
- 9. Open EndedProfit in the market economy can make our lives better by inspiring a service or product that people will want to buy. True False
- 10. Open EndedConsumers buying fuel efficient cars when the price of gas is high is an example of how most markets are self-correcting. True False
- 11. Fill in the BlankReaping the benefit from other's effort and expense is a definition of ___________. -Free rider -Market discrimination -Cost maintenance -Exploitation
- 12. Open EndedWhich of the following is an example of incentives? -Having a boss tell you "good job" for completing a work task -Volunteering for overtime -Earning a monetary bonus for exceptional work practices -Receiving a paycheck for work
- 13. Fill in the BlankLaw of unintentional consequences is defined as __________. -Bad outcomes -Perverse incentives -Policy in which the procedures intentionally causes harm to other -A well intention-ed proposal that inadvertently causes harm to others
- 14. Fill in the BlankGood policy uses _____ to drive behavior toward a desired outcome. Bad policy fails to ______ human behavior changes to avoid being penalized. -Consequences, calculate -Incentives, anticipate -Investments, consider -Rewards, punish
- 15. Open EndedThe prisoners' dilemma (outlined in the text) is an example of what concept? -How incentives are self-serving -How unfettered self-interest leads to poor outcomes -How detectives get confessions -Human behavior decision making
- 16. Open EndedEconomist prefer taxes that are: (select ALL that apply) -Broad -Simple -Amoral -Wide -Fair -Incentivized -Complex
- 17. Open EndedAn externality of individual behavior occurs by the difference between private cost and social cost. True False
- 18. Open EndedSelect all statements about externalities that are true. -If given the chance, individuals for the most part will decide on social well being over making themselves better off. -The government has no purpose in trying to deal with externalities. -Externalities can be the reason for many social policies -There can be positive externalities as well as negative
- 19. Open EndedTaxing a behavior that generates negative externality provides what good incentives? -Improves good behavior, encourages development of better products, generates taxes -Raises money, limits good behavior of consumers, forces manufacturers to build better products. -Limits poor behavior of consumers, encourages manufactures to build more costly products, raises revenue from higher taxes. -Encourages manufacturers to build more efficiently and effectively, limits poor behavior of consumers, raises revenue.
- 20. Open EndedAccording to Wheelan, setting rules and regulations, defines and protects property rights, enforce antitrust laws, and provide public goods, redistributes wealth: are all examples of what? -A democracy -How Communism works -Government tax laws -A good functioning government
- 21. Open EndedGovernment regulates property rights by defining and monitoring which of the following (select all that applies): -copyright creative work -Investment/buy/sell property -patent inventions -patent government ideas
- 22. Open EndedProviding uniform rules and regulation, Rule of law, antitrust laws, and infrastructure are examples of what? -Government providing a reason to have lawyers -Government raising taxes and interests in the private sector -Government providing too much oversight into private sector -Government lowering costs of doing business in the private sector
- 23. Fill in the BlankThe idea of Libertarian Paternalism is the idea that __________________. -society must provide laws because you can't trust people to take care of themselves -society should not provide laws because people have to responsible for their own successes or mistakes -society should expend resources because private events often end up effecting others -society should guide but cannot be force people to change their behavior
- 24. Open EndedGovernment redistributes wealth only in the Communist market not the free market (U.S.). True False
- 25. Open EndedAccording to Wheelan, consumers lose out in what two ways when politics is involved in the economy? -The economy grows too large and tax revenue is squandered -Tax revenue is squandered on projects that benefit society and the economy decreases -Tax revenue is used efficiently and develops value laden projects -The economy does not grow and develop efficiently and tax revenue is placed on worthless projects
- 26. Open EndedWhat two ways do taxes exert a cost on the economy? -By diminishing our utility and cause people to change their behavior -By diminishing our utility and causes people to change their behavior that ultimately hurts the economy -By taking money out of the people's pocket and making the economy worse off and not building revenue for the government -By improving our utility and causing people to change their behavior that improves the economy
