Question 1

Evidence indicates that seat belt laws have led to

Accepted Answer

A)  fewer pedestrian deaths. 
B)  fewer automobile accidents. 
C)  fewer deaths per automobile accident. 
D)  All of the above are correct. 
A)  fewer pedestrian deaths. 
B)  fewer automobile accidents. 
C)  fewer deaths per automobile accident. 
D)  All of the above are correct.

Question 2

Trade can make everyone better off except in the case where one person is better at doing everything.

Accepted Answer

A) True 
 B)False

Question 3

The business cycle is measured by the

Accepted Answer

A)  production of goods and services. 
B)  number of people employed. 
C)  the interest rate. 
D)  Both a and b are correct. 
A)  production of goods and services. 
B)  number of people employed. 
C)  the interest rate. 
D)  Both a and b are correct.

Question 4

Most economists believe that an increase in the quantity of money results in

Accepted Answer

A)  an increase in the demand for goods and services. 
B)  lower unemployment in the short run. 
C)  higher inflation in the long run. 
D)  All of the above are correct. 
A)  an increase in the demand for goods and services. 
B)  lower unemployment in the short run. 
C)  higher inflation in the long run. 
D)  All of the above are correct.

Question 5

A bagel shop sells fresh baked bagels from 5 a.m.until 7 p.m.every day.The shop does not sell day-old bagels,so all unsold bagels are thrown away at 7 p.m.each day.The cost of making and selling a dozen bagels is $1.00; there are no costs associated with throwing bagels away.If the manager has 8 dozen bagels left at 6:30 p.m.on a particular day,which of the following alternatives is most attractive?

Accepted Answer

A)  Lower the price of the remaining bagels, even if the price falls below $1.00 per dozen. 
B)  Lower the price of the remaining bagels, but under no circumstances should the price fall below $1.00 per dozen. 
C)  Throw the bagels away and produce 8 fewer dozen bagels tomorrow. 
D)  Starting tomorrow, lower the price on all bagels so they will all be sold earlier in the day. 
A)  Lower the price of the remaining bagels, even if the price falls below $1.00 per dozen. 
B)  Lower the price of the remaining bagels, but under no circumstances should the price fall below $1.00 per dozen. 
C)  Throw the bagels away and produce 8 fewer dozen bagels tomorrow. 
D)  Starting tomorrow, lower the price on all bagels so they will all be sold earlier in the day.

Question 6

The opportunity cost of going to college is

Accepted Answer

A)  the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses. 
B)  the value of the best opportunity a student gives up to attend college. 
C)  zero for students who are fortunate enough to have all of their college expenses paid by someone else. 
D)  zero, since a college education will allow a student to earn a larger income after graduation. 
A)  the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses. 
B)  the value of the best opportunity a student gives up to attend college. 
C)  zero for students who are fortunate enough to have all of their college expenses paid by someone else. 
D)  zero, since a college education will allow a student to earn a larger income after graduation.

Question 7

The economy of the former Soviet Union is best described as a

Accepted Answer

A)  primitive economy. 
B)  market economy. 
C)  hybrid economy. 
D)  centrally-planned economy. 
A)  primitive economy. 
B)  market economy. 
C)  hybrid economy. 
D)  centrally-planned economy.

Question 8

If the price of visiting a doctor were fixed below the current price,then we would expect

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 9

England can benefit from trade

Accepted Answer

A)  only with nations that can produce goods England cannot produce. 
B)  only with less developed nations. 
C)  only with nations outside of Europe. 
D)  with any nation. 
A)  only with nations that can produce goods England cannot produce. 
B)  only with less developed nations. 
C)  only with nations outside of Europe. 
D)  with any nation.

Question 10

Which of the following statements best characterizes a basic difference between market economies and centrally-planned economies?

Accepted Answer

A)  Society relies more upon prices to allocate resources when the economy is centrally-planned than when it is market-based. 
B)  The self-interest of households is reflected more fully in the outcome of a centrally-planned economy than in the outcome of a market economy. 
C)  Government plays a larger role in the economic affairs of a market economy than in the economic affairs of a centrally-planned economy. 
D)  None of the above are correct. 
A)  Society relies more upon prices to allocate resources when the economy is centrally-planned than when it is market-based. 
B)  The self-interest of households is reflected more fully in the outcome of a centrally-planned economy than in the outcome of a market economy. 
C)  Government plays a larger role in the economic affairs of a market economy than in the economic affairs of a centrally-planned economy. 
D)  None of the above are correct.

Question 11

Mark is refinishing an antique china cabinet and has already spent $180 on the restoration.He expects to be able to sell the cabinet for $360.Mark discovers that he needs to do an additional $200 of work to make the cabinet worth $360 to potential buyers.He could also sell the cabinet now,without completing the additional work,for $100.What should he do?

Accepted Answer

A)  He should sell the cabinet now for $100. 
B)  He should keep the cabinet since it wouldn't be rational to spend $380 restoring a cabinet and then sell it for only $360. 
C)  He should complete the additional work and sell the cabinet for $360. 
D)  It does not matter which action he takes since the outcome will be the same either way. 
A)  He should sell the cabinet now for $100. 
B)  He should keep the cabinet since it wouldn't be rational to spend $380 restoring a cabinet and then sell it for only $360. 
C)  He should complete the additional work and sell the cabinet for $360. 
D)  It does not matter which action he takes since the outcome will be the same either way.

Question 12

Which of the following could reduce economic efficiency?

Accepted Answer

A)  laws that encourage lawsuits 
B)  policies that redistribute income 
C)  policies that impose significant restrictions on international trade 
D)  All of the above are correct 
A)  laws that encourage lawsuits 
B)  policies that redistribute income 
C)  policies that impose significant restrictions on international trade 
D)  All of the above are correct

Question 13

In most societies,resources are allocated by

Accepted Answer

A)  a single central planner. 
B)  a small number of central planners. 
C)  those firms that use resources to provide goods and services. 
D)  the combined actions of millions of households and firms. 
A)  a single central planner. 
B)  a small number of central planners. 
C)  those firms that use resources to provide goods and services. 
D)  the combined actions of millions of households and firms.

Question 14

In a market economy,economic activity is guided by

Accepted Answer

A)  the government. 
B)  corporations. 
C)  central planners. 
D)  self-interest and prices. 
A)  the government. 
B)  corporations. 
C)  central planners. 
D)  self-interest and prices.

Question 15

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 16

The English word that comes from the Greek word for "one who manages a household" is

Accepted Answer

A)  market. 
B)  consumer. 
C)  producer. 
D)  economy. 
A)  market. 
B)  consumer. 
C)  producer. 
D)  economy.

Question 17

College-age athletes who drop out of college to play professional sports

Accepted Answer

A)  are not rational decision makers. 
B)  are well aware that their opportunity cost of attending college is very high. 
C)  are concerned more about present circumstances than their future. 
D)  underestimate the value of a college education. 
A)  are not rational decision makers. 
B)  are well aware that their opportunity cost of attending college is very high. 
C)  are concerned more about present circumstances than their future. 
D)  underestimate the value of a college education.

Question 18

You are considering staying in college another semester so that you can complete a major in economics.In deciding whether or not to stay you should

Accepted Answer

A)  compare the total cost of your education to the total benefits of your education. 
B)  compare the total cost of your education to the benefits of staying one more semester. 
C)  compare the cost of staying one more semester to the benefits of staying one more semester. 
D)  compare the total benefits of your education to the cost of staying one more semester. 
A)  compare the total cost of your education to the total benefits of your education. 
B)  compare the total cost of your education to the benefits of staying one more semester. 
C)  compare the cost of staying one more semester to the benefits of staying one more semester. 
D)  compare the total benefits of your education to the cost of staying one more semester.

Question 19

The phenomenon of scarcity stems from the fact that

Accepted Answer

A)  most economies' production methods are not very good. 
B)  in most economies, wealthy people consume disproportionate quantities of goods and services. 
C)  governments restrict production of too many goods and services. 
D)  resources are limited. 
A)  most economies' production methods are not very good. 
B)  in most economies, wealthy people consume disproportionate quantities of goods and services. 
C)  governments restrict production of too many goods and services. 
D)  resources are limited.

Question 20

Denise decides to spend three hours working overtime rather than watching a video with her friends.She earns $10 an hour.Her opportunity cost of working is

Accepted Answer

A)  the $30 she earns working. 
B)  the $30 minus the enjoyment she would have received from watching the video. 
C)  the enjoyment she would have received had she watched the video. 
D)  nothing, since she would have received less than $30 of enjoyment from the video. 
A)  the $30 she earns working. 
B)  the $30 minus the enjoyment she would have received from watching the video. 
C)  the enjoyment she would have received had she watched the video. 
D)  nothing, since she would have received less than $30 of enjoyment from the video.

Evidence indicates that seat belt laws have led to

Trade can make everyone better off except in the case where one person is better at doing everything.

The business cycle is measured by the

Most economists believe that an increase in the quantity of money results in

The opportunity cost of going to college is

The economy of the former Soviet Union is best described as a

If the price of visiting a doctor were fixed below the current price,then we would expect

England can benefit from trade

Which of the following statements best characterizes a basic difference between market economies and centrally-planned economies?

Which of the following could reduce economic efficiency?

In most societies,resources are allocated by

In a market economy,economic activity is guided by

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

The English word that comes from the Greek word for "one who manages a household" is

College-age athletes who drop out of college to play professional sports

You are considering staying in college another semester so that you can complete a major in economics.In deciding whether or not to stay you should

The phenomenon of scarcity stems from the fact that

Denise decides to spend three hours working overtime rather than watching a video with her friends.She earns $10 an hour.Her opportunity cost of working is

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.

Evidence indicates that seat belt laws have led to

Trade can make everyone better off except in the case where one person is better at doing everything.

The business cycle is measured by the

Most economists believe that an increase in the quantity of money results in

The opportunity cost of going to college is

The economy of the former Soviet Union is best described as a

If the price of visiting a doctor were fixed below the current price,then we would expect

England can benefit from trade

Which of the following statements best characterizes a basic difference between market economies and centrally-planned economies?

Which of the following could reduce economic efficiency?

In most societies,resources are allocated by

In a market economy,economic activity is guided by

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

The English word that comes from the Greek word for "one who manages a household" is

College-age athletes who drop out of college to play professional sports

You are considering staying in college another semester so that you can complete a major in economics.In deciding whether or not to stay you should

The phenomenon of scarcity stems from the fact that

Denise decides to spend three hours working overtime rather than watching a video with her friends.She earns $10 an hour.Her opportunity cost of working is

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