Question 1

Individuals will only pursue an activity if:

Accepted Answer

A) E(M B) E(M C) . B) E(M B) = E(M C) . C) E(M B) > E(M C) . D) E(M B) < E(M C) . A) E(M B) E(M C) . B) E(M B) = E(M C) . C) E(M B) > E(M C) . D) E(M B) < E(M C) . C

Question 2

Which of the following is an example of a resource?​

Accepted Answer

A) ​a river 
B) ​a tractor 
C) ​the chef at a restaurant 
D) ​all of the above are resources 
A) ​a river 
B) ​a tractor 
C) ​the chef at a restaurant 
D) ​all of the above are resources D

Question 3

The market mechanism assures full employment and stable prices

Accepted Answer

A) True 
 B)False  False

Question 4

The additional benefit received as a result of undertaking an action is:

Accepted Answer

A) ​the opportunity cost. 
B) ​the marginal cost. 
C) ​the marginal benefit. 
D) ​the total benefit. 
A) ​the opportunity cost. 
B) ​the marginal cost. 
C) ​the marginal benefit. 
D) ​the total benefit.

Question 5

The opportunity cost of a decision is the value of all of the available alternatives that were not chosen.

Accepted Answer

A) True 
 B)False

Question 6

Jamie and Danny both attend the same college and incur the same expenses for tuition, books, and school supplies. Jamie gave up a lucrative modeling job in Paris to attend school full-time and Danny gave up a part-time job as a sales clerk in a department store. It follows that:​

Accepted Answer

A) ​the opportunity cost of attending college is the same for both since they are enrolled at the same academic institution. 
B) ​the opportunity cost of attending college is likely greater for Jamie than for Danny. 
C) ​the opportunity cost of attending college is likely greater for Danny than for Jamie. 
D) ​the opportunity cost is minimal for both since college graduates are paid much higher than high school graduates on average. 
A) ​the opportunity cost of attending college is the same for both since they are enrolled at the same academic institution. 
B) ​the opportunity cost of attending college is likely greater for Jamie than for Danny. 
C) ​the opportunity cost of attending college is likely greater for Danny than for Jamie. 
D) ​the opportunity cost is minimal for both since college graduates are paid much higher than high school graduates on average.

Question 7

In order to acquire more of a good we must sacrifice production of another good, because resources are in limited supply. This illustrates the concept of:

Accepted Answer

A) ​the division of labor. 
B) ​ceteris paribus. 
C) ​opportunity cost. 
D) ​specialization. 
A) ​the division of labor. 
B) ​ceteris paribus. 
C) ​opportunity cost. 
D) ​specialization.

Question 8

The opportunity cost of attending college is likely to include all except which of the following?

Accepted Answer

A) ​the cost of required textbooks 
B) ​tuition fees 
C) ​the income you forego in order to attend classes 
D) ​the cost of haircuts received during the school term 
A) ​the cost of required textbooks 
B) ​tuition fees 
C) ​the income you forego in order to attend classes 
D) ​the cost of haircuts received during the school term

Question 9

If airfares to Europe were to increase, other things equal, an economist would predict that:​

Accepted Answer

A) ​most people will not change their travel and vacation plans. 
B) ​more individuals will choose to fly to Europe because now it is a more valuable experience. 
C) ​some individuals will substitute toward other travel destinations. 
D) ​airlines will make significantly greater profits. 
A) ​most people will not change their travel and vacation plans. 
B) ​more individuals will choose to fly to Europe because now it is a more valuable experience. 
C) ​some individuals will substitute toward other travel destinations. 
D) ​airlines will make significantly greater profits.

Question 10

Small, developing countries must first become self-sufficient before they can benefit from international trade.​

Accepted Answer

A) True 
 B)False

Question 11

The opportunity cost of an action:

Accepted Answer

A) ​can be objectively determined only by economists. 
B) ​is a subjective valuation that can only be determined by the individual who chooses the action. 
C) ​can be determined by adding up the dollar costs incurred as a result of the action. 
D) ​can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action. 
A) ​can be objectively determined only by economists. 
B) ​is a subjective valuation that can only be determined by the individual who chooses the action. 
C) ​can be determined by adding up the dollar costs incurred as a result of the action. 
D) ​can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action.

Question 12

Which of the following is true?

Accepted Answer

A) ​People specialize by concentrating their energies on the activity to which they are best suited, because they incur lower opportunity costs as a result. 
B) ​One advantage of specialization is that workers acquire greater skill from repetition. 
C) ​If a person, a region, or a country can produce a good or service at a lower opportunity cost than others, we say that they have a comparative advantage in the production of that good or service. 
D) ​All of the above are true. 
A) ​People specialize by concentrating their energies on the activity to which they are best suited, because they incur lower opportunity costs as a result. 
B) ​One advantage of specialization is that workers acquire greater skill from repetition. 
C) ​If a person, a region, or a country can produce a good or service at a lower opportunity cost than others, we say that they have a comparative advantage in the production of that good or service. 
D) ​All of the above are true.

