Economics 1021A/B Study Guide - Final Guide: Marginal Product, Cumulative Frequency Analysis, Technological Change
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Person |
Judy |
Sandy |
Dee |
Shawntae |
Martha |
Income |
$40,000 |
$75,000 |
$85,000 |
$35,000 |
$110,000 |
The above table lists the incomes for the 5 people who live on the remote island nation of Richland.
1. Refer to Table 21.1. If Martha's income doubled to $220,000 while the incomes of the other four residents did not change, what would happen to the original median income onâ Richlandia?
A.It would increase by $22,000.
B.It would increase by $44,000.
C.It would not change.
D.It would double.
2.When we compare shares of income earned by U.S. households over the past 40 years, which of the following statements about the distribution of income isâ true?
A.The percentage of total income represented by each quintile has decreased.
B.Lower income households gained at the expense of higher-income households.
C.The largest gain in income percentage is in the top 5% of households.
D.The percentage of total income represented by each quintile has increased.
3.From 1970 to 2012, the Gini coefficient in the United States has
A.dramatically decreased.
B.remained is relatively unchanged.
C.steadily increased.
D.more than doubled.
4.Income distribution in the United States over the past 40 years has become more equal.
True
False
5.Income inequality in the United States has increased in part due to technological change. How does technological change contribute to incomeâ inequality?
A.It is responsible for a majority of new products on the market, and these products are only affordable to higher-income households.
B.It reduces the cost of producing goods and therefore lowers the value of labor services.
C.It allows manufacturers to produce products with lessâ labor, and this reduction in the demand for labor lowers wages at all skill levels.
D.It has created many higher-income jobs for skilled and trainedâ workers, leaving the income of less-skilled workers relatively unchanged by comparison.
6.Income inequality in the United States has increased in part due to globalization. How does globalization contribute to incomeâinequality?
A.It allows domestic firms to hire low skilled workers anywhere in the world, putting U.S. workers in competition with foreign workers. This has caused the wages of low skilled workers to fall relative to the wages of other workers.
B.It increases the demand for a wide variety of products which in turn increases prices beyond the reach of average income
households.
C.It allows producers to exploit workers and reduce the wages they are willing to pay those workers.
D.It reduces the cost of producing goods and therefore lowers the value of labor services.
7.Rachel, a large pineapple producer in Hawaii, lobbies Congress to limit imports of pineapples to be able to sell her pineapples at a higher price and greatly increase her income. This possible source of income inequality is due to
A.technology changes.
B.rent seeking.
C.globalization.
D.productivity differences.
8.If growing income inequality results from changes in technology that, as a whole, make society better off, this will
A.decrease the size of the economic pie because of income inequality.
B.increase the size of the economic pie.
C.not change the size of the economic pie because the positive technology changes will be offset by the increases in income inequality.
D.result incomplete income inequality as technology continues to change in the future.
9.The belief that having more of something makes you happier but in successively smaller increments is called
A.utilitarianism.
B.diminishing marginal utility.
C.the benefits received principle.
D.transcendentalism.
10.The results of a survey conducted by Dan Ariely and Michael Norton found that Americans
A.show absolutely no preference for the amount of equality in wealth distribution in the nation.
B.have a preference for much less equality in wealth distribution than currently exists.
C.have a preference for roughly the amount of equality in wealth distribution that currently exists.
D.have a preference for much greater equality in wealth distribution than currently exists.
11.In the United States, the highest quintile of income earners contribute ________ of all federal tax dollars received, and the lowest quintile of income earners contribute ________ of all federal tax dollars received
A. 24%; 1.5%
B. 20%; 20%
C. 68.8%; 0.4%
D. 29.4%; 11.5%
12.The question "Is the U.S tax system disproportionate enough?" is a ________ question, and the question "How would higher taxes make the rich behave?" is a ________ question.
A. normative; positive
B. positive; normative
C. positive; positive
D. normative; normative
1. Which of the following groups of countries are all advanced economies?
Hong Kong, Japan, France, and the United Kingdom |
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Italy, the United States, China, and Russia |
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Singapore, Russia, France, and Chad |
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Australia, Brazil, and the United States |
QUESTION 2
1. The most people live in ________ economies and the fewest people live in ________ economies.
developing; emerging market |
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advanced; emerging market |
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emerging market; developing |
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advanced; developing |
QUESTION 3
1. Households and firms in the U.S. economy interact with those in the rest of the world in the ________ market and the ________ market.
goods; financial |
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government; goods |
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goods; factor |
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financial; factor |
QUESTION 4
1. As a factor of production, oil reserves are counted as
labor. |
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capital. |
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entrepreneurship. |
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land. |
QUESTION 5
1. ________ the owners of the factors of production, while ________ what amounts of those factors to hire.
Households are; the government determines |
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Firms are; households that determine |
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The government is; firms determine |
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Households are; firms that determine |
QUESTION 6
1. The emerging market economies are
the nations that are currently agricultural in nature. |
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most of the nations of Western Europe. |
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the largest grouping including the nations of China and India. |
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in the transition from state-owned production to free markets. |
QUESTION 7
1. In the United States, the productive factor that, as a group, receives the largest fraction of the nation's total income was
consumption of goods and services. |
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entrepreneurship. |
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capital. |
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labor. |
QUESTION 8
1. Items bought by individuals to provide personal enjoyment are termed
personal goods. |
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consumption of goods. |
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consumption or investment goods. |
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standard goods. |
QUESTION 9
1. In the advanced economies, ________ of the factories use advanced capital equipment and in the developing economies ________ of the factories use advanced capital equipment
virtually all; none |
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some; some |
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virtually all; virtually all |
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virtually all; some |
QUESTION 10
1. The productive resource that includes all the "gifts of nature" is called
land. |
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labor. |
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entrepreneurship. |
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capital. |
QUESTION 11
1. What would be an example of government good?
Donald Trump purchases furniture for his office. |
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Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
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The local driver's license office purchases a new digital camera and printer. |
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Jake buys an iPhone. |
QUESTION 12
1. The world population is approximately ________ people.
2 trillion |
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680 million |
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6.8 billion |
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6.8 million |
QUESTION 13
1. Computers and insurance coverage produced in the United States and sold to people in other nations are categorized as
U.S. exports of goods and services. |
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U.S. government goods and services. |
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foreign capital goods. |
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U.S. consumer goods and services. |
QUESTION 14
1. Of the following, the federal government obtains most revenue from
corporate income taxes. |
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excise taxes. |
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sales taxes. |
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social security taxes. |
QUESTION 15
1. Items bought by businesses to help produce other goods and services are called
capital goods. |
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government goods and services. |
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consumption of goods and services. |
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exports of goods and services. |
QUESTION 16
1. The majority of the income earned in the United States is paid in
profit. |
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interest. |
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rent. |
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wages. |
QUESTION 17
1. Dan missed class the day the professor covered the circular flow model. Dan asked his friend Joan to explain markets to him. Joan correctly stated that a market
must include a written contract between buyers and sellers. |
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requires a physical location for buyers and sellers to get together. |
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is only a place to purchase groceries. |
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is an arrangement that brings buyers and sellers together. |
QUESTION 18
1. The United States possesses a large amount of human capital. As a result of this fact, in the United States, there is a
highly skilled and educated labor force. |
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a large number of kind and generous humans. |
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a large number of people and a great deal of land. |
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a large amount of machinery and equipment. |
QUESTION 19
1. Which of the following correctly lists the categories of factors of production?
labor, machines, buildings, capital, and entrepreneurship |
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land, buildings, capital, and entrepreneurship |
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land, labor, capital, and entrepreneurship |
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forests, fish, buildings, capital, and entrepreneurship |
QUESTION 20
1. Which of the following correctly lists the categories of factors of production?
capital, money, and labor |
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hardware, software, land, and money |
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land, labor, capital, and entrepreneurship |
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machines, buildings, land, and money |
QUESTION 21
1. In the United States, the poorest 20 percent of households receive roughly ________ percent of total income.
10 |
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3 |
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15 |
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20 |
QUESTION 22
1. What would be an example of a consumption service?
Jake buys an iPhone. |
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The local driver's license office purchases a new digital camera and printer. |
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Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
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Rhianna gets a haircut. |
QUESTION 23
1. The total value of capital in the United States is around
$47 trillion. |
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$10 trillion. |
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$100 trillion. |
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$79 trillion. |
QUESTION 24
1. An export good is a good produced
by foreigners in the United States and purchased by U.S. households. |
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in another country and purchased by U.S. residents. |
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in the United States and sold to foreigners living in the United States. |
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in the United States and sold in other countries. |
QUESTION 25
1. ________ paid for the use of land; ________ paid for the services of labor; and ________ paid for the use of capital.
Interest is; wages are; profit is |
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Rent is; wages are; interest is |
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Rent is; interest is; wages are |
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Mortgages are; interest is; wages are |