Question 1

To explore the rationale for specialization, economists use the

Accepted Answer

A)  marginal principle. 
B)  principle of opportunity cost. 
C)  real-nominal principle. 
D)  principle of marginal exchange. 
A)  marginal principle. 
B)  principle of opportunity cost. 
C)  real-nominal principle. 
D)  principle of marginal exchange.

Question 2

In a market system, self-interest motivates most people to

Accepted Answer

A)  avoid paying insurance premiums. 
B)  remain self-sufficient. 
C)  provide products for other people. 
D)  rely on government central planning. 
A)  avoid paying insurance premiums. 
B)  remain self-sufficient. 
C)  provide products for other people. 
D)  rely on government central planning.

Question 3

Explain how patents have been beneficial for markets.

Accepted Answer

Patents increase the profitabi

Question 4

Recall the Application about productivity in the nation of Latvia in the 1990s to answer the following question(s).
-According to this Application, in the 1990s EU countries had ________ in the production of all products compared to Latvia.

Accepted Answer

A)  an absolute advantage and a comparative advantage 
B)  an absolute advantage but not a comparative advantage 
C)  a comparative advantage but not an absolute advantage 
D)  neither an absolute advantage nor a comparative advantage 
A)  an absolute advantage and a comparative advantage 
B)  an absolute advantage but not a comparative advantage 
C)  a comparative advantage but not an absolute advantage 
D)  neither an absolute advantage nor a comparative advantage

Question 5

The government plays no role in a market-based economy.

Accepted Answer

A) True 
 B)False

Question 6

Recall the Application about the role of government in promoting civil liberties to answer the following question(s).
-According to the Application, moving from a country with relatively weak civil liberties to one with relatively strong civil liberties, the economic rate of return on World Bank development projects

Accepted Answer

A)  increases by about 15 percentage points. 
B)  more than triples. 
C)  decreases by more than 20 percent. 
D)  is not noticeably changed. 
A)  increases by about 15 percentage points. 
B)  more than triples. 
C)  decreases by more than 20 percent. 
D)  is not noticeably changed.

Question 7

Table 3.2
  
-Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.2 shows how much of each good Jesse and April can paint in one hour. Which of the following is true?

Accepted Answer

A)  Jesse has an absolute advantage in painting kites but not snowboards. 
B)  Jesse has an absolute advantage in painting snowboards but not kites. 
C)  Jesse has an absolute advantage in painting both goods. 
D)  Jesse has an absolute advantage in painting neither good. 
A)  Jesse has an absolute advantage in painting kites but not snowboards. 
B)  Jesse has an absolute advantage in painting snowboards but not kites. 
C)  Jesse has an absolute advantage in painting both goods. 
D)  Jesse has an absolute advantage in painting neither good.

Question 8

In which system are decisions made by thousands of people who have information about resources, production technology and consumer desires?

Accepted Answer

A)  market system 
B)  centrally planned system 
C)  command system 
D)  socialist system 
A)  market system 
B)  centrally planned system 
C)  command system 
D)  socialist system

Question 9

The prices of the products in the World War II POW camps, measured in terms of cigarettes, reflected the products'

Accepted Answer

A)  costs of production. 
B)  retail prices. 
C)  practicality. 
D)  scarcity. 
A)  costs of production. 
B)  retail prices. 
C)  practicality. 
D)  scarcity.

Question 10

In a market-based economy, only the government can reduce economic uncertainty.

Accepted Answer

A) True 
 B)False

Question 11

What is a centrally planned economy?

Accepted Answer

A centrally planned economy is

Question 12

Identify markets in which there is an exchange.

Accepted Answer

financial capital ma

Question 13

Imports are products produced in the home country and sold in another country.

Accepted Answer

A) True 
 B)False

Question 14

An economy in which people exchange goods and services in a market is called a

Accepted Answer

A)  socialist economy. 
B)  market economy. 
C)  centrally planned economy. 
D)  command economy. 
A)  socialist economy. 
B)  market economy. 
C)  centrally planned economy. 
D)  command economy.

Question 15

Table 3.1
  
-Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.1 shows how much of each good Jesse and April can paint in one hour. April's opportunity cost of painting one kite is painting

Accepted Answer

A)  1/12 of a snowboard. 
B)  1/4 of a snowboard. 
C)  3 snowboards. 
D)  4 snowboards. 
A)  1/12 of a snowboard. 
B)  1/4 of a snowboard. 
C)  3 snowboards. 
D)  4 snowboards.

Question 16

An individual or country that has a comparative advantage in the production of one good

Accepted Answer

A)  must have an absolute advantage in the good's production. 
B)  must not have an absolute advantage in the good's production. 
C)  may or may not have an absolute advantage in the good's production. 
D)  must not have an absolute advantage in the production of the other good. 
A)  must have an absolute advantage in the good's production. 
B)  must not have an absolute advantage in the good's production. 
C)  may or may not have an absolute advantage in the good's production. 
D)  must not have an absolute advantage in the production of the other good.

Question 17

Recall the Application about productivity in the nation of Latvia in the 1990s to answer the following question(s).
-According to this Application, workers in the EU were more productive than workers in Latvia in the 1990s, yet EU nations still purchased products from Latvia. This is because Latvia ________ in the production of the products it sold to EU nations.

Accepted Answer

A)  had an absolute advantage 
B)  had a comparative advantage 
C)  used fewer resources 
D)  had a higher opportunity cost 
A)  had an absolute advantage 
B)  had a comparative advantage 
C)  used fewer resources 
D)  had a higher opportunity cost

Question 18

When a U.S. company shifts some of its production to Mexico, it is engaging in

Accepted Answer

A)  outsourcing. 
B)  insourcing. 
C)  self-sufficiency. 
D)  involuntary exchange. 
A)  outsourcing. 
B)  insourcing. 
C)  self-sufficiency. 
D)  involuntary exchange.

Question 19

Trade results from

Accepted Answer

A)  comparative advantage. 
B)  absolute advantage. 
C)  self-sufficiency. 
D)  diminishing returns. 
A)  comparative advantage. 
B)  absolute advantage. 
C)  self-sufficiency. 
D)  diminishing returns.

Question 20

Table 3.3
  
-Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 3.3. Which of the following is true?

Accepted Answer

A)  Nigel has a comparative advantage in producing hair pins but not bandanas. 
B)  Nigel has a comparative advantage in producing bandanas but not hair pins. 
C)  Nigel has a comparative advantage in producing both goods. 
D)  Nigel does not have a comparative advantage in producing either good. 
A)  Nigel has a comparative advantage in producing hair pins but not bandanas. 
B)  Nigel has a comparative advantage in producing bandanas but not hair pins. 
C)  Nigel has a comparative advantage in producing both goods. 
D)  Nigel does not have a comparative advantage in producing either good.

To explore the rationale for specialization, economists use the

In a market system, self-interest motivates most people to

Explain how patents have been beneficial for markets.

Recall the Application about productivity in the nation of Latvia in the 1990s to answer the following question(s). -According to this Application, in the 1990s EU countries had ________ in the production of all products compared to Latvia.

The government plays no role in a market-based economy.

Table 3.2 -Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.2 shows how much of each good Jesse and April can paint in one hour. Which of the following is true?

In which system are decisions made by thousands of people who have information about resources, production technology and consumer desires?

The prices of the products in the World War II POW camps, measured in terms of cigarettes, reflected the products'

In a market-based economy, only the government can reduce economic uncertainty.

What is a centrally planned economy?

Identify markets in which there is an exchange.

Imports are products produced in the home country and sold in another country.

An economy in which people exchange goods and services in a market is called a

Table 3.1 -Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.1 shows how much of each good Jesse and April can paint in one hour. April's opportunity cost of painting one kite is painting

An individual or country that has a comparative advantage in the production of one good

When a U.S. company shifts some of its production to Mexico, it is engaging in

Trade results from

Table 3.3 -Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 3.3. Which of the following is true?

Introduction: What Is Economics?

The Key Principles of Economics

Demand, Supply, and Market Equilibrium

Measuring a Nation's Production and Income

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow?

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters

Exam 3: Exchange and Markets

To explore the rationale for specialization, economists use the

In a market system, self-interest motivates most people to

Explain how patents have been beneficial for markets.

Recall the Application about productivity in the nation of Latvia in the 1990s to answer the following question(s). -According to this Application, in the 1990s EU countries had ________ in the production of all products compared to Latvia.

The government plays no role in a market-based economy.

Table 3.2 -Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.2 shows how much of each good Jesse and April can paint in one hour. Which of the following is true?

In which system are decisions made by thousands of people who have information about resources, production technology and consumer desires?

The prices of the products in the World War II POW camps, measured in terms of cigarettes, reflected the products'

In a market-based economy, only the government can reduce economic uncertainty.

What is a centrally planned economy?

Identify markets in which there is an exchange.

Imports are products produced in the home country and sold in another country.

An economy in which people exchange goods and services in a market is called a

Table 3.1 -Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.1 shows how much of each good Jesse and April can paint in one hour. April's opportunity cost of painting one kite is painting

An individual or country that has a comparative advantage in the production of one good

When a U.S. company shifts some of its production to Mexico, it is engaging in

Trade results from

Table 3.3 -Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 3.3. Which of the following is true?

Introduction: What Is Economics?

The Key Principles of Economics

Demand, Supply, and Market Equilibrium

Measuring a Nation's Production and Income

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow?

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters