Question 1

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

Accepted Answer

A) True 
 B)False

Question 2

In the short run, which of the following is not correct?

Accepted Answer

A) Increasing the money supply increases the demand for goods and services. 
B) Increasing the money supply encourages firms to hire more workers. 
C) Lowering the money supply leads to a higher level of unemployment. 
D) Policies that encourage higher employment will also induce a lower rate of inflation. 
A) Increasing the money supply increases the demand for goods and services. 
B) Increasing the money supply encourages firms to hire more workers. 
C) Lowering the money supply leads to a higher level of unemployment. 
D) Policies that encourage higher employment will also induce a lower rate of inflation.

Question 3

What is the main difference between a centrally planned economy and a market economy?

Accepted Answer

In a market economy, decisions

Question 4

Suppose your finance professor has been offered a corporate job with a 25 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) benefit of teaching was negative. 
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) benefit of teaching was negative.

Question 5

Laws that enforce chemical hazard control are examples of government intervention that is intended to reduce

Accepted Answer

A) efficiency. 
B) equality. 
C) externalities. 
D) productivity. 
A) efficiency. 
B) equality. 
C) externalities. 
D) productivity.

Question 6

Economics is the study of how society manages its

Accepted Answer

A) limited wants and unlimited resources. 
B) unlimited wants and unlimited resources. 
C) limited wants and limited resources. 
D) unlimited wants and limited resources. 
A) limited wants and unlimited resources. 
B) unlimited wants and unlimited resources. 
C) limited wants and limited resources. 
D) unlimited wants and limited resources.

Question 7

The cost of an action is measured in terms of foregone opportunities.

Accepted Answer

A) True 
 B)False

Question 8

The primary determinant of a country's standard of living is

Accepted Answer

A) the country's ability to prevail over foreign competition. 
B) the country's ability to produce goods and services. 
C) the total supply of money in the economy. 
D) the average age of the country's labor force. 
A) the country's ability to prevail over foreign competition. 
B) the country's ability to produce goods and services. 
C) the total supply of money in the economy. 
D) the average age of the country's labor force.

Question 9

Economists study how people make decisions.

Accepted Answer

A) True 
 B)False

Question 10

The goal of President Obama's stimulus package and increased government spending following the deep economic downturn in 2008 and 2009 was to reduce inflation.

Accepted Answer

A) True 
 B)False

Question 11

Efficiency means that

Accepted Answer

A) society is conserving resources in order to save them for the future. 
B) society's goods and services are distributed equally among society's members. 
C) society's goods and services are distributed fairly, though not necessarily equally, among society's members. 
D) society is getting the most it can from its scarce resources. 
A) society is conserving resources in order to save them for the future. 
B) society's goods and services are distributed equally among society's members. 
C) society's goods and services are distributed fairly, though not necessarily equally, among society's members. 
D) society is getting the most it can from its scarce resources.

Question 12

Inflation measures the increase in the quantity of goods and services produced from each hour of a worker's time.

Accepted Answer

A) True 
 B)False

Question 13

What are the two basic types of economies?

Accepted Answer

Centrally

Question 14

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 marginal cost?

Accepted Answer

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

Question 15

What are the two possible causes of market failure?

Accepted Answer

Externalit

Question 16

During the 1990s, the United Kingdom experienced low levels of inflation while Turkey experienced high levels of inflation. A likely explanation of these facts is that

Accepted Answer

A) the United Kingdom has a better education system than Turkey. 
B) the rate of growth of the quantity of money was slower in the United Kingdom than in Turkey. 
C) workers in Turkey are more productive than workers in the United Kingdom. 
D) there are more instances of market power in Turkey than in the United Kingdom. 
A) the United Kingdom has a better education system than Turkey. 
B) the rate of growth of the quantity of money was slower in the United Kingdom than in Turkey. 
C) workers in Turkey are more productive than workers in the United Kingdom. 
D) there are more instances of market power in Turkey than in the United Kingdom.

Question 17

Economics is the study of ______ .

Accepted Answer

how societ

Question 18

You go to the movieplex where movies ordinarily cost $8.00. You are intending to see a movie for which you have a $2.50-off coupon good for only that movie at that time. However, when you get there you see a friend who asks if you would rather see a new release. Both movies start and end at the same time. If you decide to see the new release with your friend, what is your opportunity cost?

Accepted Answer

A) The amount you value the first movie + $2.50 
B) The amount you value the first movie + $8.00 
C) $2.50 
D) $8.00 
A) The amount you value the first movie + $2.50 
B) The amount you value the first movie + $8.00 
C) $2.50 
D) $8.00

Question 19

In the short-run, society faces a tradeoff between inflation and unemployment.

Accepted Answer

A) True 
 B)False

Question 20

A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. However, redistributing income from rich to poor reduces the reward for working hard. Therefore, society faces a tradeoff between

Accepted Answer

A) guns and butter. 
B) efficiency and equality. 
C) inflation and unemployment. 
D) work and leisure. 
A) guns and butter. 
B) efficiency and equality. 
C) inflation and unemployment. 
D) work and leisure.

Exam 1: Ten Principles of Economics

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

In the short run, which of the following is not correct?

What is the main difference between a centrally planned economy and a market economy?

Suppose your finance professor has been offered a corporate job with a 25 percent pay increase. He has decided to take the job. For him, the marginal

Laws that enforce chemical hazard control are examples of government intervention that is intended to reduce

Economics is the study of how society manages its

The cost of an action is measured in terms of foregone opportunities.

The primary determinant of a country's standard of living is

Economists study how people make decisions.

The goal of President Obama's stimulus package and increased government spending following the deep economic downturn in 2008 and 2009 was to reduce inflation.

Efficiency means that

Inflation measures the increase in the quantity of goods and services produced from each hour of a worker's time.

What are the two basic types of economies?

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 marginal cost?

What are the two possible causes of market failure?

During the 1990s, the United Kingdom experienced low levels of inflation while Turkey experienced high levels of inflation. A likely explanation of these facts is that

Economics is the study of ______ .

In the short-run, society faces a tradeoff between inflation and unemployment.

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