Question 1

Exhibit 1-7  
-Refer to Exhibit 1-7. Assume the economy is operating at Point C. This indicates that

Accepted Answer

A) the only way the economy could move toward a point such as D is by discovering new resources. 
B) the economy is efficiently using all its resources. 
C) there is no excess resource capacity in the economy. 
D) it is possible for the economy to produce more of Good X and Good Y with the given resources. 
E) it is possible for the economy to produce more of Good X only if it produces less of Good Y. 
A) the only way the economy could move toward a point such as D is by discovering new resources. 
B) the economy is efficiently using all its resources. 
C) there is no excess resource capacity in the economy. 
D) it is possible for the economy to produce more of Good X and Good Y with the given resources. 
E) it is possible for the economy to produce more of Good X only if it produces less of Good Y.

Question 2

Explain how a market economy works to enable the production and allocation of smartphones.

Accepted Answer

Prices in the smartphone market are free

Question 3

Given a production possibilities curve for defense goods and nondefense goods, a production point outside the curve

Accepted Answer

A) cannot be attained with the current level of resources and technology. 
B) may be attained by shifting resources to defense goods. 
C) may be attained by acquiring new technology. 
D) may be attained if new resources are discovered. 
E) may be attained by acquiring both new technology and greater resources. 
A) cannot be attained with the current level of resources and technology. 
B) may be attained by shifting resources to defense goods. 
C) may be attained by acquiring new technology. 
D) may be attained if new resources are discovered. 
E) may be attained by acquiring both new technology and greater resources.

Question 4

As a result of economic interaction,

Accepted Answer

A) the number of available choices is reduced. 
B) scarcity is increased. 
C) opportunity costs increase. 
D) people are able to specialize. 
E) scarcity is eliminated. 
A) the number of available choices is reduced. 
B) scarcity is increased. 
C) opportunity costs increase. 
D) people are able to specialize. 
E) scarcity is eliminated.

Question 5

The economic problem is

Accepted Answer

A) a lack of money. 
B) a lack of jobs. 
C) poverty. 
D) scarcity. 
E) a rising standard of living. 
A) a lack of money. 
B) a lack of jobs. 
C) poverty. 
D) scarcity. 
E) a rising standard of living.

Question 6

The movement from a point inside a production possibilities curve to a point outside the curve is likely to result in no change in an economy's total production.

Accepted Answer

A) True 
 B)False

Question 7

To say that a change in taste causes prices to rise is to claim that

Accepted Answer

A) transfer prices are a more accurate gauge of economic activity than market prices. 
B) prices are a signal. 
C) the economy has full information. 
D) prices would not change if people did not know the exact reason for the price change. 
E) price changes cannot be predicted. 
A) transfer prices are a more accurate gauge of economic activity than market prices. 
B) prices are a signal. 
C) the economy has full information. 
D) prices would not change if people did not know the exact reason for the price change. 
E) price changes cannot be predicted.

Question 8

The opportunity cost of attending college

Accepted Answer

A) is zero because the return is always positive. 
B) includes the skills earned from attending college. 
C) is the living expenses, which are the same whether the students attend college or not. 
D) includes the lost incomes that would have been earned if the student had not attended college. 
E) includes the scholarships for attending college. 
A) is zero because the return is always positive. 
B) includes the skills earned from attending college. 
C) is the living expenses, which are the same whether the students attend college or not. 
D) includes the lost incomes that would have been earned if the student had not attended college. 
E) includes the scholarships for attending college.

Question 9

If a resource is always available when needed, then it

Accepted Answer

A) will be more expensive than other resources. 
B) is not scarce. 
C) has a high opportunity cost. 
D) it must be valuable. 
E) is scarce. 
A) will be more expensive than other resources. 
B) is not scarce. 
C) has a high opportunity cost. 
D) it must be valuable. 
E) is scarce.

Question 10

Exhibit 1-7  
-Refer to Exhibit 1-7. A movement from Point B to Point D indicates

Accepted Answer

A) a gain in Good X and a loss in Good Y. 
B) a gain in Good Y and a loss in Good X. 
C) a gain in both Good X and Good Y. 
D) a loss in both Good X and Good Y. 
E) no change in the production of Good X or Good Y. 
A) a gain in Good X and a loss in Good Y. 
B) a gain in Good Y and a loss in Good X. 
C) a gain in both Good X and Good Y. 
D) a loss in both Good X and Good Y. 
E) no change in the production of Good X or Good Y.

Question 11

Economic interaction occurs in firms as opposed to markets

Accepted Answer

A) because markets are too competitive. 
B) because this is what the government wants. 
C) in order to lower transaction costs. 
D) in order to increase transaction costs. 
E) if workers want to increase wages but not product prices. 
A) because markets are too competitive. 
B) because this is what the government wants. 
C) in order to lower transaction costs. 
D) in order to increase transaction costs. 
E) if workers want to increase wages but not product prices.

Question 12

Maria has two options to spend her school break in the summer: get a summer job that pays $3,000 or travel in Mexico. The opportunity cost of the summer job is that Maria

Accepted Answer

A) can earn more than $3,000. 
B) can also travel in Mexico. 
C) has to give up traveling in Mexico. 
D) can save the money for traveling in Mexico. 
E) has to work and travel at the same time. 
A) can earn more than $3,000. 
B) can also travel in Mexico. 
C) has to give up traveling in Mexico. 
D) can save the money for traveling in Mexico. 
E) has to work and travel at the same time.

Question 13

Answer the questions below:

Accepted Answer

The answer of Answer the questions below:
  
...

Question 14

Exhibit 1-2  
-According to Exhibit 1-2, if Sam did all the cooking as well as waited on tables, how many customers would he be able to serve per day?

Accepted Answer

A) 4 
B) Between 2 and 20 
C) 0 
D) 20 
E) 5 
A) 4 
B) Between 2 and 20 
C) 0 
D) 20 
E) 5

Question 15

Explain how trade between two different countries is similar to trade occurring between two individuals within a country.

Accepted Answer

Trade between two countries is similar t

Question 16

Economic growth in the future can be encouraged by tradeoffs made today.

Accepted Answer

A) True 
 B)False

Question 17

Exhibit 1-9  
-Refer to Exhibit 1-9. A movement of the economy from Point C to Point A

Accepted Answer

A) will benefit no one. 
B) occurs when everyone can win. 
C) cannot occur. 
D) occurs when some people win only if others lose. 
E) occurs when everyone loses. 
A) will benefit no one. 
B) occurs when everyone can win. 
C) cannot occur. 
D) occurs when some people win only if others lose. 
E) occurs when everyone loses.

Question 18

Establishing property rights

Accepted Answer

A) is a characteristic of most centrally planned economies. 
B) provides incentives. 
C) is the most important feature of a centrally planned economy. 
D) is not necessary for a market economy to function. 
E) is a key obstacle for the economy to grow over time. 
A) is a characteristic of most centrally planned economies. 
B) provides incentives. 
C) is the most important feature of a centrally planned economy. 
D) is not necessary for a market economy to function. 
E) is a key obstacle for the economy to grow over time.

Question 19

Trade always results in a gain for one or both participants in the trade

Accepted Answer

A) True 
 B)False

Question 20

Suppose a financial crisis prevents many companies to get loans so that their production levels fall as they are unable to purchase the same amount of inputs as before. We can conclude that the economy is

Accepted Answer

A) operating on the production possibility curve. 
B) operating outside the production possibility curve. 
C) operating inside the production possibility curve. 
D) efficient. 
E) experiencing economic growth. 
A) operating on the production possibility curve. 
B) operating outside the production possibility curve. 
C) operating inside the production possibility curve. 
D) efficient. 
E) experiencing economic growth.

Exam 1: The Central Idea

Exhibit 1-7 -Refer to Exhibit 1-7. Assume the economy is operating at Point C. This indicates that

Explain how a market economy works to enable the production and allocation of smartphones.

Given a production possibilities curve for defense goods and nondefense goods, a production point outside the curve

As a result of economic interaction,

The economic problem is

The movement from a point inside a production possibilities curve to a point outside the curve is likely to result in no change in an economy's total production.

To say that a change in taste causes prices to rise is to claim that

The opportunity cost of attending college

If a resource is always available when needed, then it

Exhibit 1-7 -Refer to Exhibit 1-7. A movement from Point B to Point D indicates

Economic interaction occurs in firms as opposed to markets

Maria has two options to spend her school break in the summer: get a summer job that pays $3,000 or travel in Mexico. The opportunity cost of the summer job is that Maria

Answer the questions below:

Exhibit 1-2 -According to Exhibit 1-2, if Sam did all the cooking as well as waited on tables, how many customers would he be able to serve per day?

Explain how trade between two different countries is similar to trade occurring between two individuals within a country.

Economic growth in the future can be encouraged by tradeoffs made today.

Exhibit 1-9 -Refer to Exhibit 1-9. A movement of the economy from Point C to Point A

Establishing property rights

Trade always results in a gain for one or both participants in the trade

Suppose a financial crisis prevents many companies to get loans so that their production levels fall as they are unable to purchase the same amount of inputs as before. We can conclude that the economy is

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

Filters