Question 13

To obtain the greatest gains from trade, a country should specialize in and ____ those goods for which it has a comparative advantage and ____ those goods for which other countries have a comparative advantage.​

Accepted Answer

A) ​export; export 
B) ​import; import 
C) ​export; import 
D) ​import; export 
A) ​export; export 
B) ​import; import 
C) ​export; import 
D) ​import; export

Question 14

Fred has decided to buy a burger and fries at a restaurant, but is considering whether to buy a drink as well. If the price of a burger is $3, fries are $2, and drinks are $1, but a value meal with all three costs $4.80, the marginal cost to Ted of the drink is:

Accepted Answer

A) ​$-0.20 
B) ​$0.20 
C) ​$0.80 
D) ​$1.00 
A) ​$-0.20 
B) ​$0.20 
C) ​$0.80 
D) ​$1.00

Question 15

Differentiate between positive and negative incentives.
​

Accepted Answer

Positive incentives either increase bene

Question 16

Imposing a new $10 downtown parking tax

Accepted Answer

A) ​would be a negative incentive that might have the positive result of reducing downtown congestion. 
B) ​would be a positive incentive that might have the positive result of reducing downtown congestion. 
C) ​would be a negative incentive that could only have negative results. 
D) ​None of the above is true. 
A) ​would be a negative incentive that might have the positive result of reducing downtown congestion. 
B) ​would be a positive incentive that might have the positive result of reducing downtown congestion. 
C) ​would be a negative incentive that could only have negative results. 
D) ​None of the above is true.

Question 17

Economic choices or tradeoffs are the result of:​

Accepted Answer

A) ​human greed. 
B) ​scarcity. 
C) ​poverty. 
D) ​private ownership of resources. 
A) ​human greed. 
B) ​scarcity. 
C) ​poverty. 
D) ​private ownership of resources.

Question 18

If a student enrolls in an additional course at the university, an economist would conclude that:

Accepted Answer

A) ​the total benefit that the student expects to receive as a result of completing her college degree exceeds the total cost of her college education. 
B) ​the student is not following the rule of rational choice. 
C) ​the student must not be involved in extracurricular campus activities. 
D) ​the expected marginal benefit of an additional course must exceed the expected marginal cost of the course. 
A) ​the total benefit that the student expects to receive as a result of completing her college degree exceeds the total cost of her college education. 
B) ​the student is not following the rule of rational choice. 
C) ​the student must not be involved in extracurricular campus activities. 
D) ​the expected marginal benefit of an additional course must exceed the expected marginal cost of the course.

Question 19

Which of the following is not a resource for a society?

Accepted Answer

A) ​cash 
B) ​entrepreneurship 
C) ​land 
D) ​labor 
A) ​cash 
B) ​entrepreneurship 
C) ​land 
D) ​labor

Question 20

The marginal cost of a vacation in the south of France is $4,500. The marginal benefit to Madeline of a vacation in the south of France is $4,800.​

Accepted Answer

A) ​Madeline will lose $300 if she vacations in the south of France. 
B) ​Madeline will experience a net gain of $300 if she vacations in the south of France. 
C) ​Madeline will be worse off if she vacations in the south of France. 
D) ​Madeline will enjoy a net gain of $4,800 if she vacations in the south of France. 
A) ​Madeline will lose $300 if she vacations in the south of France. 
B) ​Madeline will experience a net gain of $300 if she vacations in the south of France. 
C) ​Madeline will be worse off if she vacations in the south of France. 
D) ​Madeline will enjoy a net gain of $4,800 if she vacations in the south of France.

Exam 2: Eight Powerful Ideas

Individuals will only pursue an activity if:

Which of the following is an example of a resource?​

The market mechanism assures full employment and stable prices

The additional benefit received as a result of undertaking an action is:

The opportunity cost of a decision is the value of all of the available alternatives that were not chosen.

Jamie and Danny both attend the same college and incur the same expenses for tuition, books, and school supplies. Jamie gave up a lucrative modeling job in Paris to attend school full-time and Danny gave up a part-time job as a sales clerk in a department store. It follows that:​

In order to acquire more of a good we must sacrifice production of another good, because resources are in limited supply. This illustrates the concept of:

The opportunity cost of attending college is likely to include all except which of the following?

If airfares to Europe were to increase, other things equal, an economist would predict that:​

Small, developing countries must first become self-sufficient before they can benefit from international trade.​

The opportunity cost of an action:

Which of the following is true?

To obtain the greatest gains from trade, a country should specialize in and ____ those goods for which it has a comparative advantage and ____ those goods for which other countries have a comparative advantage.​

Fred has decided to buy a burger and fries at a restaurant, but is considering whether to buy a drink as well. If the price of a burger is $3, fries are $2, and drinks are $1, but a value meal with all three costs $4.80, the marginal cost to Ted of the drink is:

Differentiate between positive and negative incentives. ​

Imposing a new $10 downtown parking tax

Economic choices or tradeoffs are the result of:​

If a student enrolls in an additional course at the university, an economist would conclude that:

Which of the following is not a resource for a society?

The marginal cost of a vacation in the south of France is $4,500. The marginal benefit to Madeline of a vacation in the south of France is $4,800.​

The Role and Method of Economics

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Which of the following is an example of a resource?

Jamie and Danny both attend the same college and incur the same expenses for tuition, books, and school supplies. Jamie gave up a lucrative modeling job in Paris to attend school full-time and Danny gave up a part-time job as a sales clerk in a department store. It follows that:

If airfares to Europe were to increase, other things equal, an economist would predict that:

Small, developing countries must first become self-sufficient before they can benefit from international trade.

To obtain the greatest gains from trade, a country should specialize in and those goods for which it has a comparative advantage and those goods for which other countries have a comparative advantage.

Differentiate between positive and negative incentives.

Economic choices or tradeoffs are the result of:

The marginal cost of a vacation in the south of France is $4,500. The marginal benefit to Madeline of a vacation in the south of France is $4,800.