An Economics Pop Quiz

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In my latest column for AIER I offer a pop quiz, with answers at the end. A slice:

2) Which of the following occurrences would increase the productivity of — and, hence, raise the wages paid to — workers in Acme, Inc.’s machine-tool factory in Michigan?

A) Michiganders increase their savings, and use these savings to modernize Acme, Inc.’s Michigan factory.

B) Missourians and Marylanders increase their savings, and use these savings to modernize Acme, Inc.’s Michigan factory.

C) Mexicans and Mozambiqueans increase their savings, and use these savings to modernize Acme, Inc.’s Michigan factory.

D) All of the above.

3) Which of the following is the least likely way that owners of motels will respond if government raises the minimum wage to a level above the wages that motels pay many of their housekeeping staff?

A) Motel owners will do nothing but raise the pay of all housekeeping staffers up to the minimum wage and learn to live with the resulting higher cost of labor.

B) Motel owners will offer motel guests discounts for agreeing not to have their rooms cleaned daily, enabling motels to operate using fewer housekeeping staff.

C) Motel owners will lay off — that is, fire — housekeeping staffers who work most slowly and demand that housekeeping staffers who remain on the job work faster.

D) Motel owners will reduce the value of fringe benefits paid to housekeeping staff.

4) True or false: Government-enforced prohibitions on all but the most highly qualified and certified electricians selling their services to the general public have resulted in fewer accidental electrocutions.

A) True

B) False

5) All other things unchanged, an increase in the US trade deficit means:

A) the American economy is becoming less competitive.

B) foreigners are trading unfairly with Americans.

C) foreigners are becoming more impressed with the US as a place to invest their savings.

D) Americans’ indebtedness to foreigners is necessarily increasing.

6) In what year did the percentage of American workers employed in the service sector become greater than the percentage of American workers employed in either manufacturing, or in agriculture and extraction industries?

A) 1916

B) 1966

C) 1986

D) 1996

E) 2006

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