Question 1

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

Accepted Answer

A)  should be counted in full, regardless of the costs of eating and sleeping elsewhere. 
B)  should be counted only to the extent that they are more expensive at college than elsewhere. 
C)  usually exceed the opportunity cost of going to college. 
D)  plus the cost of tuition, equals the opportunity cost of going to college. 
A)  should be counted in full, regardless of the costs of eating and sleeping elsewhere. 
B)  should be counted only to the extent that they are more expensive at college than elsewhere. 
C)  usually exceed the opportunity cost of going to college. 
D)  plus the cost of tuition, equals the opportunity cost of going to college.

Question 2

Following the implementation of laws requiring automobiles to have seat belts, which of the following occurred?

Accepted Answer

A)  An individual's probability of surviving an auto accident rose. 
B)  There was an increase in pedestrian deaths. 
C)  There was an increase in automobile accidents. 
D)  All of the above are correct. 
A)  An individual's probability of surviving an auto accident rose. 
B)  There was an increase in pedestrian deaths. 
C)  There was an increase in automobile accidents. 
D)  All of the above are correct.

Question 3

What do prices reflect in a market economy?

Accepted Answer

The value of a good

Question 4

When society requires that firms reduce pollution, there is

Accepted Answer

A)  a tradeoff because of reduced incomes to the firms' owners and workers. 
B)  a tradeoff only if some firms are forced to close. 
C)  no tradeoff, since the cost of reducing pollution falls only on the firms affected by the requirements. 
D)  no tradeoff, since everyone benefits from reduced pollution. 
A)  a tradeoff because of reduced incomes to the firms' owners and workers. 
B)  a tradeoff only if some firms are forced to close. 
C)  no tradeoff, since the cost of reducing pollution falls only on the firms affected by the requirements. 
D)  no tradeoff, since everyone benefits from reduced pollution.

Question 5

To say that government intervenes in the economy to promote efficiency is to say that government is attempting to

Accepted Answer

A)  create a more fair distribution of income. 
B)  change the way in which the economic pie is divided. 
C)  enlarge the economic pie. 
D)  All of the above are correct. 
A)  create a more fair distribution of income. 
B)  change the way in which the economic pie is divided. 
C)  enlarge the economic pie. 
D)  All of the above are correct.

Question 6

The willingness of citizens to pay for vaccinations does not include the benefit society receives from having vaccinated citizens who cannot transmit an illness to others. This extra benefit society gets from vaccinating its citizens is known as

Accepted Answer

A)  productivity. 
B)  an externality. 
C)  market power. 
D)  property rights. 
A)  productivity. 
B)  an externality. 
C)  market power. 
D)  property rights.

Question 7

US citizens have better nutrition, better healthcare, and a longer life expectancy than citizens of Ghana. Which of the following conclusions can be drawn from this statement?

Accepted Answer

A)  Average income in the US is higher than the average income in Ghana. 
B)  The US has a higher standard of living than Ghanb. 
C)  Productivity in the US is higher than productivity in Ghana. 
D)  All of the above are correct. 
A)  Average income in the US is higher than the average income in Ghana. 
B)  The US has a higher standard of living than Ghanb. 
C)  Productivity in the US is higher than productivity in Ghana. 
D)  All of the above are correct.

Question 8

Equality means distributing society's resources in the most efficient manner.

Accepted Answer

A) True 
 B)False

Question 9

Give an example of government intervention that is intended to reduce an externality.

Accepted Answer

Laws that restrict t

Question 10

Evidence indicates that seat belt laws have led to

Accepted Answer

A)  fewer pedestrian deaths. 
B)  fewer automobile accidents. 
C)  fewer deaths per automobile accident. 
D)  All of the above are correct. 
A)  fewer pedestrian deaths. 
B)  fewer automobile accidents. 
C)  fewer deaths per automobile accident. 
D)  All of the above are correct.

Question 11

Guns and butter are used to represent the classic societal tradeoff between spending on

Accepted Answer

A)  durable and nondurable goods. 
B)  imports and exports. 
C)  national defense and consumer goods. 
D)  law enforcement and agriculture. 
A)  durable and nondurable goods. 
B)  imports and exports. 
C)  national defense and consumer goods. 
D)  law enforcement and agriculture.

Question 12

The classic tradeoff between "guns and butter" states that when a society spends more on national defense, it has less to spend on consumer goods to raise the standard of living.

Accepted Answer

A) True 
 B)False

Question 13

Suppose the state of Illinois passes a law that bans smoking in restaurants. As a result, residents of Wisconsin who do not like breathing second-hand smoke begin driving across the border to Illinois to eat at restaurants there. Which of the following principles does this best illustrate?

Accepted Answer

A)  People respond to incentives 
B)  Rational people think at the margin 
C)  Trade can make everyone better off 
D)  Markets are usually a good way to organize economic activity 
A)  People respond to incentives 
B)  Rational people think at the margin 
C)  Trade can make everyone better off 
D)  Markets are usually a good way to organize economic activity

Question 14

Max and Maddy charge people to park on their lawn while attending a nearby craft fair. At the current price of $10, seven people park on their lawn. If they raise the price to $15, they know that only five people will want to park on their lawn. Whether they have seven or five cars parked on their lawn does not affect their costs. From this information it follows that

Accepted Answer

A)  they should leave the price at $10. 
B)  it does not matter if they charge $10 or $15. 
C)  they would do better charging $15 than $10. 
D)  they should raise the price even more. 
A)  they should leave the price at $10. 
B)  it does not matter if they charge $10 or $15. 
C)  they would do better charging $15 than $10. 
D)  they should raise the price even more.

Question 15

Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

Accepted Answer

A)  only Sam is made better off by trade. 
B)  only Annie is made better off by trade. 
C)  both Sam and Annie are made better off by trade. 
D)  neither Sam nor Annie are made better off by trade. 
A)  only Sam is made better off by trade. 
B)  only Annie is made better off by trade. 
C)  both Sam and Annie are made better off by trade. 
D)  neither Sam nor Annie are made better off by trade.

Question 16

Low rates of inflation are generally associated with

Accepted Answer

A)  low rates of government spending. 
B)  small or nonexistent government budget deficits. 
C)  low rates of productivity growth. 
D)  low rates of growth of the quantity of money. 
A)  low rates of government spending. 
B)  small or nonexistent government budget deficits. 
C)  low rates of productivity growth. 
D)  low rates of growth of the quantity of money.

Question 17

Scenario 1-1
You have the afternoon free. You have a choice between going to the movies with a friend or studying economics for three hours. If you go to the movies, you will spend $8.00 on a ticket and $4.50 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 10 points.
-Refer to Scenario 1-1. What is your opportunity cost of studying economics?

Accepted Answer

The enjoyment you wo

Question 18

A certain state legislature is considering an increase in the state gasoline tax. Representative Campbell argues that an increase in the gasoline tax would harm low-income drivers disproportionately. Representative Richards responds by saying that low-income drivers own smaller cars that use less gasoline, and that low-income drivers therefore would not be harmed disproportionately.

Accepted Answer

A)  Representative Campbell's argument is based primarily on efficiency, while Representative Richards' argument is based primarily on equality. 
B)  Representative Campbell's argument is based primarily on equality, while Representative Richards' argument is based primarily on efficiency. 
C)  Both representatives' arguments are based primarily on efficiency. 
D)  Both representatives' arguments are based primarily on equality. 
A)  Representative Campbell's argument is based primarily on efficiency, while Representative Richards' argument is based primarily on equality. 
B)  Representative Campbell's argument is based primarily on equality, while Representative Richards' argument is based primarily on efficiency. 
C)  Both representatives' arguments are based primarily on efficiency. 
D)  Both representatives' arguments are based primarily on equality.

Question 19

Inflation is defined as

Accepted Answer

A)  a period of rising productivity in the economy. 
B)  a period of rising income in the economy. 
C)  an increase in the overall level of output in the economy. 
D)  an increase in the overall level of prices in the economy. 
A)  a period of rising productivity in the economy. 
B)  a period of rising income in the economy. 
C)  an increase in the overall level of output in the economy. 
D)  an increase in the overall level of prices in the economy.

Question 20

Efficiency

Accepted Answer

A)  and equality both refer to how much a society can produce with its resources. 
B)  and equality both refer to how fairly the benefits from using resources are distributed between members of a society. 
C)  refers to how much a society can produce with its resources. Equality refers to how evenly the benefits from using resources are distributed among members of society. 
D)  refers to how evenly the benefits from using resources are distributed between members of society. Equality refers to how much a society can produce with its resources 
A)  and equality both refer to how much a society can produce with its resources. 
B)  and equality both refer to how fairly the benefits from using resources are distributed between members of a society. 
C)  refers to how much a society can produce with its resources. Equality refers to how evenly the benefits from using resources are distributed among members of society. 
D)  refers to how evenly the benefits from using resources are distributed between members of society. Equality refers to how much a society can produce with its resources

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

Following the implementation of laws requiring automobiles to have seat belts, which of the following occurred?

What do prices reflect in a market economy?

When society requires that firms reduce pollution, there is

To say that government intervenes in the economy to promote efficiency is to say that government is attempting to

The willingness of citizens to pay for vaccinations does not include the benefit society receives from having vaccinated citizens who cannot transmit an illness to others. This extra benefit society gets from vaccinating its citizens is known as

US citizens have better nutrition, better healthcare, and a longer life expectancy than citizens of Ghana. Which of the following conclusions can be drawn from this statement?

Equality means distributing society's resources in the most efficient manner.

Give an example of government intervention that is intended to reduce an externality.

Evidence indicates that seat belt laws have led to

Guns and butter are used to represent the classic societal tradeoff between spending on

The classic tradeoff between "guns and butter" states that when a society spends more on national defense, it has less to spend on consumer goods to raise the standard of living.

Suppose the state of Illinois passes a law that bans smoking in restaurants. As a result, residents of Wisconsin who do not like breathing second-hand smoke begin driving across the border to Illinois to eat at restaurants there. Which of the following principles does this best illustrate?

Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

Low rates of inflation are generally associated with

Inflation is defined as

Efficiency

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters

Exam 1: Ten Principles of Economics

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

Following the implementation of laws requiring automobiles to have seat belts, which of the following occurred?

What do prices reflect in a market economy?

When society requires that firms reduce pollution, there is

To say that government intervenes in the economy to promote efficiency is to say that government is attempting to

The willingness of citizens to pay for vaccinations does not include the benefit society receives from having vaccinated citizens who cannot transmit an illness to others. This extra benefit society gets from vaccinating its citizens is known as

US citizens have better nutrition, better healthcare, and a longer life expectancy than citizens of Ghana. Which of the following conclusions can be drawn from this statement?

Equality means distributing society's resources in the most efficient manner.

Give an example of government intervention that is intended to reduce an externality.

Evidence indicates that seat belt laws have led to

Guns and butter are used to represent the classic societal tradeoff between spending on

The classic tradeoff between "guns and butter" states that when a society spends more on national defense, it has less to spend on consumer goods to raise the standard of living.

Suppose the state of Illinois passes a law that bans smoking in restaurants. As a result, residents of Wisconsin who do not like breathing second-hand smoke begin driving across the border to Illinois to eat at restaurants there. Which of the following principles does this best illustrate?

Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

Low rates of inflation are generally associated with

Inflation is defined as

Efficiency

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters