Question 1

Voluntary exchange ________ economic efficiency because neither the buyer nor the seller would agree to a trade unless ________.

Accepted Answer

A) increases; they both benefit 
B) increases; only one party benefits 
C) decreases; neither benefit 
D) decreases; they both benefit 
A) increases; they both benefit 
B) increases; only one party benefits 
C) decreases; neither benefit 
D) decreases; they both benefit

Question 2

When production reflects consumer preferences,________ occurs.

Accepted Answer

A) allocative efficiency 
B) productive efficiency 
C) equity 
D) efficient central planning 
A) allocative efficiency 
B) productive efficiency 
C) equity 
D) efficient central planning

Question 3

Which of the following statements about economic resources is false?

Accepted Answer

A) Economic resources include financial capital and money. 
B) Economic resources are also called factors of production. 
C) Economic resources are used to produce goods and services. 
D) Some economic resources are human-made while others are found in nature. 
A) Economic resources include financial capital and money. 
B) Economic resources are also called factors of production. 
C) Economic resources are used to produce goods and services. 
D) Some economic resources are human-made while others are found in nature.

Question 4

How does the study of microeconomics differ from that of macroeconomics? Give one example each of an issue studied in microeconomics and in macroeconomics.

Accepted Answer

Microeconomics is the study of how house

Question 5

What does the word "marginal" mean in economics? What is a marginal benefit? What is a marginal cost? What is marginal analysis?

Accepted Answer

In economics,the word "marginal" means "

Question 6

The Farm Factory,a booth at the local Farmer's Market,sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon.What is the opportunity cost of buying a dozen eggs?

Accepted Answer

A) 1 2/3 gallons of milk 
B) 3/5 of a gallon of milk 
C) $2.50 
D) $1.50 
A) 1 2/3 gallons of milk 
B) 3/5 of a gallon of milk 
C) $2.50 
D) $1.50

Question 7

________ is a situation in which a good or service is produced at the lowest possible cost.

Accepted Answer

A) Allocative efficiency 
B) Productive efficiency 
C) Equity 
D) Optimal marginalism 
A) Allocative efficiency 
B) Productive efficiency 
C) Equity 
D) Optimal marginalism

Question 8

Opportunity cost is defined as

Accepted Answer

A) the benefit of an activity. 
B) the monetary expense associated with an activity. 
C) the highest valued alternative that must be given up to engage in an activity. 
D) the total value of all alternatives that must be given up to engage in an activity. 
A) the benefit of an activity. 
B) the monetary expense associated with an activity. 
C) the highest valued alternative that must be given up to engage in an activity. 
D) the total value of all alternatives that must be given up to engage in an activity.

Question 9

"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement.

Accepted Answer

A) True 
 B)False

Question 10

The number of people who have gray hair is very high among residents living in Florida.A student concludes that living in Florida causes hair to turn gray.What is the flaw in this student's reasoning?

Accepted Answer

A) The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents. 
B) The student is using an inadequate sample size. 
C) The student is drawing a false conclusion; he is confusing cause and effect. 
D) The student has failed to take into account other causes of gray hair. 
A) The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents. 
B) The student is using an inadequate sample size. 
C) The student is drawing a false conclusion; he is confusing cause and effect. 
D) The student has failed to take into account other causes of gray hair.

Question 11

________ occurs when economic benefits are distributed fairly.

Accepted Answer

A) Productive efficiency 
B) Allocative efficiency 
C) Equality 
D) Equity 
A) Productive efficiency 
B) Allocative efficiency 
C) Equality 
D) Equity

Question 12

Scenario 1-4
Suppose a cigar manufacturer currently sells 1,500 cigars per week and makes a profit of $3,000 per week.The plant foreman observes, "Although the last 500 cell cigars we produced and sold increased our revenue by $7,500 and our costs by $7,000, we are only making an overall profit of $3,000 per week so I think we need to cut back on production."
-Refer to Scenario 1-4.Using marginal analysis terminology,what is another economic term for the incremental cost of producing the last 500 cigars?

Accepted Answer

A) marginal cost 
B) operating cost 
C) explicit cost 
D) Any of the above terms are correct. 
A) marginal cost 
B) operating cost 
C) explicit cost 
D) Any of the above terms are correct.

Question 13

At a recent faculty meeting,Lorraine Waverly,president of Skywalker College,announced that enrollment is up by 12 percent over the previous semester.If enrollment the previous semester was 3,250 students,what is the student enrollment this semester?

Accepted Answer

A) 390 
B) 2,860 
C) 3,640 
D) 4,030 
A) 390 
B) 2,860 
C) 3,640 
D) 4,030

Question 14

Table 1-1
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Hours } \
\text { Open }
\end{array} & \begin{array} { c } 
\text { Total } \
\text { Revenue } \
\text { (dollars) }
\end{array} \
\hline 1 & \$ 50 \
\hline 2 & 75 \
\hline 3 & 95 \
\hline 4 & 110 \
\hline 5 & 120 \
\hline 6 & 125 \
\hline
\end{array}$$ 
Lydia runs a small nail salon in the town of New Hope.She is debating whether she should extend her hours of operation.Lydia figures that her sales revenue will depend on the number of hours the nail salon is open as shown in the table above.She would have to hire a worker for those hours at a wage rate of $10 per hour.
-Refer to Table 1-1.What is Lydia's marginal benefit if she decides to stay open for two hours instead of one hour?

Accepted Answer

A) $25 
B) $50 
C) $75 
D) $125 
A) $25 
B) $50 
C) $75 
D) $125

Question 15

On a two-dimensional graph,________ allows for the effects of additional variables.

Accepted Answer

A) moving along a curve 
B) shifting curves 
C) eliminating a curve 
D) adding an additional curve 
A) moving along a curve 
B) shifting curves 
C) eliminating a curve 
D) adding an additional curve

Question 16

What is a market economy?

Accepted Answer

A market economy is an economy

Question 17

Every society faces economic trade-offs.This means

Accepted Answer

A) some people live better than others do. 
B) not everyone can have enough goods to survive. 
C) producing more of one good means less of another good can be produced. 
D) society's output cannot be made available to all. 
A) some people live better than others do. 
B) not everyone can have enough goods to survive. 
C) producing more of one good means less of another good can be produced. 
D) society's output cannot be made available to all.

Question 18

What is an economic variable? Give an example of an economic variable.

Accepted Answer

An economic variable is someth

Question 19

The relationship between consumer spending and disposable personal income is

Accepted Answer

A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) independent. 
A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) independent.

Question 20

Markets promote

Accepted Answer

A) equity and competition. 
B) voluntary exchange and equality. 
C) equity and equality. 
D) competition and voluntary exchange. 
A) equity and competition. 
B) voluntary exchange and equality. 
C) equity and equality. 
D) competition and voluntary exchange.

Voluntary exchange economic efficiency because neither the buyer nor the seller would agree to a trade unless .

When production reflects consumer preferences,________ occurs.

Which of the following statements about economic resources is false?

How does the study of microeconomics differ from that of macroeconomics? Give one example each of an issue studied in microeconomics and in macroeconomics.

What does the word "marginal" mean in economics? What is a marginal benefit? What is a marginal cost? What is marginal analysis?

The Farm Factory,a booth at the local Farmer's Market,sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon.What is the opportunity cost of buying a dozen eggs?

________ is a situation in which a good or service is produced at the lowest possible cost.

Opportunity cost is defined as

"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement.

The number of people who have gray hair is very high among residents living in Florida.A student concludes that living in Florida causes hair to turn gray.What is the flaw in this student's reasoning?

________ occurs when economic benefits are distributed fairly.

At a recent faculty meeting,Lorraine Waverly,president of Skywalker College,announced that enrollment is up by 12 percent over the previous semester.If enrollment the previous semester was 3,250 students,what is the student enrollment this semester?

On a two-dimensional graph,________ allows for the effects of additional variables.

What is a market economy?

Every society faces economic trade-offs.This means

What is an economic variable? Give an example of an economic variable.

The relationship between consumer spending and disposable personal income is

Markets promote

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 1: Economics: Foundations and Models

Voluntary exchange ________ economic efficiency because neither the buyer nor the seller would agree to a trade unless ________.

When production reflects consumer preferences,________ occurs.

Which of the following statements about economic resources is false?

How does the study of microeconomics differ from that of macroeconomics? Give one example each of an issue studied in microeconomics and in macroeconomics.

What does the word "marginal" mean in economics? What is a marginal benefit? What is a marginal cost? What is marginal analysis?

The Farm Factory,a booth at the local Farmer's Market,sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon.What is the opportunity cost of buying a dozen eggs?

________ is a situation in which a good or service is produced at the lowest possible cost.

Opportunity cost is defined as

"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement.

The number of people who have gray hair is very high among residents living in Florida.A student concludes that living in Florida causes hair to turn gray.What is the flaw in this student's reasoning?

________ occurs when economic benefits are distributed fairly.

At a recent faculty meeting,Lorraine Waverly,president of Skywalker College,announced that enrollment is up by 12 percent over the previous semester.If enrollment the previous semester was 3,250 students,what is the student enrollment this semester?

On a two-dimensional graph,________ allows for the effects of additional variables.

What is a market economy?

Every society faces economic trade-offs.This means

What is an economic variable? Give an example of an economic variable.

The relationship between consumer spending and disposable personal income is

Markets promote

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Voluntary exchange economic efficiency because neither the buyer nor the seller would agree to a trade unless .