ECN 1A Study Guide - Midterm Guide: Marginal Cost, Economic Equilibrium, Opportunity Cost
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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
21. The English word that comes from the Greek word for "one who manages a household" is
A- market
B- consumer
C- producer
D- economy
B- should be counted only to the extent that they are more expensive at college than elsewhere. C- usually exceed the opportunity cost of going to college. D- plus the cost of tuition, equals the opportunity cost of going to college. |
B- in most economies, wealthy people consume disproportionate quantities of goods and services. C- governments restrict the production of too many goods and services. D- resources are limited. |
B- markets guiding economic activity. Today many countries that did not have this system have implemented it. C- government guiding economic activity. Today many countries that had this system have abandoned it. D- government guiding economic activity. Today many countries that did not have this system have implemented it. |
B- we should agree with Senator Johnson. C- a good decision requires that we recognize both viewpoints. D- there are no tradeoffs between equity and efficiency. |
B- it does not matter if they charge $10 or $15. C- they would do better charging $15 than $10. D- they should raise the price even more. |
B- helps to explain how the economy is organized. C- incorporates all aspects of the real economy. D- Both (a) and (b) are correct. |
B- households provide firms with labor, land, and capital. C- firms provide households with output. D- firms provide households with profit. |
B- grew rapidly, due to several increases in the minimum wage during those decades. C- grew rapidly, due to government policies that discouraged the importation of foreign products during those decades. D- grew slowly, due to the slow growth of the output of goods and services per hour of U.S. workers' time during those decades. |
Question 30. 30. For economists, statements about the world are of two types: |
A- assumptions and theories.
B- true statements and false statements.
C- specific statements and general statements.
D- positive statements and normative statements.
1. Terms of Payment found in international business contracts include:
a. CFR (cost and freight, foreign port)
b. Consignment
c. Documentary Drafts
d. all of the above
e. (b) and (c) above
2. Joint Ventures have the
a. advantage of utilizing the expertise of a local partner.
b. disadvantage of not being able to make all the decisions because control is shared.
c. advantage of being able to share the profits.
d. all of the above
e. (a) and (b) above
4. Businesses are using global or regional brands for the following reason(s):
a. private brands do not offer any meaningful competition.
b. economies of scale usually result in reduced costs.
c. satellite and cable TV are widely available.
d. all of the above
e. (b) and (c) above
6. E-Commerce Potential is
a) is higher for Jamaica than for Argentina.
b) is an index based on mobile phones, internet hosts, and number of PCs.
c) is a composite ranking of three indices.
d) (a) and (b) above
e) (a) and (c) above
7. Generally, industrial products require __________ adaptation than consumer products to meet the demands of the world market.
a) greater
b) less
c) the same amount of
d) only slightly less
e) only slightly more
13. Although global sourcing can be beneficial it may have some disadvantages such as
a. added costs
b. exchange rate fluctuations affecting prices
c. quality control
d. all of the above
e. (b) and (c) above
14. In staffing
a. an ethnocentric policy is always the most effective if qualified personnel are available.
b. a polycentric policy is always the least effective even when qualified personnel are available.
c. using third country personnel would be considered most frequently with regiocentric or geocentric policies.
d. all of the above
e. (a) and (c) above
16. In the most recent 40 years, union membership around the world has been in decline, in part because:
a) There are more women in the workforce.
b) The unions have been successful and priced themselves out of the market.
c) Employers have made efforts to keep business union-free.
d) (a) and (c) above only
e) All of the above.
17. When a firm has less than a majority interest in a subsidiary it can still have control by having
a) a management contract
b) the right to control the technology
c) the right to vote its shares
d) all of the above
e) (a) and (b) above only
18. The Female Wage Gap
a. is the percent of Male Wages earned by Female Employees.
b. younger females have less of a gap in all countries.
c. is the smallest for older females in Korea.
d. all of the above
e. (a) and (c) above
19. Income earned abroad by U.S. citizens:
a) incurs a tax liability in the US with some adjustments.
b) incurs tax liability only on the portions earned in the U.S.
c) incurs no tax liability.
d) incurs a tax liability in the US on all income earned with no adjustments for
taxes paid in other countries.
e) none of the above
20. The international structural stages model suggests that a typical evolutional path for an international company's structure would be:
a) from international division to geographical area division to worldwide product division.
b) from international division to worldwide product division to geographical area division.
c) from geographical area division to worldwide product division to global matrix.
d) from functional division to horizontal company to virtual corporation.
e) from international division to worldwide product division to global matrix.
21. Competitive advantage is acquired by developing competencies that
a. are common to all competitors so the firm can compete.
b. create value for customers even if the price is higher than customers want to pay.
c. are difficult to imitate.
d. all of the above
e. (a) and (c) above only
22. In their measurement and disclosure for accounting systems, less developed countries tend toward:
23. Export Marketing plans should be specific about: A. The markets to be developed B. The marketing strategy for servicing them. C. the tactics required to make the strategy operational
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24. Factors that are involved in the operation of a manufacturing system include:
A. Plant location
B. Plant layout
C. Material handling
D. Human asset
E. all of the above
26. A middle ground between an ad campaign that is standardized worldwide and an entirely local ad campaign is called a:
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27. In selecting a foreign market, a screening process is used by a firm. In regard to this process, answer the following:
a) The importance of the priority order of the steps in the screening process.
b) The reasons for participating in either a trade show or in a trade mission.(Select one)
c) The reasons for using cluster analysis in assessing global markets.
d) The importance of regional or ethnic subcultures in evaluating competitive forces.
28. Select any four of the following, explain each of them, and discuss the role each of them plays in international business activities:
a) Summarize any one of the videos from week six or eight (either one of them not both) and discuss the role the information in this video plays in international business activities.
b) Foreign (Free) Trade Zones
c) Countertrade
d) Explain why a manager with a global assignment needs a mentor in the host country and a mentor in the home country.
e) Quality and quantity of the labor force in a country
f) Labor Mobility and Guest Workers