- 27. Open EndedWhat is the difference between consumption versus investment? -Buying a TV makes us happy now but does nothing for creating a productive future -Buying stuff does not lead to a productive future -Investment makes us more productive, thus richer, in future whereas buying a product does not -Makes a college education more worthwhile
- 28. Open EndedLower marginal tax rates stimulate economic activity is the definition of what? -Cutting taxes will increase government revenue -Tax rate justification -One-sided economics -Supply-side economics
- 29. Open EndedAccording to Wheelan, what are two things that government should not be doing? (Select the correct 2) -Be in the business of building bridges and roads -Be in the business of delivering mail -Not be the sole provider of a service unless the private sector will fail at it. -The government should not do the actual work (contract work done)
- 30. Open EndedThe theory of "helping hand" or "grabbing hand" refers to what issue? -Regulation of taxes -Regulation of permits and professional license -Regulation of professional education -Regulation of copyright laws and patents
- 31. Open EndedThe problem with excessive regulating is that it pushes businesses into the underground or illegal economy where there is no regulation at all. True False
- 32. Open EndedConservative politicians & economists push for lowering the taxes but cutting taxes typically results in less money to spend on government programs. One cannot cut taxes and have these programs. True False
- 33. Open EndedGovernment has no potential to improve the economic productivity and make us better off. True False
- 34. Open EndedMarkets tend to favor the party that knows more. True False
- 35. Open EndedThe fundamental challenge with health care reform and information is that expensive treatments never outweigh the cost. Similarly, when purchasing a product at a store, one should select the cheaper product that has all the features the consumer prefers. True False
- 36. Fill in the BlankIf the healthcare marketplace ("Obamacare") did not provide subsidies to cover premium costs and did not impose a tax penalty to assure most people purchase insurance, many young, healthy people would not participate. In turn, the cost of this program would increase due to only people with high use for insurance purchasing insurance. The result when potential participants sort themselves in or out of a program is called __________. -discrimination due to ageism -asymmetry of information -racial profiling -adverse selection
- 37. Open EndedSelect all statements that are true about "statistical discrimination". -Can have a discriminatory effect on a group of people -Takes place when someone makes an inference that they can defend based on narrow, specific statistical evidence -Is at risk to be incorrect/inaccurate when applied to individuals because broad statistical patterns can be misleading -Also referred to as "rational discrimination"
- 38. Fill in the Blank____________, a method of building an identity or reputation for a product, (i.e Coach purses) is a means that a company has to create a monopoly for themselves. -Competition -Branding -Optimizing quality -Rational discrimination
- 39. Fill in the BlankThe definition of __________ is that capitalism is a process of destroying the old structure and creating a new one. -Providing transitional aid, job retraining, subsidies -Maintaining the status quo -Creative destruction -Policies that protect new developments in technology
- 40. Fill in the BlankAn "earmark" is defined as ___________. -Directing federal money to specific small projects that protects it from formal review -Attaching federal money to small projects through grants and subsidies -Directs federal money to specific state projects -Attaching federal money to small projects that is approved by formal review
- 41. Fill in the BlankPork-barrel legislation refers to __________. -Large government funding for small projects with no national interest -Passing policy for the self-interest of politicians -Subsidies lavished on pork farmers -Large government funds for small projects of nation interest
- 42. Open EndedThe example of teacher certification is an example of what 2 points? - The inefficiencies of government related to unfair certification & special interest groups - Special interests groups and the businesses that fail due to regulations - Special interest groups and the firms that deliver certifications - Firms and businesses often benefit from regulations and special interest groups
- 43. Open Ended"The legislative process helps those who help themselves" is used to describe what benefits? - Trade protections, government bailout, tax considerations, limitations on competing technology - Special interest groups - Trade protections, government handouts, lowering taxes, regulate competing technology - Pork barrel spending created by special interest groups
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