ECN2011 Final exam
Fall 2015
1. The headline read, “Medicaid Growth Could Aggravate Doctor Shortage.” As a result of the Affordable Care Act there will be an increasing number of Americans who will be eligible for Medicaid. How will we show the impact of this on the market for physician services?
a. an increase in supply
b. a decrease in supply
c. an increase in demand
d. a decrease in demand
2. What's going to happen to the labor market for college grads as the world economy falls into a recession at the same time more people are graduating.If these 'shocks' occur, then we can be certain that ___.
a. Demand will rise and supply will fall
b. Demand will fall and supply will rise
c. Demand will fall and supply will fall
d. Demand will rise and supply will rise
3. Billy Beane revolutionized baseball by identifying _____ discrimination.
a. employee
b. employer
c. customer
d. statistical
4. One of my colleagues used to rant about 'terrorist vehicles," the name he gave to SUVs. He called them this because he felt that the $s going to fill up those gas tanks put $s into the hands of potential terrorists. His goal was to get his students out of those SUVs, and this strategy was focused on ____ incentives.
a. social
b. moral
c. economic
d. Bayesian
5. Which of these headlines is true based on the world's demographic patterns? Be careful when reading the headlines!!!
a. "Life expectancies in the US becomes longest in the world".
b. "many of the world's poorest countries are getting younger while its richest countries are getting older"
c. "North America is the continent with the slowest projected population growth rate in next 20 years"
d. "Russia's population growth rate inches past that of the US"
Use this info to answer the next two questions: The administration decided to increase enrollment by 1,200 students and add 20 full-time faculty members.Based on this data and the fact that each additional student would pay tuition of $10,000 and each faculty member would be paid $80,000
6. What is the marginal revenue of an additional faculty member?
a. $80,000
b. $100,000
c. $600,000
d. $750,000
7. What is the marginal cost of an additional faculty member?
a. $80,000
b. $100,000
c. $500,000
d. $750,000
8. In the US we have seen a long-running "battle" for the hearts and minds of the American people between proponents of competing ideologies.That battle has been accurately described as one in which the “ _____ mistake is to think that there is a program or policy to alleviate every problem in the world, the ______flaw is to be vigilant against concentrations of power in government only – not in the private sector.”
a. liberal Marxist
b. institutionalist liberal
c. conservative liberal
d. liberal conservative
9. Miller beer was successful where others had failed - marketing light beer. What phenomenon was responsible for its success?
a. observational learning
b. opportunity cost
c. adverse selection
d. signaling
10. Claudia Goldin in "The quiet revolution that transformed women’s employment, education, and family" tried to make sense of the dramatic changes in women's attachment to the labor market by adopting the traditional rational choice model. Which of the following would not be among those factors identified by the rational choice model as cause of the increased labor force participation rate?
a. decreased discrimination against women in the labor market
b. decrease in divorce rates
c. discovery and distribution of the pill
d. increase in women's rights
11. Which of these would NOT be responsible for the growing ideological divide we see today in Congress and the news media?
a. Gerrymandering
b. Fracturing of media
c. Rapid economic growth
d. Increased heterogeneity of the population
12. "In an oft-cited experiment from 2006, students in two New York University classes read case studies about a tech entrepreneur who in some versions was named Heidi and in others, Howard. The students rated Heidi and Howard as equally competent, but liked Heidi less and didn’t want to work with her." This would be an example of ____ discrimination.
a. employee
b. employer
c. customer
d. statistical
13. I recently went to my neighbor and suggested he contribute to the cost of the painting of my house. Which imperfection in the market system would I use as a basis for my proposal?
a. instability
b. externalities
c. imperfect competition
d. inadequate growth
14. Based on this graph, which of the following statements is true? When we compare the US with these European countries___.a. Income inequality is largest in the US
b. The chances of rising in the income distribution have declined over time
c. In the US those at the bottom of the income distribution have a larger chance of remaining in the bottom of the distribution
d. Income growth is largest in the US /
15. It doesn't matter whether we look at economic or demographic data, the story is still the same - the US is very different from the other rich countries in the world. When we look at the demographic differences, which of the following would be true?
a. Life expectancies are higher in the US.
b. US ageing slower than other wealthy countries
c. Population is growing slower in the US.
d. Infant mortality rate is lower in the US.
16. At one time my daughter worked for a large retailer so I got a chance to see more about the inner workings of these operations. One of the things that always intrigued me was the use of SALE signs. Why was it that almost every store had Sale signs rather than simply low prices? It turns out those "Sale" signs are there for a good reason. Research has found that people react differently to a price tag of $20 and one that has $40 crossed out with a $20 sales price. The fact that the sales ticket looks better is an example of which behavioral peculiarity?
a. opportunity cost
b. anchoring
c. moral hazard
d. regression to the mean
17. If I wanted a plan to raise revenue and wanted to know if I should raise or lower the price, then I would want to have information on?
a. The cross-price elasticity of demand
b. The income elasticity of demand
c. The cross-income elasticity of demand
d. The own-price elasticity of demand
18. There have been proposals to reduce obesity by raising the price of sugary products. In one article I read that a 10% increase in price reduces consumption by about 5%. Based on this we could conclude that the own-price elasticity of demand is ______and as a result a price increase will ____ expenditures on gasoline.
a. elastic decrease
b. inelastic increase
c. elastic increase
d. inelastic decrease
19. A university's ratings is affected by the average SAT scores of applicants, why would making SATs optional increase a school’s ranking? What is the concept behind this?
a. Moral Hazard
b. Signaling
c. Adverse selection
d. Observational learning
20. The price of gas rose substantially in late 2002 and early 2003 with a rising fear of a war with IraqWhich diagram best depicts the impact of the rising gas prices on the market for SUVs?
a. A b. B c. C d. D
21. Insurance companies in recent years have suffered some very large losses on homeowner policies.As a result the insurance companies want the builders to install costly equipment on new homes, such as storm shutters, that would reduce the damage done by the hurricanes.The builders do not want to be forced to provide the extra equipment since it will add to the costs of construction. The increase in construction costs on the market for housing could best be demonstrated by which graph?
a. A b. B c. C d. D
22. This is a graph of supply of autos made in the US where the original graph is the solid line. Which of the following could explain the shift in the relationship represented by the new dotted line?a. An increase in price of autos
b. A reduction in imported autos
c. A decrease in the price of steel used to build autos
d. An increase in wages of United Auto Workers /
23. If you have not noticed, URI is bursting at the seems as a result of the president's decision to expand enrollment -by 1,500 students paying $30,000 in tuition. To accommodate this expansion the decision was made to add 25 full-time faculty members with an average salary of $80,000.Based on this data, the MC of an additional student would be approximately___? [I want the closest number]
a. $80,000 b. $30,000 c. $1,300 d. $1,100
24. Which of the following statements is NOT true?
a. Carbon dioxide levels in the world are increasing
b. Inequality is increasing in the US
c. Fewer sellers usually means lower prices
d. The world’s rich countries are aging rapidly
25. Claudia Goldin recently wrote "The quiet revolution that transformed women’s employment, education, and family" in which she examined the changing role of women in modern society. As she tried to make sense of the dramatic changes in women's attachment to the labor market she adopted the traditional rational choice model, so her conclusions regarding the factors behind the movement were not that surprising. Which of the following would be among those factors identified by the rational choice model as a cause of the increased labor force participation of women?
a. Discrimination against women in the labor force
b. Increase in value of public pensions
c. Increase in discrimination against women in the labor market
d. Increasing acceptance of divorce
26. Which of the following statements is true?
a. Corporate income taxes have become an increasingly important component of federal tax revenue in the past 30 years
b. payroll taxes have become a less important source of federal tax revenues in the past 30 years
c. property taxes are the major source of tax revenue at the federal level
d. tariffs in recent years have become a minor source of revenue for the federal government
27. If things got bad for me and I decided I really needed to sell As in this class, which of the following would probably drive the going price down?
a. Reinstitution of the draft to support the US war effort in the Middle East
b. The College of Business' decision to raise the GPA requirement of students in pre business courses that include ECN201
c. The hiring of a new faculty member in ECN that is a notoriously easy grader
d. A tighter job market that raises the importance of a good GPA for those grads looking for work.
28. Which of these headlines would be true based on the world's demographic patterns? Be careful when reading the headlines!!!
a. "Life expectancies in the US becomes longest in the world".
b. "Russia's population growth rate inches past that of the US"
c. "China's rapidly aging population putting strains on pension system"
d. "World's population growth rates rise as immigration rates rise"
29. How would we make an adjustment in the table to reflect the situation facing an older student, which would help explain why older students tend to work harder in school?a. The $41,000 figure would be higher
b. The $40,000 figure would be higher
c. The $8,000 figure would be lower
d. The $35,000 figure would be lower /
30. Based on this Gini Coefficient graph produced by the World Bank, which of the following statements is true? In the past 200 years___
a. the population in the world’s poor countries has risen
b. the level of pollution in the world has risen fairly steadily with industrialization
c. the share of the world’s income in wealthy countries has risen
d. the share of economic activity controlled by the government has increased /
Beer - own price elasticity of demand / -0.25
Wine - own price elasticity of demand / -0.8
Cigarettes - own price elasticity of demand / -0.4
Marijuana own -price elasticity of demand / -1.5
Fresh fruit – own price elasticity of demand / -2.3
Beer - income elasticity / 0.4
Wine- income elasticity / 1
Public transportation – income elasticity of demand / -.4
Computers – income elasticity / 1.7
Beer - in response to price changes in wine / 0.2
Hard liquor - in response to price changes in beer / 0.7
Pepsi - with price of Coke / 0.8
Coke - with price of Pepsi / 0.6
31. Which of the following statements is true based on the table above?
a. In a recession demand will fall most for fresh fruit
b. If the price if wine increases 10%, demand will fall 8%
c. If the price of Coke rises 10%, demand will fall 6%
d. If the sellers of fresh fruit raise the price this will increase the revenue earned by the sellers
32. Based on the possibility curve for Americans who can spend money on college educations or vacations, which of the following statements explains the movement from B to D?a. A decrease in total spending
b. An increase in the cost of education
c. A increase in the cost of vacations
d. An increase in total spending /
33. Tutoring is quite a competitive business and Tammy wants to reduce the competition on RIU’s campus, which she can do by creating some barriers to competition. At the present time Tammy is trying to persuade the administration to issue her the only license are operating on campus. This is an example of _____.