Question 1

Economists assume that people respond to:

Accepted Answer

A)  other people. 
B)  social interest. 
C)  benevolence. 
D)  incentives. 
A)  other people. 
B)  social interest. 
C)  benevolence. 
D)  incentives.

Question 2

A student at a party deciding whether to stay a few more minutes is:

Accepted Answer

A)  thinking on the margin. 
B)  increasing the rate of unemployment. 
C)  aligning her self-interest with the social interest. 
D)  paying high interest rates. 
A)  thinking on the margin. 
B)  increasing the rate of unemployment. 
C)  aligning her self-interest with the social interest. 
D)  paying high interest rates.

Question 3

In the 2 hours between classes a student can do one of three things, ranking them from most to least desirable as: (1) chat with friends, (2) study economics, or (3) eat lunch. This student's opportunity cost of chatting with friends is:

Accepted Answer

A)  the total value of studying economics and eating lunch. 
B)  the value of studying economics. 
C)  the value of chatting with friends. 
D)  There is no opportunity cost because students do not pay their friends to chat with them. 
A)  the total value of studying economics and eating lunch. 
B)  the value of studying economics. 
C)  the value of chatting with friends. 
D)  There is no opportunity cost because students do not pay their friends to chat with them.

Question 4

The historical rise in living standards of American workers is primarily a result of:

Accepted Answer

A)  the influence of labor unions in America. 
B)  tariff protection imposed by the American government. 
C)  the enactment of minimum wage laws in America. 
D)  the rise in American productivity. 
A)  the influence of labor unions in America. 
B)  tariff protection imposed by the American government. 
C)  the enactment of minimum wage laws in America. 
D)  the rise in American productivity.

Question 5

According to Milton Friedman, "Inflation is always and everywhere a:

Accepted Answer

A)  capitalist problem." 
B)  communist problem." 
C)  monetary phenomenon." 
D)  situation caused by haphazard technological growth." 
A)  capitalist problem." 
B)  communist problem." 
C)  monetary phenomenon." 
D)  situation caused by haphazard technological growth."

Question 6

The ______ has the power to regulate the money supply in the United States.

Accepted Answer

A)  Federal Reserve 
B)  President 
C)  Senate 
D)  House of Representatives 
A)  Federal Reserve 
B)  President 
C)  Senate 
D)  House of Representatives

Question 7

Ideas:

Accepted Answer

A)  will run out some day. 
B)  are not depleted when they are used. 
C)  are not an important factor in economic growth. 
D)  occur at the same rate no matter what. 
A)  will run out some day. 
B)  are not depleted when they are used. 
C)  are not an important factor in economic growth. 
D)  occur at the same rate no matter what.

Question 8

Inflation typically arises from:

Accepted Answer

A)  a sufficiently rapid contraction of the money supply. 
B)  a constant money supply. 
C)  a sufficiently rapid increase in the money supply. 
D)  an increase in the price level. 
A)  a sufficiently rapid contraction of the money supply. 
B)  a constant money supply. 
C)  a sufficiently rapid increase in the money supply. 
D)  an increase in the price level.

Question 9

Economics is the study of:

Accepted Answer

A)  what is good and what is bad. 
B)  how to make everyone rich. 
C)  how to make the world most productive. 
D)  trade-offs when making decisions. 
A)  what is good and what is bad. 
B)  how to make everyone rich. 
C)  how to make the world most productive. 
D)  trade-offs when making decisions.

Question 10

The basic postulate of economics indicates that changes in incentives influence the:

Accepted Answer

A)  actions of producers but not consumers. 
B)  actions of consumers but not producers. 
C)  choices of individuals only when they buy and sell goods in the marketplace. 
D)  choices of individuals with regard to a wide range of activities, including those generally perceived as social or political. 
A)  actions of producers but not consumers. 
B)  actions of consumers but not producers. 
C)  choices of individuals only when they buy and sell goods in the marketplace. 
D)  choices of individuals with regard to a wide range of activities, including those generally perceived as social or political.

Question 11

Booms and busts refer to the:

Accepted Answer

A)  fluctuations in economic activity over time. 
B)  theory of the second best. 
C)  decreases in a nation's output growth over time. 
D)  monetary inflation and deflation caused by the central bank. 
A)  fluctuations in economic activity over time. 
B)  theory of the second best. 
C)  decreases in a nation's output growth over time. 
D)  monetary inflation and deflation caused by the central bank.

Question 12

In the process of trading in free markets, firms and consumers benefit but workers do not.

Accepted Answer

A) True 
 B)False

Question 13

Inflation increases the value of money by increasing the purchasing power of money.

Accepted Answer

A) True 
 B)False

Economists assume that people respond to:

A student at a party deciding whether to stay a few more minutes is:

In the 2 hours between classes a student can do one of three things, ranking them from most to least desirable as: (1) chat with friends, (2) study economics, or (3) eat lunch. This student's opportunity cost of chatting with friends is:

The historical rise in living standards of American workers is primarily a result of:

According to Milton Friedman, "Inflation is always and everywhere a:

The ______ has the power to regulate the money supply in the United States.

Ideas:

Inflation typically arises from:

Economics is the study of:

The basic postulate of economics indicates that changes in incentives influence the:

Booms and busts refer to the:

In the process of trading in free markets, firms and consumers benefit but workers do not.

Inflation increases the value of money by increasing the purchasing power of money.

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Elasticity and Its Applications

Taxes and Subsidies

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters

Exam 1: The Big Ideas

Economists assume that people respond to:

A student at a party deciding whether to stay a few more minutes is:

In the 2 hours between classes a student can do one of three things, ranking them from most to least desirable as: (1) chat with friends, (2) study economics, or (3) eat lunch. This student's opportunity cost of chatting with friends is:

The historical rise in living standards of American workers is primarily a result of:

According to Milton Friedman, "Inflation is always and everywhere a:

The ______ has the power to regulate the money supply in the United States.

Ideas:

Inflation typically arises from:

Economics is the study of:

The basic postulate of economics indicates that changes in incentives influence the:

Booms and busts refer to the:

In the process of trading in free markets, firms and consumers benefit but workers do not.

Inflation increases the value of money by increasing the purchasing power of money.

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Elasticity and Its Applications

Taxes and Subsidies

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters