Question 1

In economics,the practical application of an invention is known as

Accepted Answer

A) technology. 
B) entrepreneurship. 
C) physical capital. 
D) innovation. 
A) technology. 
B) entrepreneurship. 
C) physical capital. 
D) innovation.

Question 2

When every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it,________ 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

Assume that a city can earn an additional $100,000 of revenue each year from using drones to catch speeding drivers.What must the additional cost of using drones to catch speeders be to make this economically rational?

Accepted Answer

The additional cost of using d

Question 4

Selling tickets to graduation ceremonies has long been a tradition among students at institutions that limit the number of guests.Suppose your classmate,Heidi,purchased two tickets for $40 each.Is this transaction economically efficient?

Accepted Answer

A) No,people should never be allowed to sell items they received for free. 
B) Yes,it was a voluntary exchange that benefited both parties. 
C) No,Heidi paid too much for the tickets. 
D) Yes,it is efficient only from the perspective of the seller and not from the perspective of the buyer. 
A) No,people should never be allowed to sell items they received for free. 
B) Yes,it was a voluntary exchange that benefited both parties. 
C) No,Heidi paid too much for the tickets. 
D) Yes,it is efficient only from the perspective of the seller and not from the perspective of the buyer.

Question 5

________ 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 6

Which of the following is a normative economic statement?

Accepted Answer

A) The price of milk is too high. 
B) The current high price of milk is the result of reduced worldwide supply. 
C) When the price of milk rises,the quantity of milk purchased falls. 
D) When the price of milk rises,the cost of milk-based products rises. 
A) The price of milk is too high. 
B) The current high price of milk is the result of reduced worldwide supply. 
C) When the price of milk rises,the quantity of milk purchased falls. 
D) When the price of milk rises,the cost of milk-based products rises.

Question 7

Define allocative efficiency.Explain the significance of this concept in economics?

Accepted Answer

Allocative efficiency is an efficiency c

Question 8

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 9

The term "market" in economics refers to

Accepted Answer

A) a place where money changes hands. 
B) a legal institution where exchange can take place. 
C) a group of buyers and sellers of a product and the arrangement by which they come together to trade. 
D) an organization which sells goods and services. 
A) a place where money changes hands. 
B) a legal institution where exchange can take place. 
C) a group of buyers and sellers of a product and the arrangement by which they come together to trade. 
D) an organization which sells goods and services.

Question 10

Competition among sellers generates

Accepted Answer

A) productive efficiency. 
B) allocative efficiency. 
C) equity. 
D) scarcity. 
A) productive efficiency. 
B) allocative efficiency. 
C) equity. 
D) scarcity.

Question 11

Which of the following is a normative economic statement?

Accepted Answer

A) Falling global demand for pesticides has led to decreases in the price of pesticides. 
B) With falling mortgage rates and falling unemployment rates,the number of new homes being built has increased. 
C) The state of Florida's unemployment rate dropped when several large companies relocated to the Miami area. 
D) Global warming should be at the top of every economic agenda. 
A) Falling global demand for pesticides has led to decreases in the price of pesticides. 
B) With falling mortgage rates and falling unemployment rates,the number of new homes being built has increased. 
C) The state of Florida's unemployment rate dropped when several large companies relocated to the Miami area. 
D) Global warming should be at the top of every economic agenda.

Question 12

Two-dimensional graphs have a horizontal and a vertical axis and are used in economics to illustrate

Accepted Answer

A) relationships between two economic variables. 
B) one variable. 
C) a flow chart. 
D) a pie chart. 
A) relationships between two economic variables. 
B) one variable. 
C) a flow chart. 
D) a pie chart.

Question 13

If it costs Vijay $150 to design 5 Web sites and $175 to design 6 Web sites,then $175 is the marginal cost of producing the 6th Web site.

Accepted Answer

A) True 
 B)False

Question 14

In the first six months of 2003,branches of Commerce Bank in New York City were robbed 14 times.The New York City Police recommended steps the bank could take to deter robberies,including the installation of plastic barriers called "bandit barriers." The police were surprised the bank did not take their advice.According to a deputy commissioner of police,"Commerce does very little of what we recommend.They've told our detectives they have no interest in ever putting in the barriers." It would seem that Commerce Bank would have a strong incentive to install "bandit barriers" to deter robberies.Why wouldn't they do it?

Accepted Answer

A) The banks would rather delay installation of any theft deterring equipment in anticipation of new,lower-cost innovations in the security devices market. 
B) The banks must have weighed the cost of installing bandit barriers against the benefits and decided that they have "no interest in ever putting in the barriers." 
C) The banks are concerned that "bandit barriers" would send the wrong message to customers-that the bank is unsafe. 
D) The banks probably resent any interference from the police department. 
A) The banks would rather delay installation of any theft deterring equipment in anticipation of new,lower-cost innovations in the security devices market. 
B) The banks must have weighed the cost of installing bandit barriers against the benefits and decided that they have "no interest in ever putting in the barriers." 
C) The banks are concerned that "bandit barriers" would send the wrong message to customers-that the bank is unsafe. 
D) The banks probably resent any interference from the police department.

Question 15

What is the difference between economic efficiency and equity?

Accepted Answer

Economic efficiency is concerned with ma

Question 16

The branch of economics which studies how households and firms make choices,interact in markets,and how government attempts to influence their choices is called

Accepted Answer

A) macroeconomics. 
B) microeconomics. 
C) positive economics. 
D) normative economics. 
A) macroeconomics. 
B) microeconomics. 
C) positive economics. 
D) normative economics.

Question 17

In the market for factors of production,households earn income by supplying factors of production to firms.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Suppose that to move more people off the wait list for organ donations,surgeons and hospitals are developing a market for organ swapping.This is an example of a macroeconomic topic.

Accepted Answer

A) True 
 B)False

Question 20

How are the fundamental economic decisions determined in Canada?

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 Canada is a centrally planned economy. 
D) The United Nations decides because Canada 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 Canada is a centrally planned economy. 
D) The United Nations decides because Canada is a developing economy.

In economics,the practical application of an invention is known as

When every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it,________ occurs.

Assume that a city can earn an additional $100,000 of revenue each year from using drones to catch speeding drivers.What must the additional cost of using drones to catch speeders be to make this economically rational?

Selling tickets to graduation ceremonies has long been a tradition among students at institutions that limit the number of guests.Suppose your classmate,Heidi,purchased two tickets for $40 each.Is this transaction economically efficient?

________ occurs when economic benefits are distributed fairly.

Which of the following is a normative economic statement?

Define allocative efficiency.Explain the significance of this concept in economics?

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

The term "market" in economics refers to

Competition among sellers generates

Which of the following is a normative economic statement?

Two-dimensional graphs have a horizontal and a vertical axis and are used in economics to illustrate

If it costs Vijay $150 to design 5 Web sites and $175 to design 6 Web sites,then $175 is the marginal cost of producing the 6th Web site.

What is the difference between economic efficiency and equity?

The branch of economics which studies how households and firms make choices,interact in markets,and how government attempts to influence their choices is called

In the market for factors of production,households earn income by supplying factors of production to firms.

Every society faces economic trade-offs.This means

Suppose that to move more people off the wait list for organ donations,surgeons and hospitals are developing a market for organ swapping.This is an example of a macroeconomic topic.

How are the fundamental economic decisions determined in Canada?

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 1: Economics: Foundations and Models

In economics,the practical application of an invention is known as

When every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it,________ occurs.

Assume that a city can earn an additional $100,000 of revenue each year from using drones to catch speeding drivers.What must the additional cost of using drones to catch speeders be to make this economically rational?

Selling tickets to graduation ceremonies has long been a tradition among students at institutions that limit the number of guests.Suppose your classmate,Heidi,purchased two tickets for $40 each.Is this transaction economically efficient?

________ occurs when economic benefits are distributed fairly.

Which of the following is a normative economic statement?

Define allocative efficiency.Explain the significance of this concept in economics?

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

The term "market" in economics refers to

Competition among sellers generates

Which of the following is a normative economic statement?

Two-dimensional graphs have a horizontal and a vertical axis and are used in economics to illustrate

If it costs Vijay $150 to design 5 Web sites and $175 to design 6 Web sites,then $175 is the marginal cost of producing the 6th Web site.

What is the difference between economic efficiency and equity?

The branch of economics which studies how households and firms make choices,interact in markets,and how government attempts to influence their choices is called

In the market for factors of production,households earn income by supplying factors of production to firms.

Every society faces economic trade-offs.This means

Suppose that to move more people off the wait list for organ donations,surgeons and hospitals are developing a market for organ swapping.This is an example of a macroeconomic topic.

How are the fundamental economic decisions determined in Canada?

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters