Question 1

A specialized worker doesn't spend time switching from one task to another. This source of productivity increase is called

Accepted Answer

A)  continuity. 
B)  innovation. 
C)  functionality. 
D)  repetition. 
A)  continuity. 
B)  innovation. 
C)  functionality. 
D)  repetition.

Question 2

Entrepreneurs play a key role in which type of economy?

Accepted Answer

A)  centrally planned economy 
B)  market economy 
C)  command economy 
D)  all of the above 
A)  centrally planned economy 
B)  market economy 
C)  command economy 
D)  all of the above

Question 3

Outsourcing allows a company to take advantage of the ________ of other countries, and in doing so it can produce its products at a lower cost.

Accepted Answer

A)  comparative advantages 
B)  diminishing returns 
C)  trade imbalances 
D)  market failures 
A)  comparative advantages 
B)  diminishing returns 
C)  trade imbalances 
D)  market failures

Question 4

If Eddie can produce 40 milk shakes or 20 banana splits in an hour, and Tina can produce 30 milk shakes or 16 banana splits in an hour, then Tina has a comparative advantage in producing milk shakes.

Accepted Answer

A) True 
 B)False

Question 5

For country A, an import is a good produced in

Accepted Answer

A)  country B and purchased by residents of country B. 
B)  country B and purchased by residents of country A. 
C)  country A and purchased by residents of country B. 
D)  country A and purchased by residents of country A. 
A)  country B and purchased by residents of country B. 
B)  country B and purchased by residents of country A. 
C)  country A and purchased by residents of country B. 
D)  country A and purchased by residents of country A.

Question 6

One role government can play in addressing market failure is to

Accepted Answer

A)  enforce the rules of exchange. 
B)  increase economic uncertainty. 
C)  promote imperfect competition. 
D)  facilitate decision making for private goods. 
A)  enforce the rules of exchange. 
B)  increase economic uncertainty. 
C)  promote imperfect competition. 
D)  facilitate decision making for private goods.

Question 7

If Eddie can produce 40 milk shakes or 20 banana splits in an hour, and Tina can produce 30 milk shakes or 16 banana splits in an hour, then Eddie has a comparative advantage in producing banana splits.

Accepted Answer

A) True 
 B)False

Question 8

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 despite this, EU nations chose to trade with Latvia. Engaging in trade with Latvia allowed ________ to become more productive.

Accepted Answer

A)  workers in the EU but not workers in Latvia 
B)  workers in Latvia but not workers in the EU 
C)  neither workers in the EU nor in Latvia 
D)  workers in both the EU and in Latvia 
A)  workers in the EU but not workers in Latvia 
B)  workers in Latvia but not workers in the EU 
C)  neither workers in the EU nor in Latvia 
D)  workers in both the EU and in Latvia

Question 9

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. Jesse's opportunity cost of painting one snowboard is painting

Accepted Answer

A)  1/8 of a kite. 
B)  1.5 kites. 
C)  8 kites. 
D)  12 kites. 
A)  1/8 of a kite. 
B)  1.5 kites. 
C)  8 kites. 
D)  12 kites.

Question 10

Explain how accounting rules have been beneficial for markets.

Accepted Answer

Accounting rules provide poten

Question 11

Explain what is meant by the economic principle of voluntary exchange.

Accepted Answer

If two people both produce goo

Question 12

What is a market economy?

Accepted Answer

A market economy is

Question 13

Specialization and trade exploit differences in productivity across workers and

Accepted Answer

A)  only benefit the exporter. 
B)  only benefit the importer. 
C)  make everyone better off. 
D)  make everyone worse off. 
A)  only benefit the exporter. 
B)  only benefit the importer. 
C)  make everyone better off. 
D)  make everyone worse off.

Question 14

Recall the Application about the role of government in promoting civil liberties to answer the following question(s).
-According to the Application, there is a ________ relationship between the strength of civil liberties and the economic rate of return on government investment projects, which tends to lead to ________ government projects.

Accepted Answer

A)  positive; less efficient 
B)  negative; less efficient 
C)  positive; more efficient 
D)  negative; more efficient 
A)  positive; less efficient 
B)  negative; less efficient 
C)  positive; more efficient 
D)  negative; more efficient

Question 15

In a market-based economy, the government

Accepted Answer

A)  allocates production. 
B)  decides how much to produce. 
C)  encourages insurance risk. 
D)  enforces property rights. 
A)  allocates production. 
B)  decides how much to produce. 
C)  encourages insurance risk. 
D)  enforces property rights.

Question 16

Table 3.1
  
-Based on the data in Table 3.1

Accepted Answer

A)  Jesse should specialize in painting kites and trade for snowboards. 
B)  Jesse should specialize in painting snowboards and trade for kites. 
C)  April should specialize in both goods. 
D)  Jesse should specialize in both goods. 
A)  Jesse should specialize in painting kites and trade for snowboards. 
B)  Jesse should specialize in painting snowboards and trade for kites. 
C)  April should specialize in both goods. 
D)  Jesse should specialize in both goods.

Question 17

Recall the Application about the market for meteorites to answer the following question(s).
-According to the Application, the market price of meteorites varies from a few dollars per gram to hundreds of dollars per gram. In a market system like the market for meteorites, prices vary due to

Accepted Answer

A)  government intervention in the pricing of the products. 
B)  the lack of accounting rules in this market. 
C)  the relative scarcity, or rarity, of the product. 
D)  outsourcing. 
A)  government intervention in the pricing of the products. 
B)  the lack of accounting rules in this market. 
C)  the relative scarcity, or rarity, of the product. 
D)  outsourcing.

Question 18

By engaging in trade and acting in their own self interest, World War II POWs were following the economic principle of

Accepted Answer

A)  comparative advantage. 
B)  division of labor. 
C)  international trade. 
D)  voluntary exchange. 
A)  comparative advantage. 
B)  division of labor. 
C)  international trade. 
D)  voluntary exchange.

Question 19

Differences in innate skills and the benefits associated with the division of labor result in

Accepted Answer

A)  differences in productivity. 
B)  absolute advantage. 
C)  self-sufficiency. 
D)  diminishing returns. 
A)  differences in productivity. 
B)  absolute advantage. 
C)  self-sufficiency. 
D)  diminishing returns.

Question 20

How can governments intervene in trade?

Accepted Answer

A)  by producing cheaper products 
B)  by helping reduce economic uncertainty 
C)  by not buying products from competing countries 
D)  all of the above 
A)  by producing cheaper products 
B)  by helping reduce economic uncertainty 
C)  by not buying products from competing countries 
D)  all of the above

A specialized worker doesn't spend time switching from one task to another. This source of productivity increase is called

Entrepreneurs play a key role in which type of economy?

Outsourcing allows a company to take advantage of the ________ of other countries, and in doing so it can produce its products at a lower cost.

If Eddie can produce 40 milk shakes or 20 banana splits in an hour, and Tina can produce 30 milk shakes or 16 banana splits in an hour, then Tina has a comparative advantage in producing milk shakes.

For country A, an import is a good produced in

One role government can play in addressing market failure is to

If Eddie can produce 40 milk shakes or 20 banana splits in an hour, and Tina can produce 30 milk shakes or 16 banana splits in an hour, then Eddie has a comparative advantage in producing banana splits.

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. Jesse's opportunity cost of painting one snowboard is painting

Explain how accounting rules have been beneficial for markets.

Explain what is meant by the economic principle of voluntary exchange.

What is a market economy?

Specialization and trade exploit differences in productivity across workers and

In a market-based economy, the government

Table 3.1 -Based on the data in Table 3.1

Recall the Application about the market for meteorites to answer the following question(s). -According to the Application, the market price of meteorites varies from a few dollars per gram to hundreds of dollars per gram. In a market system like the market for meteorites, prices vary due to

By engaging in trade and acting in their own self interest, World War II POWs were following the economic principle of

Differences in innate skills and the benefits associated with the division of labor result in

How can governments intervene in trade?

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

A specialized worker doesn't spend time switching from one task to another. This source of productivity increase is called

Entrepreneurs play a key role in which type of economy?

Outsourcing allows a company to take advantage of the ________ of other countries, and in doing so it can produce its products at a lower cost.

If Eddie can produce 40 milk shakes or 20 banana splits in an hour, and Tina can produce 30 milk shakes or 16 banana splits in an hour, then Tina has a comparative advantage in producing milk shakes.

For country A, an import is a good produced in

One role government can play in addressing market failure is to

If Eddie can produce 40 milk shakes or 20 banana splits in an hour, and Tina can produce 30 milk shakes or 16 banana splits in an hour, then Eddie has a comparative advantage in producing banana splits.

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. Jesse's opportunity cost of painting one snowboard is painting

Explain how accounting rules have been beneficial for markets.

Explain what is meant by the economic principle of voluntary exchange.

What is a market economy?

Specialization and trade exploit differences in productivity across workers and

In a market-based economy, the government

Table 3.1 -Based on the data in Table 3.1

Recall the Application about the market for meteorites to answer the following question(s). -According to the Application, the market price of meteorites varies from a few dollars per gram to hundreds of dollars per gram. In a market system like the market for meteorites, prices vary due to

By engaging in trade and acting in their own self interest, World War II POWs were following the economic principle of

Differences in innate skills and the benefits associated with the division of labor result in

How can governments intervene in trade?

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