Question 1

Which of the following would be likely to raise your opportunity cost of attending a big basketball game this Sunday night?

Accepted Answer

A) ​A friend calls you up and offers you free tickets to a concert by one of your favorite bands on Sunday night. 
B) ​Your employer offered you double your usual wage to work this Sunday night. 
C) ​Late Friday afternoon, your physics professor makes a surprise announcement that there will be a major exam on Monday morning. 
D) ​All of the above would likely raise the opportunity cost of attending the game. 
A) ​A friend calls you up and offers you free tickets to a concert by one of your favorite bands on Sunday night. 
B) ​Your employer offered you double your usual wage to work this Sunday night. 
C) ​Late Friday afternoon, your physics professor makes a surprise announcement that there will be a major exam on Monday morning. 
D) ​All of the above would likely raise the opportunity cost of attending the game.

Question 2

Why do people commonly switch channels on their TVs when the final credits of a movie they were watching on it are being displayed?

Accepted Answer

Individuals will only pursue an activity

Question 3

Which of the following is likely to provide teenagers with the greatest incentive not to buy one more pack of cigarettes?

Accepted Answer

A) ​public service television advertisement featuring Jennifer Lopez urging kids to refrain from smoking 
B) ​an additional $2.00 per-pack tax on cigarettes 
C) ​citing moral grounds, Leonardo DiCaprio refuses to play any part in which he will be seen smoking 
D) ​a law prohibits anyone from smoking in public buildings 
A) ​public service television advertisement featuring Jennifer Lopez urging kids to refrain from smoking 
B) ​an additional $2.00 per-pack tax on cigarettes 
C) ​citing moral grounds, Leonardo DiCaprio refuses to play any part in which he will be seen smoking 
D) ​a law prohibits anyone from smoking in public buildings

Question 4

Two parties can capture gains from specialization and trade whenever:

Accepted Answer

A) ​One party is twice as good as producing all goods as the other. 
B) ​The opportunity costs of producing each good are the same for both parties. 
C) ​Both parties can produce equal amounts of both goods. 
D) ​None of the above are true. 
A) ​One party is twice as good as producing all goods as the other. 
B) ​The opportunity costs of producing each good are the same for both parties. 
C) ​Both parties can produce equal amounts of both goods. 
D) ​None of the above are true.

Question 5

Several political leaders have proposed that parents be granted a substantially larger reduction in their annual personal income taxes for each child that they raise. The economic way of thinking indicates that legislation of this type would:

Accepted Answer

A) ​make it more expensive for parents to provide for their children. 
B) ​reduce the value of children to their parents and therefore lead to a reduction in the birth rate. 
C) ​reduce the after-tax cost of raising children and therefore increase the birth rate. 
D) ​exert no impact on either the cost of raising children or the birth rate since parenting children is a non-economic activity. 
A) ​make it more expensive for parents to provide for their children. 
B) ​reduce the value of children to their parents and therefore lead to a reduction in the birth rate. 
C) ​reduce the after-tax cost of raising children and therefore increase the birth rate. 
D) ​exert no impact on either the cost of raising children or the birth rate since parenting children is a non-economic activity.

Question 6

The marginal cost of a vacation in Jamaica is $3,500. The marginal benefit to Jordan of a vacation in Jamaica is $3,000.

Accepted Answer

A) ​According to the rule of rational choice, Jordan should choose not to vacation in Jamaica at this time. 
B) ​According to the rule of rational choice, Jordan will experience a net gain of $500 if he vacations in Jamaica. 
C) ​According to the rule of rational choice, Jordan should borrow $500 and vacation in Jamaica. 
D) ​According to the rule of rational choice, Jordan will experience a net gain of $3,000 if he vacations in Jamaica. 
A) ​According to the rule of rational choice, Jordan should choose not to vacation in Jamaica at this time. 
B) ​According to the rule of rational choice, Jordan will experience a net gain of $500 if he vacations in Jamaica. 
C) ​According to the rule of rational choice, Jordan should borrow $500 and vacation in Jamaica. 
D) ​According to the rule of rational choice, Jordan will experience a net gain of $3,000 if he vacations in Jamaica.

Question 7

Would it make good sense for a community to seek to reduce its levels of pollution to zero? Why or why not?

Accepted Answer

​In general it would not make

Question 8

If the government is successful in cutting the economic pie into more equal slices, than it is quite possible that

Accepted Answer

A) ​the pie gets larger. 
B) ​the pie gets smaller. 
C) ​it increases the reward for working hard, resulting in people producing more goods and services. 
D) ​none of the above. 
A) ​the pie gets larger. 
B) ​the pie gets smaller. 
C) ​it increases the reward for working hard, resulting in people producing more goods and services. 
D) ​none of the above.

Question 9

Kelly is an attorney and also an excellent typist. She can type 120 words per minute, but she is pressed for time because she has all the legal work she can handle at $75 per hour. Kelly's friend Todd works as a waiter and would like some typing work (provided that he can make at least his wage as a waiter, which is $25 per hour). Todd can only type 60 words per minute.​

Accepted Answer

A) ​Kelly should do all the typing because she is faster. 
B) ​Todd should do the typing as long as his earnings are more than $25 and less than $37.50 per hour. 
C) ​Unless Todd can match Kelly's typing speed, he should remain a waiter. 
D) ​Todd should do the typing, and Kelly should pay him $20 per hour. 
A) ​Kelly should do all the typing because she is faster. 
B) ​Todd should do the typing as long as his earnings are more than $25 and less than $37.50 per hour. 
C) ​Unless Todd can match Kelly's typing speed, he should remain a waiter. 
D) ​Todd should do the typing, and Kelly should pay him $20 per hour.

Question 10

Which of the following would not be considered "capital" in economics?

Accepted Answer

A) ​A delivery van used by Federal Express. 
B) ​$500 in currency. 
C) ​A microprocessor factory 
D) ​In economics, both (a) and (c) are considered capital. 
A) ​A delivery van used by Federal Express. 
B) ​$500 in currency. 
C) ​A microprocessor factory 
D) ​In economics, both (a) and (c) are considered capital.

Question 11

The expected marginal benefit to you from purchasing a new sport utility vehicle is $20,000. The price of the new sport utility vehicle is $22,000.

Accepted Answer

A) ​If you are acting rationally, you will borrow $2,000 and purchase a new sport utility vehicle. 
B) ​You will not purchase the new sport utility vehicle at this time if you are acting rationally. 
C) ​If you do not purchase the new sport utility vehicle, your net loss will be $2,000. 
D) ​If you are acting rationally, you will purchase sport utility vehicles until the marginal cost of doing so falls to $20,000. 
A) ​If you are acting rationally, you will borrow $2,000 and purchase a new sport utility vehicle. 
B) ​You will not purchase the new sport utility vehicle at this time if you are acting rationally. 
C) ​If you do not purchase the new sport utility vehicle, your net loss will be $2,000. 
D) ​If you are acting rationally, you will purchase sport utility vehicles until the marginal cost of doing so falls to $20,000.

Question 12

Negative incentives:

Accepted Answer

A) ​increase benefits or reduce costs. 
B) ​increase behaviors. 
C) ​decrease benefits or increase costs. 
D) ​include both cash subsidies and taxes. 
A) ​increase benefits or reduce costs. 
B) ​increase behaviors. 
C) ​decrease benefits or increase costs. 
D) ​include both cash subsidies and taxes.

Question 13

The opportunity cost of an action is always equal to:

Accepted Answer

A) ​the monetary expense incurred as a result of the action. 
B) ​the value of any alternative use of the time expended on the action. 
C) ​the highest valued alternatives sacrificed as a result of the action. 
D) ​the sum of the benefits received as a result of the action. 
A) ​the monetary expense incurred as a result of the action. 
B) ​the value of any alternative use of the time expended on the action. 
C) ​the highest valued alternatives sacrificed as a result of the action. 
D) ​the sum of the benefits received as a result of the action.

Question 14

An entrepreneur organizes the other factors of production and bears the business risk.

Accepted Answer

A) True 
 B)False

Question 15

Government policies that use taxes and government spending in an attempt to stabilize the economy are known as

Accepted Answer

A) ​Trade policy. 
B) ​Regulatory policy. 
C) ​monetary policy. 
D) ​fiscal policy. 
A) ​Trade policy. 
B) ​Regulatory policy. 
C) ​monetary policy. 
D) ​fiscal policy.

Question 16

All of the following are intangible except:

Accepted Answer

A) ​health. 
B) ​love. 
C) ​computer programming expertise. 
D) ​All of the above are intangible goods. 
A) ​health. 
B) ​love. 
C) ​computer programming expertise. 
D) ​All of the above are intangible goods.

Question 17

A student has a chance to see Taylor Swift in concert. The student also has a major economics exam in the morning. If the student goes to the concert:

Accepted Answer

A) ​she may receive a lower grade on the economics exam. 
B) ​the opportunity cost of the concert includes the value of the time that would otherwise have been spent studying. 
C) ​the decision involves a tradeoff. 
D) ​all of the above are correct. 
A) ​she may receive a lower grade on the economics exam. 
B) ​the opportunity cost of the concert includes the value of the time that would otherwise have been spent studying. 
C) ​the decision involves a tradeoff. 
D) ​all of the above are correct.

Question 18

Trade

Accepted Answer

A) ​can make every participating nation better off. 
B) ​makes some participating nations better off and others worse off. 
C) ​makes a participating nation better off only if the nation cannot produce that good itself. 
D) ​helps developed countries and hurts developing countries. 
A) ​can make every participating nation better off. 
B) ​makes some participating nations better off and others worse off. 
C) ​makes a participating nation better off only if the nation cannot produce that good itself. 
D) ​helps developed countries and hurts developing countries.

Question 19

How do price controls undermine the market as a communication device?

Accepted Answer

The imposition of price controls (which

Question 20

A stable monetary environment will typically lead to

Accepted Answer

A) ​inflation. 
B) ​producers and consumers better coordinating their decisions through markets. 
C) ​independence of central banks. 
D) ​increased trade deficits and limited budgets deficits. 
A) ​inflation. 
B) ​producers and consumers better coordinating their decisions through markets. 
C) ​independence of central banks. 
D) ​increased trade deficits and limited budgets deficits.

Which of the following would be likely to raise your opportunity cost of attending a big basketball game this Sunday night?

Why do people commonly switch channels on their TVs when the final credits of a movie they were watching on it are being displayed?

Which of the following is likely to provide teenagers with the greatest incentive not to buy one more pack of cigarettes?

Two parties can capture gains from specialization and trade whenever:

Several political leaders have proposed that parents be granted a substantially larger reduction in their annual personal income taxes for each child that they raise. The economic way of thinking indicates that legislation of this type would:

The marginal cost of a vacation in Jamaica is $3,500. The marginal benefit to Jordan of a vacation in Jamaica is $3,000.

Would it make good sense for a community to seek to reduce its levels of pollution to zero? Why or why not?

If the government is successful in cutting the economic pie into more equal slices, than it is quite possible that

Which of the following would not be considered "capital" in economics?

The expected marginal benefit to you from purchasing a new sport utility vehicle is $20,000. The price of the new sport utility vehicle is $22,000.

Negative incentives:

The opportunity cost of an action is always equal to:

An entrepreneur organizes the other factors of production and bears the business risk.

Government policies that use taxes and government spending in an attempt to stabilize the economy are known as

All of the following are intangible except:

A student has a chance to see Taylor Swift in concert. The student also has a major economics exam in the morning. If the student goes to the concert:

Trade

How do price controls undermine the market as a communication device?

A stable monetary environment will typically lead to

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

Which of the following would be likely to raise your opportunity cost of attending a big basketball game this Sunday night?

Why do people commonly switch channels on their TVs when the final credits of a movie they were watching on it are being displayed?

Which of the following is likely to provide teenagers with the greatest incentive not to buy one more pack of cigarettes?

Two parties can capture gains from specialization and trade whenever:

Several political leaders have proposed that parents be granted a substantially larger reduction in their annual personal income taxes for each child that they raise. The economic way of thinking indicates that legislation of this type would:

The marginal cost of a vacation in Jamaica is $3,500. The marginal benefit to Jordan of a vacation in Jamaica is $3,000.

Would it make good sense for a community to seek to reduce its levels of pollution to zero? Why or why not?

If the government is successful in cutting the economic pie into more equal slices, than it is quite possible that

Which of the following would not be considered "capital" in economics?

The expected marginal benefit to you from purchasing a new sport utility vehicle is $20,000. The price of the new sport utility vehicle is $22,000.

Negative incentives:

The opportunity cost of an action is always equal to:

An entrepreneur organizes the other factors of production and bears the business risk.

Government policies that use taxes and government spending in an attempt to stabilize the economy are known as

All of the following are intangible except:

A student has a chance to see Taylor Swift in concert. The student also has a major economics exam in the morning. If the student goes to the concert:

Trade

How do price controls undermine the market as a communication device?

A stable monetary environment will typically lead to

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