WorksheetsQuizizz--Economics (Module 4--Element 1.12)--Unintended Conseque
Total questions: 27
Worksheet time: 14mins
Who wrote the book "Economics in One Lesson"?
Frédéric Bastiat
John Maynard Keynes
Henry Hazlitt
Adam Smith
What is the main argument against the "broken window fallacy"?
It creates more jobs in the community.
It ignores the secondary effects of economic actions.
It leads to increased production of goods.
It results in higher taxes for the shopkeeper.
What would the shopkeeper have done if the window had not been broken?
Invested in a new business
Bought a new car
Spent money on other items like shoes or clothes
Saved the money in a bank
What does the "broken window fallacy" suggest about destructive acts?
They are beneficial for the economy.
They reduce employment opportunities.
They have no impact on the economy.
They increase the wealth of the community.
What was Hazlitt's main lesson when analyzing an economic proposal?
Focus only on the immediate results.
Consider only the primary consequences.
Trace both immediate and long-term results, and consider effects on everyone.
Analyze only the effects on a special group.
What did Hazlitt believe was the most common source of economic error?
Overestimating the benefits of a policy.
Ignoring the short-term benefits of a policy.
Focusing only on the long-term consequences.
Failing to apply the lesson of considering secondary consequences.
What unintended consequence resulted from the regulation to make automobiles more fuel efficient?
Decrease in highway deaths.
Increase in gasoline consumption.
Increase in highway deaths.
Decrease in vehicle congestion.
How did higher mileage standards for cars and light trucks affect driving behavior?
People drove less due to higher costs.
People drove more because driving became cheaper.
People stopped using cars altogether.
People switched to public transportation.
What are the secondary effects of tariffs and import quotas on foreign goods?
They always benefit domestic workers.
They have no impact on domestic prices.
They can lead to higher costs for similar products.
They reduce the employment of foreign workers.
What is one argument made by proponents of import quotas on sugar in the United States?
They decrease the price of sugar globally.
They save jobs and increase employment.
They reduce the cost of candy production.
They increase foreign sugar sales.
What is a consequence of higher sugar prices in the United States due to import quotas?
Increased employment in candy production.
Candy producers moving to countries like Canada and Mexico.
Lower domestic sugar production.
Higher foreign sugar imports.
What is a potential effect of trade restrictions like the sugar quota program on U.S. employment?
Increase in overall U.S. employment
Decrease in employment in favored industries
Reshuffling of employment rather than an increase
Increase in employment in all industries
Why is it important to consider the secondary effects of economic decisions?
They always lead to positive outcomes
They are irrelevant to economic thinking
They can lead to unanticipated consequences
They only affect political decision-making
What unintended consequence did the first-grade teacher in West Virginia experience?
Students stopped using pencils
Students formed long lines at the pencil sharpener
Students saved their pencils without sharpening
Students refused to use pencils
A “fallacy” is something that is generally thought to be true but is actually not. What is the fallacy in the Broken Window Fallacy?
That other craftsmen are harmed by the need to fix the window.
That a broken window is on balance good for society because it creates work for glassmakers and window installers.
That glassmakers and window installers are better off when people break windows.
In creating policy to improve current economic situations, a common economic mistake made by policymakers is:
they did not allocate enough money to fully fund the project.
they do not have the resources to ensure businesses fully enact the policy.
understanding the full importance of unintended consequences, the secondary effects, of a policy.
The secondary effects of an economic action refer to the
best alternative that must be forgone as the result of a choice.
the unintended consequences of a change that are not immediately identifiable but are felt over time.
immediate and visible intended consequences of a change
impact on the availability of a resource needed to produce a good or service.
Many Americans have been hurt by recent economic events. Raising the minimum wage is the best policy to improve the wages and employment opportunities of Americans. This argument is
correct because a higher minimum wage will increase total income which will stimulate aggregate demand and employment.
correct because most minimum wage workers are household heads trying to earn enough to support their family.
incorrect because the government has too big a deficit to pay for the increase in the minimum wage.
incorrect because while some people will receive higher wages, others will experience less employment and fewer training opportunities.
Mediocre economists ofen consider only the immediate direct effects of a change, whereas a good economist will also consider indirect effects that may only become observable over time. This statement most clearly emphasizes
the law of comparative advantage.
economizing behavior.
the importance of secondary effects.
the gains derived from voluntary exchange.
The U.S. government subsidizes the production of ethanol from corn and requires gasoline to contain a specific percentage of ethanol.What are the unintended consequences of this program?
I. higher corn prices
II. higher prices for cornbread and tortillas, products made from corn
III. lower prices for gasoline because corn is a renewable resource
I only
II only
I and II
I, II, and III
Which of the following was an unintended consequence of the subsidies and mandated expansion in output of gasoline produced from corn-based ethanol?
higher food and grain prices.
a reduction in the demand for battery powered automobiles because of the low prices of gasoline produced from ethanol.
sharply lower prices for feed grains because of a reduction in the demand for corn.
a substantial reduction in crude oil prices because of the low-cost production of gasoline from ethanol.
Many Americans have been hurt by recent economic events. Raising the minimum wage is the best policy to improve the wages and employment opportunities of Americans. This argument is
correct because a higher minimum wage will increase total income which will stimulate aggregate demand and employment.
incorrect because while some people will receive higher wages, others will experience less employment and fewer training opportunities.
correct because most minimum wage workers are household heads trying to earn enough to support their family.
incorrect because the government has too big a deficit to pay for the increase in the minimum wage.
Which of the following is a predictable, secondary effect of a sharp increase in gasoline prices?
Producers will increase the production of gas guzzling vehicles.
the termination of research on the cost-effectiveness of alternative fuels to power automobiles.
The federal government will place a quota on the number of fuel-efficient cars for sale, thus forcing consumers to purchase the gas guzzling vehicles.
Producers will increase the production of fuel-efficient cars.
Mediocre economists often consider only the immediate direct effects of a change, whereas a good economist will also consider indirect effects that may only become observable over time. This statement most clearly emphasizes
the law of comparative advantage.
economizing behavior.
the importance of secondary effects.
the gains derived from voluntary exchange.
The secondary effects of an economic action refer to the
best alternative that must be forgone as the result of a choice.
the unintended consequences of a change that are not immediately identifiable but are felt over time.
immediate and visible intended consequences of a change.
impact on the availability of a resource needed to produce a good or service.
Which of the following statements reflect sound economic reasoning?
Foreign competition will reduce the wealth of Americans.
If domestic production of a good will employ lots of people, the good should be produced domestically.
Higher tariffs will increase the total volume of international trade.
If it is more economical to acquire a good through trade than by self-production, it makes sense to trade for it.
During 2007-2008, the price of gasoline increased from approximately $1.50 to $4.00 per gallon. As a result, the
supply of gas guzzling automobiles decreased, causing their price to increase.
supply of gas guzzling automobiles increased causing their price to fall.
demand for gas guzzling automobiles, such as the Hummer, decreased, causing their price to decline.
demand for gas guzzling automobiles increased, causing their price to increase.
