Question 1

The government makes all economic decisions in a market economy.

Accepted Answer

A) True 
 B)False

Question 2

What does the term "marginal" mean in economics?

Accepted Answer

A)  the edge of a market 
B)  an additional or extra 
C)  illegal 
D)  secondary 
E)  trivial 
A)  the edge of a market 
B)  an additional or extra 
C)  illegal 
D)  secondary 
E)  trivial

Question 3

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

Accepted Answer

A)  Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others. 
B)  Failure to do this could lead to an inequitable allocation of goods and services produced. 
C)  Failure to do this will lead to drastic shortages of all goods and services. 
D)  Failure to do this could reduce efficiency and lead to an inequitable allocation of output. 
A)  Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others. 
B)  Failure to do this could lead to an inequitable allocation of goods and services produced. 
C)  Failure to do this will lead to drastic shortages of all goods and services. 
D)  Failure to do this could reduce efficiency and lead to an inequitable allocation of output.

Question 4

Marginal benefit is the benefit that your activity provides to someone else.

Accepted Answer

A) True 
 B)False

Question 5

In 2017,Hooverville consumed 205,000 tons of sugar.In 2018,sugar consumption rose to 245,000 tons.Calculate the percentage change in sugar consumption.

Accepted Answer

A)  8.37% 
B)  11.95% 
C)  19.51% 
D)  26.33% 
A)  8.37% 
B)  11.95% 
C)  19.51% 
D)  26.33%

Question 6

Every society faces trade-offs.Explain the concept of trade-offs.

Accepted Answer

Trade-offs refer to the idea t

Question 7

Suppose the U.S.government encouraged new teachers to take jobs in underperforming schools by paying the new teachers a $20,000 bonus.These teachers would be 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 8

In a market economy,________ interact in markets to decide the answers to the fundamental economic questions.

Accepted Answer

A)  state and local governments 
B)  large corporations 
C)  households and firms 
D)  the judicial and legislative branches of the federal government 
A)  state and local governments 
B)  large corporations 
C)  households and firms 
D)  the judicial and legislative branches of the federal government

Question 9

The decisions General Motors makes in determining production levels for its Chevy Volt is an example of a microeconomic topic.

Accepted Answer

A) True 
 B)False

Question 10

Billie's Billiard Barn has seen its business slow down ever since Patti's Ping Pong Parlour opened up across the street.Since the opening of Patti's Ping Pong Parlour,the opportunity cost of shooting pool at Billie's Billiard Barn has ________ for Billie's customers who also like to play ping pong.

Accepted Answer

A)  decreased. 
B)  increased. 
C)  fallen to zero. 
D)  not changed. 
A)  decreased. 
B)  increased. 
C)  fallen to zero. 
D)  not changed.

Question 11

Which of the following is an example of a "how much" decision?

Accepted Answer

A)  The Pleasantville movie theatre is open only in the evenings. The theatre's manager is debating whether to add daily matinee shows. 
B)  The Zhous have demolished their old home and are debating whether to build a ranch-style house or a Craftsman home. 
C)  You're planning to hold a graduation party and must decide between having your party catered or having a pot-luck. 
D)  Chelsea has withdrawn from the swim team to take a full-time job. 
A)  The Pleasantville movie theatre is open only in the evenings. The theatre's manager is debating whether to add daily matinee shows. 
B)  The Zhous have demolished their old home and are debating whether to build a ranch-style house or a Craftsman home. 
C)  You're planning to hold a graduation party and must decide between having your party catered or having a pot-luck. 
D)  Chelsea has withdrawn from the swim team to take a full-time job.

Question 12

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10,the slope of this line is

Accepted Answer

A)  negative 11 divided by 6. 
B)  seven-tenths. 
C)  negative seven-tenths. 
D)  6 divided by 11. 
A)  negative 11 divided by 6. 
B)  seven-tenths. 
C)  negative seven-tenths. 
D)  6 divided by 11.

Question 13

Consider the following statements:
A.Consumers rent more kayaks from a vendor that rents kayaks at a lower price than other rival kayak vendors along Waikiki beach.
B.Department stores take steps to increase security since they believe it is more costly to allow shoplifting than to install expensive security monitoring equipment.
C.Farmers produce more cotton when its selling price falls.
Which of the above statements demonstrates that economic agents respond to incentives?

Accepted Answer

A)  a only. 
B)  b only. 
C)  c only. 
D)  a and b. 
E)  a, b, and c. 
A)  a only. 
B)  b only. 
C)  c only. 
D)  a and b. 
E)  a, b, and c.

Question 14

Which of the following statements about competition in a market is true?

Accepted Answer

A)  Competition forces firms to outsource the production of their labor-intensive products. 
B)  Competition forces firms to undercut their selling price, thus benefiting consumers who will be able to purchase products at the lowest price possible. 
C)  Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production. 
D)  Competition forces firms to add only low profit margins to their costs of production. 
A)  Competition forces firms to outsource the production of their labor-intensive products. 
B)  Competition forces firms to undercut their selling price, thus benefiting consumers who will be able to purchase products at the lowest price possible. 
C)  Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production. 
D)  Competition forces firms to add only low profit margins to their costs of production.

Question 15

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 16

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 17

A college must decide if it wants to offer more adult literacy classes.This decision involves answering the economic question of "what to produce."

Accepted Answer

A) True 
 B)False

Question 18

Suppose the extra cost for a town to lower its speed limit by 5 mph is $20 per day.Then,the town should lower the speed limit if it can generate an additional benefit of $20 per day.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a microeconomic question?

Accepted Answer

A)  How much will be saved and how much will be produced in the entire economy? 
B)  What will the level of economic growth be in the entire economy? 
C)  What factors determine the price of carrots? 
D)  What determines the average price level and inflation? 
A)  How much will be saved and how much will be produced in the entire economy? 
B)  What will the level of economic growth be in the entire economy? 
C)  What factors determine the price of carrots? 
D)  What determines the average price level and inflation?

Question 20

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.

The government makes all economic decisions in a market economy.

What does the term "marginal" mean in economics?

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

Marginal benefit is the benefit that your activity provides to someone else.

In 2017,Hooverville consumed 205,000 tons of sugar.In 2018,sugar consumption rose to 245,000 tons.Calculate the percentage change in sugar consumption.

Every society faces trade-offs.Explain the concept of trade-offs.

Suppose the U.S.government encouraged new teachers to take jobs in underperforming schools by paying the new teachers a $20,000 bonus.These teachers would be exemplifying the economic idea that

In a market economy,________ interact in markets to decide the answers to the fundamental economic questions.

The decisions General Motors makes in determining production levels for its Chevy Volt is an example of a microeconomic topic.

Billie's Billiard Barn has seen its business slow down ever since Patti's Ping Pong Parlour opened up across the street.Since the opening of Patti's Ping Pong Parlour,the opportunity cost of shooting pool at Billie's Billiard Barn has ________ for Billie's customers who also like to play ping pong.

Which of the following is an example of a "how much" decision?

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10,the slope of this line is

Which of the following statements about competition in a market is true?

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

A college must decide if it wants to offer more adult literacy classes.This decision involves answering the economic question of "what to produce."

Suppose the extra cost for a town to lower its speed limit by 5 mph is $20 per day.Then,the town should lower the speed limit if it can generate an additional benefit of $20 per day.

Which of the following is a microeconomic question?

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

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

The government makes all economic decisions in a market economy.

What does the term "marginal" mean in economics?

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

Marginal benefit is the benefit that your activity provides to someone else.

In 2017,Hooverville consumed 205,000 tons of sugar.In 2018,sugar consumption rose to 245,000 tons.Calculate the percentage change in sugar consumption.

Every society faces trade-offs.Explain the concept of trade-offs.

Suppose the U.S.government encouraged new teachers to take jobs in underperforming schools by paying the new teachers a $20,000 bonus.These teachers would be exemplifying the economic idea that

In a market economy,________ interact in markets to decide the answers to the fundamental economic questions.

The decisions General Motors makes in determining production levels for its Chevy Volt is an example of a microeconomic topic.

Billie's Billiard Barn has seen its business slow down ever since Patti's Ping Pong Parlour opened up across the street.Since the opening of Patti's Ping Pong Parlour,the opportunity cost of shooting pool at Billie's Billiard Barn has ________ for Billie's customers who also like to play ping pong.

Which of the following is an example of a "how much" decision?

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10,the slope of this line is

Which of the following statements about competition in a market is true?

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

A college must decide if it wants to offer more adult literacy classes.This decision involves answering the economic question of "what to produce."

Suppose the extra cost for a town to lower its speed limit by 5 mph is $20 per day.Then,the town should lower the speed limit if it can generate an additional benefit of $20 per day.

Which of the following is a microeconomic question?

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

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