Question 1

What can cause market failure?

Accepted Answer

A)  low consumer demand 
B)  government intervention and price controls 
C)  externalities and market power 
D)  high prices and foreign competition 
A)  low consumer demand 
B)  government intervention and price controls 
C)  externalities and market power 
D)  high prices and foreign competition

Question 2

What has been one effect of a government-imposed seat belt law?

Accepted Answer

A)  fewer pedestrian deaths 
B)  safer driving 
C)  an increase in the number of accidents 
D)  everyone now wears seat belts 
A)  fewer pedestrian deaths 
B)  safer driving 
C)  an increase in the number of accidents 
D)  everyone now wears seat belts

Question 3

How do prices direct economic activity in a market economy?

Accepted Answer

A)  by influencing the actions of buyers and sellers 
B)  by reducing scarcity of the goods and services produced 
C)  by eliminating the need for government intervention 
D)  by allocating goods and services produced in the most equitable way 
A)  by influencing the actions of buyers and sellers 
B)  by reducing scarcity of the goods and services produced 
C)  by eliminating the need for government intervention 
D)  by allocating goods and services produced in the most equitable way

Question 4

What happens when government policies such as the welfare system try to help the neediest members of society?

Accepted Answer

A)  It increases equity and reduces efficiency. 
B)  It reduces charitable contributions in an economy. 
C)  It increases the productivity of the needy in society. 
D)  It causes market failure to occur. 
A)  It increases equity and reduces efficiency. 
B)  It reduces charitable contributions in an economy. 
C)  It increases the productivity of the needy in society. 
D)  It causes market failure to occur.

Question 5

In the former Soviet Union, producers were paid for meeting output targets, not for selling products. Under those circumstances, what were the economic incentives for producers?

Accepted Answer

A)  to produce good quality products which last longer so output targets can be reduced 
B)  to conserve on costs, so as to maintain efficiency in the economy 
C)  to produce enough to meet the output target, without regard for quality or cost 
D)  to produce those products that society desires most 
A)  to produce good quality products which last longer so output targets can be reduced 
B)  to conserve on costs, so as to maintain efficiency in the economy 
C)  to produce enough to meet the output target, without regard for quality or cost 
D)  to produce those products that society desires most

Question 6

What will pollution regulations do?

Accepted Answer

A)  increase profit to firms 
B)  impose a tradeoff on society 
C)  allow firms to raise workers' wages 
D)  lower prices for consumers 
A)  increase profit to firms 
B)  impose a tradeoff on society 
C)  allow firms to raise workers' wages 
D)  lower prices for consumers

Question 7

How does a tradeoff exist between a clean environment and a higher level of income?

Accepted Answer

A)  Studies show that individuals with higher levels of income purchase more environmentally friendly products than low-income individuals. 
B)  To pay for pollution cleanup, the government must increase taxes, which lowers income. 
C)  Laws that reduce pollution raise costs of production and reduce incomes. 
D)  By employing individuals to clean up pollution, employment and income both rise. 
A)  Studies show that individuals with higher levels of income purchase more environmentally friendly products than low-income individuals. 
B)  To pay for pollution cleanup, the government must increase taxes, which lowers income. 
C)  Laws that reduce pollution raise costs of production and reduce incomes. 
D)  By employing individuals to clean up pollution, employment and income both rise.

Question 8

After much consideration, you have chosen Cancun over Miami for your spring break trip this year. For this decision to change, what must occur?

Accepted Answer

A)  The marginal benefit of Cancun must increase. 
B)  The marginal cost of Cancun must decrease. 
C)  The marginal benefit of Miami must increase. 
D)  The marginal cost of Miami must increase. 
A)  The marginal benefit of Cancun must increase. 
B)  The marginal cost of Cancun must decrease. 
C)  The marginal benefit of Miami must increase. 
D)  The marginal cost of Miami must increase.

Question 9

Which of the following is NOT a major area of study for economists?

Accepted Answer

A)  how people make decisions 
B)  how countries choose national leaders 
C)  how people interact with each other 
D)  how forces and trends affect the overall economy 
A)  how people make decisions 
B)  how countries choose national leaders 
C)  how people interact with each other 
D)  how forces and trends affect the overall economy

Question 10

Henry decides to spend two hours swimming at the beach rather than working at his job, which pays $16 per hour. What is Henry's tradeoff?

Accepted Answer

A)  the $32 he could have earned working for two hours 
B)  nothing, because he enjoys going to the beach more than working 
C)  the increase in skill he obtains from swimming for those two hours 
D)  nothing, because he spent $32 on new swim shorts 
A)  the $32 he could have earned working for two hours 
B)  nothing, because he enjoys going to the beach more than working 
C)  the increase in skill he obtains from swimming for those two hours 
D)  nothing, because he spent $32 on new swim shorts

Question 11

What do households and economies have in common?

Accepted Answer

A)  They both must allocate scarce resources. 
B)  They both face difficulties saving money. 
C)  They both must sell the goods and services they produce. 
D)  They both must have a central decision maker. 
A)  They both must allocate scarce resources. 
B)  They both face difficulties saving money. 
C)  They both must sell the goods and services they produce. 
D)  They both must have a central decision maker.

Question 12

How does trade affect the well-being of the nations involved?

Accepted Answer

A)  Trade makes every nation better off. 
B)  Trade makes exporting nations better off and importing nations worse off. 
C)  Trade makes a nation better off only if the nation cannot produce that good itself. 
D)  Trade makes rich nations better off and poor nations worse off. 
A)  Trade makes every nation better off. 
B)  Trade makes exporting nations better off and importing nations worse off. 
C)  Trade makes a nation better off only if the nation cannot produce that good itself. 
D)  Trade makes rich nations better off and poor nations worse off.

Question 13

For most students, what is the largest single cost of a university education?

Accepted Answer

A)  the wages given up to attend school 
B)  tuition, fees, and books 
C)  room and board 
D)  transportation, parking, and entertainment 
A)  the wages given up to attend school 
B)  tuition, fees, and books 
C)  room and board 
D)  transportation, parking, and entertainment

Question 14

Productivity is the primary determinant of a country's living standards.

Accepted Answer

A) True 
 B)False

Question 15

In a 2014 survey, what percentage of economists felt car services, like Uber, improved economic well-being?

Accepted Answer

A)  40 
B)  60 
C)  80 
D)  100 
A)  40 
B)  60 
C)  80 
D)  100

Question 16

What is one definition of equity?

Accepted Answer

A)  equality 
B)  efficiency 
C)  fairness 
D)  similarity 
A)  equality 
B)  efficiency 
C)  fairness 
D)  similarity

Question 17

What could policymakers do to raise productivity?

Accepted Answer

A)  increase spending on education 
B)  lower tax credits to firms for capital improvements 
C)  reduce the number of imports allowed into the economy 
D)  eliminate minimum wage laws 
A)  increase spending on education 
B)  lower tax credits to firms for capital improvements 
C)  reduce the number of imports allowed into the economy 
D)  eliminate minimum wage laws

Question 18

George receives $50 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: A, B, C, and D. Each option costs $50, but George values each option differently. Finally, he decides on C. What is the opportunity cost of C?

Accepted Answer

A)  $50 
B)  $100 
C)  the value to him of options A, B, and D combined 
D)  the value to him of the option he would have chosen if C was not available 
A)  $50 
B)  $100 
C)  the value to him of options A, B, and D combined 
D)  the value to him of the option he would have chosen if C was not available

Question 19

What is NOT a benefit from trade?

Accepted Answer

A)  the ability to specialize 
B)  a greater variety of goods and services becoming available 
C)  less competition 
D)  lower prices 
A)  the ability to specialize 
B)  a greater variety of goods and services becoming available 
C)  less competition 
D)  lower prices

Question 20

When policymakers make policies that change the costs and benefits that people face, what is the result for society?

Accepted Answer

A)  people's behaviours are altered 
B)  people ignore incentives 
C)  inflation occurs 
D)  government revenue is reduced 
A)  people's behaviours are altered 
B)  people ignore incentives 
C)  inflation occurs 
D)  government revenue is reduced

What can cause market failure?

What has been one effect of a government-imposed seat belt law?

How do prices direct economic activity in a market economy?

What happens when government policies such as the welfare system try to help the neediest members of society?

In the former Soviet Union, producers were paid for meeting output targets, not for selling products. Under those circumstances, what were the economic incentives for producers?

What will pollution regulations do?

How does a tradeoff exist between a clean environment and a higher level of income?

After much consideration, you have chosen Cancun over Miami for your spring break trip this year. For this decision to change, what must occur?

Which of the following is NOT a major area of study for economists?

Henry decides to spend two hours swimming at the beach rather than working at his job, which pays $16 per hour. What is Henry's tradeoff?

What do households and economies have in common?

How does trade affect the well-being of the nations involved?

For most students, what is the largest single cost of a university education?

Productivity is the primary determinant of a country's living standards.

In a 2014 survey, what percentage of economists felt car services, like Uber, improved economic well-being?

What is one definition of equity?

What could policymakers do to raise productivity?

George receives $50 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: A, B, C, and D. Each option costs $50, but George values each option differently. Finally, he decides on C. What is the opportunity cost of C?

What is NOT a benefit from trade?

When policymakers make policies that change the costs and benefits that people face, what is the result for society?

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 1: Ten Principles of Economics

What can cause market failure?

What has been one effect of a government-imposed seat belt law?

How do prices direct economic activity in a market economy?

What happens when government policies such as the welfare system try to help the neediest members of society?

In the former Soviet Union, producers were paid for meeting output targets, not for selling products. Under those circumstances, what were the economic incentives for producers?

What will pollution regulations do?

How does a tradeoff exist between a clean environment and a higher level of income?

After much consideration, you have chosen Cancun over Miami for your spring break trip this year. For this decision to change, what must occur?

Which of the following is NOT a major area of study for economists?

Henry decides to spend two hours swimming at the beach rather than working at his job, which pays $16 per hour. What is Henry's tradeoff?

What do households and economies have in common?

How does trade affect the well-being of the nations involved?

For most students, what is the largest single cost of a university education?

Productivity is the primary determinant of a country's living standards.

In a 2014 survey, what percentage of economists felt car services, like Uber, improved economic well-being?

What is one definition of equity?

What could policymakers do to raise productivity?

George receives $50 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: A, B, C, and D. Each option costs $50, but George values each option differently. Finally, he decides on C. What is the opportunity cost of C?

What is NOT a benefit from trade?

When policymakers make policies that change the costs and benefits that people face, what is the result for society?

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters