Question 1

When production reflects consumer preferences, ________ occurs.

Accepted Answer

A)  allocative efficiency 
B)  productive efficiency 
C)  equity 
D)  efficient central planning 
A)  allocative efficiency 
B)  productive efficiency 
C)  equity 
D)  efficient central planning

Question 2

Table 1-8
  
-Refer to Table 1-8. The table above shows the sales of flat-panel television sets in Central America. Present the information using a bar graph.

Accepted Answer

The answer of Table 1-8
  
-Refer to Table 1-8....

Question 3

When voluntary exchange takes place, both parties gain from the exchange.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following generates productive efficiency?

Accepted Answer

A)  competition among sellers 
B)  competition among buyers 
C)  government inspectors 
D)  government production rules and regulations 
A)  competition among sellers 
B)  competition among buyers 
C)  government inspectors 
D)  government production rules and regulations

Question 5

Which of the following is a normative economic statement?

Accepted Answer

A)  Falling global demand for pesticides has led to decreases in the price of pesticides. 
B)  With falling mortgage rates and falling unemployment rates, the number of new homes being built has increased. 
C)  The state of Florida's unemployment rate dropped when several large companies relocated to the Miami area. 
D)  Global warming should be at the top of every economic agenda. 
A)  Falling global demand for pesticides has led to decreases in the price of pesticides. 
B)  With falling mortgage rates and falling unemployment rates, the number of new homes being built has increased. 
C)  The state of Florida's unemployment rate dropped when several large companies relocated to the Miami area. 
D)  Global warming should be at the top of every economic agenda.

Question 6

"The distribution of income should be left to the market" is an example of a positive economic statement.

Accepted Answer

A) True 
 B)False

Question 7

The term "market" refers only to trading arrangements that have been approved by the government.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a result of a market economy?

Accepted Answer

A)  environmental protection 
B)  an equal income distribution 
C)  agreement on equity 
D)  voluntary exchange 
A)  environmental protection 
B)  an equal income distribution 
C)  agreement on equity 
D)  voluntary exchange

Question 9

Which of the following is not an example of an efficiency-equity trade-off faced by economic agents?

Accepted Answer

A)  According to an article by in the American Journal of Public Health by Edward Kaplan and Michael Merson of Yale University School of Medicine, the federal government's current method of allocating HIV-prevention resources is not cost-effective. Instead of allocating resources to states in proportion to reported AIDS cases, resources should flow first to those activities that prevent more infections per dollar and then to less and less effective combinations of programs and populations until funds are exhausted, even if it means that some populations would be left without any prevention services. 
B)  Concerned about the falling birth rate, the French government has pledged more money for families with three children, in an effort to encourage working women to have more babies. 
C)  The growing demand for corn by ethanol producers has led to a surge in the price of tortillas, a staple in the Mexican diet. To quell public outcry over rising tortilla prices, the Mexican government released government corn stocks at prices well below the market, and pressured states to impose price ceilings on tortillas. 
D)  Some U.S. colleges cut back on merit scholarships since these programs siphon money from need-based programs, thus harming lower-income students with greater financial need. 
A)  According to an article by in the American Journal of Public Health by Edward Kaplan and Michael Merson of Yale University School of Medicine, the federal government's current method of allocating HIV-prevention resources is not cost-effective. Instead of allocating resources to states in proportion to reported AIDS cases, resources should flow first to those activities that prevent more infections per dollar and then to less and less effective combinations of programs and populations until funds are exhausted, even if it means that some populations would be left without any prevention services. 
B)  Concerned about the falling birth rate, the French government has pledged more money for families with three children, in an effort to encourage working women to have more babies. 
C)  The growing demand for corn by ethanol producers has led to a surge in the price of tortillas, a staple in the Mexican diet. To quell public outcry over rising tortilla prices, the Mexican government released government corn stocks at prices well below the market, and pressured states to impose price ceilings on tortillas. 
D)  Some U.S. colleges cut back on merit scholarships since these programs siphon money from need-based programs, thus harming lower-income students with greater financial need.

Question 10

If the price of milk was $1.25 a gallon and it is now $2.25 a gallon, what is the percentage change in price?

Accepted Answer

A)  4.4 percent 
B)  8 percent 
C)  44 percent 
D)  80 percent 
A)  4.4 percent 
B)  8 percent 
C)  44 percent 
D)  80 percent

Question 11

The highest-valued alternative that must be given up to engage in an activity is the definition of

Accepted Answer

A)  economic equity. 
B)  marginal benefit. 
C)  opportunity cost. 
D)  marginal cost. 
A)  economic equity. 
B)  marginal benefit. 
C)  opportunity cost. 
D)  marginal cost.

Question 12

Figure 1.1  
-Refer to Figure 1-1. Using the information in the figure above, calculate the percentage change in revenue from alcoholic beverage sales between 2012 and 2016.

Accepted Answer

A)  30% 
B)  50% 
C)  66.7% 
D)  100% 
A)  30% 
B)  50% 
C)  66.7% 
D)  100%

Question 13

The revenue received from the sale of ________ of a product is a marginal benefit to the firm.

Accepted Answer

A)  an additional unit 
B)  the total number of units 
C)  no units 
D)  only profitable units 
A)  an additional unit 
B)  the total number of units 
C)  no units 
D)  only profitable units

Question 14

Which of the following is a macroeconomic question?

Accepted Answer

A)  What determines the growth rate of gross domestic product? 
B)  How is the production quantity of snowboards determined? 
C)  What factors determine the price of electronic cigarettes? 
D)  What determines the salaries of Wall Street executives? 
A)  What determines the growth rate of gross domestic product? 
B)  How is the production quantity of snowboards determined? 
C)  What factors determine the price of electronic cigarettes? 
D)  What determines the salaries of Wall Street executives?

Question 15

Physical capital refers to stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 16

Holding all other personal characteristics-such as age, gender, and income-constant, economists would expect that

Accepted Answer

A)  people without health insurance will be less likely to be overweight than people with health insurance. 
B)  people without health insurance will be more likely to be overweight than people with health insurance. 
C)  people without health insurance will be equally likely to be overweight as people with health insurance. 
D)  there is no correlation between not having health insurance and being overweight. 
A)  people without health insurance will be less likely to be overweight than people with health insurance. 
B)  people without health insurance will be more likely to be overweight than people with health insurance. 
C)  people without health insurance will be equally likely to be overweight as people with health insurance. 
D)  there is no correlation between not having health insurance and being overweight.

Question 17

The government makes all economic decisions in a centrally planned economy.

Accepted Answer

A) True 
 B)False

Question 18

What is an economic variable? Give an example of an economic variable.

Accepted Answer

An economic variable is someth

Question 19

The U.S. Bureau of Labor Statistics forecasts that by 2024, total employment in U.S. manufacturing will

Accepted Answer

A)  decline to 11.4 million. 
B)  increase to 12.3 million. 
C)  remain the same as it was in 2016. 
D)  virtually cease to exist. 
A)  decline to 11.4 million. 
B)  increase to 12.3 million. 
C)  remain the same as it was in 2016. 
D)  virtually cease to exist.

Question 20

In economics, the accumulated skills and training that workers have is known as

Accepted Answer

A)  human capital. 
B)  entrepreneurship. 
C)  physical capital. 
D)  innovation. 
A)  human capital. 
B)  entrepreneurship. 
C)  physical capital. 
D)  innovation.

Exam 1: Economics: Foundations and Models

When production reflects consumer preferences, ________ occurs.

Table 1-8 -Refer to Table 1-8. The table above shows the sales of flat-panel television sets in Central America. Present the information using a bar graph.

When voluntary exchange takes place, both parties gain from the exchange.

Which of the following generates productive efficiency?

Which of the following is a normative economic statement?

"The distribution of income should be left to the market" is an example of a positive economic statement.

The term "market" refers only to trading arrangements that have been approved by the government.

Which of the following is a result of a market economy?

Which of the following is not an example of an efficiency-equity trade-off faced by economic agents?

If the price of milk was $1.25 a gallon and it is now $2.25 a gallon, what is the percentage change in price?

The highest-valued alternative that must be given up to engage in an activity is the definition of

Figure 1.1 -Refer to Figure 1-1. Using the information in the figure above, calculate the percentage change in revenue from alcoholic beverage sales between 2012 and 2016.

The revenue received from the sale of ________ of a product is a marginal benefit to the firm.

Which of the following is a macroeconomic question?

Physical capital refers to stocks and bonds.

Holding all other personal characteristics-such as age, gender, and income-constant, economists would expect that

The government makes all economic decisions in a centrally planned economy.

What is an economic variable? Give an example of an economic variable.

The U.S. Bureau of Labor Statistics forecasts that by 2024, total employment in U.S. manufacturing will

In economics, the accumulated skills and training that workers have is known as

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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