Question 1

.    The U.S. Constitution was initially designed to set up:

.	.	.    A large expansive of government
.	.	.    A small laissez-faire government
.	.	.    A constrained government of enumerated powers
.	.	.    None of the above

.

1 points  

Question 2

.    Evaluate: “Your major in college should have no relationship to your comparative advantages.”

.	.	.    This is true because it is more efficient to major in whatever makes the most money
.	.	.    This is true because it is more efficient to major in whatever promises us a job
.	.	.    This is false because it is more efficient to major in something you are relatively better at than others since you will be specializing in it
.	.	.    This is false because you should only major in fields in which you have an absolute advantage

.

1 points  

Question 3

.    In a market, the value of your services and skills are determined by:

.	.	.    How much effort you put into it
.	.	.    How much self-esteem you get from doing a good job
.	.	.    How much others value what you are providing
.	.	.    The man

.

1 points  

Question 4

.    How many amendments are in the Bill of Rights?

.	.	.    5
.	.	.    10
.	.	.    15
.	.	.    12

.

1 points  

Question 5

.    Bart was arguing with Milhouse about economics. Millhouse told Bart that we are always in equilibrium. Bart told Milhouse that we are never in equilibrium.

.	.	.    Milhouse is correct because that is what he was taught in his Econ 201 class.
.	.	.    Bart is correct because Milhouse is an idiot.
.	.	.    Bart is correct because if we were always in equilibrium, entrepreneurs would not exist.
.	.	.    Milhouse is correct because entrepreneurs exist.

.

1 points  

Question 6

.    Justice Chase’s opinion in Calder v. Bull is often referred to as:

.	.	.    The Constitutional Revolution of 1937
.	.	.    The Basic Doctrine of American Law
.	.	.    The Switch in Time That Saved Nine
.	.	.    The Liberty to Contract

.

1 points  

Question 7

.    Hayek argued that:

.	.	.    Given limited information in the market, we move towards equilibrium and coordinate with others; perfect information is not necessary.
.	.	.    Given limited information in the market, we move towards equilibrium and coordinate with others, if and only if, we have perfect information.
.	.	.    Given perfect information, the market is never in equilibrium.
.	.	.    Both A and C.

.

1 points  

Question 8

.    What two philosophers influenced the Founding Fathers?

.	.	.    Marx and Engles
.	.	.    John Stuart Mill and Adam Smith
.	.	.    John Locke and Adam Smith
.	.	.    Marx and Lenin

.

1 points  

Question 9

.    According to Williams, Mankind’s Most Brutal Institution is:

.	.	.    Government
.	.	.    Organized religion
.	.	.    Marshbanks Cafeteria
.	.	.    All of the above

.

1 points  

Question 10

.    According to In re: Jacobs:

.	.	.    Your skills as a laborer are not considered property
.	.	.    Your skills as a laborer are property
.	.	.    Your skills as a laborer are property that cannot be taken away without due process of law
.	.	.    Your skills as a laborer are property that can be taken away without due process of law

.

1 points  

Question 11

.    Since 1937 the size and intrusiveness of the Federal Government has:

.	.	.    Remained constant
.	.	.    Decreased regardless of the party in power
.	.	.    Increased regardless of the party in power
.	.	.    None of the above

.

1 points  

Question 12

.    According to Hayek, we:

.	.	.    Live in a static world that changes constantly.
.	.	.    Live in a dynamic world that does not change.
.	.	.    Live in a static world.
.	.	.    Live in a dynamic world.

.

1 points  

Question 13

.    Comparative advantage implies:

.	.	.    You are the most inefficient in producing a particular skill or product
.	.	.    You are more efficient in producing a particular skill or product relative to others
.	.	.    You are more efficient in producing everything relative to others
.	.	.    You have an absolute advantage in everything

.

1 points  

Question 14

.    Who practices Political Economy?

.	.	.    The Economist
.	.	.    The Politician
.	.	.    The Media
.	.	.    The Everyman

.

1 points  

Question 15

.    The First and Second Amendment are important because:

.	.	.    We all like trials by jury
.	.	.    They allow us to retain the rights necessary to revolt against future governments
.	.	.    America needs the freedom of religion to ensure fair and speedy trials
.	.	.    These rights were retained by the states

.

1 points  

Question 16

.    According to Hayek, True Individualism is:

.	.	.    A theory of society
.	.	.    Assumes man is Rational and can rationally construct society
.	.	.    Assumes man is rational and only does her best to match up her means and ends
.	.	.    Both A and C

.

1 points  

Question 17

.    One reason we should use government intervention only as a last resort is:

.	.	.    Because since we have democracy, government force is voluntary.
.	.	.    Because government force is coercive and coercion tends to be immoral.
.	.	.    Because government force is efficient since it is self-interested.
.	.	.    Because government force maximizes the utility of the coerced.

.

1 points  

Question 18

.    Which case announced the doctrine of Liberty to Contract?

.	.	.    Calder v. Bull
.	.	.    West Coast Hotel v. Parrish
.	.	.    In re: Jacobs
.	.	.    Lochner v. New York

.

1 points  

Question 19

.    Which of the following was not listed as a cause for independence?

.	.	.    Making judges dependent on the King’s will
.	.	.    Plundering our seas
.	.	.    Cutting off our trade with the rest of the world
.	.	.    Not quartering troops in populated areas

.

1 points  

Question 20

.    Assume it is 1935 and North Carolina wanted to institute a minimum wage to help the young adults earn more money. Which of the following statements is most correct?

.	.	.    This is a good policy and will help young adults
.	.	.    This policy is unconstitutional because it creates a surplus of labor
.	.	.    This policy is unconstitutional because it violates Liberty to Contract
.	.	.    This is a bad policy because it will create deflation

.

1 points  

Question 21

.    The Federal government has increased in size and scope since 1937.

.	.	.    True
.	.	.    False
.	.	.    How big is big?
.	.	.    Bigger is better

.

1 points  

Question 22

.    In Calder v. Bull, Justice Chase states:

.	.	.    Our government only has enumerated powers
.	.	.    Our government has all powers not expressly restrained in the Constitution
.	.	.    Our government is a democracy
.	.	.    Property can be taken from A and given to B

.

1 points  

Question 23

.    In “Economics and Knowledge”, Hayek argued that:

.	.	.    We should wonder why markets fail and not why they work.
.	.	.    Given the dynamic nature of the market, we should focus on why they fail.
.	.	.    We should wonder why markets ever get it right and not focus on whey they fail.
.	.	.    Given the dynamic nature of the market, we should wonder why markets ever get it right and not focus on why they fail.

.

1 points  

Question 24

.    The Bill of Rights in 1791 constrains:

.	.	.    US citizens
.	.	.    The state governments
.	.	.    The Federal government
.	.	.    All of the above

.

1 points  

Question 25

.    When people argue that there was a Constitutional revolution in 1937, they are referring to:

.	.	.    The end of the New Deal
.	.	.    The radical change in constitutional doctrine allowing for the contraction of the Federal Government
.	.	.    The radical change in constitutional doctrine allowing for the expansion of the Federal Government
.	.	.    The fact that FDR was not allowed to appoint justices to the Supreme Court

.

1 points  

Question 26

.    Profit and loss exist because:

.	.	.    Of perfect information.
.	.	.    Of uncertainty.
.	.	.    We live in a world of conflict where the winner can extract profit from the loser and cause them loss.
.	.	.    Both B and C.

.

1 points  

Question 27

.    People are paid according:

.	.	.    To their marginal productivity of labor.
.	.	.    To the effort they put into the task.
.	.	.    To their means.
.	.	.    To the arbitrary decisions of their boss.

.

1 points  

Question 28

.    Assume it is discovered that Bank of America is completely insolvent. If Congress decides to bailout Bank of America because it is too big to fail, which logical fallacy is at play?

.	.	.    The broken window fallacy
.	.	.    The blessings of destruction
.	.	.    Concentrated benefits and dispersed costs
.	.	.    None of the above.

.

1 points  

Question 29

.    Accounting profit and Economic profit are:

.	.	.    The same thing.
.	.	.    Different because one is used for taxation.
.	.	.    Different because Economic profit also account for opportunity costs.
.	.	.    Different.

.

1 points  

Question 30

.    Bart was arguing with Milhouse about economics. Millhouse told Bart that we are always in equilibrium. Bart told Milhouse that we are never in equilibrium.

.	.	.    Milhouse is correct because that is what he was taught in his Econ 201 class.
.	.	.    Bart is correct because Milhouse is an idiot.
.	.	.    Bart is correct because if we were always in equilibrium, entrepreneurs would not exist.
.	.	.    Milhouse is correct because entrepreneurs exist.

.

1 points  

Question 31

.    Assume you are an admissions officer to an MBA program in entrepreneurship at a rural university. Peter Griffin is applying to your MBA program and tells you he wants to become and entrepreneur. He also tells you that he expects that your program to teach him how to be entrepreneurial and how discover that next big idea. How should you advise him?

.	.	.    Mr. Griffin, you are accepted to the program because everyone can learn how to become entrepreneurial.
.	.	.    Mr. Griffin, you are accepted to the program because since entrepreneurship is a tacit skill we can teach you that.
.	.	.    Mr. Griffin, you should probably not apply because we cannot teach you how to be entrepreneurial since it is a tacit skill.
.	.	.    Mr. Griffin, you should probably not apply because we cannot teach you how to be entrepreneurial since it is a tacit skill; we merely teach you how to capture it once you have already discovered it.

.

1 points  

Question 32

.    Some people argue that cutting out the middleman is better since they increase the price of goods and add nothing to them.

.	.	.    This position is correct.
.	.	.    This position is correct because middlemen add nothing.
.	.	.    This position is incorrect because middlemen reduce our search costs and make transactions possible that may never be made.
.	.	.    This position is incorrect because middlemen have no profit margin.

.

1 points  

Question 33

.    Entrepreneurs:

.	.	.    Discover profit opportunities.
.	.	.    Acquire undervalued inputs and sell them as higher valued output.
.	.	.    Help markets coordinate and move towards equilibrium.
.	.	.    All of the above.

.

1 points  

Question 34

.    President Obama and other politicians argue that America must act now to stop another potential Great Depression. In response, the government spent more than 5% of GDP towards a stimulus package. Which economic fallacy (or fallacies) have President Obama and Congress committed?

.	.	.    The broken window fallacy
.	.	.    Focusing on the short-run at the expense of the long-run
.	.	.    Concentrated benefits and dispersed costs
.	.	.    B and C.

.

1 points  

Question 35

.    According to Mises, what makes us different from animals?

.	.	.    We possess free will.
.	.	.    We engage in useless action, which makes us moral beings.
.	.	.    We have morality and therefore are not animals.
.	.	.    We engage in purposeful behavior, which makes us moral beings.

.

1 points  

Question 36

.    For economists, profit is:

.	.	.    An objective value.
.	.	.    An objective and quantifiable value.
.	.	.    A subjective value.
.	.	.    A subjective and quantifiable value.

.

1 points  

Question 37

.    The Fed can increase money supply by:

.	.	.    Purchasing bonds.
.	.	.    Decreasing interest rates.
.	.	.    Decreasing the discount rate.
.	.	.    All of the above.

.

1 points  

Question 38

.    Competition can be a discovery procedure because:

.	.	.    It can urge you to seek out new consumer wants and desires.
.	.	.    It can urge you to find lower cost ways of producing.
.	.	.    It is a static equilibrium.
.	.	.    Both A and B.

.

1 points  

Question 39

.    Assume Rise Against is giving a concert in Raleigh. Instead of waiting in line to buy concert tickets I decide to buy my tickets from a ticket scalper who will charge me 200% of the face value for the tickets. Also assume that some people had been waiting in line for several days. If I purchase tickets from the scalper:

.	.	.    I am being ripped off because the scalper is being paid for doing nothing.
.	.	.    I am being ripped off because the scalper is breaking the law.
.	.	.    The scalper’s price mark-up actually represents me paying her to wait in line for me.
.	.	.    The scalper’s price mark-up represents her ability to coerce me into paying a higher price for the tickets.

.

1 points  

Question 40

.    According to Hayek, most economic problems occur:

.	.	.    With changes at the aggregate level (i.e. aggregate supply and aggregate demand).
.	.	.    With changes in local conditions.
.	.	.    With changes in the macroeconomic level.
.	.	.    With changes in the universal level.