Economics Worksheet - Set 1 (Translated)

When society requires firms to reduce pollution, what occurs?

• A trade-off appears because the incomes of owners and workers at affected firms fall

• There is no trade-off because the cost of reducing pollution only occurs at firms subject to the regulations

• There is no trade-off because everyone benefits from lower pollution

• A trade-off appears only when some firms are forced to shut down

Suppose the income elasticity of demand for good X is negative. Good X is best described as which type of good?

• A necessity

• A luxury

• An inferior good

• A normal good

Which tools help us evaluate how a tax affects economic well‑being? (i) consumer surplus, (ii) producer surplus, (iii) government surplus, (iv) deadweight loss

• Only (i) and (ii)

• Only (ii) and (iv)

• (i), (ii), (iii), and (iv)

• Only (i), (ii), and (iii)

By definition, imports are:

• People working abroad

• Goods for which a country has an absolute advantage

• A cap on the number of goods that can leave the country

• Goods produced abroad and sold domestically

By definition, exports are:

• A cap on the number of goods that can be purchased domestically

• Goods produced domestically and sold abroad

• People working in foreign countries

• Goods for which a country has an absolute advantage

A good for which a 2% increase in price causes a 12% decrease in quantity demanded is most plausibly:

• In a very broadly defined market

• Without close substitutes

• A luxury good

• In a short‑run setting

The art in scientific thinking—in chemistry, economics, or biology—is to:

• Construct mathematical models for natural phenomena

• Know when to stop collecting data and when to begin analyzing data

• Decide which assumptions to make

• Design and conduct experiments in a laboratory

In which case would the United States produce more wheat than it needs and trade some to Italy for wine?

• The United States is not proficient at processing wheat compared with Italy

• The United States has an absolute advantage over Italy in wheat production

• Italy’s opportunity cost of producing 1 gallon of wine equals that of the United States

• Italy has a comparative advantage over the United States in producing wine

To cope with shortages caused by a binding price ceiling on a good:

• Long waiting lines of buyers increase

• Sellers may allocate the good using their own biases

• The ceiling price no longer allocates scarce resources efficiently

• All of the above

• She does not buy the dishwasher and, from the purchase alone, would receive a consumer surplus of $150

• She does not buy the dishwasher and, from the purchase alone, would receive a consumer surplus of $50

• She buys the dishwasher and, from the purchase alone, would receive a consumer surplus of $150

• She buys the dishwasher and, from the purchase alone, would receive a consumer surplus of $150