Question 1

With careful planning,we can usually get something that we like without having to give up something else that we like.

Accepted Answer

A) True 
 B)False

Question 2

In 2000 the average American had an income of about

Accepted Answer

A) $28,400. 
B) $34,100. 
C) $39,800. 
D) $44,500. 
A) $28,400. 
B) $34,100. 
C) $39,800. 
D) $44,500.

Question 3

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 4

Which of the following words and phrases best captures the notion of equity?

Accepted Answer

A) minimum waste 
B) maximum benefit 
C) sameness 
D) fairness 
A) minimum waste 
B) maximum benefit 
C) sameness 
D) fairness

Question 5

The slow growth of U.S.incomes during the 1970s and 1980s can best be explained by

Accepted Answer

A) unstable economic conditions in Eastern Europe. 
B) increased competition from abroad. 
C) a decline in the rate of increase in U.S.productivity. 
D) a strong U.S.dollar abroad, hurting U.S.exports. 
A) unstable economic conditions in Eastern Europe. 
B) increased competition from abroad. 
C) a decline in the rate of increase in U.S.productivity. 
D) a strong U.S.dollar abroad, hurting U.S.exports.

Question 6

A tradeoff exists between a clean environment and a higher level of income in that

Accepted Answer

A) studies show that individuals with higher levels of income actually pollute less than low-income individuals. 
B) efforts to reduce pollution typically are not completely successful. 
C) laws that reduce pollution raise costs of production and reduce incomes. 
D) by employing individuals to clean up pollution, employment and income both rise. 
A) studies show that individuals with higher levels of income actually pollute less than low-income individuals. 
B) efforts to reduce pollution typically are not completely successful. 
C) laws that reduce pollution raise costs of production and reduce incomes. 
D) by employing individuals to clean up pollution, employment and income both rise.

Question 7

One effect of the government-imposed seat belt law in the U.S.has been

Accepted Answer

A) a dramatic decrease in the number of pedestrian deaths. 
B) safer driving. 
C) an increase in the number of accidents. 
D) a dramatic decrease in the number of driver deaths. 
A) a dramatic decrease in the number of pedestrian deaths. 
B) safer driving. 
C) an increase in the number of accidents. 
D) a dramatic decrease in the number of driver deaths.

Question 8

Senator Smart,who understands economic principles,is trying to convince workers in her district that trade with other countries is beneficial.Senator Smart should argue that trade can be beneficial

Accepted Answer

A) only if it allows us to obtain things that we couldn't make for ourselves. 
B) because it allows specialization, which increases total output. 
C) to us if we can gain and the others involved in the trade lose. 
D) in only a limited number of circumstances because others are typically self-interested. 
A) only if it allows us to obtain things that we couldn't make for ourselves. 
B) because it allows specialization, which increases total output. 
C) to us if we can gain and the others involved in the trade lose. 
D) in only a limited number of circumstances because others are typically self-interested.

Question 9

Russell spends an hour studying instead of playing tennis.The opportunity cost to him of studying is

Accepted Answer

A) the improvement in his grades from studying for the hour. 
B) the improvement in his grades from studying minus the enjoyment of playing tennis. 
C) the enjoyment and exercise he would have received had he played tennis. 
D) zero.Since Russell chose to study rather than to play tennis, the value of studying must have been greater than the value of playing tennis. 
A) the improvement in his grades from studying for the hour. 
B) the improvement in his grades from studying minus the enjoyment of playing tennis. 
C) the enjoyment and exercise he would have received had he played tennis. 
D) zero.Since Russell chose to study rather than to play tennis, the value of studying must have been greater than the value of playing tennis.

Question 10

Policies to enhance living standards should be designed to ensure that workers

Accepted Answer

A) have access to the best available methods of producing goods and services. 
B) have the appropriate equipment to produce goods and services. 
C) receive good educations. 
D) All of the above are correct. 
A) have access to the best available methods of producing goods and services. 
B) have the appropriate equipment to produce goods and services. 
C) receive good educations. 
D) All of the above are correct.

Question 11

Trade with any nation can be mutually beneficial.

Accepted Answer

A) True 
 B)False

Question 12

Resources are

Accepted Answer

A) scarce for households but plentiful for economies. 
B) plentiful for households but scarce for economies. 
C) scarce for households and scarce for economies. 
D) plentiful for households and plentiful for economies. 
A) scarce for households but plentiful for economies. 
B) plentiful for households but scarce for economies. 
C) scarce for households and scarce for economies. 
D) plentiful for households and plentiful for economies.

Question 13

The average cost per seat on the 50-passenger Floating-On-Air Bus company's trip from Kansas City to St.Louis,on which no refreshments are served,is $45.In advance of a particular trip,three seats remain unsold.The bus company could increase its profit only if it

Accepted Answer

A) charged any ticket price above $0 for the three remaining seats. 
B) charged at least $15 for each of the three remaining seats. 
C) charged at least $45 for each of the three remaining seats. 
D) paid three people to occupy the three remaining seats. 
A) charged any ticket price above $0 for the three remaining seats. 
B) charged at least $15 for each of the three remaining seats. 
C) charged at least $45 for each of the three remaining seats. 
D) paid three people to occupy the three remaining seats.

Question 14

Prior to the collapse of communism,communist countries worked on the premise that economic well-being could be best attained by

Accepted Answer

A) a market economy. 
B) a strong reliance on prices and individuals' self-interests. 
C) a system of large, government-operated, privately-owned firms. 
D) the actions of government central planners. 
A) a market economy. 
B) a strong reliance on prices and individuals' self-interests. 
C) a system of large, government-operated, privately-owned firms. 
D) the actions of government central planners.

Question 15

The overriding reason as to why households and societies face many decisions is that

Accepted Answer

A) resources are scarce. 
B) goods and services are not scarce. 
C) incomes fluctuate with business cycles. 
D) people, by nature, tend to disagree. 
A) resources are scarce. 
B) goods and services are not scarce. 
C) incomes fluctuate with business cycles. 
D) people, by nature, tend to disagree.

Question 16

During the early 1920s in Germany,prices

Accepted Answer

A) doubled annually. 
B) doubled monthly. 
C) tripled monthly. 
D) tripled annually. 
A) doubled annually. 
B) doubled monthly. 
C) tripled monthly. 
D) tripled annually.

Question 17

When a society cannot produce all the goods and services people wish to have,it is said that the economy is experiencing

Accepted Answer

A) scarcity. 
B) shortages. 
C) inefficiencies. 
D) inequities. 
A) scarcity. 
B) shortages. 
C) inefficiencies. 
D) inequities.

Question 18

Equity means everyone in the economy should receive an equal share of the goods and services produced.

Accepted Answer

A) True 
 B)False

Question 19

The income of a typical worker in a country is most closely linked to which of the following?

Accepted Answer

A) population 
B) productivity 
C) market power 
D) government policies 
A) population 
B) productivity 
C) market power 
D) government policies

Question 20

In the United States,the overall level of prices more than doubled during the

Accepted Answer

A) 1950s. 
B) 1960s. 
C) 1970s. 
D) 1980s. 
A) 1950s. 
B) 1960s. 
C) 1970s. 
D) 1980s.

Exam 1: Ten Principles of Economics

With careful planning,we can usually get something that we like without having to give up something else that we like.

In 2000 the average American had an income of about

In a market economy,economic activity is guided by

Which of the following words and phrases best captures the notion of equity?

The slow growth of U.S.incomes during the 1970s and 1980s can best be explained by

A tradeoff exists between a clean environment and a higher level of income in that

One effect of the government-imposed seat belt law in the U.S.has been

Senator Smart,who understands economic principles,is trying to convince workers in her district that trade with other countries is beneficial.Senator Smart should argue that trade can be beneficial

Russell spends an hour studying instead of playing tennis.The opportunity cost to him of studying is

Policies to enhance living standards should be designed to ensure that workers

Trade with any nation can be mutually beneficial.

Resources are

The average cost per seat on the 50-passenger Floating-On-Air Bus company's trip from Kansas City to St.Louis,on which no refreshments are served,is $45.In advance of a particular trip,three seats remain unsold.The bus company could increase its profit only if it

Prior to the collapse of communism,communist countries worked on the premise that economic well-being could be best attained by

The overriding reason as to why households and societies face many decisions is that

During the early 1920s in Germany,prices

When a society cannot produce all the goods and services people wish to have,it is said that the economy is experiencing

Equity means everyone in the economy should receive an equal share of the goods and services produced.

The income of a typical worker in a country is most closely linked to which of the following?

In the United States,the overall level of prices more than doubled during the

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

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