Question 1

Under what conditions might government intervention in a market economy improve the economy's performance?

Accepted Answer

If there is a market failure, such as an

Question 2

Economists use the term ______ to refer to the ability of a single person (or a small group) to have a substantial influence on market prices.

Accepted Answer

The answer of Economists use the term ______ to refer...

Question 3

Scenario 1-5
Suppose that you have a choice between going to the movies with a friend for three hours or working at your job. If you go to the movies, you will spend $12 on a ticket and $6 on popcorn. If you choose to work, you will earn $10 an hour.
-Refer to Scenario 1-5. What is your opportunity cost of working?

Accepted Answer

The enjoyment you wo

Question 4

Tuition is the single-largest cost of attending college for most students.

Accepted Answer

A) True 
 B)False

Question 5

Productivity is defined as the quantity of goods and services produced from each unit of labor input.

Accepted Answer

A) True 
 B)False

Question 6

An individual deciding how to allocate her limited time is dealing with both scarcity and trade-offs.

Accepted Answer

A) True 
 B)False

Question 7

Scenario 1-6
It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors.
-Refer to Scenario 1-6. What is the company's average cost?

Accepted Answer

The answer of Scenario 1-6
It costs a company $30,000 to...

Question 8

Zack quits his job at a consulting firm, which pays $40,000 a year, to enroll in a two-year graduate program. His annual school expenses are $30,000 for tuition, $2,000 for books, and $600 for food. What is his opportunity cost of attending the two-year graduate program?

Accepted Answer

The answer of Zack quits his job at a consulting...

Question 9

Communist countries worked under the premise that

Accepted Answer

A) people, when left on their own without government intervention, will find the best use of available resources 
B) central planners were in the best position to determine the allocation of scarce resources in the economy. 
C) households and firms, guided by an "invisible hand," could achieve the most efficient allocation of scarce resources. 
D) allowing the market forces of supply and demand to operate with no government intervention would achieve the most efficient allocation of scarce resources. 
A) people, when left on their own without government intervention, will find the best use of available resources 
B) central planners were in the best position to determine the allocation of scarce resources in the economy. 
C) households and firms, guided by an "invisible hand," could achieve the most efficient allocation of scarce resources. 
D) allowing the market forces of supply and demand to operate with no government intervention would achieve the most efficient allocation of scarce resources.

Question 10

Debbie quits her job, which pays $30,000 a year, to finish her college degree. Her annual college expenses are $10,000 for tuition, $2,000 for books, and $700 for food. What is her opportunity cost of attending college for the year?

Accepted Answer

The answer of Debbie quits her job, which pays $30,000...

Question 11

Scenario 1-3
It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators.
-Refer to Scenario 1-3. What is the minimum price the company will charge for the 701th calculator?

Accepted Answer

Question 12

Senator Fujita argues that replacing the federal income tax with a national sales tax would increase the level of output. Senator Watson objects that this policy would benefit the rich at the expense of the poor.

Accepted Answer

A) Both senators' arguments are primarily about equality. 
B) Both senators' arguments are primarily about efficiency. 
C) Senator Fujita's argument is primarily about equality, while Senator Watson's argument is primarily about efficiency. 
D) Senator Fujita's argument is primarily about efficiency, while Senator Watson's argument is primarily about equality. 
A) Both senators' arguments are primarily about equality. 
B) Both senators' arguments are primarily about efficiency. 
C) Senator Fujita's argument is primarily about equality, while Senator Watson's argument is primarily about efficiency. 
D) Senator Fujita's argument is primarily about efficiency, while Senator Watson's argument is primarily about equality.

Question 13

What are the two reasons for the government to intervene in a market?

Accepted Answer

To promote

Question 14

Thousands of people develop lung cancer from second-hand exposure to cigarette smoke. This is an example of

Accepted Answer

A) a market failure caused by an externality. 
B) a market failure caused by market power. 
C) a market failure caused by equality. 
D) There is no market failure in this case. 
A) a market failure caused by an externality. 
B) a market failure caused by market power. 
C) a market failure caused by equality. 
D) There is no market failure in this case.

Question 15

The overriding reason why households and societies face many decisions is that

Accepted Answer

A) resources are scarce. 
B) goods and services are not scarce. 
C) incomes fluctuate with business cycles. 
D) people, by nature, tend to disagree. 
A) resources are scarce. 
B) goods and services are not scarce. 
C) incomes fluctuate with business cycles. 
D) people, by nature, tend to disagree.

Question 16

The fact that people are willing to pay much more for a diamond, which is not needed for survival, than they are willing to pay for a cup of water, which is needed for survival, is an example of irrational behavior.

Accepted Answer

A) True 
 B)False

Question 17

To improve living standards, policymakers should

Accepted Answer

A) impose restrictions on foreign competition. 
B) formulate policies designed to increase productivity. 
C) impose tougher immigration policies. 
D) provide tax breaks for the middle class. 
A) impose restrictions on foreign competition. 
B) formulate policies designed to increase productivity. 
C) impose tougher immigration policies. 
D) provide tax breaks for the middle class.

Question 18

If the government were to intervene in a market economy and fix the price of visiting a health care provider below the market price, then we would expect, relative to the market outcome,

Accepted Answer

A) an increase in the number of visits people want to make and an increase in the number of visits health care providers want to provide. 
B) an increase in the number of visits people want to make and a decrease in the number of visits health care providers want to provide. 
C) a decrease in the number of visits people want to make and an increase in the number of visits health care providers want to provide. 
D) a decrease in the number of visits people want to make and a decrease in the number of visits health care providers want to provide. 
A) an increase in the number of visits people want to make and an increase in the number of visits health care providers want to provide. 
B) an increase in the number of visits people want to make and a decrease in the number of visits health care providers want to provide. 
C) a decrease in the number of visits people want to make and an increase in the number of visits health care providers want to provide. 
D) a decrease in the number of visits people want to make and a decrease in the number of visits health care providers want to provide.

Question 19

The opportunity cost of working one hour is the sum of the values you would have received from all other activities you could have done in that hour.

Accepted Answer

A) True 
 B)False

Question 20

Equality refers to how the pie is divided, and efficiency refers to the size of the economic pie.

Accepted Answer

A) True 
 B)False

Exam 1: Ten Principles of Economics

Under what conditions might government intervention in a market economy improve the economy's performance?

Economists use the term ______ to refer to the ability of a single person (or a small group) to have a substantial influence on market prices.

Tuition is the single-largest cost of attending college for most students.

Productivity is defined as the quantity of goods and services produced from each unit of labor input.

An individual deciding how to allocate her limited time is dealing with both scarcity and trade-offs.

Scenario 1-6 It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors. -Refer to Scenario 1-6. What is the company's average cost?

Zack quits his job at a consulting firm, which pays $40,000 a year, to enroll in a two-year graduate program. His annual school expenses are $30,000 for tuition, $2,000 for books, and $600 for food. What is his opportunity cost of attending the two-year graduate program?

Communist countries worked under the premise that

Debbie quits her job, which pays $30,000 a year, to finish her college degree. Her annual college expenses are $10,000 for tuition, $2,000 for books, and $700 for food. What is her opportunity cost of attending college for the year?

Senator Fujita argues that replacing the federal income tax with a national sales tax would increase the level of output. Senator Watson objects that this policy would benefit the rich at the expense of the poor.

What are the two reasons for the government to intervene in a market?

Thousands of people develop lung cancer from second-hand exposure to cigarette smoke. This is an example of

The overriding reason why households and societies face many decisions is that

The fact that people are willing to pay much more for a diamond, which is not needed for survival, than they are willing to pay for a cup of water, which is needed for survival, is an example of irrational behavior.

To improve living standards, policymakers should

If the government were to intervene in a market economy and fix the price of visiting a health care provider below the market price, then we would expect, relative to the market outcome,

The opportunity cost of working one hour is the sum of the values you would have received from all other activities you could have done in that hour.

Equality refers to how the pie is divided, and efficiency refers to the size of the economic pie.

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

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