Question 1

Better tools and technology can increase productivity and therefore living standards in countries.

Accepted Answer

A) True 
 B)False  True

Question 2

If scientific research is not supported by patents and government subsidies then there is a risk that:

Accepted Answer

A) pharmaceutical companies will not make enough profit 
B) too much research will be done 
C) universities will have to do all the research 
D) not enough research will be done 
A) pharmaceutical companies will not make enough profit 
B) too much research will be done 
C) universities will have to do all the research 
D) not enough research will be done D

Question 3

An equitable outcome is one where:

Accepted Answer

A) rich people give more to charities 
B) it can be described as fair 
C) it can be described as efficient 
D) everyone has the same income 
A) rich people give more to charities 
B) it can be described as fair 
C) it can be described as efficient 
D) everyone has the same income B

Question 4

There has been some discussion about changes to unemployment benefits that will result in recently graduated students not receiving payments until six months after they finish their studies.How might the changes affect people's decision-making on finishing university?

Accepted Answer

Changes in the unemployment benefits sys

Question 5

What is inflation and why can it be a problem?

Accepted Answer

Inflation is an increase in the overall

Question 6

Which of the following is the most correct statement about the relationship between inflation and unemployment?

Accepted Answer

A) In the short run, reducing inflation is associated with rising unemployment 
B) In the short run, reducing inflation is associated with falling unemployment 
C) In the long run, reducing inflation is associated with falling unemployment 
D) In the long run, reducing inflation is associated with rising unemployment 
A) In the short run, reducing inflation is associated with rising unemployment 
B) In the short run, reducing inflation is associated with falling unemployment 
C) In the long run, reducing inflation is associated with falling unemployment 
D) In the long run, reducing inflation is associated with rising unemployment

Question 7

Which of the following is an example of market failure?

Accepted Answer

A) a firm becomes insolvent and is forced out of the market 
B) a firm's research and development fails to develop a new product 
C) a firm closes down a factory due to poor sales 
D) a firm's pollution into a river reduces the number of fish that can be caught 
A) a firm becomes insolvent and is forced out of the market 
B) a firm's research and development fails to develop a new product 
C) a firm closes down a factory due to poor sales 
D) a firm's pollution into a river reduces the number of fish that can be caught

Question 8

Public policies to reduce emissions from cars do not affect the private costs and benefits of driving cars.

Accepted Answer

A) True 
 B)False

Question 9

A higher price on a good is a disincentive to buying it.

Accepted Answer

A) True 
 B)False

Question 10

What are some differences between a centrally planned economy and a market economy?

Accepted Answer

Market economies are economies that allo

Question 11

Why does Australia continue to trade with a country like Japan, which places tariffs and other barriers on Australian goods?

Accepted Answer

Trade between Australia and Japan allows

Question 12

Equity means that:

Accepted Answer

A) all members of society have the same income 
B) the benefits of society's resources are distributed fairly among society's members 
C) society's goods and services are distributed according to need 
D) society is getting the most it can from its scarce resources 
A) all members of society have the same income 
B) the benefits of society's resources are distributed fairly among society's members 
C) society's goods and services are distributed according to need 
D) society is getting the most it can from its scarce resources

Question 13

Whenever a person gives up one resource to obtain an item it is called:

Accepted Answer

A) cost-benefit analysis 
B) opportunity decision 
C) opportunity price 
D) opportunity cost 
A) cost-benefit analysis 
B) opportunity decision 
C) opportunity price 
D) opportunity cost

Question 14

Daniel decides to spend an hour playing cricket rather than working at $16 per hour.His trade-off is:

Accepted Answer

A) nothing, because he enjoys playing cricket more than working 
B) the increase in skill he obtains from playing cricket for that hour 
C) the $16 he could have earned 
D) nothing, because he spent $16 for admission into the sports complex to play cricket 
A) nothing, because he enjoys playing cricket more than working 
B) the increase in skill he obtains from playing cricket for that hour 
C) the $16 he could have earned 
D) nothing, because he spent $16 for admission into the sports complex to play cricket

Question 15

Efficiency refers to the size of the economic pie and equity refers to how the pie is divided.

Accepted Answer

A) True 
 B)False

Question 16

Scarcity means that society has less to offer than people wish to have.

Accepted Answer

A) True 
 B)False

Question 17

Lee decides to go to the zoo with her friends on Saturday instead of photographing a wedding for $1000.The opportunity cost she places on photographing the wedding is:

Accepted Answer

A) the $1000 she would earn 
B) the enjoyment of spending the day with her friends at the zoo 
C) the $1000 less the enjoyment she would have received from being at the zoo with her friends 
D) nothing, as she wasn't going to earn any money at the zoo 
A) the $1000 she would earn 
B) the enjoyment of spending the day with her friends at the zoo 
C) the $1000 less the enjoyment she would have received from being at the zoo with her friends 
D) nothing, as she wasn't going to earn any money at the zoo

Question 18

From an accounting point of view, the largest single cost of a university education for most students is:

Accepted Answer

A) transportation, parking and entertainment 
B) tuition fees and books 
C) the wages given up to attend university 
D) room and board 
A) transportation, parking and entertainment 
B) tuition fees and books 
C) the wages given up to attend university 
D) room and board

Question 19

In the recent Global Financial Crisis, the US economy went from a situation of full employment to 12 per cent unemployment.What do you assume happened to prices?

Accepted Answer

A) prices were unaffected 
B) prices fell and the economy experienced deflation 
C) prices rose and the economy experienced inflation 
D) it is impossible to guess what happened to prices from the information given 
A) prices were unaffected 
B) prices fell and the economy experienced deflation 
C) prices rose and the economy experienced inflation 
D) it is impossible to guess what happened to prices from the information given

Question 20

In Australia, it would be possible to justify a higher income tax on the rich by potential gains in:

Accepted Answer

A) efficiency 
B) equity 
C) market power 
D) business ethics 
A) efficiency 
B) equity 
C) market power 
D) business ethics

Exam 1: Ten Lessons From Economics

Better tools and technology can increase productivity and therefore living standards in countries.

If scientific research is not supported by patents and government subsidies then there is a risk that:

An equitable outcome is one where:

There has been some discussion about changes to unemployment benefits that will result in recently graduated students not receiving payments until six months after they finish their studies.How might the changes affect people's decision-making on finishing university?

What is inflation and why can it be a problem?

Which of the following is the most correct statement about the relationship between inflation and unemployment?

Which of the following is an example of market failure?

Public policies to reduce emissions from cars do not affect the private costs and benefits of driving cars.

A higher price on a good is a disincentive to buying it.

What are some differences between a centrally planned economy and a market economy?

Why does Australia continue to trade with a country like Japan, which places tariffs and other barriers on Australian goods?

Equity means that:

Whenever a person gives up one resource to obtain an item it is called:

Daniel decides to spend an hour playing cricket rather than working at $16 per hour.His trade-off is:

Efficiency refers to the size of the economic pie and equity refers to how the pie is divided.

Scarcity means that society has less to offer than people wish to have.

Lee decides to go to the zoo with her friends on Saturday instead of photographing a wedding for $1000.The opportunity cost she places on photographing the wedding is:

From an accounting point of view, the largest single cost of a university education for most students is:

In the recent Global Financial Crisis, the US economy went from a situation of full employment to 12 per cent unemployment.What do you assume happened to prices?

In Australia, it would be possible to justify a higher income tax on the rich by potential gains in:

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

Application: 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

Business Strategy and Oligopoly

Competition Policy

The Markets for the Factors of Production

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

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 Trade-Off Between Inflation and Unemployment

Global Financial Crisis of 2008 and Beyond

Five Debates Over Macroeconomic Policy

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