ECO204 Quizzes Week 5 – Quiz

Question 1

Some movie complexes have machines that sell movie tickets. When this occurs, the movie complex is substituting __________ for __________.

land; labor

labor; capital

labor; technology

Correct Answer

capital; labor

The answer can be found in Chapter 12, Section 12.4, Determinants of the Demand for Labor.

Question 2

The profit-maximizing firm equates the marginal benefit of labor to the marginal __________.

units of labor

production

Correct!

cost of labor

profit

Question 3

Suppose that the marginal product of labor falls from 21 units of output to 0 as the amount of labor employed increases by 1. Which of the following is TRUE?

The coefficient of price elasticity of demand is 1.

Total revenue is at a minimum, and the additional worker should be laid off.

The marginal revenue product is at a maximum.

Correct!

Total product cannot be increased further with additional workers.

Question 4

The official definition of the poverty income level __________.

does not include Social Security benefits

includes any and all in-kind transfers

is adjusted every year for real income growth

Correct Answer

is based on the cost of a minimally adequate diet

The answer can be found in Chapter 13, Section 13.2, Poverty in the United States.

Question 5

The life-cycle concept of income distribution, as opposed to the simple Lorenz curve concept of income distribution, draws attention to the fact that __________.

households are similar in both urban and rural areas

Correct!

household income changes over time, as people age and move in and out of jobs

the poor typically live in female-headed families

the poor lack human capital such as education or training and good health care

Question 6

A Lorenz curve that is a 45-degree line implies that __________.

household incomes share consistent distribution inequality

transfer payments are perfectly unequal

transfer payments are perfectly equal

Correct!

household incomes have perfect equality in income distribution

Question 7

Which of the following scenarios is an example of logrolling?

Correct!

Tanisha votes for Alejandro’s school construction if Alejandro votes for Tanisha’s farm subsidies.

Luis adds a rider to a health care bill to raise the age of dependents to be insured.

Ned joins Avena to help write a finance reform bill for the state legislature.

Rebecca convinces her party to vote for funds to recruit more firefighters.

Question 8

Why is bureaucratic decision making different from private sector decision making?

Bureau managers care more about self-interest than private sector managers do.

Bureau managers have a larger hierarchy of superiors to answer to.

Correct!

Bureau managers face a different set of incentives than private sector managers do.

Bureau managers typically have formal decision-making training.

Question 9

A politician who attempts to build a coalition of rent-seeking groups by brokering transfers to those groups is __________.

logrolling the rent-seeking groups

breaking federal laws

looking for a legitimate solution

Correct Answer

acting like an entrepreneur

The answer can be found in Chapter 14, Section 14.2, Rent Seeking.

Question 10

The commitment of scarce resources to capture returns created politically is called __________.

logrolling

cost minimizing

Correct!

rent seeking

profit maximizing