Question 1

Equality means distributing society's resources in the most efficient manner.

Accepted Answer

A) True 
 B)False

Question 2

College-age athletes who drop out of college to play professional sports

Accepted Answer

A)  are not rational decision makers. 
B)  are well aware that their opportunity cost of attending college is very high. 
C)  are concerned more about present circumstances than their future. 
D)  underestimate the value of a college education. 
A)  are not rational decision makers. 
B)  are well aware that their opportunity cost of attending college is very high. 
C)  are concerned more about present circumstances than their future. 
D)  underestimate the value of a college education.

Question 3

A rational decision maker takes an action if and only if

Accepted Answer

A)  the average benefit of the action exceeds the average cost. 
B)  the average cost of the action exceeds the average benefit. 
C)  the marginal benefit of the action exceeds the marginal cost. 
D)  the marginal cost of the action exceeds the marginal benefit. 
A)  the average benefit of the action exceeds the average cost. 
B)  the average cost of the action exceeds the average benefit. 
C)  the marginal benefit of the action exceeds the marginal cost. 
D)  the marginal cost of the action exceeds the marginal benefit.

Question 4

What is another word for "marginal"?

Accepted Answer

incrementa

Question 5

A society allocates its scarce resources to various jobs. These scarce resources include

Accepted Answer

A)  land. 
B)  people. 
C)  machines. 
D)  All of the above are correct. 
A)  land. 
B)  people. 
C)  machines. 
D)  All of the above are correct.

Question 6

Which of the following can lead to market failure?

Accepted Answer

A)  externalities and market power 
B)  externalities but not market power 
C)  market power but not externalities 
D)  neither externalities nor market power 
A)  externalities and market power 
B)  externalities but not market power 
C)  market power but not externalities 
D)  neither externalities nor market power

Question 7

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by

Accepted Answer

A)  unstable economic conditions in Eastern Europe. 
B)  increased competition from abroad. 
C)  a decline in the rate of increase in U.S. productivity. 
D)  a strong U.S. dollar abroad, hurting U.S. exports. 
A)  unstable economic conditions in Eastern Europe. 
B)  increased competition from abroad. 
C)  a decline in the rate of increase in U.S. productivity. 
D)  a strong U.S. dollar abroad, hurting U.S. exports.

Question 8

When society gets the most it can from its scarce resources, then the outcome is called

Accepted Answer

A)  equitable. 
B)  efficient. 
C)  normal. 
D)  efficacious. 
A)  equitable. 
B)  efficient. 
C)  normal. 
D)  efficacious.

Question 9

Cole is refinishing an antique china cabinet and has already spent $180 on the restoration. He expects to be able to sell the cabinet for $360. Cole discovers that he needs to do an additional $200 worth of work to make the cabinet worth $360 to potential buyers. He could also sell the cabinet now, without completing the additional work, for $100. What should Cole do?

Accepted Answer

A)  He should sell the cabinet now for $100. 
B)  He should keep the cabinet since it wouldn't be rational to spend $380 restoring a cabinet and then sell it for only $360. 
C)  He should complete the additional work and sell the cabinet for $360. 
D)  It does not matter which action he takes since the outcome will be the same either way. 
A)  He should sell the cabinet now for $100. 
B)  He should keep the cabinet since it wouldn't be rational to spend $380 restoring a cabinet and then sell it for only $360. 
C)  He should complete the additional work and sell the cabinet for $360. 
D)  It does not matter which action he takes since the outcome will be the same either way.

Question 10

Based on the available evidence, which of the following groups benefits most from mandatory seat belt laws?

Accepted Answer

A)  automakers 
B)  pedestrians 
C)  drivers 
D)  owners of collision-repair shops 
A)  automakers 
B)  pedestrians 
C)  drivers 
D)  owners of collision-repair shops

Question 11

What are the two possible causes of market failure?

Accepted Answer

Externalit

Question 12

Consider Noah's decision to go to college. If he goes to college, he will spend $80,000 on tuition, $15,000 on room and board, and $4,000 on books. If he does not go to college, he will earn $22,000 working in a store and he will spend $13,000 on room and board. Noah's cost of going to college is

Accepted Answer

A)  $99,000. 
B)  $103,000. 
C)  $108,000. 
D)  $121,000. 
A)  $99,000. 
B)  $103,000. 
C)  $108,000. 
D)  $121,000.

Question 13

Both the production of goods and services and the unemployment rate are used to measure

Accepted Answer

A)  the business cycle. 
B)  productivity. 
C)  the interest rate. 
D)  inflation. 
A)  the business cycle. 
B)  productivity. 
C)  the interest rate. 
D)  inflation.

Question 14

Market economies are distinguished from other types of economies largely on the basis of

Accepted Answer

A)  the political affiliations of government officials. 
B)  the process by which government officials are elected or appointed. 
C)  the ways in which scarce resources are allocated. 
D)  the number of retail outlets available to consumers. 
A)  the political affiliations of government officials. 
B)  the process by which government officials are elected or appointed. 
C)  the ways in which scarce resources are allocated. 
D)  the number of retail outlets available to consumers.

Question 15

For a very long time the country of Zeeland has had an inflation rate of 9%. Suddenly its inflation rate drops to 3%. The drop in the inflation rate

Accepted Answer

A)  could be due to slower money supply growth. We would expect unemployment to be higher. 
B)  could be due to slower money supply growth. We would expect unemployment to be lower. 
C)  could be due to higher money supply growth. We would expect unemployment to be higher. 
D)  could be due to higher money supply growth. We would expect unemployment to be lower. 
A)  could be due to slower money supply growth. We would expect unemployment to be higher. 
B)  could be due to slower money supply growth. We would expect unemployment to be lower. 
C)  could be due to higher money supply growth. We would expect unemployment to be higher. 
D)  could be due to higher money supply growth. We would expect unemployment to be lower.

Question 16

Give an example of government intervention that is intended to reduce an externality.

Accepted Answer

Laws that restrict t

Question 17

What do prices reflect in a market economy?

Accepted Answer

The value of a good

Question 18

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

Accepted Answer

A)  3 percent per year 
B)  5 percent per year 
C)  7 percent per year 
D)  9 percent per year 
A)  3 percent per year 
B)  5 percent per year 
C)  7 percent per year 
D)  9 percent per year

Question 19

Economics deals primarily with the concept of

Accepted Answer

A)  scarcity. 
B)  money. 
C)  poverty. 
D)  banking. 
A)  scarcity. 
B)  money. 
C)  poverty. 
D)  banking.

Question 20

Give an example of government intervention that is intended to improve equality.

Accepted Answer

The income

Equality means distributing society's resources in the most efficient manner.

College-age athletes who drop out of college to play professional sports

A rational decision maker takes an action if and only if

What is another word for "marginal"?

A society allocates its scarce resources to various jobs. These scarce resources include

Which of the following can lead to market failure?

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by

When society gets the most it can from its scarce resources, then the outcome is called

Based on the available evidence, which of the following groups benefits most from mandatory seat belt laws?

What are the two possible causes of market failure?

Consider Noah's decision to go to college. If he goes to college, he will spend $80,000 on tuition, $15,000 on room and board, and $4,000 on books. If he does not go to college, he will earn $22,000 working in a store and he will spend $13,000 on room and board. Noah's cost of going to college is

Both the production of goods and services and the unemployment rate are used to measure

Market economies are distinguished from other types of economies largely on the basis of

For a very long time the country of Zeeland has had an inflation rate of 9%. Suddenly its inflation rate drops to 3%. The drop in the inflation rate

Give an example of government intervention that is intended to reduce an externality.

What do prices reflect in a market economy?

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

Economics deals primarily with the concept of

Give an example of government intervention that is intended to improve equality.

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

Equality means distributing society's resources in the most efficient manner.

College-age athletes who drop out of college to play professional sports

A rational decision maker takes an action if and only if

What is another word for "marginal"?

A society allocates its scarce resources to various jobs. These scarce resources include

Which of the following can lead to market failure?

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by

When society gets the most it can from its scarce resources, then the outcome is called

Based on the available evidence, which of the following groups benefits most from mandatory seat belt laws?

What are the two possible causes of market failure?

Consider Noah's decision to go to college. If he goes to college, he will spend $80,000 on tuition, $15,000 on room and board, and $4,000 on books. If he does not go to college, he will earn $22,000 working in a store and he will spend $13,000 on room and board. Noah's cost of going to college is

Both the production of goods and services and the unemployment rate are used to measure

Market economies are distinguished from other types of economies largely on the basis of

For a very long time the country of Zeeland has had an inflation rate of 9%. Suddenly its inflation rate drops to 3%. The drop in the inflation rate

Give an example of government intervention that is intended to reduce an externality.

What do prices reflect in a market economy?

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

Economics deals primarily with the concept of

Give an example of government intervention that is intended to improve equality.

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