Question 1

If Australian workers are more productive than New Zealand workers, one would expect:

Accepted Answer

A) The two countries to trade with each other 
B) Australia to have higher wages than New Zealand 
C) Australia to have more trade barriers than New Zealand 
D) Australia to provide aid to New Zealand 
A) The two countries to trade with each other 
B) Australia to have higher wages than New Zealand 
C) Australia to have more trade barriers than New Zealand 
D) Australia to provide aid to New Zealand

Question 2

Economics is the study of the circulation of money between banks, taxpayers and the government.

Accepted Answer

A) True 
 B)False

Question 3

The two best reasons for a government to intervene in a market are to:

Accepted Answer

A) raise revenues and to promote stability 
B) promote equity and to raise revenues 
C) promote efficiency and to raise revenues 
D) promote equity and to promote efficiency 
A) raise revenues and to promote stability 
B) promote equity and to raise revenues 
C) promote efficiency and to raise revenues 
D) promote equity and to promote efficiency

Question 4

Which of the following is important for policymakers to consider when designing public policy?

Accepted Answer

A) the possibility that policies might change behaviour 
B) the direct effect of policies 
C) the indirect effect of policies 
D) all of the above 
A) the possibility that policies might change behaviour 
B) the direct effect of policies 
C) the indirect effect of policies 
D) all of the above

Question 5

Which of the following is a major area of study for economists?

Accepted Answer

A) how people make decisions 
B) the design of nuclear power plants 
C) the best way to design a nature reserve 
D) how countries choose national leaders 
A) how people make decisions 
B) the design of nuclear power plants 
C) the best way to design a nature reserve 
D) how countries choose national leaders

Question 6

What ultimately determines a country's standard of living?

Accepted Answer

A) its ability to produce goods and services that people want to buy 
B) the level of oil reserves it has 
C) the quantity of natural resources, like forests and gold mines 
D) the level of trade barriers to protect domestic industries and local workers 
A) its ability to produce goods and services that people want to buy 
B) the level of oil reserves it has 
C) the quantity of natural resources, like forests and gold mines 
D) the level of trade barriers to protect domestic industries and local workers

Question 7

A good example of a monopoly is:

Accepted Answer

A) a commercial fishing boat operating in the inshore fishery 
B) an eco-tourist business that has sole rights to take visitors into a reserve 
C) a large computer company with many business software products 
D) a bookstore in a large city 
A) a commercial fishing boat operating in the inshore fishery 
B) an eco-tourist business that has sole rights to take visitors into a reserve 
C) a large computer company with many business software products 
D) a bookstore in a large city

Question 8

In economic policymaking, there is often a conflict between the goal of efficiency and the goal of equity.

Accepted Answer

A) True 
 B)False

Question 9

Public policies often alter the costs and benefits of private actions.Why is it important for policymakers to consider both the direct and indirect effects of public policies?

Accepted Answer

If policymakers don't consider

Question 10

The two broad reasons for a government to intervene in the economy are: to promote efficiency, and to promote equity.

Accepted Answer

A) True 
 B)False

Question 11

What alternatives would you include when determining your opportunity cost of starting a university degree?

Accepted Answer

You would include:
- What you could othe

Question 12

If paper-pulp factories generate too much water pollution with their discharge, which kills local fish stocks then:

Accepted Answer

A) the government will not be able to do anything to stop this 
B) the factories will be concerned about the loss of fish and reduce their pollution 
C) the government can treat the water for pollution and restock the river 
D) the government can use environmental regulations to reduce the pollution and improve economic well being 
A) the government will not be able to do anything to stop this 
B) the factories will be concerned about the loss of fish and reduce their pollution 
C) the government can treat the water for pollution and restock the river 
D) the government can use environmental regulations to reduce the pollution and improve economic well being

Question 13

New Zealand and Australia trade similar, but not identical, forestry products with each other.Why wouldn't each country choose to produce all the forestry products they need domestically?

