Question 1

For a college student who wishes to calculate the true costs of going to college,the costs of room and board

Accepted Answer

A) should be counted in full,regardless of the costs of eating and sleeping elsewhere. 
B) should be counted only to the extent that they are more expensive at college than elsewhere. 
C) usually exceed the opportunity cost of going to college. 
D) plus the cost of tuition,equals the opportunity cost of going to college. 
A) should be counted in full,regardless of the costs of eating and sleeping elsewhere. 
B) should be counted only to the extent that they are more expensive at college than elsewhere. 
C) usually exceed the opportunity cost of going to college. 
D) plus the cost of tuition,equals the opportunity cost of going to college.

Question 2

If a decision maker uses marginal analysis,then the relevant costs are the

Accepted Answer

A) full costs of a particular activity or product. 
B) fixed costs which do not vary with the extra activity or output. 
C) profits obtained on the activity or product. 
D) average costs for a particular activity or product. 
E) additional costs of a particular activity or product. 
A) full costs of a particular activity or product. 
B) fixed costs which do not vary with the extra activity or output. 
C) profits obtained on the activity or product. 
D) average costs for a particular activity or product. 
E) additional costs of a particular activity or product.

Question 3

Which of the following is most consistent with economizing behavior?

Accepted Answer

A) If you derive the same satisfaction from eating pizza and eating ice cream,it makes no difference which one of the two you choose. 
B) Before voting,you should invest the time and energy to become fully informed on all of the issues and candidates. 
C) It never makes sense to hire someone to do something for you that you could do yourself. 
D) If you get the same satisfaction from a chicken sandwich and a salad,you should purchase the one that costs the least. 
A) If you derive the same satisfaction from eating pizza and eating ice cream,it makes no difference which one of the two you choose. 
B) Before voting,you should invest the time and energy to become fully informed on all of the issues and candidates. 
C) It never makes sense to hire someone to do something for you that you could do yourself. 
D) If you get the same satisfaction from a chicken sandwich and a salad,you should purchase the one that costs the least.

Question 4

A fact based on observable phenomenon that is not influenced by differences in personal opinion is called

Accepted Answer

A) an objective concept. 
B) a subjective concept. 
C) an unintended consequence. 
D) ceteris paribus. 
A) an objective concept. 
B) a subjective concept. 
C) an unintended consequence. 
D) ceteris paribus.

Question 5

The economic way of thinking stresses that

Accepted Answer

A) changes in personal costs and benefits generally do not influence human behavior. 
B) incentives matter--when an option becomes less costly,people will be more likely to choose it. 
C) if one individual gains from an economic activity,then someone else must lose. 
D) goods provided by government do not consume valuable scarce resources since government activity is not part of the market economy. 
A) changes in personal costs and benefits generally do not influence human behavior. 
B) incentives matter--when an option becomes less costly,people will be more likely to choose it. 
C) if one individual gains from an economic activity,then someone else must lose. 
D) goods provided by government do not consume valuable scarce resources since government activity is not part of the market economy.

Question 6

The expression "There's no such thing as a free lunch" means

Accepted Answer

A) in an exchange,if one person gains,someone else must lose. 
B) each person must pay for exactly what he or she receives. 
C) the use of resources to meet one need means that those resources can no longer be used to meet another need. 
D) in an exchange,if one person gains,someone else must lose and equal amount. 
A) in an exchange,if one person gains,someone else must lose. 
B) each person must pay for exactly what he or she receives. 
C) the use of resources to meet one need means that those resources can no longer be used to meet another need. 
D) in an exchange,if one person gains,someone else must lose and equal amount.

Question 7

"There is no such thing as a free lunch." This statement best reflects the fact that

Accepted Answer

A) consumers are unwilling to pay for a good unless it provides them with value. 
B) an opportunity cost is always present when scarce resources are used to produce a good. 
C) it generally requires enormous effort to search out the best place to eat lunch. 
D) the value of a good to consumers will decrease as they have more of it. 
A) consumers are unwilling to pay for a good unless it provides them with value. 
B) an opportunity cost is always present when scarce resources are used to produce a good. 
C) it generally requires enormous effort to search out the best place to eat lunch. 
D) the value of a good to consumers will decrease as they have more of it.

Question 8

A radio station gives "free money" to those listeners whose names are drawn and announced over the airwaves from postcards the listeners sent into the radio station.Is the money really free for the listener?

Accepted Answer

While most students can identify the mon

Question 9

When economists say that people choose rationally,this means

Accepted Answer

A) they gather all relevant information before making their purchases 
B) once a pattern of behavior has been established,people tend to become set in their ways 
C) people respond in predictable ways to changes in costs and benefits 
D) people rarely make errors when they are permitted to make transactions 
E) once made,decisions are never reversed 
A) they gather all relevant information before making their purchases 
B) once a pattern of behavior has been established,people tend to become set in their ways 
C) people respond in predictable ways to changes in costs and benefits 
D) people rarely make errors when they are permitted to make transactions 
E) once made,decisions are never reversed

Question 10

Evaluate this statement: "People engaged in economizing behavior will always buy the lowest priced item they can find."

Accepted Answer

As long as price is the only factor,we w

Question 11

If economics is correct in its assumption that people are rational,why then would anyone choose to smoke cigarettes?

Accepted Answer

Even though the harmful effects of cigar

Question 12

The most fundamental concept in economics is that

Accepted Answer

A) changes in incentives influence behavior in a predictable way--people will be less likely to choose an option as it becomes more expensive. 
B) changes in incentives generally do not influence human behavior. 
C) goods that are provided by government are free for society. 
D) individuals generally do not consider other alternatives when making a choice. 
A) changes in incentives influence behavior in a predictable way--people will be less likely to choose an option as it becomes more expensive. 
B) changes in incentives generally do not influence human behavior. 
C) goods that are provided by government are free for society. 
D) individuals generally do not consider other alternatives when making a choice.

Question 13

Which of the following represents a positive statement?

Accepted Answer

A) A higher income tax rate will reduce the amount of time that people spend working. 
B) Teenage unemployment should be reduced. 
C) We should raise the standard of living for the elderly. 
D) A decrease in tax rates is needed to help the poor. 
A) A higher income tax rate will reduce the amount of time that people spend working. 
B) Teenage unemployment should be reduced. 
C) We should raise the standard of living for the elderly. 
D) A decrease in tax rates is needed to help the poor.

Question 14

An opinion based on personal preferences and value judgments is called

Accepted Answer

A) an objective concept. 
B) a subjective concept. 
C) an unintended consequence. 
D) ceteris paribus. 
A) an objective concept. 
B) a subjective concept. 
C) an unintended consequence. 
D) ceteris paribus.

Question 15

During a war,governments will sometimes draft people,most of whom are presently employed,into the army.An economist,computing the real cost of the war,would be sure to include which of the following items?

Accepted Answer

A) the value of the civilian goods no longer produced by the new soldiers 
B) the cost of feeding and clothing the new soldiers 
C) the dollar cost of the payroll 
D) the higher prices of civilian goods due to wartime shortages 
E) the cost of transporting the soldiers to combat 
A) the value of the civilian goods no longer produced by the new soldiers 
B) the cost of feeding and clothing the new soldiers 
C) the dollar cost of the payroll 
D) the higher prices of civilian goods due to wartime shortages 
E) the cost of transporting the soldiers to combat

Question 16

In Latavia,cultural pressures cause voluntary donations to orphanages to be very large;in Slobovia,people make smaller donations.If the governments of both countries suddenly grant a tax break to those donating money to orphanages,the basic postulate of economics predicts that donations

Accepted Answer

A) in both nations will increase. 
B) will increase in Latavia but not in Slobovia. 
C) will increase only in Slobovia,where people care about taxes,but not in Latavia,where compassion is more important. 
D) are unlikely to change in either nation,since voluntary donations are not an economic decision. 
A) in both nations will increase. 
B) will increase in Latavia but not in Slobovia. 
C) will increase only in Slobovia,where people care about taxes,but not in Latavia,where compassion is more important. 
D) are unlikely to change in either nation,since voluntary donations are not an economic decision.

Question 17

A marginal change usually is a

Accepted Answer

A) change that involves little,if anything,that is important. 
B) large,significant adjustment. 
C) change for the worse,and so it is usually a short-term change. 
D) small,incremental adjustment. 
A) change that involves little,if anything,that is important. 
B) large,significant adjustment. 
C) change for the worse,and so it is usually a short-term change. 
D) small,incremental adjustment.

Question 18

In economics the term utility refers to

Accepted Answer

A) the subjective benefit or satisfaction a person expects to receive from a choice or course of action. 
B) the number of possible uses for a resource. 
C) the fact that human desire for goods is unlimited while the resources available to meet those desires is limited. 
D) the highest valued alternative that must be sacrificed when a choice is made. 
A) the subjective benefit or satisfaction a person expects to receive from a choice or course of action. 
B) the number of possible uses for a resource. 
C) the fact that human desire for goods is unlimited while the resources available to meet those desires is limited. 
D) the highest valued alternative that must be sacrificed when a choice is made.

Question 19

A firm producing cans buys three tons of aluminum per day at $200 per ton.If it buys four tons per day,it receives a quantity discount on all units and pays only $175 per ton.The marginal cost of the fourth ton per day is

Accepted Answer

A) $100. 
B) $175. 
C) $700. 
D) $225. 
A) $100. 
B) $175. 
C) $700. 
D) $225.

Question 20

Adam Smith believed that if people were free to pursue their own interests,

Accepted Answer

A) public interest would be served quite well. 
B) less would be produced than if altruism were the guiding principle. 
C) they would generally apply their talents to unproductive activities that would generate little value to society. 
D) they would have little incentive to undertake productive activities. 
A) public interest would be served quite well. 
B) less would be produced than if altruism were the guiding principle. 
C) they would generally apply their talents to unproductive activities that would generate little value to society. 
D) they would have little incentive to undertake productive activities.

Exam 1: The Economic Approach

For a college student who wishes to calculate the true costs of going to college,the costs of room and board

If a decision maker uses marginal analysis,then the relevant costs are the

Which of the following is most consistent with economizing behavior?

A fact based on observable phenomenon that is not influenced by differences in personal opinion is called

The economic way of thinking stresses that

The expression "There's no such thing as a free lunch" means

"There is no such thing as a free lunch." This statement best reflects the fact that

A radio station gives "free money" to those listeners whose names are drawn and announced over the airwaves from postcards the listeners sent into the radio station.Is the money really free for the listener?

When economists say that people choose rationally,this means

Evaluate this statement: "People engaged in economizing behavior will always buy the lowest priced item they can find."

If economics is correct in its assumption that people are rational,why then would anyone choose to smoke cigarettes?

The most fundamental concept in economics is that

Which of the following represents a positive statement?

An opinion based on personal preferences and value judgments is called

During a war,governments will sometimes draft people,most of whom are presently employed,into the army.An economist,computing the real cost of the war,would be sure to include which of the following items?

In Latavia,cultural pressures cause voluntary donations to orphanages to be very large;in Slobovia,people make smaller donations.If the governments of both countries suddenly grant a tax break to those donating money to orphanages,the basic postulate of economics predicts that donations

A marginal change usually is a

In economics the term utility refers to

A firm producing cans buys three tons of aluminum per day at $200 per ton.If it buys four tons per day,it receives a quantity discount on all units and pays only $175 per ton.The marginal cost of the fourth ton per day is

Adam Smith believed that if people were free to pursue their own interests,

Asome Tools of the Economist

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Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Institutions,policies,and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

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