Question 1

The reason why the government taxes the gasoline used by pollution-causing automobiles is because it is trying to

Accepted Answer

A)  make the drivers face the full cost of their driving decisions. 
B)  make the government face the full cost of the driver's driving decisions. 
C)  make the oil companies face the full cost of the driver's driving decisions. 
D)  make the people who suffer from asthma face the full cost of the driver's driving decisions. 
A)  make the drivers face the full cost of their driving decisions. 
B)  make the government face the full cost of the driver's driving decisions. 
C)  make the oil companies face the full cost of the driver's driving decisions. 
D)  make the people who suffer from asthma face the full cost of the driver's driving decisions.

Question 2

If Tom can produce 20 multiple choice questions or 30 true/false questions in an hour,and Mary can produce 15 multiple choice questions or 15 true/false questions in an hour,then Tom has a comparative advantage in writing multiple choice questions.

Accepted Answer

A) True 
 B)False

Question 3

The ability of one person or nation to produce a good at a lower absolute cost than another is called a(n)

Accepted Answer

A)  market advantage. 
B)  comparative advantage. 
C)  absolute advantage. 
D)  specialization advantage. 
A)  market advantage. 
B)  comparative advantage. 
C)  absolute advantage. 
D)  specialization advantage.

Question 4

Accounting rules

Accepted Answer

A)  specify the term of exchange, facilitating exchange between strangers. 
B)  increase the profitability of inventions, encouraging firms to develop new products. 
C)  provide the public with reliable information about the performance of a firm. 
D)  increase the risk faced by entrepreneurs. 
A)  specify the term of exchange, facilitating exchange between strangers. 
B)  increase the profitability of inventions, encouraging firms to develop new products. 
C)  provide the public with reliable information about the performance of a firm. 
D)  increase the risk faced by entrepreneurs.

Question 5

Which of the following is NOT a public good?

Accepted Answer

A)  national defense 
B)  space exploration 
C)  a hamburger 
D)  a levee 
A)  national defense 
B)  space exploration 
C)  a hamburger 
D)  a levee

Question 6

Patents

Accepted Answer

A)  specify the term of exchange, facilitating exchange between strangers. 
B)  increase the profitability of inventions, encouraging firms to develop new products. 
C)  provide the public with reliable information about the performance of a firm. 
D)  increase the risk faced by entrepreneurs. 
A)  specify the term of exchange, facilitating exchange between strangers. 
B)  increase the profitability of inventions, encouraging firms to develop new products. 
C)  provide the public with reliable information about the performance of a firm. 
D)  increase the risk faced by entrepreneurs.

Question 7

A product produced in the home country and sold in another country is an export for the home country.

Accepted Answer

A) True 
 B)False

Question 8

Table 3.1
-Table 3.1 illustrates Willy and Blythe's hourly production for apples and carrots.Based on the table,Blythe's opportunity cost of 1 apple is

Accepted Answer

A)  6 carrot. 
B)  4 carrots. 
C)  1 carrots. 
D)  1/3 of a carrot. 
A)  6 carrot. 
B)  4 carrots. 
C)  1 carrots. 
D)  1/3 of a carrot.

Question 9

An individual or country that has a comparative advantage in the production of one good

Accepted Answer

A)  must have an absolute advantage in the good's production. 
B)  must not have an absolute advantage in the good's production. 
C)  may or may not have an absolute advantage in the good's production. 
D)  must not have an absolute advantage in the production of the other good. 
A)  must have an absolute advantage in the good's production. 
B)  must not have an absolute advantage in the good's production. 
C)  may or may not have an absolute advantage in the good's production. 
D)  must not have an absolute advantage in the production of the other good.

Question 10

Suppose a product suddenly loses popularity and the firms producing the product begin to realize large losses.As firms exit the market,the equilibrium price in the market will

Accepted Answer

A)  increase and make it more attractive for the remaining firms stay in business. 
B)  decrease and make it more attractive for the remaining firms stay in business. 
C)  decrease further and push more firms out of business. 
D)  decrease further while making the remaining firms realize profits again. 
A)  increase and make it more attractive for the remaining firms stay in business. 
B)  decrease and make it more attractive for the remaining firms stay in business. 
C)  decrease further and push more firms out of business. 
D)  decrease further while making the remaining firms realize profits again.

Question 11

Specialization in production will increase total output.

Accepted Answer

A) True 
 B)False

Question 12

A comparative advantage is the ability of one person or nation to produce a good at an opportunity cost that is lower than that of another person or nation.

Accepted Answer

A) True 
 B)False

Question 13

The ability of one person or nation to produce a good at a lower resource cost than another is called a(n)

Accepted Answer

A)  market advantage. 
B)  comparative advantage. 
C)  absolute advantage. 
D)  specialization advantage. 
A)  market advantage. 
B)  comparative advantage. 
C)  absolute advantage. 
D)  specialization advantage.

Question 14

When it comes to pollution,economists believe that the government must

Accepted Answer

A)  allow firms to pollute as long as they bear the full cost of their pollution. 
B)  never allow pollution to exist. 
C)  allow firms to pollute as long as the benefits of pollution are positive. 
D)  allow pollution to exist unabated. 
A)  allow firms to pollute as long as they bear the full cost of their pollution. 
B)  never allow pollution to exist. 
C)  allow firms to pollute as long as the benefits of pollution are positive. 
D)  allow pollution to exist unabated.

Question 15

For country A,an export is a good produced in

Accepted Answer

A)  country B and purchased by residents of country B. 
B)  country B and purchased by residents of country A. 
C)  country A and purchased by residents of country B. 
D)  country A and purchased by residents of country A. 
A)  country B and purchased by residents of country B. 
B)  country B and purchased by residents of country A. 
C)  country A and purchased by residents of country B. 
D)  country A and purchased by residents of country A.

Question 16

An example of a market failure due to a firm NOT fully bearing the costs of its production decision is

Accepted Answer

A)  a levee. 
B)  pollution. 
C)  profit. 
D)  imperfect information. 
A)  a levee. 
B)  pollution. 
C)  profit. 
D)  imperfect information.

Question 17

Table 3.1
-Table 3.1 illustrates Willy and Blythe's hourly production for apples and carrots.From the table,we can conclude that

Accepted Answer

A)  Blythe has an absolute advantage in producing apples but not carrots. 
B)  Blythe has an absolute advantage in producing carrots but not apples. 
C)  Blythe has an absolute advantage in producing both goods. 
D)  Blythe has an absolute advantage in producing neither good. 
A)  Blythe has an absolute advantage in producing apples but not carrots. 
B)  Blythe has an absolute advantage in producing carrots but not apples. 
C)  Blythe has an absolute advantage in producing both goods. 
D)  Blythe has an absolute advantage in producing neither good.

Question 18

A product produced overseas and sold in another country is an export for the country in which it is sold.

Accepted Answer

A) True 
 B)False

Question 19

When the government provides its citizens an unemployment insurance program,it is providing its citizens

Accepted Answer

A)  a social safety net. 
B)  a public good. 
C)  a new job. 
D)  uncertainty. 
A)  a social safety net. 
B)  a public good. 
C)  a new job. 
D)  uncertainty.

Question 20

Adam Smith used the metaphor "invisible hand" to explain that

Accepted Answer

A)  people acting in their own self-interest may actually promote the interest of the society as a whole. 
B)  people need a push from the government to do what the government thinks is right. 
C)  people always act with the interest of society in the back of their minds. 
D)  governments always act in the best interest of its citizenry. 
A)  people acting in their own self-interest may actually promote the interest of the society as a whole. 
B)  people need a push from the government to do what the government thinks is right. 
C)  people always act with the interest of society in the back of their minds. 
D)  governments always act in the best interest of its citizenry.

The reason why the government taxes the gasoline used by pollution-causing automobiles is because it is trying to

If Tom can produce 20 multiple choice questions or 30 true/false questions in an hour,and Mary can produce 15 multiple choice questions or 15 true/false questions in an hour,then Tom has a comparative advantage in writing multiple choice questions.

The ability of one person or nation to produce a good at a lower absolute cost than another is called a(n)

Accounting rules

Which of the following is NOT a public good?

Patents

A product produced in the home country and sold in another country is an export for the home country.

Table 3.1 -Table 3.1 illustrates Willy and Blythe's hourly production for apples and carrots.Based on the table,Blythe's opportunity cost of 1 apple is

An individual or country that has a comparative advantage in the production of one good

Suppose a product suddenly loses popularity and the firms producing the product begin to realize large losses.As firms exit the market,the equilibrium price in the market will

Specialization in production will increase total output.

A comparative advantage is the ability of one person or nation to produce a good at an opportunity cost that is lower than that of another person or nation.

The ability of one person or nation to produce a good at a lower resource cost than another is called a(n)

When it comes to pollution,economists believe that the government must

For country A,an export is a good produced in

An example of a market failure due to a firm NOT fully bearing the costs of its production decision is

Table 3.1 -Table 3.1 illustrates Willy and Blythe's hourly production for apples and carrots.From the table,we can conclude that

A product produced overseas and sold in another country is an export for the country in which it is sold.

When the government provides its citizens an unemployment insurance program,it is providing its citizens

Adam Smith used the metaphor "invisible hand" to explain that

Introduction: What Is Economics

The Key Principles of Economics

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 3: Exchange and Markets

The reason why the government taxes the gasoline used by pollution-causing automobiles is because it is trying to

If Tom can produce 20 multiple choice questions or 30 true/false questions in an hour,and Mary can produce 15 multiple choice questions or 15 true/false questions in an hour,then Tom has a comparative advantage in writing multiple choice questions.

The ability of one person or nation to produce a good at a lower absolute cost than another is called a(n)

Accounting rules

Which of the following is NOT a public good?

Patents

A product produced in the home country and sold in another country is an export for the home country.

Table 3.1 -Table 3.1 illustrates Willy and Blythe's hourly production for apples and carrots.Based on the table,Blythe's opportunity cost of 1 apple is

An individual or country that has a comparative advantage in the production of one good

Suppose a product suddenly loses popularity and the firms producing the product begin to realize large losses.As firms exit the market,the equilibrium price in the market will

Specialization in production will increase total output.

A comparative advantage is the ability of one person or nation to produce a good at an opportunity cost that is lower than that of another person or nation.

The ability of one person or nation to produce a good at a lower resource cost than another is called a(n)

When it comes to pollution,economists believe that the government must

For country A,an export is a good produced in

An example of a market failure due to a firm NOT fully bearing the costs of its production decision is

Table 3.1 -Table 3.1 illustrates Willy and Blythe's hourly production for apples and carrots.From the table,we can conclude that

A product produced overseas and sold in another country is an export for the country in which it is sold.

When the government provides its citizens an unemployment insurance program,it is providing its citizens

Adam Smith used the metaphor "invisible hand" to explain that

Introduction: What Is Economics

The Key Principles of Economics

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters