Question 1

Government policies resulting in reduced efficiency 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 2

Suppose that a country that has a high level of output per person agrees to trade with a country that has a low level of output per person. Which country can benefit?

Accepted Answer

A)  only the one with a low level of output per person. 
B)  only the one with a high level of output per person. 
C)  both 
D)  neither 
A)  only the one with a low level of output per person. 
B)  only the one with a high level of output per person. 
C)  both 
D)  neither

Question 3

Use the following Scenario to answer the question scenario 1-6 :
It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors.
-Refer to Scenario 1-6. A customer is willing to pay $60 for the 601st heart rate monitor. Should the company produce and sell it? Explain.

Accepted Answer

No, because the marg

Question 4

When the United States trades with China,

Accepted Answer

A)  both countries will likely benefit. 
B)  only United States will benefit. 
C)  only China will benefit. 
D)  neither country will benefit. 
A)  both countries will likely benefit. 
B)  only United States will benefit. 
C)  only China will benefit. 
D)  neither country will benefit.

Question 5

Rational people make decisions "at the margin" by comparing

Accepted Answer

A)  average costs and benefits. 
B)  total costs and benefits. 
C)  additional costs and benefits. 
D)  opportunity costs and benefits. 
A)  average costs and benefits. 
B)  total costs and benefits. 
C)  additional costs and benefits. 
D)  opportunity costs and benefits.

Question 6

For markets to work well, there must be

Accepted Answer

A)  market power. 
B)  a central planner. 
C)  property rights. 
D)  abundant, not scarce, resources. 
A)  market power. 
B)  a central planner. 
C)  property rights. 
D)  abundant, not scarce, resources.

Question 7

Use the following Scenario to answer the question scenario 1-2 :  
Suppose that you have a choice between going to the movies with a friend for two hours or working at your job. If you go to the movies, you will spend $7 on a ticket and $5 on popcorn. If you choose to work, you will earn $10 an hour.
-Refer to Scenario 1-2. What is your opportunity cost of working?

Accepted Answer

The enjoyment you wo

Question 8

Incomes of U.S. households in the 1970s and 1980s

Accepted Answer

A)  grew rapidly, due to the widespread success of labor unions in pushing up wages during those decades. 
B)  grew rapidly, due to several increases in the minimum wage during those decades. 
C)  grew rapidly, due to government policies that discouraged the importation of foreign products during those decades. 
D)  grew slowly, due to slow growth of the output of goods and services per hour of U.S. workers' time during those decades. 
A)  grew rapidly, due to the widespread success of labor unions in pushing up wages during those decades. 
B)  grew rapidly, due to several increases in the minimum wage during those decades. 
C)  grew rapidly, due to government policies that discouraged the importation of foreign products during those decades. 
D)  grew slowly, due to slow growth of the output of goods and services per hour of U.S. workers' time during those decades.

Question 9

In 2011, the average American earned about $48,000 while the average Nigerian earned about $1,200. Which of the following statements is likely?

Accepted Answer

A)  The average American purchases more televisions than the average Nigerian. 
B)  The average American has better nutrition and healthcare than the average Nigerian. 
C)  The average American has a longer life expectancy than the average Nigerian. 
D)  All of the above are correct. 
A)  The average American purchases more televisions than the average Nigerian. 
B)  The average American has better nutrition and healthcare than the average Nigerian. 
C)  The average American has a longer life expectancy than the average Nigerian. 
D)  All of the above are correct.

Question 10

To increase living standards, public policy should

Accepted Answer

A)  ensure that workers are well educated and have the necessary tools and technology. 
B)  make unemployment benefits more generous. 
C)  move workers into jobs directly from high school. 
D)  ensure a greater degree of equality, taking all income-earners into account. 
A)  ensure that workers are well educated and have the necessary tools and technology. 
B)  make unemployment benefits more generous. 
C)  move workers into jobs directly from high school. 
D)  ensure a greater degree of equality, taking all income-earners into account.

Question 11

Suppose your college institutes a new policy requiring you to pay for a permit to park your car in a campus parking lot.

Accepted Answer

A)  The cost of the parking permit is not part of the opportunity cost of attending college if you would not have to pay for parking otherwise. 
B)  The cost of the parking permit is part of the opportunity cost of attending college if you would not have to pay for parking otherwise. 
C)  Only half of the cost of the parking permit is part of the opportunity cost of attending college. 
D)  The cost of the parking permit is not part of the opportunity cost of attending college under any circumstances. 
A)  The cost of the parking permit is not part of the opportunity cost of attending college if you would not have to pay for parking otherwise. 
B)  The cost of the parking permit is part of the opportunity cost of attending college if you would not have to pay for parking otherwise. 
C)  Only half of the cost of the parking permit is part of the opportunity cost of attending college. 
D)  The cost of the parking permit is not part of the opportunity cost of attending college under any circumstances.

Question 12

In a particular country in 2000, the average worker needed to work 40 hours to produce 55 units of output. In that same country in 2008, the average worker needed to work 30 hours to produce 45 units of output. In that country, the productivity of the average worker

Accepted Answer

A)  decreased by about 6 percent between 2000 and 2008. 
B)  remained unchanged between 2000 and 2008. 
C)  increased by about 9 percent between 2000 and 2008. 
D)  increased by about 18 percent between 2000 and 2008. 
A)  decreased by about 6 percent between 2000 and 2008. 
B)  remained unchanged between 2000 and 2008. 
C)  increased by about 9 percent between 2000 and 2008. 
D)  increased by about 18 percent between 2000 and 2008.

Question 13

President Gerald Ford referred to inflation as

Accepted Answer

A)  a blight on our nation's economy. 
B)  a necessary evil to combat high unemployment. 
C)  public enemy number one. 
D)  a fly in the ointment. 
A)  a blight on our nation's economy. 
B)  a necessary evil to combat high unemployment. 
C)  public enemy number one. 
D)  a fly in the ointment.

Question 14

The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place.

Accepted Answer

A) True 
 B)False

Question 15

Approximately what percentage of the world's economies experience scarcity?

Accepted Answer

A)  10% 
B)  40% 
C)  85% 
D)  100% 
A)  10% 
B)  40% 
C)  85% 
D)  100%

Question 16

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

Accepted Answer

A) True 
 B)False

Question 17

In the short run, which of the following rates of growth in the money supply is likely to lead to the highest level of unemployment in the economy?

Accepted Answer

A)  1 percent per year 
B)  2 percent per year 
C)  3 percent per year 
D)  4 percent per year 
A)  1 percent per year 
B)  2 percent per year 
C)  3 percent per year 
D)  4 percent per year

Question 18

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. A customer is willing to pay $60 for the 701th calculator. Should the company produce and sell it? Explain.

Accepted Answer

No, because the marg

Question 19

Use the following Scenario to answer the question scenario 1-1 :  
You have the afternoon free. You have a choice between going to the movies with a friend or studying economics for three hours. If you go to the movies, you will spend $8.00 on a ticket and $4.50 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 10 points.
-Refer to Scenario 1-1. What is your opportunity cost of going to the movies?

Accepted Answer

$12.50 and

Question 20

What term refers to the property that society has limited resources and therefore cannot produce all the goods and services people wish to have?

Accepted Answer

A)  inefficiency 
B)  inequality 
C)  scarcity 
D)  market failure 
A)  inefficiency 
B)  inequality 
C)  scarcity 
D)  market failure

Government policies resulting in reduced efficiency include I. the welfare system Ii. unemployment insurance Iii. progressive income tax

Suppose that a country that has a high level of output per person agrees to trade with a country that has a low level of output per person. Which country can benefit?

When the United States trades with China,

Rational people make decisions "at the margin" by comparing

For markets to work well, there must be

Incomes of U.S. households in the 1970s and 1980s

In 2011, the average American earned about $48,000 while the average Nigerian earned about $1,200. Which of the following statements is likely?

To increase living standards, public policy should

Suppose your college institutes a new policy requiring you to pay for a permit to park your car in a campus parking lot.

In a particular country in 2000, the average worker needed to work 40 hours to produce 55 units of output. In that same country in 2008, the average worker needed to work 30 hours to produce 45 units of output. In that country, the productivity of the average worker

President Gerald Ford referred to inflation as

The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place.

Approximately what percentage of the world's economies experience scarcity?

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

In the short run, which of the following rates of growth in the money supply is likely to lead to the highest level of unemployment in the economy?

What term refers to the property that society has limited resources and therefore cannot produce all the goods and services people wish to have?

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

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Exam 1: Ten Principles of Economics

Government policies resulting in reduced efficiency include I. the welfare system Ii. unemployment insurance Iii. progressive income tax

Suppose that a country that has a high level of output per person agrees to trade with a country that has a low level of output per person. Which country can benefit?

When the United States trades with China,

Rational people make decisions "at the margin" by comparing

For markets to work well, there must be

Incomes of U.S. households in the 1970s and 1980s

In 2011, the average American earned about $48,000 while the average Nigerian earned about $1,200. Which of the following statements is likely?

To increase living standards, public policy should

Suppose your college institutes a new policy requiring you to pay for a permit to park your car in a campus parking lot.

In a particular country in 2000, the average worker needed to work 40 hours to produce 55 units of output. In that same country in 2008, the average worker needed to work 30 hours to produce 45 units of output. In that country, the productivity of the average worker

President Gerald Ford referred to inflation as

The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place.

Approximately what percentage of the world's economies experience scarcity?

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

In the short run, which of the following rates of growth in the money supply is likely to lead to the highest level of unemployment in the economy?

What term refers to the property that society has limited resources and therefore cannot produce all the goods and services people wish to have?

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