Question 1

When a single person (or small group) has the ability to influence market prices, there is

Accepted Answer

A) competition. 
B) market power. 
C) an externality. 
D) a lack of property rights. 
A) competition. 
B) market power. 
C) an externality. 
D) a lack of property rights.

Question 2

Both The Wealth of Nations and the Declaration of Independence share the point of view that

Accepted Answer

A) every person is entitled to life, liberty, and the pursuit of happiness. 
B) individuals are best left to their own devices without the government guiding their actions. 
C) the government plays a central role in organizing a market economy. 
D) because of human nature a strong legal system is necessary for a market system to survive. 
A) every person is entitled to life, liberty, and the pursuit of happiness. 
B) individuals are best left to their own devices without the government guiding their actions. 
C) the government plays a central role in organizing a market economy. 
D) because of human nature a strong legal system is necessary for a market system to survive.

Question 3

Market power refers to the

Accepted Answer

A) power of a single person or small group to influence market prices. 
B) ability of a person or small group to successfully market new products. 
C) power of the government to regulate a market. 
D) importance of a certain market in relation to the overall economy. 
A) power of a single person or small group to influence market prices. 
B) ability of a person or small group to successfully market new products. 
C) power of the government to regulate a market. 
D) importance of a certain market in relation to the overall economy.

Question 4

One way that governments can improve market outcomes is to ensure that individuals are able to own and exercise control over their scarce resources.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is an example of something economists study?

Accepted Answer

A) Mitch chooses to work overtime to earn extra income for his family. 
B) Megan sells her physics textbook from last semester to her roommate for half the price of a new textbook. 
C) The unemployment rate in the United States has fallen by two percentage points in the last few years. 
D) All of the above are correct. 
A) Mitch chooses to work overtime to earn extra income for his family. 
B) Megan sells her physics textbook from last semester to her roommate for half the price of a new textbook. 
C) The unemployment rate in the United States has fallen by two percentage points in the last few years. 
D) All of the above are correct.

Question 6

Melinda quits her job at a bank, which pays $30,000 a year, to enroll in a two-year graduate program. Her annual school expenses are $22,000 for tuition and fees and $2,000 for books. What is her opportunity cost of attending the two-year graduate program?

Accepted Answer

The answer of Melinda quits her job at a bank,...

Question 7

A tradeoff exists between a clean environment and a higher level of income in that

Accepted Answer

A) studies show that individuals with higher levels of income pollute less than low-income individuals. 
B) efforts to reduce pollution typically are not completely successful. 
C) laws that reduce pollution raise costs of production and reduce incomes. 
D) employing individuals to clean up pollution causes increases in employment and income. 
A) studies show that individuals with higher levels of income pollute less than low-income individuals. 
B) efforts to reduce pollution typically are not completely successful. 
C) laws that reduce pollution raise costs of production and reduce incomes. 
D) employing individuals to clean up pollution causes increases in employment and income.

Question 8

When the government redistributes income from the wealthy to the poor,

Accepted Answer

A) efficiency is improved, but equality is not. 
B) equality is improved, but efficiency is not. 
C) both efficiency and equality are improved. 
D) neither efficiency nor equality are improved. 
A) efficiency is improved, but equality is not. 
B) equality is improved, but efficiency is not. 
C) both efficiency and equality are improved. 
D) neither efficiency nor equality are improved.

Question 9

The income of a typical worker in a country is most closely linked to which of the following?

Accepted Answer

A) population 
B) productivity 
C) market power 
D) government policies 
A) population 
B) productivity 
C) market power 
D) government policies

Question 10

The government can potentially improve market outcomes if market inequalities or market failure exists.

Accepted Answer

A) True 
 B)False

Question 11

In a particular country in 2000, the average worker needed to work 40 hours to produce 55 units of output. In that same country in 2008, the average worker needed to work 30 hours to produce 45 units of output. In that country, the productivity of the average worker

Accepted Answer

A) decreased by about 6 percent between 2000 and 2008. 
B) remained unchanged between 2000 and 2008. 
C) increased by about 9 percent between 2000 and 2008. 
D) increased by about 18 percent between 2000 and 2008. 
A) decreased by about 6 percent between 2000 and 2008. 
B) remained unchanged between 2000 and 2008. 
C) increased by about 9 percent between 2000 and 2008. 
D) increased by about 18 percent between 2000 and 2008.

Question 12

If the United States decides to trade with Yemen, we know that

Accepted Answer

A) Yemen will benefit, but trade with a less developed country could not benefit the United States. 
B) it will not benefit Yemen because workers in the United States are more productive. 
C) Yemen and the United States can both benefit. 
D) it will not benefit either country because their cultural differences are too vast. 
A) Yemen will benefit, but trade with a less developed country could not benefit the United States. 
B) it will not benefit Yemen because workers in the United States are more productive. 
C) Yemen and the United States can both benefit. 
D) it will not benefit either country because their cultural differences are too vast.

Question 13

Scenario 1-4 You have the afternoon free. You have a choice between going to the movies with a friend or studying economics for three hours. If you go to the movies, you will spend $12.00 on a ticket and $4.75 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 15 points.
-Refer to Scenario 1-4. What is your opportunity cost of going to the movies?

Accepted Answer

$16.75 and

Question 14

Resources are

Accepted Answer

A) scarce for households but plentiful for economies. 
B) plentiful for households but scarce for economies. 
C) scarce for households and scarce for economies. 
D) plentiful for households and plentiful for economies. 
A) scarce for households but plentiful for economies. 
B) plentiful for households but scarce for economies. 
C) scarce for households and scarce for economies. 
D) plentiful for households and plentiful for economies.

Question 15

Suppose the Federal Reserve announces that it will be making a change to a key interest rate to increase the money supply. This is likely because

Accepted Answer

A) the Federal Reserve is worried about inflation. 
B) the Federal Reserve is worried about unemployment. 
C) the Federal Reserve is hoping to reduce the demand for goods and services. 
D) the Federal Reserve is worried that the economy is growing too quickly. 
A) the Federal Reserve is worried about inflation. 
B) the Federal Reserve is worried about unemployment. 
C) the Federal Reserve is hoping to reduce the demand for goods and services. 
D) the Federal Reserve is worried that the economy is growing too quickly.

Question 16

Suppose your management professor has been offered a corporate job with a 30 percent pay increase. He has decided to take the job. For him, the marginal

Accepted Answer

A) cost of leaving was greater than the marginal benefit. 
B) benefit of leaving was greater than the marginal cost. 
C) benefit of teaching was greater than the marginal cost. 
D) All of the above are correct. 
A) cost of leaving was greater than the marginal benefit. 
B) benefit of leaving was greater than the marginal cost. 
C) benefit of teaching was greater than the marginal cost. 
D) All of the above are correct.

Question 17

It costs a meat-processing company $50,000 to produce 5,000 pounds of steak. The company's cost will be $50,009 if it produces an additional pound of steak. If the company produces 5,001 pounds of steak then

Accepted Answer

A) its average cost is greater than its marginal cost. 
B) its average cost and its marginal cost are equal. 
C) its average cost is less than its marginal cost. 
D) there is insufficient information to compute average and marginal costs. 
A) its average cost is greater than its marginal cost. 
B) its average cost and its marginal cost are equal. 
C) its average cost is less than its marginal cost. 
D) there is insufficient information to compute average and marginal costs.

Question 18

Scenario 1-2
Suppose that you have a choice between going to the movies with a friend for two hours or working at your job. If you go to the movies, you will spend $7 on a ticket and $5 on popcorn. If you choose to work, you will earn $10 an hour.
-Refer to Scenario 1-2. What is your opportunity cost of working?

Accepted Answer

The enjoyment you wo

Question 19

Which of the following is not subject to scarcity?​

Accepted Answer

A) ​water 
B) ​steel 
C) ​diamonds 
D) none of the above 
A) ​water 
B) ​steel 
C) ​diamonds 
D) none of the above

Question 20

In a particular country in 1998, the average worker needed to work 40 hours to produce 100 units of output. In that same country in 2008, the average worker needed to work 36 hours to produce 72 units of output. In that country, the productivity of the average worker

Accepted Answer

A) decreased between 1998 and 2008, so we would expect the standard of living to have decreased accordingly. 
B) increased between 1998 and 2008, so we would expect the standard of living to have increased accordingly. 
C) decreased between 1998 and 2008, so we would expect inflation to have decreased accordingly. 
D) increased between 1998 and 2008, so we would expect inflation to have increased accordingly. 
A) decreased between 1998 and 2008, so we would expect the standard of living to have decreased accordingly. 
B) increased between 1998 and 2008, so we would expect the standard of living to have increased accordingly. 
C) decreased between 1998 and 2008, so we would expect inflation to have decreased accordingly. 
D) increased between 1998 and 2008, so we would expect inflation to have increased accordingly.

Exam 1: Ten Principles of Economics

When a single person (or small group) has the ability to influence market prices, there is

Both The Wealth of Nations and the Declaration of Independence share the point of view that

Market power refers to the

One way that governments can improve market outcomes is to ensure that individuals are able to own and exercise control over their scarce resources.

Which of the following is an example of something economists study?

Melinda quits her job at a bank, which pays $30,000 a year, to enroll in a two-year graduate program. Her annual school expenses are $22,000 for tuition and fees and $2,000 for books. What is her opportunity cost of attending the two-year graduate program?

A tradeoff exists between a clean environment and a higher level of income in that

When the government redistributes income from the wealthy to the poor,

The income of a typical worker in a country is most closely linked to which of the following?

The government can potentially improve market outcomes if market inequalities or market failure exists.

In a particular country in 2000, the average worker needed to work 40 hours to produce 55 units of output. In that same country in 2008, the average worker needed to work 30 hours to produce 45 units of output. In that country, the productivity of the average worker

If the United States decides to trade with Yemen, we know that

Resources are

Suppose the Federal Reserve announces that it will be making a change to a key interest rate to increase the money supply. This is likely because

Suppose your management professor has been offered a corporate job with a 30 percent pay increase. He has decided to take the job. For him, the marginal

It costs a meat-processing company $50,000 to produce 5,000 pounds of steak. The company's cost will be $50,009 if it produces an additional pound of steak. If the company produces 5,001 pounds of steak then

Which of the following is not subject to scarcity?​

In a particular country in 1998, the average worker needed to work 40 hours to produce 100 units of output. In that same country in 2008, the average worker needed to work 36 hours to produce 72 units of output. In that country, the productivity of the average worker

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Which of the following is not subject to scarcity?