Question 1

​The illegality of organ sales from willing donors to willing recipients is ineffective because:

Accepted Answer

A) ​It encourages organ sales 
B) It discourages wealth creating transactions through the threat of heavy penalty 
C) It encourages government intervention 
D) None of the above 
A) ​It encourages organ sales 
B) It discourages wealth creating transactions through the threat of heavy penalty 
C) It encourages government intervention 
D) None of the above

Question 2

​A creative entrepreneur is one who knows how to

Accepted Answer

A) ​Run a business 
B) Escape the burden of taxes 
C) Profitably exploit money making opportunities 
D) ​All of the above 
A) ​Run a business 
B) Escape the burden of taxes 
C) Profitably exploit money making opportunities 
D) ​All of the above

Question 3

​A consumer values a car at $30,000 and a producer values the same car at $20,000.The transaction will not take place if a tax is imposed

Accepted Answer

A) ​equal to the seller surplus 
B) smaller than the total surplus 
C) larger than the total surplus 
D) ​smaller than the buyer surplus 
A) ​equal to the seller surplus 
B) smaller than the total surplus 
C) larger than the total surplus 
D) ​smaller than the buyer surplus

Question 4

​Your cellular phone contract is due for renewal and the company offers you a new free phone.Since you want to use your new phone,you decide to recycle your old phone.Your action

Accepted Answer

A) ​Creates wealth by moving the phone from lower value use to higher value use 
B) Destroys wealth since you lose your phone 
C) Creates wealth by making you feel richer 
D) ​All of the above 
A) ​Creates wealth by moving the phone from lower value use to higher value use 
B) Destroys wealth since you lose your phone 
C) Creates wealth by making you feel richer 
D) ​All of the above

Question 5

Government can intervene in the market through​

Accepted Answer

A) ​Price floors 
B) Price ceilings 
C) Taxes 
D) ​All the above 
A) ​Price floors 
B) Price ceilings 
C) Taxes 
D) ​All the above

Question 6

​Government can

Accepted Answer

A) ​Create wealth by not interfering in the markets in any way what so ever 
B) Not affect wealth in the markets 
C) Create wealth by enforcing property rights and contracts 
D) ​Create wealth by making choice decisions for the market 
A) ​Create wealth by not interfering in the markets in any way what so ever 
B) Not affect wealth in the markets 
C) Create wealth by enforcing property rights and contracts 
D) ​Create wealth by making choice decisions for the market

Question 7

Government intervention​

Accepted Answer

A) ​can provide incentives to conduct business in an illegal black market 
B) plays no role in generating wealth 
C) is the best way to eliminate poverty 
D) ​does not enforce property rights 
A) ​can provide incentives to conduct business in an illegal black market 
B) plays no role in generating wealth 
C) is the best way to eliminate poverty 
D) ​does not enforce property rights

Question 8

A consumer values a house at $525,000 and a producer values the same house at $485,000.If the transaction is completed at $510,000,the transaction will generate:

Accepted Answer

A) ​No surplus 
B) $25,000 worth of seller surplus and unknown amount of buyer surplus 
C) $15,000 worth of buyer surplus and $25,000 of seller surplus 
D) ​$25,000 worth of buyer surplus and unknown amount of seller surplus 
A) ​No surplus 
B) $25,000 worth of seller surplus and unknown amount of buyer surplus 
C) $15,000 worth of buyer surplus and $25,000 of seller surplus 
D) ​$25,000 worth of buyer surplus and unknown amount of seller surplus

Question 9

A buyer values a house at $525,000 and a seller values the same house at $485,000.If sales tax is 8% and is levied on the seller,then what would be the lowest price that the seller would be willing to sell at?​

Accepted Answer

A) ​$527,000 
B) $523,800 
C) $525,000 
D) ​$500,000 
A) ​$527,000 
B) $523,800 
C) $525,000 
D) ​$500,000

Question 10

​Subsidies can destroy wealth because

Accepted Answer

A) ​subsidies move assets from lower- to higher- valued uses 
B) subsidies move assets from higher- to lower- valued uses 
C) subsidies help producers only 
D) ​subsidies help consumers only 
A) ​subsidies move assets from lower- to higher- valued uses 
B) subsidies move assets from higher- to lower- valued uses 
C) subsidies help producers only 
D) ​subsidies help consumers only

Question 11

​The zero sum fallacy refers to

Accepted Answer

A) ​You gaining only if someone else loses 
B) The allocation of the pieces of the total economic pie- if you eat the piece,I cannot consume it 
C) Ignores the possibility of the total pie growing itself 
D) ​All of the above 
A) ​You gaining only if someone else loses 
B) The allocation of the pieces of the total economic pie- if you eat the piece,I cannot consume it 
C) Ignores the possibility of the total pie growing itself 
D) ​All of the above

Question 12

If you are willing to purchase a house for $300,000 and you purchase the house for $275,000,this transaction will generate:​

Accepted Answer

A) ​There is no surplus created 
B) $25,000 worth of seller surplus and unknown amount of buyer surplus 
C) $10,000 worth of buyer surplus and $15,000 of seller surplus 
D) $25,000 worth of buyer surplus and unknown amount of seller surplus 
A) ​There is no surplus created 
B) $25,000 worth of seller surplus and unknown amount of buyer surplus 
C) $10,000 worth of buyer surplus and $15,000 of seller surplus 
D) $25,000 worth of buyer surplus and unknown amount of seller surplus

Question 13

​A consumer values a car at $30,000 and a producer values the same car at $20,000.If the transaction is completed at $24,000,what level of sales tax will result in unconsummated transaction?

Accepted Answer

A) ​0% 
B) 25% 
C) 20% 
D) ​40% 
A) ​0% 
B) 25% 
C) 20% 
D) ​40%

Question 14

​Technological advancement creates unemployment in firms that shut down or labor that is laid off.Wealth in this case is

Accepted Answer

A) ​Destroyed,since firms are shutting down and production of certain goods and services decreasing 
B) Created,since the dislocated labor and resources are absorbed by new firms created through the technological innovation,moving them to higher value use 
C) Destroyed,since technological progress is leading to higher unemployment 
D) ​None of the above 
A) ​Destroyed,since firms are shutting down and production of certain goods and services decreasing 
B) Created,since the dislocated labor and resources are absorbed by new firms created through the technological innovation,moving them to higher value use 
C) Destroyed,since technological progress is leading to higher unemployment 
D) ​None of the above

Question 15

​Total surplus or gains created from trade equal

Accepted Answer

A) ​Seller surplus 
B) Buyer surplus 
C) The summation of seller and buyer surplus 
D) ​Profits earned by a firm 
A) ​Seller surplus 
B) Buyer surplus 
C) The summation of seller and buyer surplus 
D) ​Profits earned by a firm

Question 16

​Ethanol Mandates
Congress has passed laws requiring that a certain percentage of retail gasoline be from ethanol produced from corn.How would this destroy wealth?

Accepted Answer

This regulation is mandating the movemen

Question 17

​An example of price floor is

Accepted Answer

A) ​Minimum wages 
B) Rent controls in New York 
C) Both a and b 
D) ​None of the above 
A) ​Minimum wages 
B) Rent controls in New York 
C) Both a and b 
D) ​None of the above

Question 18

​Wealth is created when

Accepted Answer

A) ​Assets move from lower value use to higher value use 
B) Assets move from higher value use to lower value use 
C) Assets move from individuals who are willing to pay less for them to individuals who are willing to pay more for them 
D) ​Both A and C 
A) ​Assets move from lower value use to higher value use 
B) Assets move from higher value use to lower value use 
C) Assets move from individuals who are willing to pay less for them to individuals who are willing to pay more for them 
D) ​Both A and C

Question 19

​The biggest advantage of capitalism is that

Accepted Answer

A) ​It generates wealth with the help of government intervention 
B) Prices hinder in moving assets from high-value to low-value uses 
C) It forces involuntary exchanges 
D) ​It creates wealth by letting a person follow his or her own self-interest 
A) ​It generates wealth with the help of government intervention 
B) Prices hinder in moving assets from high-value to low-value uses 
C) It forces involuntary exchanges 
D) ​It creates wealth by letting a person follow his or her own self-interest

Question 20

Economic reasoning is based on the premise that:​

Accepted Answer

A) ​all decisions or actions are costless. 
B) only non-economic decisions or actions have a cost associated with them. 
C) only economic decisions or actions have a cost associated with them. 
D) ​all decisions and actions have a cost associated with them. 
A) ​all decisions or actions are costless. 
B) only non-economic decisions or actions have a cost associated with them. 
C) only economic decisions or actions have a cost associated with them. 
D) ​all decisions and actions have a cost associated with them.

Exam 1: The One Lessor of Business

​The illegality of organ sales from willing donors to willing recipients is ineffective because:

​A creative entrepreneur is one who knows how to

​A consumer values a car at $30,000 and a producer values the same car at $20,000.The transaction will not take place if a tax is imposed

​Your cellular phone contract is due for renewal and the company offers you a new free phone.Since you want to use your new phone,you decide to recycle your old phone.Your action

Government can intervene in the market through​

​Government can

Government intervention​

A consumer values a house at $525,000 and a producer values the same house at $485,000.If the transaction is completed at $510,000,the transaction will generate:

A buyer values a house at $525,000 and a seller values the same house at $485,000.If sales tax is 8% and is levied on the seller,then what would be the lowest price that the seller would be willing to sell at?​

​Subsidies can destroy wealth because

​The zero sum fallacy refers to

If you are willing to purchase a house for $300,000 and you purchase the house for $275,000,this transaction will generate:​

​A consumer values a car at $30,000 and a producer values the same car at $20,000.If the transaction is completed at $24,000,what level of sales tax will result in unconsummated transaction?

​Technological advancement creates unemployment in firms that shut down or labor that is laid off.Wealth in this case is

​Total surplus or gains created from trade equal

​Ethanol Mandates Congress has passed laws requiring that a certain percentage of retail gasoline be from ethanol produced from corn.How would this destroy wealth?

​An example of price floor is

​Wealth is created when

​The biggest advantage of capitalism is that

Economic reasoning is based on the premise that:​

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

The illegality of organ sales from willing donors to willing recipients is ineffective because:

A creative entrepreneur is one who knows how to

A consumer values a car at $30,000 and a producer values the same car at $20,000.The transaction will not take place if a tax is imposed

Your cellular phone contract is due for renewal and the company offers you a new free phone.Since you want to use your new phone,you decide to recycle your old phone.Your action

Government can intervene in the market through

Government can

Government intervention

A buyer values a house at $525,000 and a seller values the same house at $485,000.If sales tax is 8% and is levied on the seller,then what would be the lowest price that the seller would be willing to sell at?

Subsidies can destroy wealth because

The zero sum fallacy refers to

If you are willing to purchase a house for $300,000 and you purchase the house for $275,000,this transaction will generate:

A consumer values a car at $30,000 and a producer values the same car at $20,000.If the transaction is completed at $24,000,what level of sales tax will result in unconsummated transaction?

Technological advancement creates unemployment in firms that shut down or labor that is laid off.Wealth in this case is

Total surplus or gains created from trade equal

Ethanol Mandates Congress has passed laws requiring that a certain percentage of retail gasoline be from ethanol produced from corn.How would this destroy wealth?

An example of price floor is

Wealth is created when

The biggest advantage of capitalism is that

Economic reasoning is based on the premise that: