Question 1

England can benefit from trade

Accepted Answer

A)  only with nations that can produce goods England cannot produce. 
B)  only with less developed nations. 
C)  only with nations outside of Europe. 
D)  with any nation. 
A)  only with nations that can produce goods England cannot produce. 
B)  only with less developed nations. 
C)  only with nations outside of Europe. 
D)  with any nation. D

Question 2

In a centrally-planned economy, economic activity is guided by .

Accepted Answer

the government

Question 3

Use the following Scenario to answer the question scenario 1-3 : 
It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators.
-Refer to Scenario 1-3. What is the company's average cost?

Accepted Answer

$50

Question 4

In a market economy,

Accepted Answer

A)  households decide which firms to work for and what to buy with their incomes. 
B)  firms decide whom to hire and what to make. 
C)  a central planner makes decisions about production and consumption. 
D)  Both a and b are correct. 
A)  households decide which firms to work for and what to buy with their incomes. 
B)  firms decide whom to hire and what to make. 
C)  a central planner makes decisions about production and consumption. 
D)  Both a and b are correct.

Question 5

Which of the following principles is not one of the four principles of individual decisionmaking?

Accepted Answer

A)  People face tradeoffs. 
B)  Trade can make everyone better off. 
C)  People respond to incentives. 
D)  Rational people think at the margin. 
A)  People face tradeoffs. 
B)  Trade can make everyone better off. 
C)  People respond to incentives. 
D)  Rational people think at the margin.

Question 6

Which of these activities will most likely result in an external benefit?

Accepted Answer

A)  A college student buys a deck of cards to play solitaire in her dorm room. 
B)  An elderly woman plants a flower garden on the vacant lot next to her house. 
C)  An executive purchases a book to read on a business trip. 
D)  A ten-year-old uses his allowance to buy new Nike shoes. 
A)  A college student buys a deck of cards to play solitaire in her dorm room. 
B)  An elderly woman plants a flower garden on the vacant lot next to her house. 
C)  An executive purchases a book to read on a business trip. 
D)  A ten-year-old uses his allowance to buy new Nike shoes.

Question 7

The relatively low inflation experienced in the United States in the 1990s is attributable to

Accepted Answer

A)  slow growth of U.S. productivity during the 1990s. 
B)  slow growth of the quantity of money in the U.S. in the 1990s. 
C)  low levels of government spending in the U.S. in the 1980s and 1990s. 
D)  the eight-year presidency of William Jefferson Clinton during the 1990s. 
A)  slow growth of U.S. productivity during the 1990s. 
B)  slow growth of the quantity of money in the U.S. in the 1990s. 
C)  low levels of government spending in the U.S. in the 1980s and 1990s. 
D)  the eight-year presidency of William Jefferson Clinton during the 1990s.

Question 8

It costs a company $35,000 to produce 500 graphing calculators. The company's cost will be $35,080 if it produces an additional graphing calculator. If the company produces 501 graphing calculators then

Accepted Answer

A)  its average cost is greater than its marginal cost. 
B)  its average cost and its marginal cost are equal. 
C)  its average cost is less than its marginal cost. 
D)  This cannot be determined from the information given. 
A)  its average cost is greater than its marginal cost. 
B)  its average cost and its marginal cost are equal. 
C)  its average cost is less than its marginal cost. 
D)  This cannot be determined from the information given.

Question 9

Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty seats on a flight. The airline should sell a ticket to a standby passenger only if the passenger is willing to pay

Accepted Answer

A)  more than $200. 
B)  more than $300. 
C)  more than $500. 
D)  This cannot be determined from the information given. 
A)  more than $200. 
B)  more than $300. 
C)  more than $500. 
D)  This cannot be determined from the information given.

Question 10

If the government were to intervene and set a wage for unskilled labor above the market wage, then we would expect, relative to the market outcome,

Accepted Answer

A)  an increase in the number of unskilled jobs available. 
B)  a decrease in the number of unskilled jobs available. 
C)  a decrease in the number of workers wanting unskilled jobs. 
D)  None of the above is correct. 
A)  an increase in the number of unskilled jobs available. 
B)  a decrease in the number of unskilled jobs available. 
C)  a decrease in the number of workers wanting unskilled jobs. 
D)  None of the above is correct.

Question 11

Public policies

Accepted Answer

A)  may be able to improve either economic efficiency or equality. 
B)  may be able to improve economic efficiency but cannot improve equality. 
C)  may be able to improve equality but cannot improve economic efficiency. 
D)  cannot improve either equality or economic efficiency. 
A)  may be able to improve either economic efficiency or equality. 
B)  may be able to improve economic efficiency but cannot improve equality. 
C)  may be able to improve equality but cannot improve economic efficiency. 
D)  cannot improve either equality or economic efficiency.

Question 12

In the long run the primary effect of increasing the quantity of money is higher prices.

Accepted Answer

A) True 
 B)False

Question 13

Give an example of a trade-off faced by society.

Accepted Answer

Efficiency and equality; a cle

Question 14

The Get-There-Safe Bus company incurs an average cost of $45 for each passenger it carries on its trip from Atlanta to Chattanooga. In advance of a particular trip, four seats remain unsold. The bus company could increase its profit only if it

Accepted Answer

A)  charged any ticket price above $0 for the four remaining seats. 
B)  charged at least $11.25 for each of the four remaining seats. 
C)  charged at least $45 for each of the four remaining seats. 
D)  paid four people to occupy the four remaining seats. 
A)  charged any ticket price above $0 for the four remaining seats. 
B)  charged at least $11.25 for each of the four remaining seats. 
C)  charged at least $45 for each of the four remaining seats. 
D)  paid four people to occupy the four remaining seats.

Question 15

In less than two years in the early 1920s, the cost of a German newspaper rose from 0.30 marks to 70,000,000 marks. This is a spectacular example of

Accepted Answer

A)  market power caused by a change in the country's standard of living. 
B)  market power caused by a single firm controlling the newspaper production. 
C)  inflation caused by increased productivity in the economy. 
D)  inflation caused by an increase in the quantity of money in the economy. 
A)  market power caused by a change in the country's standard of living. 
B)  market power caused by a single firm controlling the newspaper production. 
C)  inflation caused by increased productivity in the economy. 
D)  inflation caused by an increase in the quantity of money in the economy.

Question 16

Coal is considered to be a non-renewable energy source. Which of the following statements is correct?

Accepted Answer

A)  Coal is an unlimited resource. 
B)  Coal is a scarce resource. 
C)  Coal is a non-productive resource. 
D)  Coal is not a resource. 
A)  Coal is an unlimited resource. 
B)  Coal is a scarce resource. 
C)  Coal is a non-productive resource. 
D)  Coal is not a resource.

Question 17

Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?

Accepted Answer

A)  There is no such thing as a free lunch. 
B)  People buy more when prices are low than when prices are high. 
C)  No matter how much people earn, they tend to spend more than they earn. 
D)  Households and firms interacting in markets are guided by an "invisible hand" that leads them to desirable market outcomes. 
A)  There is no such thing as a free lunch. 
B)  People buy more when prices are low than when prices are high. 
C)  No matter how much people earn, they tend to spend more than they earn. 
D)  Households and firms interacting in markets are guided by an "invisible hand" that leads them to desirable market outcomes.

Question 18

The "invisible hand" refers to

Accepted Answer

A)  the government. 
B)  the free market. 
C)  central planners. 
D)  large businesses. 
A)  the government. 
B)  the free market. 
C)  central planners. 
D)  large businesses.

Question 19

Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

Accepted Answer

A)  only Sam is made better off by trade. 
B)  only Annie is made better off by trade. 
C)  both Sam and Annie are made better off by trade. 
D)  neither Sam nor Annie are made better off by trade. 
A)  only Sam is made better off by trade. 
B)  only Annie is made better off by trade. 
C)  both Sam and Annie are made better off by trade. 
D)  neither Sam nor Annie are made better off by trade.

Question 20

To say that government intervenes in the economy to promote efficiency is to say that government is attempting to

Accepted Answer

A)  create a more fair distribution of income. 
B)  change the way in which the economic pie is divided. 
C)  enlarge the economic pie. 
D)  All of the above are correct. 
A)  create a more fair distribution of income. 
B)  change the way in which the economic pie is divided. 
C)  enlarge the economic pie. 
D)  All of the above are correct.

England can benefit from trade

In a centrally-planned economy, economic activity is guided by .

In a market economy,

Which of the following principles is not one of the four principles of individual decisionmaking?

Which of these activities will most likely result in an external benefit?

The relatively low inflation experienced in the United States in the 1990s is attributable to

It costs a company $35,000 to produce 500 graphing calculators. The company's cost will be $35,080 if it produces an additional graphing calculator. If the company produces 501 graphing calculators then

Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty seats on a flight. The airline should sell a ticket to a standby passenger only if the passenger is willing to pay

If the government were to intervene and set a wage for unskilled labor above the market wage, then we would expect, relative to the market outcome,

Public policies

In the long run the primary effect of increasing the quantity of money is higher prices.

Give an example of a trade-off faced by society.

The Get-There-Safe Bus company incurs an average cost of $45 for each passenger it carries on its trip from Atlanta to Chattanooga. In advance of a particular trip, four seats remain unsold. The bus company could increase its profit only if it

In less than two years in the early 1920s, the cost of a German newspaper rose from 0.30 marks to 70,000,000 marks. This is a spectacular example of

Coal is considered to be a non-renewable energy source. Which of the following statements is correct?

Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?

The "invisible hand" refers to

Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

To say that government intervenes in the economy to promote efficiency is to say that government is attempting to

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Exam 1: Ten Principles of Economics

England can benefit from trade

In a centrally-planned economy, economic activity is guided by .

In a market economy,

Which of the following principles is not one of the four principles of individual decisionmaking?

Which of these activities will most likely result in an external benefit?

The relatively low inflation experienced in the United States in the 1990s is attributable to

It costs a company $35,000 to produce 500 graphing calculators. The company's cost will be $35,080 if it produces an additional graphing calculator. If the company produces 501 graphing calculators then

Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty seats on a flight. The airline should sell a ticket to a standby passenger only if the passenger is willing to pay

If the government were to intervene and set a wage for unskilled labor above the market wage, then we would expect, relative to the market outcome,

Public policies

In the long run the primary effect of increasing the quantity of money is higher prices.

Give an example of a trade-off faced by society.

The Get-There-Safe Bus company incurs an average cost of $45 for each passenger it carries on its trip from Atlanta to Chattanooga. In advance of a particular trip, four seats remain unsold. The bus company could increase its profit only if it

In less than two years in the early 1920s, the cost of a German newspaper rose from 0.30 marks to 70,000,000 marks. This is a spectacular example of

Coal is considered to be a non-renewable energy source. Which of the following statements is correct?

Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?

The "invisible hand" refers to

Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

To say that government intervenes in the economy to promote efficiency is to say that government is attempting to

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters