Question 1

The principle that "people face tradeoffs" applies to

Accepted Answer

A)  individuals. 
B)  families. 
C)  societies. 
D)  All of the above are correct. 
A)  individuals. 
B)  families. 
C)  societies. 
D)  All of the above are correct.

Question 2

When government policies are enacted,

Accepted Answer

A)  equality can usually be enhanced without an efficiency loss, but efficiency can never be enhanced without a reduction in equality. 
B)  efficiency can usually be enhanced without a reduction in equality, but equality can never be enhanced without an efficiency loss. 
C)  it is always the case that either efficiency and equality are both enhanced, or efficiency and equality are both diminished. 
D)  None of the above are correct. 
A)  equality can usually be enhanced without an efficiency loss, but efficiency can never be enhanced without a reduction in equality. 
B)  efficiency can usually be enhanced without a reduction in equality, but equality can never be enhanced without an efficiency loss. 
C)  it is always the case that either efficiency and equality are both enhanced, or efficiency and equality are both diminished. 
D)  None of the above are correct.

Question 3

If a paper factory does not bear the entire cost of the pollution it emits,it will

Accepted Answer

A)  not emit any pollution so as to avoid the entire cost of the pollution. 
B)  emit lower levels of pollution. 
C)  emit an acceptable level of pollution. 
D)  emit too much pollution. 
A)  not emit any pollution so as to avoid the entire cost of the pollution. 
B)  emit lower levels of pollution. 
C)  emit an acceptable level of pollution. 
D)  emit too much pollution.

Question 4

The invisible hand refers to

Accepted Answer

A)  how central planners made economic decisions. 
B)  how the decisions of households and firms lead to desirable market outcomes. 
C)  the control that large firms have over the economy. 
D)  government regulations without which the economy would be less efficient. 
A)  how central planners made economic decisions. 
B)  how the decisions of households and firms lead to desirable market outcomes. 
C)  the control that large firms have over the economy. 
D)  government regulations without which the economy would be less efficient.

Question 5

Economics is the study of how evenly goods and services are distributed within society.

Accepted Answer

A) True 
 B)False

Question 6

For a number of years country A had inflation of 3% but for the last five years has had inflation of 6%.Country B had inflation of 4% for many years,but very recently inflation unexpectedly rose to 9%.Other things the same,in which of the countries would the higher inflation rate be more likely to reduce unemployment?

Accepted Answer

A)  both country A and country B 
B)  neither country A nor country B 
C)  country A but not country B 
D)  country B but not country A 
A)  both country A and country B 
B)  neither country A nor country B 
C)  country A but not country B 
D)  country B but not country A

Question 7

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Accepted Answer

A) True 
 B)False

Question 8

Suppose that in Ireland total annual output is worth $600 million and people work 30 million hours.In Canada total annual output is worth $800 million and people work 50 million hours.Productivity is higher

Accepted Answer

A)  in Ireland. Most variation in the standard of living across countries is due to differences in productivity. 
B)  in Ireland. Differences in productivity explain very little of the variation in the standard of living across countries. 
C)  in Canada. Most variation in the standard of living across countries is due to differences in productivity. 
D)  in Canada. Differences in productivity explain very little of the variation in the standard of living across countries. 
A)  in Ireland. Most variation in the standard of living across countries is due to differences in productivity. 
B)  in Ireland. Differences in productivity explain very little of the variation in the standard of living across countries. 
C)  in Canada. Most variation in the standard of living across countries is due to differences in productivity. 
D)  in Canada. Differences in productivity explain very little of the variation in the standard of living across countries.

Question 9

The term "invisible hand" was coined by

Accepted Answer

A)  Adam Smith. 
B)  David Ricardo. 
C)  Karl Marx. 
D)  Benjamin Franklin. 
A)  Adam Smith. 
B)  David Ricardo. 
C)  Karl Marx. 
D)  Benjamin Franklin.

Question 10

Slow growth in US incomes during the 1970s and 1980s was primarily due to

Accepted Answer

A)  slow productivity growth in the US. 
B)  increased competition from Japan. 
C)  increased competition from European countries. 
D)  a rapid decrease in the quantity of money in the economy. 
A)  slow productivity growth in the US. 
B)  increased competition from Japan. 
C)  increased competition from European countries. 
D)  a rapid decrease in the quantity of money in the economy.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

A company that formerly produced software went out of business because too many potential customers bought illegally-produced copies of the software instead of buying the product directly from the company.This instance serves as an example of

Accepted Answer

A)  market power. 
B)  inefficient trade. 
C)  inadequate enforcement of property rights. 
D)  the invisible hand at work. 
A)  market power. 
B)  inefficient trade. 
C)  inadequate enforcement of property rights. 
D)  the invisible hand at work.

Question 13

In the United States,incomes historically have grown about 2 percent per year.At this rate,average income doubles every

Accepted Answer

A)  15 years. 
B)  25 years. 
C)  35 years. 
D)  45 years. 
A)  15 years. 
B)  25 years. 
C)  35 years. 
D)  45 years.

Question 14

Which of the following firms is most likely to have market power?

Accepted Answer

A)  a grocery store in a metropolitan area 
B)  a gas station in a suburb 
C)  a pub in a college town 
D)  the only hotel in a rural area 
A)  a grocery store in a metropolitan area 
B)  a gas station in a suburb 
C)  a pub in a college town 
D)  the only hotel in a rural area

Question 15

Katie is planning to sell her house,and she is considering making two upgrades to the house before listing it for sale.Replacing the carpeting will cost her $2,500 and replacing the roof will cost her $9,000.Katie expects the new carpeting to increase the value of her house by $3,000 and the new roof to increase the value of her house by $7,000.

Accepted Answer

A)  She should make both improvements to her house. 
B)  She should replace the carpeting but not replace the roof. 
C)  She should replace the roof but not replace the carpeting. 
D)  She should not make either improvement to her house. 
A)  She should make both improvements to her house. 
B)  She should replace the carpeting but not replace the roof. 
C)  She should replace the roof but not replace the carpeting. 
D)  She should not make either improvement to her house.

Question 16

Kyle is planning to take a roadtrip.After he makes his plans,he has to make some unexpected auto repairs.Also,he sees the price of gas has gone up.Which of these two events should Kyle consider in deciding if it is still worthwhile to go on the trip?

Accepted Answer

A)  the unexpected repairs and the increase in the price of gas 
B)  the unexpected increase for repairs, but not the increase in the price of gas 
C)  the increase in the price of gas, but not the unexpected repairs 
D)  neither the unexpected increase in the price of gas nor the unexpected repairs 
A)  the unexpected repairs and the increase in the price of gas 
B)  the unexpected increase for repairs, but not the increase in the price of gas 
C)  the increase in the price of gas, but not the unexpected repairs 
D)  neither the unexpected increase in the price of gas nor the unexpected repairs

Question 17

Your professor loves her work,teaching economics.She has been offered other positions in the corporate world that would increase her income by 25 percent,but she has decided to continue working as a professor.Her decision would not change unless the marginal

Accepted Answer

A)  cost of teaching increased. 
B)  benefit of teaching increased. 
C)  cost of a corporate job increased. 
D)  benefit of a corporate job decreased. 
A)  cost of teaching increased. 
B)  benefit of teaching increased. 
C)  cost of a corporate job increased. 
D)  benefit of a corporate job decreased.

Question 18

Which of the following is an example of something economists study?

Accepted Answer

A)  Kate chooses to work overtime to earn extra income for her family. 
B)  Ryan sells his economics textbook from last semester to his roommate for half the price of a new textbook. 
C)  The unemployment rate in the United States is at its highest level in over fifty years. 
D)  All of the above are correct. 
A)  Kate chooses to work overtime to earn extra income for her family. 
B)  Ryan sells his economics textbook from last semester to his roommate for half the price of a new textbook. 
C)  The unemployment rate in the United States is at its highest level in over fifty years. 
D)  All of the above are correct.

Question 19

Adam Smith's book The Wealth of Nations was published in

Accepted Answer

A)  1692. 
B)  1776. 
C)  1816. 
D)  1936. 
A)  1692. 
B)  1776. 
C)  1816. 
D)  1936.

Question 20

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

Accepted Answer

A) True 
 B)False

The principle that "people face tradeoffs" applies to

When government policies are enacted,

If a paper factory does not bear the entire cost of the pollution it emits,it will

The invisible hand refers to

Economics is the study of how evenly goods and services are distributed within society.

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Suppose that in Ireland total annual output is worth $600 million and people work 30 million hours.In Canada total annual output is worth $800 million and people work 50 million hours.Productivity is higher

The term "invisible hand" was coined by

Slow growth in US incomes during the 1970s and 1980s was primarily due to

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

A company that formerly produced software went out of business because too many potential customers bought illegally-produced copies of the software instead of buying the product directly from the company.This instance serves as an example of

In the United States,incomes historically have grown about 2 percent per year.At this rate,average income doubles every

Which of the following firms is most likely to have market power?

Kyle is planning to take a roadtrip.After he makes his plans,he has to make some unexpected auto repairs.Also,he sees the price of gas has gone up.Which of these two events should Kyle consider in deciding if it is still worthwhile to go on the trip?

Your professor loves her work,teaching economics.She has been offered other positions in the corporate world that would increase her income by 25 percent,but she has decided to continue working as a professor.Her decision would not change unless the marginal

Which of the following is an example of something economists study?

Adam Smith's book The Wealth of Nations was published in

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

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.

Oligopoly.

The Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

Filters

Exam 1: Ten Principles of Economics.

The principle that "people face tradeoffs" applies to

When government policies are enacted,

If a paper factory does not bear the entire cost of the pollution it emits,it will

The invisible hand refers to

Economics is the study of how evenly goods and services are distributed within society.

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Suppose that in Ireland total annual output is worth $600 million and people work 30 million hours.In Canada total annual output is worth $800 million and people work 50 million hours.Productivity is higher

The term "invisible hand" was coined by

Slow growth in US incomes during the 1970s and 1980s was primarily due to

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

A company that formerly produced software went out of business because too many potential customers bought illegally-produced copies of the software instead of buying the product directly from the company.This instance serves as an example of

In the United States,incomes historically have grown about 2 percent per year.At this rate,average income doubles every

Which of the following firms is most likely to have market power?

Kyle is planning to take a roadtrip.After he makes his plans,he has to make some unexpected auto repairs.Also,he sees the price of gas has gone up.Which of these two events should Kyle consider in deciding if it is still worthwhile to go on the trip?

Your professor loves her work,teaching economics.She has been offered other positions in the corporate world that would increase her income by 25 percent,but she has decided to continue working as a professor.Her decision would not change unless the marginal

Which of the following is an example of something economists study?

Adam Smith's book The Wealth of Nations was published in

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

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.

Oligopoly.

The Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

Filters