Accepted Answer

By trading, each country can specialise

Question 14

You have spent $500 purchasing and repairing an old car which you expect to sell for $700 once the repairs are complete.You discover that you need an additional part, which will cost $500, including labour, in order to complete the repairs.You can sell the car as it is now for $300.What should you do?

Accepted Answer

A) you should never sell something for less than it costs 
B) you should cut your losses and take the $300 
C) you should complete the repairs and sell the car 
D) it doesn't matter which action you take; the outcome is the same either way 
A) you should never sell something for less than it costs 
B) you should cut your losses and take the $300 
C) you should complete the repairs and sell the car 
D) it doesn't matter which action you take; the outcome is the same either way

Question 15

The main motivation behind the 'invisible hand' is:

Accepted Answer

A) the threat of government intervention 
B) business ethics 
C) self-interest 
D) the legal system 
A) the threat of government intervention 
B) business ethics 
C) self-interest 
D) the legal system

Question 16

When a society cannot produce all the resources that people wish to have, it is called:

Accepted Answer

A) a trade-off 
B) a market 
C) efficiency 
D) scarcity 
A) a trade-off 
B) a market 
C) efficiency 
D) scarcity

Question 17

Inflation is defined as:

Accepted Answer

A) a period of rising productivity in the economy 
B) an increase in the overall level of output in the economy 
C) a period of rising income in the economy 
D) an increase in the overall level of prices in the economy 
A) a period of rising productivity in the economy 
B) an increase in the overall level of output in the economy 
C) a period of rising income in the economy 
D) an increase in the overall level of prices in the economy

Question 18

Economists agree that monetary and fiscal policy, although not very powerful, are necessary instruments for controlling the economy.

Accepted Answer

A) True 
 B)False

Question 19

Pollution regulations make society better off by raising incomes.

Accepted Answer

A) True 
 B)False

Question 20

If Australia is better than the US at producing wheat, but the US is better than Australia at producing cars, the US should:

Accepted Answer

A) impose a tariff on Australian wheat in order to protect jobs in the US car industry 
B) sell cars to Australia, and buy Australian wheat 
C) subsidise its wheat industry so that it can compete with Australian wheat 
D) put a quota on the amount of Australian wheat imported 
A) impose a tariff on Australian wheat in order to protect jobs in the US car industry 
B) sell cars to Australia, and buy Australian wheat 
C) subsidise its wheat industry so that it can compete with Australian wheat 
D) put a quota on the amount of Australian wheat imported

Exam 1: Ten Lessons From Economics

If Australian workers are more productive than New Zealand workers, one would expect:

Economics is the study of the circulation of money between banks, taxpayers and the government.

The two best reasons for a government to intervene in a market are to:

Which of the following is important for policymakers to consider when designing public policy?

Which of the following is a major area of study for economists?

What ultimately determines a country's standard of living?

A good example of a monopoly is:

In economic policymaking, there is often a conflict between the goal of efficiency and the goal of equity.

Public policies often alter the costs and benefits of private actions.Why is it important for policymakers to consider both the direct and indirect effects of public policies?

The two broad reasons for a government to intervene in the economy are: to promote efficiency, and to promote equity.

What alternatives would you include when determining your opportunity cost of starting a university degree?

If paper-pulp factories generate too much water pollution with their discharge, which kills local fish stocks then:

New Zealand and Australia trade similar, but not identical, forestry products with each other.Why wouldn't each country choose to produce all the forestry products they need domestically?

The main motivation behind the 'invisible hand' is:

When a society cannot produce all the resources that people wish to have, it is called:

Inflation is defined as:

Economists agree that monetary and fiscal policy, although not very powerful, are necessary instruments for controlling the economy.

Pollution regulations make society better off by raising incomes.

If Australia is better than the US at producing wheat, but the US is better than Australia at producing cars, the US should:

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

Filters