Question 1

For most students,the largest single cost of a college education is

Accepted Answer

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

Question 2

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

Accepted Answer

To lower inflation,the government may ch

Question 3

The principle that "trade can make everyone better off" applies to interactions and trade between

Accepted Answer

A) families. 
B) states within the United States. 
C) nations. 
D) All of the above are correct. 
A) families. 
B) states within the United States. 
C) nations. 
D) All of the above are correct.

Question 4

To increase living standards,public policy should

Accepted Answer

A) ensure that workers are well educated and have the necessary tools and technology. 
B) make unemployment benefits more generous. 
C) move workers into jobs directly from high school. 
D) ensure a greater degree of equity, taking all income-earners into account. 
A) ensure that workers are well educated and have the necessary tools and technology. 
B) make unemployment benefits more generous. 
C) move workers into jobs directly from high school. 
D) ensure a greater degree of equity, taking all income-earners into account.

Question 5

Which of the following statements best represents the principle represented by the adage,"There is no such thing as a free lunch"?

Accepted Answer

A) Melissa can attend the concert only if she takes her sister with her. 
B) Greg is hungry and homeless. 
C) Brian must repair the tire on his bike before he can ride it to class. 
D) Kendra must decide between going to Colorado or Cancun for spring break. 
A) Melissa can attend the concert only if she takes her sister with her. 
B) Greg is hungry and homeless. 
C) Brian must repair the tire on his bike before he can ride it to class. 
D) Kendra must decide between going to Colorado or Cancun for spring break.

Question 6

If the average cost of transporting a passenger on the train from Chicago to St.Louis is $75,it would be irrational for the railroad to allow any passenger to ride for less than $75.

Accepted Answer

A) True 
 B)False

Question 7

An example of an externality is the impact of

Accepted Answer

A) bad weather on the income of farmers. 
B) the personal income tax on a person's ability to purchase goods and services. 
C) pollution from a factory on the health of people in the vicinity of the factory. 
D) increases in health care costs on the health of individuals in society. 
A) bad weather on the income of farmers. 
B) the personal income tax on a person's ability to purchase goods and services. 
C) pollution from a factory on the health of people in the vicinity of the factory. 
D) increases in health care costs on the health of individuals in society.

Question 8

The government enforces property rights by

Accepted Answer

A) requiring property owners to pay property taxes. 
B) providing police and courts. 
C) forcing people to own property. 
D) providing public parks and recreation facilities. 
A) requiring property owners to pay property taxes. 
B) providing police and courts. 
C) forcing people to own property. 
D) providing public parks and recreation facilities.

Question 9

Which of the following statements about trade is false?

Accepted Answer

A) Trade increases competition. 
B) With trade, one country wins and one country loses. 
C) Bulgaria can benefit, potentially, from trade with any other country. 
D) Trade allows people to buy a greater variety of goods and services at lower cost. 
A) Trade increases competition. 
B) With trade, one country wins and one country loses. 
C) Bulgaria can benefit, potentially, from trade with any other country. 
D) Trade allows people to buy a greater variety of goods and services at lower cost.

Question 10

President Gerald Ford referred to inflation as

Accepted Answer

A) a blight on our nation's economy. 
B) a necessary evil to combat high unemployment. 
C) public enemy number one. 
D) a fly in the ointment. 
A) a blight on our nation's economy. 
B) a necessary evil to combat high unemployment. 
C) public enemy number one. 
D) a fly in the ointment.

Question 11

How does the study of economics depend upon the phenomenon of scarcity?

Accepted Answer

Since economics is the study of how soci

Question 12

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 13

Based on the available evidence,which of the following groups benefits most from mandatory seat belt laws?

Accepted Answer

A) automakers 
B) pedestrians 
C) drivers 
D) owners of collision-repair shops 
A) automakers 
B) pedestrians 
C) drivers 
D) owners of collision-repair shops

Question 14

Canada can benefit from trade

Accepted Answer

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

Question 15

Germany could have avoided the high inflation that it experienced in the 1920s by

Accepted Answer

A) not directing so many of its resources toward preparation for World War II. 
B) not increasing taxes so much on the German middle class. 
C) not allowing the quantity of money to increase so rapidly. 
D) using government policies to stimulate the economy more so than what was done. 
A) not directing so many of its resources toward preparation for World War II. 
B) not increasing taxes so much on the German middle class. 
C) not allowing the quantity of money to increase so rapidly. 
D) using government policies to stimulate the economy more so than what was done.

Question 16

The idea that only the government can organize economic activity in a way that promotes economic well-being for a country as a whole

Accepted Answer

A) is a basic principle regarding individual decisionmaking. 
B) amounts to a denial of one of the basic principles regarding interactions among people. 
C) supports the idea that the "invisible hand" should guide economic activity. 
D) was promoted by the economist Adam Smith in a well-known 1776 book. 
A) is a basic principle regarding individual decisionmaking. 
B) amounts to a denial of one of the basic principles regarding interactions among people. 
C) supports the idea that the "invisible hand" should guide economic activity. 
D) was promoted by the economist Adam Smith in a well-known 1776 book.

Question 17

According to Adam Smith,the success of decentralized market economies is primarily due to

Accepted Answer

A) the basic benevolence of society. 
B) society's legal system. 
C) individuals' pursuit of self-interest. 
D) partnerships that are forged between business and government. 
A) the basic benevolence of society. 
B) society's legal system. 
C) individuals' pursuit of self-interest. 
D) partnerships that are forged between business and government.

Question 18

The amount of goods and services produced from each hour of a worker's time is called

Accepted Answer

A) total output. 
B) productivity. 
C) marginal product. 
D) efficiency. 
A) total output. 
B) productivity. 
C) marginal product. 
D) efficiency.

Question 19

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 1: Ten Principles of Economics

For most students,the largest single cost of a college education is

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

The principle that "trade can make everyone better off" applies to interactions and trade between

To increase living standards,public policy should

Which of the following statements best represents the principle represented by the adage,"There is no such thing as a free lunch"?

If the average cost of transporting a passenger on the train from Chicago to St.Louis is $75,it would be irrational for the railroad to allow any passenger to ride for less than $75.

An example of an externality is the impact of

The government enforces property rights by

Which of the following statements about trade is false?

President Gerald Ford referred to inflation as

How does the study of economics depend upon the phenomenon of scarcity?

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

Based on the available evidence,which of the following groups benefits most from mandatory seat belt laws?

Canada can benefit from trade

Germany could have avoided the high inflation that it experienced in the 1920s by

The idea that only the government can organize economic activity in a way that promotes economic well-being for a country as a whole

According to Adam Smith,the success of decentralized market economies is primarily due to

The amount of goods and services produced from each hour of a worker's time is called

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

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

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

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

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality 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 Basic Tools of Finance

Unemployment

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 Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters