Question 1

If the price of gasoline was $3.25 a gallon and it is now $3.75 a gallon, what is the percentage change in price?

Accepted Answer

A) 7.1 percent 
B) 13.3 percent 
C) 15.4 percent 
D) 33.3 percent 
A) 7.1 percent 
B) 13.3 percent 
C) 15.4 percent 
D) 33.3 percent

Question 2

By definition, economics is the study of

Accepted Answer

A) how to make money in the stock market. 
B) how to make money in a market economy. 
C) the choices people make to attain their goals, given their scarce resources. 
D) supply and demand. 
A) how to make money in the stock market. 
B) how to make money in a market economy. 
C) the choices people make to attain their goals, given their scarce resources. 
D) supply and demand.

Question 3

Table 1-3
   
Santiago runs a comic book store in the town of East Arbor. He is debating whether he should extend his hours of operation. Santiago figures that his sales revenue will depend on the number of extra hours the store is open as shown in the table above. He would have to hire a worker for those extra hours at a wage rate of $18 per hour.
-Refer to Table 1-3.Using marginal analysis, by how many hours should Santiago extend his store's hours of operations?

Accepted Answer

A) 2 hours 
B) 3 hours 
C) 4 hours 
D) 5 hours 
E) 6 hours 
A) 2 hours 
B) 3 hours 
C) 4 hours 
D) 5 hours 
E) 6 hours

Question 4

Examining the conditions that could lead to a recession in an economy is an example of a macroeconomic topic.

Accepted Answer

A) True 
 B)False

Question 5

Assume that an additional $50,000 in benefits will be received each year if a town hires an additional police officer whose only job would be to catch drivers who drive over the speed limit on its only street.What must the additional cost of this additional police officer be to make this hiring economically rational?

Accepted Answer

The additional cost of the add

Question 6

Which of the following statements is true?

Accepted Answer

A) Only government policymakers can improve decision making by using economic principles. 
B) Only government policymakers and business managers can improve decision making by using economic principles. 
C) Only business managers and individuals can improve decision making by using economic principles. 
D) Government policymakers, business managers, and individuals can all improve decision making by using economic principles. 
A) Only government policymakers can improve decision making by using economic principles. 
B) Only government policymakers and business managers can improve decision making by using economic principles. 
C) Only business managers and individuals can improve decision making by using economic principles. 
D) Government policymakers, business managers, and individuals can all improve decision making by using economic principles.

Question 7

One example of physical capital is the amount of savings that you have.

Accepted Answer

A) True 
 B)False

Question 8

A grocery store sells a bag of potatoes at a fixed price of $2.30.Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?

Accepted Answer

A) marginal revenue 
B) gross earnings 
C) pure profit 
D) marginal costs 
E) net benefit 
A) marginal revenue 
B) gross earnings 
C) pure profit 
D) marginal costs 
E) net benefit

Question 9

Society faces a trade-off in all of the following situations except

Accepted Answer

A) when deciding who will receive the goods and services produced. 
B) when deciding what goods and services will be produced. 
C) when deciding how goods and services will be produced. 
D) when some previously unemployed workers find jobs. 
A) when deciding who will receive the goods and services produced. 
B) when deciding what goods and services will be produced. 
C) when deciding how goods and services will be produced. 
D) when some previously unemployed workers find jobs.

Question 10

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 11

Marginal analysis involves undertaking an activity

Accepted Answer

A) until its marginal costs start declining. 
B) only when its marginal benefits are positive. 
C) until its marginal benefits equal marginal costs. 
D) only if its marginal costs are greater than its marginal benefits. 
A) until its marginal costs start declining. 
B) only when its marginal benefits are positive. 
C) until its marginal benefits equal marginal costs. 
D) only if its marginal costs are greater than its marginal benefits.

Question 12

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service.For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package.What is DeShawn's marginal benefit if he sells a basic detailing package?

Accepted Answer

A) $35 
B) $75 
C) He makes a marginal loss of $15, not a marginal benefit. 
D) The marginal benefit cannot be determined. 
A) $35 
B) $75 
C) He makes a marginal loss of $15, not a marginal benefit. 
D) The marginal benefit cannot be determined.

Question 13

At a recent company meeting, Ravi Batra, sales manager of Life's a Beach, a surfboard producer, announced, "We have increased our sales by 13 percent in just 9 months." Suppose 9 months ago, its sales amounted to $245,000.What is the value of its sales today?

Accepted Answer

A) $31,850 
B) $207,638 
C) $276,850 
D) $359,905 
A) $31,850 
B) $207,638 
C) $276,850 
D) $359,905

Question 14

How are the fundamental economic decisions determined in North Korea?

Accepted Answer

A) Individuals, firms, and the government interact in a market to make these economic decisions. 
B) These decisions are made by the country's elders who have had much experience in answering these questions. 
C) The government decides because North Korea is a centrally planned economy. 
D) The United Nations decides because North Korea is a developing economy. 
A) Individuals, firms, and the government interact in a market to make these economic decisions. 
B) These decisions are made by the country's elders who have had much experience in answering these questions. 
C) The government decides because North Korea is a centrally planned economy. 
D) The United Nations decides because North Korea is a developing economy.

Question 15

Table 1-3
   
Santiago runs a comic book store in the town of East Arbor. He is debating whether he should extend his hours of operation. Santiago figures that his sales revenue will depend on the number of extra hours the store is open as shown in the table above. He would have to hire a worker for those extra hours at a wage rate of $18 per hour.
-Refer to Table 1-3.What is Santiago's marginal benefit if he decides to stay open for an extra two hours instead of one hour?

Accepted Answer

A) $40 
B) $50 
C) $120 
D) $190 
A) $40 
B) $50 
C) $120 
D) $190

Question 16

The government makes all economic decisions in a market economy.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following correctly describes the relationship between economic efficiency and economic equity?

Accepted Answer

A) They are both automatically achieved in a free market economy. 
B) They always call for opposite outcomes. 
C) There is no conflict between the two goals. 
D) There is often a trade-off between the two. 
A) They are both automatically achieved in a free market economy. 
B) They always call for opposite outcomes. 
C) There is no conflict between the two goals. 
D) There is often a trade-off between the two.

Question 18

Which of the following is a positive economic statement?

Accepted Answer

A) U.S. citizens should only buy products which are produced in the United States. 
B) The government should ban the production and sale of incandescent light bulbs. 
C) Raising the tax on gasoline raises the selling price of gasoline. 
D) The government should revamp its immigration policies. 
A) U.S. citizens should only buy products which are produced in the United States. 
B) The government should ban the production and sale of incandescent light bulbs. 
C) Raising the tax on gasoline raises the selling price of gasoline. 
D) The government should revamp its immigration policies.

Question 19

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 could 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 could coordinate economic activities.

Question 20

Which of the following is a normative economic statement?

Accepted Answer

A) Rising corn prices have increased the price of corn-based ethanol. 
B) With rising home prices and falling mortgage interest rates, the amount of home foreclosures has decreased. 
C) The federal government is considering increasing regulations on the use of fossil fuels to promote the use of wind power. 
D) Farmers should not be allowed to grow and sell genetically-modified crops. 
A) Rising corn prices have increased the price of corn-based ethanol. 
B) With rising home prices and falling mortgage interest rates, the amount of home foreclosures has decreased. 
C) The federal government is considering increasing regulations on the use of fossil fuels to promote the use of wind power. 
D) Farmers should not be allowed to grow and sell genetically-modified crops.

If the price of gasoline was $3.25 a gallon and it is now $3.75 a gallon, what is the percentage change in price?

By definition, economics is the study of

Examining the conditions that could lead to a recession in an economy is an example of a macroeconomic topic.

Which of the following statements is true?

One example of physical capital is the amount of savings that you have.

A grocery store sells a bag of potatoes at a fixed price of $2.30.Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?

Society faces a trade-off in all of the following situations except

Productive efficiency is achieved when

Marginal analysis involves undertaking an activity

At a recent company meeting, Ravi Batra, sales manager of Life's a Beach, a surfboard producer, announced, "We have increased our sales by 13 percent in just 9 months." Suppose 9 months ago, its sales amounted to $245,000.What is the value of its sales today?

How are the fundamental economic decisions determined in North Korea?

The government makes all economic decisions in a market economy.

Which of the following correctly describes the relationship between economic efficiency and economic equity?

Which of the following is a positive economic statement?

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

Which of the following is a normative economic statement?

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters

Exam 1: Economics: Foundations and Models

If the price of gasoline was $3.25 a gallon and it is now $3.75 a gallon, what is the percentage change in price?

By definition, economics is the study of

Examining the conditions that could lead to a recession in an economy is an example of a macroeconomic topic.

Which of the following statements is true?

One example of physical capital is the amount of savings that you have.

A grocery store sells a bag of potatoes at a fixed price of $2.30.Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?

Society faces a trade-off in all of the following situations except

Productive efficiency is achieved when

Marginal analysis involves undertaking an activity

At a recent company meeting, Ravi Batra, sales manager of Life's a Beach, a surfboard producer, announced, "We have increased our sales by 13 percent in just 9 months." Suppose 9 months ago, its sales amounted to $245,000.What is the value of its sales today?

How are the fundamental economic decisions determined in North Korea?

The government makes all economic decisions in a market economy.

Which of the following correctly describes the relationship between economic efficiency and economic equity?

Which of the following is a positive economic statement?

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

Which of the following is a normative economic statement?

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters