1. The fundamental economic problem all societies face is that choice is necessitated by ______
   democracy.
   scarcity.
   capitalism.
   utilitarianism.
   

2. In which of the following is scarcity the least likely to be relevant?
   The last cookie in the cookie jar.
   Clean air in the atmosphere.
   One hour of your time.
   Love and spirituality.
   

3. True of false: The benefits of biodiversity, wilderness areas, and clean air are not economic because these aspects of the natural environment are not bought and sold in markets and thus do not have a price to indicate scarcity and value.
   True.
   False.
   

4. The opportunity cost of an action is:
   The sum of the value generated by each of the possible alternatives available when a choice is to be made.
   The value of the next-best alternative, which was passed up when the action was taken.
   The penalty associated with opportunistic behavior such as cheating on tests or shop-lifting.
   The incentive for effort and risk-taking--normally associated with an opportunity economy--that is lost in centrally-planned economies.
   

5. Structural unemployment refers to...
   Permanent job losses due to technological or other changes in markets, a classic example being the permanent decline in horse-drawn buggy manufacturing.
   The unemployment that occurs as people voluntarily change jobs.
   The unemployment that occurs as a consequence of recessions.
   A problem that only occurs in centrally-planned economies such as those of the former Soviet Union.
   

6. Empirically, the most important overall explanation for why U.S. manufacturing firms re-locate their plants in developing countries appears to be that:
   Stringent US pollution regulation reflects at least one-half of the overall cost of producing manufactured goods in the US, which drives manufacturers to "pollution havens" in developing countries.
   People in developing countries consume a larger volume of consumer goods per capita than do Americans.
   Immigration into the US has kept labor costs relatively low in the US.
   Labor costs are commonly an order of magnitude lower in developing countries, and labor costs are commonly at least one-half of the overall cost of producing manufactured goods.
   

7. What share of the world's income does the wealthiest 20% of the world's population receive?
   28.7%.
   82.7%.
   45.3%.
   99%.
   

8. How much of the world's income does the poorest 20% of the world's population receive
   1.4%.
   16.4%.
   20.1%.
   30.67%.
   

9. Deontological ethics proposes theories of action based on
   The premise of an open society featuring diverse values, cultures, and attitudes toward civic virtue.
   Duty or moral obligation to select an intrinsically correct action, regardless of the desirability of the outcome anticipated as the consequence of the action.
   The desirability of the outcome anticipated as the consequence of the action.
   Appropriating the earths resources to satisfy human wants.
   

10. Teleological ethics proposes theories of action based on...
    The premise of an open society featuring diverse values, cultures, and attitudes toward civic virtue.
    Duty or moral obligation to select an intrinsically correct action, regardless of the desirability of the outcome anticipated as the consequence of the action.
    The desirability of the outcome anticipated as the consequence of the action.
    Appropriating the earths resources to satisfy human wants.
    

11. According to act utilitarianism a social rule is ethical if...
    The rule benefits the people in power.
    After adding up all the utility and disutility the rule causes for all members of society, a net positive value for social utility results that is larger than under any alternative social rule.
    The rule is held to be intrinsically right based on shared social values in the community.
    Aggregate costs exceed aggregate benefits, but the costs are borne by a few while the benefits accrue to the majority of society.
    

12. According to Jeremy Bentham, an effective and ethical policy is one...
    That maximizes profit for corporations.
    That best instills a system of deontological ethics.
    That maximizes the net utility to society relative to all other options under consideration.
    That does not reduce the utility of any member of society.
    

Questions:
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