Question 1

Which of the following statements is true?

Accepted Answer

A) Anytime you have to decide which action to take you are experiencing economic equity. 
B) Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale. 
C) Every individual, no matter how rich or poor, is faced with making trade-offs. 
D) Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited. 
A) Anytime you have to decide which action to take you are experiencing economic equity. 
B) Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale. 
C) Every individual, no matter how rich or poor, is faced with making trade-offs. 
D) Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited.

Question 2

An economic model is a simplified version of reality used to analyze real-world economic situations.

Accepted Answer

A) True 
 B)False

Question 3

The government makes all economic decisions in a mixed economy.

Accepted Answer

A) True 
 B)False

Question 4

Explain the economic idea that "people respond to incentives."

Accepted Answer

Human beings act from a variety of motiv

Question 5

Figure 1.2
  
-Refer to Figure 1.2.Calculate the area of the triangle A.

Accepted Answer

A) $1.3 million 
B) $2.6 million 
C) $3.4 million 
D) $5.2 million 
A) $1.3 million 
B) $2.6 million 
C) $3.4 million 
D) $5.2 million

Question 6

If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets, then the difference of $120 is the marginal cost of producing the 4th suede jacket.

Accepted Answer

A) True 
 B)False

Question 7

Productive efficiency is achieved when

Accepted Answer

A) firms add a low profit margin to the goods and services they produce. 
B) firms produce the goods and services that consumers value most. 
C) firms produce goods and services at the lowest cost. 
D) there are no shortages or surpluses in the market. 
A) firms add a low profit margin to the goods and services they produce. 
B) firms produce the goods and services that consumers value most. 
C) firms produce goods and services at the lowest cost. 
D) there are no shortages or surpluses in the market.

Question 8

In economics, the term "equity" means

Accepted Answer

A) everyone has an equal standard of living. 
B) the hardest working individuals consume all they want. 
C) only elected officials have high standards of living. 
D) economic benefits are distributed fairly. 
A) everyone has an equal standard of living. 
B) the hardest working individuals consume all they want. 
C) only elected officials have high standards of living. 
D) economic benefits are distributed fairly.

Question 9

Which of the following is a problem inherent in centrally planned economies?

Accepted Answer

A) Households and firms make poor decisions in choosing how resources are allocated. 
B) There is too little production of low-cost, high-quality goods and services. 
C) Production managers are more concerned with satisfying consumer wants than with satisfying government's orders. 
D) Exports tend to exceed imports. 
A) Households and firms make poor decisions in choosing how resources are allocated. 
B) There is too little production of low-cost, high-quality goods and services. 
C) Production managers are more concerned with satisfying consumer wants than with satisfying government's orders. 
D) Exports tend to exceed imports.

Question 10

Define productive efficiency.Does productive efficiency imply allocative efficiency? Explain.

Accepted Answer

Productive efficiency is an efficiency c

Question 11

Positive analysis is concerned with "what ought to be," while normative analysis is concerned with "what is."

Accepted Answer

A) True 
 B)False

Question 12

Suppose that some teachers have decided that economic and financial uncertainty have made the prospect of retiring more risky, and therefore it carries a higher cost than not retiring.By using all available information as they act to achieve their goals, these teachers are exemplifying the economic idea that

Accepted Answer

A) people are rational. 
B) people respond to economic incentives. 
C) optimal decisions are made at the margin. 
D) equity is more important than efficiency. 
A) people are rational. 
B) people respond to economic incentives. 
C) optimal decisions are made at the margin. 
D) equity is more important than efficiency.

Question 13

Which of the following statements about the economic decisions consumers, firms, and the government have to make is false?

Accepted Answer

A) Governments face the problem of scarcity in making economic decisions. 
B) Only individuals face scarcity; firms and the government do not. 
C) Both firms and individuals face scarcity. 
D) Each faces the problem of scarcity which necessitates trade-offs in making economic decisions. 
A) Governments face the problem of scarcity in making economic decisions. 
B) Only individuals face scarcity; firms and the government do not. 
C) Both firms and individuals face scarcity. 
D) Each faces the problem of scarcity which necessitates trade-offs in making economic decisions.

Question 14

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

Accepted Answer

A) True 
 B)False

Question 15

The highest valued alternative that must be given up to engage in an activity is the definition of

Accepted Answer

A) economic equity. 
B) marginal benefit. 
C) opportunity cost. 
D) marginal cost. 
A) economic equity. 
B) marginal benefit. 
C) opportunity cost. 
D) marginal cost.

Question 16

What is the "omitted variable" problem in determining cause and effect?

Accepted Answer

A) It is a problem that arises when an insignificant variable is given too much weight in an economic analysis leading to skewed conclusions about cause and effect. 
B) It is a problem that arises when a significant variable is not given enough weight in an economic experiment leading to skewed conclusions about cause and effect. 
C) It is a problem that arises when an insignificant economic variable that should have been omitted is included in an economic experiment leading to false conclusions about cause and effect. 
D) It is a problem that arises when an economic variable that affects other variables is omitted from an analysis and its omission leads to false conclusions about cause and effect. 
A) It is a problem that arises when an insignificant variable is given too much weight in an economic analysis leading to skewed conclusions about cause and effect. 
B) It is a problem that arises when a significant variable is not given enough weight in an economic experiment leading to skewed conclusions about cause and effect. 
C) It is a problem that arises when an insignificant economic variable that should have been omitted is included in an economic experiment leading to false conclusions about cause and effect. 
D) It is a problem that arises when an economic variable that affects other variables is omitted from an analysis and its omission leads to false conclusions about cause and effect.

Question 17

Microeconomics is the study of

Accepted Answer

A) how households and firms make choices. 
B) the economy as a whole. 
C) the global economy. 
D) topics such as unemployment, inflation, and economic growth. 
A) how households and firms make choices. 
B) the economy as a whole. 
C) the global economy. 
D) topics such as unemployment, inflation, and economic growth.

Question 18

All of the following contributed to the downfall of the Soviet Union in 1991 except

Accepted Answer

A) public dissatisfaction with low living standards and political repression. 
B) an inability to produce low-cost consumer goods that households wanted. 
C) lack of high-quality goods and services. 
D) lack of a strong dictator who can coordinate economic activities. 
A) public dissatisfaction with low living standards and political repression. 
B) an inability to produce low-cost consumer goods that households wanted. 
C) lack of high-quality goods and services. 
D) lack of a strong dictator who can coordinate economic activities.

Question 19

In economics, the term ________ means "additional" or "extra."

Accepted Answer

A) allocative 
B) marginal 
C) equity 
D) optimal 
A) allocative 
B) marginal 
C) equity 
D) optimal

Question 20

Scarcity is a problem that will eventually disappear as technology advances.

Accepted Answer

A) True 
 B)False

Which of the following statements is true?

An economic model is a simplified version of reality used to analyze real-world economic situations.

The government makes all economic decisions in a mixed economy.

Explain the economic idea that "people respond to incentives."

Figure 1.2 -Refer to Figure 1.2.Calculate the area of the triangle A.

If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets, then the difference of $120 is the marginal cost of producing the 4th suede jacket.

Productive efficiency is achieved when

In economics, the term "equity" means

Which of the following is a problem inherent in centrally planned economies?

Define productive efficiency.Does productive efficiency imply allocative efficiency? Explain.

Positive analysis is concerned with "what ought to be," while normative analysis is concerned with "what is."

Which of the following statements about the economic decisions consumers, firms, and the government have to make is false?

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

The highest valued alternative that must be given up to engage in an activity is the definition of

What is the "omitted variable" problem in determining cause and effect?

Microeconomics is the study of

All of the following contributed to the downfall of the Soviet Union in 1991 except

In economics, the term ________ means "additional" or "extra."

Scarcity is a problem that will eventually disappear as technology advances.

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

The Markets for Labour and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Pricing Strategy

Firms, the Stock Market, and Corporate Governance

Filters

Exam 1: Economics: Foundations and Models

Which of the following statements is true?

An economic model is a simplified version of reality used to analyze real-world economic situations.

The government makes all economic decisions in a mixed economy.

Explain the economic idea that "people respond to incentives."

Figure 1.2 -Refer to Figure 1.2.Calculate the area of the triangle A.

If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets, then the difference of $120 is the marginal cost of producing the 4th suede jacket.

Productive efficiency is achieved when

In economics, the term "equity" means

Which of the following is a problem inherent in centrally planned economies?

Define productive efficiency.Does productive efficiency imply allocative efficiency? Explain.

Positive analysis is concerned with "what ought to be," while normative analysis is concerned with "what is."

Which of the following statements about the economic decisions consumers, firms, and the government have to make is false?

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

The highest valued alternative that must be given up to engage in an activity is the definition of

What is the "omitted variable" problem in determining cause and effect?

Microeconomics is the study of

All of the following contributed to the downfall of the Soviet Union in 1991 except

In economics, the term ________ means "additional" or "extra."

Scarcity is a problem that will eventually disappear as technology advances.

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

The Markets for Labour and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Pricing Strategy

Firms, the Stock Market, and Corporate Governance

Filters