Question 1

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort. This law is likely to

Accepted Answer

A) increase efficiency and increase equality. 
B) increase efficiency but decrease equality. 
C) decrease efficiency but increase equality. 
D) decrease efficiency and decrease equality. 
A) increase efficiency and increase equality. 
B) increase efficiency but decrease equality. 
C) decrease efficiency but increase equality. 
D) decrease efficiency and decrease equality.

Question 2

Maureen's college raises the cost of room and board per semester. This increase raises Maureen's opportunity cost of attending college

Accepted Answer

A) even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost reduces Maureen's incentive to attend college. 
B) even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost increases Maureen's incentive to attend college. 
C) only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost reduces Maureen's incentive to attend college. 
D) only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost increases Maureen's incentive to attend college. 
A) even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost reduces Maureen's incentive to attend college. 
B) even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost increases Maureen's incentive to attend college. 
C) only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost reduces Maureen's incentive to attend college. 
D) only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost increases Maureen's incentive to attend college.

Question 3

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

Accepted Answer

A) True 
 B)False

Question 4

Trade with any nation can be mutually beneficial.

Accepted Answer

A) True 
 B)False

Question 5

In the short run, an increase in the money supply is likely to lead to

Accepted Answer

A) lower unemployment and lower inflation. 
B) lower unemployment and higher inflation. 
C) higher unemployment and lower inflation. 
D) higher unemployment and higher inflation. 
A) lower unemployment and lower inflation. 
B) lower unemployment and higher inflation. 
C) higher unemployment and lower inflation. 
D) higher unemployment and higher inflation.

Question 6

The phrase "no such thing as a free lunch" means

Accepted Answer

A) people must face tradeoffs. 
B) rational people think at the margin. 
C) people respond to incentives. 
D) trade can make everyone better off. 
A) people must face tradeoffs. 
B) rational people think at the margin. 
C) people respond to incentives. 
D) trade can make everyone better off.

Question 7

A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. In other words, the society faces a tradeoff between

Accepted Answer

A) guns and butter. 
B) efficiency and equality. 
C) inflation and unemployment. 
D) work and leisure. 
A) guns and butter. 
B) efficiency and equality. 
C) inflation and unemployment. 
D) work and leisure.

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort. This law is likely to

Maureen's college raises the cost of room and board per semester. This increase raises Maureen's opportunity cost of attending college

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

Trade with any nation can be mutually beneficial.

In the short run, an increase in the money supply is likely to lead to

The phrase "no such thing as a free lunch" means

A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. In other words, the society faces a tradeoff between

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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Exam 1: Ten Principles of Economics

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort. This law is likely to

Maureen's college raises the cost of room and board per semester. This increase raises Maureen's opportunity cost of attending college

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

Trade with any nation can be mutually beneficial.

In the short run, an increase in the money supply is likely to lead to

The phrase "no such thing as a free lunch" means

A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. In other words, the society faces a tradeoff between

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters