Question 1

Voluntary exchange ________ economic efficiency because neither the buyer nor the seller would agree to a trade unless ________.

Accepted Answer

A)  increases; they both benefit 
B)  increases; only one party benefits 
C)  decreases; neither benefit 
D)  decreases; they both benefit 
A)  increases; they both benefit 
B)  increases; only one party benefits 
C)  decreases; neither benefit 
D)  decreases; they both benefit

Question 2

Consider the following statements: 
A.Consumers buy more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area.
B.Schools take steps to increase security since they believe it is more costly to allow vandalism than to hire additional security guards.
C.Citrus growers produce more oranges when the selling price of oranges falls.
The statement above that demonstrates that economic agents respond to incentives is:

Accepted Answer

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

Voluntary exchange economic efficiency because neither the buyer nor the seller would agree to a trade unless .

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters

Exam 1: Economics: Foundations and Models