111.Supposethatpolicymakersaredoingcost-benefitanalysisonaproposaltoaddtrafficbarrierstodividetheflowoftrafficinanefforttoincreasesafetyonagivenhighway.Whichofthefollowingstatementsiscorrect? a.Thebenefitsareusuallyeasiertomeasurethanthecosts. b.Becausehumanlifeispriceless,anymeasuretoincreasetrafficsafetywouldgeneratebenefitsthatoutweighthecosts. c.Estimatingthevalueofahumanlifeisdifficultbutnecessarytoevaluatetheproposal. d.Bothaandbarecorrect. 112.Inacost-benefitanalysis,thevalueofahumanlifeissometimescalculatedonthebasisof a.therisksthatapersonvoluntarilyexposesherselftoinherjoband/orrecreationalchoices. b.thevalueofeachindividual’sassets. c.thebeliefthathumanlifeispriceless. d.theamountofresourcesrequiredtoadequatelysustainlife. 113.Cost-benefitanalysisisimportanttodeterminetheroleofgovernmentinoureconomybecause a.thegovernmentshouldprovideallgoodsforwhichthebenefitsexceedthecosts. b.cost-benefitanalysisidentifiesthepossiblegainstosocietyfromgovernmentprovisionofaparticulargood. c.marketsforprivategoodscannoteffectivelyassigncostsandbenefits. d.cost-benefitanalysisisthebesttooltoidentifymarketfailures. 114.Beforeconsideringanypublicproject,thegovernmentshould a.(i)only b.(ii)only c.(i)and(ii)only d.(i),(ii),and(iii) 115.Highwayengineerswanttoimproveadangerousstretchofhighway.Theyexpectthatitwillreducetheriskofsomeonedyinginanaccidentfrom5.3percentto2.1percentoverthelifeofthehighway.Ifahumanlifeisworth$10million,thentheprojectisworthdoingaslongasitdoesnotcostmorethan a.$53,000. b.$210,000. c.$320,000. d.$2.1million. 116.Afterarecentspikeinviolentcrime,thelocalpolicedepartmentwantstospend$550,000onanewcrimefightinginitiative.If ahumanlifeisworth$9million,thecrimefightinginitiativeisworththecostifitreducestheriskofsomeonedyingfromcrimebyatleast a.3.5percentagepoints. b.5.5percentagepoints. c.6.1percentagepoints. d.9.0percentagepoints. 117.Toincreasesafetyatabadintersection,themayormustdecidewhethertoinstallatrafficlightatacostof$45,000. a.installthelightbecausetheexpectedbenefitof$400,000isgreaterthanthecost. b.installthelightbecausetheexpectedbenefitof$45,000isgreaterthanthecost. c.notinstallthelightbecausetheexpectedbenefitof$45,000isonlyequaltothecost. d.notinstallthelightbecausetheexpectedbenefitof$40,000islessthanthecost. 118.Atownengineercomestothecitycouncilwithaproposaltoinstallatrafficlightatacertainintersectionthatcurrentlyhasastopsign.Thebenefitofthetrafficlightisincreasedsafetybecausethelightwillreducetheincidenceoffataltrafficaccidentsby50percentperyear.Whichofthefollowingstatementsiscorrect? a.Thecitycouncilshouldvotetoinstallthetrafficlightbecausethebenefitswilloutweighthecosts. b.Thecitycouncilshouldcarefullyevaluatethebenefitsofreducedfatalitiesagainstonlytheexplicitcostsofthelight. c.Thecitycouncilshouldcarefullyevaluatethebenefitsofreducedfatalitiesagainstthecostsofthelightandoftheextratimethatdriverswillspendwaitingforagreenlight. d.Thecostswillinvariablyoutweighthebenefits. 119.Supposethatinstallinganoverheadpedestrianwalkwaywouldcostacollegetown$150,000.Thewalkwayisexpectedtoreducetheriskoffatalityby3percent,andthecostofahumanlifeisestimatedat$10million.Thetownshould a.installthewalkwaybecausetheestimatedbenefitistwicethecost. b.installthewalkwaybecausetheestimatedbenefitequalsthecost. c.notinstallthewalkway,sincethecostistwicetheestimatedbenefit. d.installthewalkway,sincethecostofevenasinglelifeistoogreatnottotakeaction. 120.Supposethatthecostofinstallinganoverheadpedestrianwalkwayinacollegetownis$150,000.Thewalkwayisexpectedtoreducetheriskoffatalityby1.5percent,andthecostofahumanlifeisestimatedat$10million.Thetownshould a.installthewalkwaybecausetheestimatedbenefitistwicethecost. b.beindifferentbetweeninstallingandnotinstallingthewalkwaybecausetheestimatedbenefitequalsthecost. c.notinstallthewalkway,sincethecostistwicetheestimatedbenefit. d.installthewalkway,sincethecostofevenasinglelifeistoogreatnottotakeaction.    

  61.Duncan Industries sold $100,000 of 12 percent bonds on January 1, 2011, when the market interest rate was 10 percent and received $107,732 for them.  The bonds mature on January 1, 2016 and pay interest on June 30 and December 31.  Duncan uses the effective interest method of amortization.  The annual cash payment for interest on the bonds are: a. $10,000 b. $12,000 c. […]

    31) Economists define investment to include purchases of A) capital goods and inventories. B) capital goods, household durable goods, and inventories. C) capital goods, such as tools, instruments, and buildings. D) capital goods, equity stocks, and bonds. E) capital goods, equity stocks, and inventories. 32) Investment includes A) GM’s purchase of robotic machinery. B) student purchases of laptops. C) Walmart’s purchase of health […]

    11) Suppose the NAIRU for Canada is 6.5%, the actual unemployment rate is 5% and productivity is constant. We can conclude that A) there is a recessionary gap. B) the NAIRU will re-adjust to 5%. C) the AD curve will automatically shift up. D) the excess demand for labour will put upward pressure on wages. E) the excess supply of labour will put […]

61. (p. 71) Which of the following best explains why petroleum-related products continue to dominate energy usage?  A. Petroleum’s versatility and ease of storage and transport B. Most governments still do not favor alternate fuels C. Petrol is still the cheapest form of fuel D. Petrol still remains the most efficient form of fuel E. Increasing discoveries of petrol deposits are making petrol cheaper 62. (p. 73) In terms of oil-imports, which of the following is […]

    11) The table above gives four production possibilities for airplanes and cruise ships. In possibility A, how many resources are devoted to the production of airplanes? A) 0 B) few C) most D) all E) It is impossible to tell without more information about the prices of airplanes and cruise ships. 12) The table above gives four production possibilities for airplanes and cruise […]

  34) With no international trade, the U.S. price of wheat is lower than the world price of wheat. This indicates that the United States ________ a comparative advantage in the production of wheat and with international trade, the United States will ________ wheat. A) has; export B) has; not trade C) has; import D) does not have; export E) might have; export   35) […]

  11) Suppose the world price of widgets is $5 each. If a widget-importing country imposed a $2 per widget tariff, what price would that country’s consumers pay for widgets? A) $10 B) $7 C) $5 D) $3 E) A price that is greater than $5 and less than $7 12) Which of the following chain of events occurs when a tariff is imposed on […]

  111.Which of the following is true of the Andean Pact during the mid-1980s?   A.Tariff-free trade existed between member countries. B.Harmonization of economic policies between member countries had been achieved. C.Successful integration of member economies had been achieved. D.The Pact had failed to achieve the objective of a common external tariff. E.The dominant political ideology in many of the Andean countries tended toward democracy. […]

    21) Demand for one item goes down when the price of another item goes up. These items must be A) substitutes. B) complements. C) normal goods. D) inferior goods.   22) In response to news reports that taking aspirin daily can reduce an individual’s risk of a heart attack, there will most likely be a(n) A) increase in the supply of aspirin. B) […]