Question 1

The ability to produce at a lower opportunity cost than someone else is referred to as:

Accepted Answer

A) ​absolute advantage. 
B) ​comparative advantage. 
C) ​absolute superiority. 
D) ​competitive disadvantage. 
A) ​absolute advantage. 
B) ​comparative advantage. 
C) ​absolute superiority. 
D) ​competitive disadvantage.

Question 2

"If I didn't go to class tonight, I would save the $2 campus parking fee and spend three hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:

Accepted Answer

A) ​$0. 
B) ​$2. 
C) ​$30. 
D) ​$32. 
A) ​$0. 
B) ​$2. 
C) ​$30. 
D) ​$32.

Question 3

Mike is able to complete a tax return in two hours earning a fee of $100. As an alternative, he could pitch in at a volunteer car wash washing four cars in one hour. His roommate Joe would take four hours to complete a tax return earning a $100 fee and also can wash four cars in one hour. Both individuals could benefit if

Accepted Answer

A) ​Mike worked on tax returns for eight hours and paid Joe $5 for each car he washed 
B) ​Mike worked on tax returns for eight hours and paid Joe $10 for each car he washed. 
C) ​Mike worked on tax returns for eight hours and paid Joe $15 for each car he washed 
D) ​Joe worked on tax returns for eight hours and paid Mike $10 for each car he washed 
A) ​Mike worked on tax returns for eight hours and paid Joe $5 for each car he washed 
B) ​Mike worked on tax returns for eight hours and paid Joe $10 for each car he washed. 
C) ​Mike worked on tax returns for eight hours and paid Joe $15 for each car he washed 
D) ​Joe worked on tax returns for eight hours and paid Mike $10 for each car he washed

Question 4

Human capital consists of computers, tools and equipment owned by private individuals.​

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is true?

Accepted Answer

A) ​The actual result of changing behavior following the rule of rational choice will always make people better off. 
B) ​The actual result of changing behavior following the rule of rational choice will never make people better off. 
C) ​In terms of the rule of rational choice, zero levels of pollution would be far too costly in terms of what we would have to give up to achieve them. 
D) ​The rule of rational choice implies that it is impossible to be too safe. 
A) ​The actual result of changing behavior following the rule of rational choice will always make people better off. 
B) ​The actual result of changing behavior following the rule of rational choice will never make people better off. 
C) ​In terms of the rule of rational choice, zero levels of pollution would be far too costly in terms of what we would have to give up to achieve them. 
D) ​The rule of rational choice implies that it is impossible to be too safe.

Question 6

In a market system, which of the following is a symptom of market failure?

Accepted Answer

A) ​competition 
B) ​falling prices 
C) ​scarcity of resources 
D) ​air pollution that those exposed object to 
A) ​competition 
B) ​falling prices 
C) ​scarcity of resources 
D) ​air pollution that those exposed object to

Question 7

Which of the following is false?

Accepted Answer

A) ​Tangible goods are inherently more valuable than intangible goods. 
B) ​Scarcity forces people to compete. 
C) ​The elimination of a bad can be considered a good. 
D) ​None of the above is false; all are true. 
A) ​Tangible goods are inherently more valuable than intangible goods. 
B) ​Scarcity forces people to compete. 
C) ​The elimination of a bad can be considered a good. 
D) ​None of the above is false; all are true.

Question 8

Which of the following would most likely be an example of market failure?​

Accepted Answer

A) ​industrial water pollution 
B) ​eBay transactions 
C) ​tradable pollution permits 
D) ​brokers re-selling tickets for concerts 
A) ​industrial water pollution 
B) ​eBay transactions 
C) ​tradable pollution permits 
D) ​brokers re-selling tickets for concerts

Question 9

Specialization and trade benefits all participants only if:

Accepted Answer

A) ​They specialize in those things they have both a comparative and absolute advantage in. 
B) ​They specialize in those things they have a comparative advantage in, even if they have an absolute disadvantage. 
C) ​They specialize in those things they have an absolute advantage in, even if they have a comparative disadvantage. 
D) ​Traders have the same opportunity cost of production 
A) ​They specialize in those things they have both a comparative and absolute advantage in. 
B) ​They specialize in those things they have a comparative advantage in, even if they have an absolute disadvantage. 
C) ​They specialize in those things they have an absolute advantage in, even if they have a comparative disadvantage. 
D) ​Traders have the same opportunity cost of production

Question 10

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:

Accepted Answer

A) ​$4. 
B) ​$40. 
C) ​$44. 
D) ​$0. 
A) ​$4. 
B) ​$40. 
C) ​$44. 
D) ​$0.

Question 11

Scarcity applies to:​

Accepted Answer

A) ​only the poor. 
B) ​the value of our time. 
C) ​both the rich and poor. 
D) ​both (b) and (c) 
A) ​only the poor. 
B) ​the value of our time. 
C) ​both the rich and poor. 
D) ​both (b) and (c)

Question 12

Which of the following would be efficient from an economic perspective?

Accepted Answer

A) ​Reducing the crime rate to zero 
B) ​Changing speed limits and safety requirements so that there were no traffic fatalities or injuries each year. 
C) ​Completely eliminating the emission of greenhouse gases 
D) ​None of the above would be efficient from an economic perspective. 
A) ​Reducing the crime rate to zero 
B) ​Changing speed limits and safety requirements so that there were no traffic fatalities or injuries each year. 
C) ​Completely eliminating the emission of greenhouse gases 
D) ​None of the above would be efficient from an economic perspective.

Question 13

Which of the following would be categorized as capital resources for a college or university?

Accepted Answer

A) ​water, trees, and the acreage a campus rests on 
B) ​chalkboards, overhead projectors, and computers 
C) ​exams, fuel oil (which heats the buildings), and electricity 
D) ​the work effort of registrars, clerical assistants and teaching assistants 
A) ​water, trees, and the acreage a campus rests on 
B) ​chalkboards, overhead projectors, and computers 
C) ​exams, fuel oil (which heats the buildings), and electricity 
D) ​the work effort of registrars, clerical assistants and teaching assistants

Question 14

Scarcity means that:

Accepted Answer

A) ​human desires are limited. 
B) ​resources are insufficient to satisfy all human desires. 
C) ​choices are unnecessary. 
D) ​all but the very wealthy must face choices. 
A) ​human desires are limited. 
B) ​resources are insufficient to satisfy all human desires. 
C) ​choices are unnecessary. 
D) ​all but the very wealthy must face choices.

Question 15

The additional cost incurred as a result of undertaking an action is:

Accepted Answer

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

Question 16

A country has a comparative advantage in the production of DVD players if it can produce DVD players at a lower opportunity cost than others.

Accepted Answer

A) True 
 B)False

Question 17

Government price controls make communication of information between buyers and sellers more effective.

Accepted Answer

A) True 
 B)False

Question 18

The most essential economic problem is the existence of:

Accepted Answer

A) ​both an increasing population and the depletion of natural resources. 
B) ​both limited economic resources and unlimited desires. 
C) ​both inflation and unemployment. 
D) ​income inequality and economic freedom. 
A) ​both an increasing population and the depletion of natural resources. 
B) ​both limited economic resources and unlimited desires. 
C) ​both inflation and unemployment. 
D) ​income inequality and economic freedom.

Question 19

Government policies resulting intended to increase equality (cutting the pie into more equal slices) include
(i) the welfare system
(ii) unemployment insurance
(iii) progressive income tax

Accepted Answer

A) ​(i) only 
B) ​(ii) only 
C) ​(i) and (ii) only 
D) ​(i), (ii), and (iii) 
A) ​(i) only 
B) ​(ii) only 
C) ​(i) and (ii) only 
D) ​(i), (ii), and (iii)

Question 20

Farmer Fred could grow wheat and barley. He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on an acre of his land. The price of wheat is $2.00 per bushel and the price of barley $ 0.80. Show the benefits to Fred from specialization. What should he specialize in?

Accepted Answer

Farmer Fred could make $150 if he grew o

The ability to produce at a lower opportunity cost than someone else is referred to as:

"If I didn't go to class tonight, I would save the $2 campus parking fee and spend three hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:

Human capital consists of computers, tools and equipment owned by private individuals.

Which of the following is true?

In a market system, which of the following is a symptom of market failure?

Which of the following is false?

Which of the following would most likely be an example of market failure?

Specialization and trade benefits all participants only if:

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:

Scarcity applies to:

Which of the following would be efficient from an economic perspective?

Which of the following would be categorized as capital resources for a college or university?

Scarcity means that:

The additional cost incurred as a result of undertaking an action is:

A country has a comparative advantage in the production of DVD players if it can produce DVD players at a lower opportunity cost than others.

Government price controls make communication of information between buyers and sellers more effective.

The most essential economic problem is the existence of:

Government policies resulting intended to increase equality (cutting the pie into more equal slices) include (i) the welfare system (ii) unemployment insurance (iii) progressive income tax

Farmer Fred could grow wheat and barley. He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on an acre of his land. The price of wheat is $2.00 per bushel and the price of barley $ 0.80. Show the benefits to Fred from specialization. What should he specialize in?

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

Exam 2: Eight Powerful Ideas

The ability to produce at a lower opportunity cost than someone else is referred to as:

"If I didn't go to class tonight, I would save the $2 campus parking fee and spend three hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:

Human capital consists of computers, tools and equipment owned by private individuals.​

Which of the following is true?

In a market system, which of the following is a symptom of market failure?

Which of the following is false?

Which of the following would most likely be an example of market failure?​

Specialization and trade benefits all participants only if:

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:

Scarcity applies to:​

Which of the following would be efficient from an economic perspective?

Which of the following would be categorized as capital resources for a college or university?

Scarcity means that:

The additional cost incurred as a result of undertaking an action is:

A country has a comparative advantage in the production of DVD players if it can produce DVD players at a lower opportunity cost than others.

Government price controls make communication of information between buyers and sellers more effective.

The most essential economic problem is the existence of:

Government policies resulting intended to increase equality (cutting the pie into more equal slices) include (i) the welfare system (ii) unemployment insurance (iii) progressive income tax

Farmer Fred could grow wheat and barley. He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on an acre of his land. The price of wheat is $2.00 per bushel and the price of barley $ 0.80. Show the benefits to Fred from specialization. What should he specialize in?

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

Human capital consists of computers, tools and equipment owned by private individuals.

Which of the following would most likely be an example of market failure?

Scarcity applies to: