Question 1

Efficiency

Accepted Answer

A) and equality both refer to how much a society can produce with its resources. 
B) and equality both refer to how fairly the benefits from using resources are distributed between members of a society. 
C) refers to how much a society can produce with its resources.Equality refers to how evenly the benefits from using resources are distributed among members of society. 
D) refers to how evenly the benefits from using resources are distributed between members of society.Equality refers to how much a society can produce with its resources. 
A) and equality both refer to how much a society can produce with its resources. 
B) and equality both refer to how fairly the benefits from using resources are distributed between members of a society. 
C) refers to how much a society can produce with its resources.Equality refers to how evenly the benefits from using resources are distributed among members of society. 
D) refers to how evenly the benefits from using resources are distributed between members of society.Equality refers to how much a society can produce with its resources.

Question 2

Choosing not to attend a concert so that you can study for your exam is an example of a tradeoff.

Accepted Answer

A) True 
 B)False

Question 3

Both the production of goods and services and the unemployment rate are used to measure

Accepted Answer

A) the business cycle. 
B) productivity. 
C) the interest rate. 
D) inflation. 
A) the business cycle. 
B) productivity. 
C) the interest rate. 
D) inflation.

Question 4

Invisible hand is a term used by the economist ______ to describe how the decisions of households and firms lead to desirable market outcomes.

Accepted Answer

The answer of Invisible hand is a term used by...

Question 5

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 6

Which of these activities will most likely result in an external benefit?

Accepted Answer

A) A college student buys a deck of cards to play solitaire in her dorm room. 
B) An elderly woman plants a flower garden on the vacant lot next to her house. 
C) An executive purchases a book to read on a business trip. 
D) A ten-year-old uses his allowance to buy new Nike shoes. 
A) A college student buys a deck of cards to play solitaire in her dorm room. 
B) An elderly woman plants a flower garden on the vacant lot next to her house. 
C) An executive purchases a book to read on a business trip. 
D) A ten-year-old uses his allowance to buy new Nike shoes.

Question 7

Explain how trade with other countries is beneficial.

Accepted Answer

Trade allows countri

Question 8

The "invisible hand" influences market behavior through trade.​

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements does not apply to a market economy?

Accepted Answer

A) Firms decide whom to hire and what to produce. 
B) The "invisible hand" usually maximizes the income of society as a whole. 
C) Households decide which firms to work for and what to buy with their incomes. 
D) Government policies are the primary forces that guide the decisions of firms and households. 
A) Firms decide whom to hire and what to produce. 
B) The "invisible hand" usually maximizes the income of society as a whole. 
C) Households decide which firms to work for and what to buy with their incomes. 
D) Government policies are the primary forces that guide the decisions of firms and households.

Question 10

To say people respond to incentives means that people may alter their decisions when the costs and benefits of an action change.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Which of the following statements best represents the principle represented by the adage, "There ain't no such thing as a free lunch"?

Accepted Answer

A) Bo can go swimming only if he takes his brother with him. 
B) Jada is starving and homeless. 
C) Alivia must put gas in her truck before she can drive it to school. 
D) Benjamin must decide between going to Florida or Brazil for summer vacation. 
A) Bo can go swimming only if he takes his brother with him. 
B) Jada is starving and homeless. 
C) Alivia must put gas in her truck before she can drive it to school. 
D) Benjamin must decide between going to Florida or Brazil for summer vacation.

Question 13

Bo buys and sells real estate. Two weeks ago, he paid $400,000 for a house on Cypress Street, intending to spend $50,000 on repairs and then sell the house for $500,000. Last week, the city government announced a plan to build a new landfill on Cypress Street just down the street from the house Bo purchased. As a result of the city's announced plan, Bo is weighing two alternatives: He can go ahead with the $50,000 in repairs and then sell the house for $390,000, or he can forgo the repairs and sell the house as it is for $350,000. He should

Accepted Answer

A) keep the house and live in it. 
B) go ahead with the $50,000 in repairs and sell the house for $390,000. 
C) forgo the repairs and sell the house as it is for $350,000. 
D) move the house from Cypress Street to a more desirable location, regardless of the cost of doing so. 
A) keep the house and live in it. 
B) go ahead with the $50,000 in repairs and sell the house for $390,000. 
C) forgo the repairs and sell the house as it is for $350,000. 
D) move the house from Cypress Street to a more desirable location, regardless of the cost of doing so.

Question 14

The term market failure refers to

Accepted Answer

A) a situation in which the market on its own fails to allocate resources efficiently. 
B) an unsuccessful advertising campaign which reduces demand for a product. 
C) a situation in which competition among firms becomes ruthless. 
D) a firm that is forced out of business because of losses. 
A) a situation in which the market on its own fails to allocate resources efficiently. 
B) an unsuccessful advertising campaign which reduces demand for a product. 
C) a situation in which competition among firms becomes ruthless. 
D) a firm that is forced out of business because of losses.

Question 15

Market failure occurs when no individual has the ability to substantially influence market prices.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) efficiency is improved, but equality is not. 
B) both wealthy people and poor people benefit directly. 
C) people work less and produce fewer goods and services. 
D) the government collects more revenue in total. 
A) efficiency is improved, but equality is not. 
B) both wealthy people and poor people benefit directly. 
C) people work less and produce fewer goods and services. 
D) the government collects more revenue in total.

Question 17

How does the study of economics depend upon the phenomenon of scarcity?

Accepted Answer

Because economics is the study of how so

Question 18

The adage, "There ain't no such thing as a free lunch," means

Accepted Answer

A) even people on welfare have to pay for food. 
B) the cost of living is always increasing. 
C) people face tradeoffs. 
D) all costs are included in the price of a product. 
A) even people on welfare have to pay for food. 
B) the cost of living is always increasing. 
C) people face tradeoffs. 
D) all costs are included in the price of a product.

Question 19

Trade can make everyone better off except in the case where one person is better at doing everything.

Accepted Answer

A) True 
 B)False

Question 20

A rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit.

Accepted Answer

A) True 
 B)False

Exam 1: Ten Principles of Economics

Efficiency

Choosing not to attend a concert so that you can study for your exam is an example of a tradeoff.

Both the production of goods and services and the unemployment rate are used to measure

Invisible hand is a term used by the economist ______ to describe how the decisions of households and firms lead to desirable market outcomes.

Market power refers to the

Which of these activities will most likely result in an external benefit?

Explain how trade with other countries is beneficial.

The "invisible hand" influences market behavior through trade.​

Which of the following statements does not apply to a market economy?

To say people respond to incentives means that people may alter their decisions when the costs and benefits of an action change.

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?

Which of the following statements best represents the principle represented by the adage, "There ain't no such thing as a free lunch"?

The term market failure refers to

Market failure occurs when no individual has the ability to substantially influence market prices.

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

How does the study of economics depend upon the phenomenon of scarcity?

The adage, "There ain't no such thing as a free lunch," means

Trade can make everyone better off except in the case where one person is better at doing everything.

A rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit.

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 Nations 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

The "invisible hand" influences market behavior through trade.