Question 1

Economics is the study of how society manages its

Accepted Answer

A)  limited wants and unlimited resources. 
B)  unlimited wants and unlimited resources. 
C)  limited wants and limited resources. 
D)  unlimited wants and limited resources. 
A)  limited wants and unlimited resources. 
B)  unlimited wants and unlimited resources. 
C)  limited wants and limited resources. 
D)  unlimited wants and limited resources.

Question 2

Which of the following firms is likely to have the greatest market power?

Accepted Answer

A)  an electric company 
B)  a farmer 
C)  a grocery store 
D)  a local electronics retailer 
A)  an electric company 
B)  a farmer 
C)  a grocery store 
D)  a local electronics retailer

Question 3

Ashley eats two bananas during a particular day. The marginal benefit she enjoys from eating the second banana

Accepted Answer

A)  can be thought of as the total benefit Ashley enjoys by eating two bananas minus the total benefit she would have enjoyed by eating just the first banana. 
B)  determines Ashley's marginal cost of the first and second bananas. 
C)  does not depend on how many bananas Ashley has already eaten. 
D)  cannot be determined unless we know how much she paid for the bananas. 
A)  can be thought of as the total benefit Ashley enjoys by eating two bananas minus the total benefit she would have enjoyed by eating just the first banana. 
B)  determines Ashley's marginal cost of the first and second bananas. 
C)  does not depend on how many bananas Ashley has already eaten. 
D)  cannot be determined unless we know how much she paid for the bananas.

Question 4

Senator Bright, who understands economic principles, is trying to convince workers in her district that trade with other countries is beneficial. Senator Bright should argue that trade can be beneficial

Accepted Answer

A)  only if it allows us to obtain things that we couldn't make for ourselves. 
B)  because it allows specialization, which increases total output. 
C)  to us if we can gain and the others involved in the trade lose. 
D)  in only a limited number of circumstances because others are typically self-interested. 
A)  only if it allows us to obtain things that we couldn't make for ourselves. 
B)  because it allows specialization, which increases total output. 
C)  to us if we can gain and the others involved in the trade lose. 
D)  in only a limited number of circumstances because others are typically self-interested.

Question 5

Which of the following is a decision that economists study?

Accepted Answer

A)  how much people work 
B)  what people buy 
C)  how much money people save 
D)  All of the above are correct. 
A)  how much people work 
B)  what people buy 
C)  how much money people save 
D)  All of the above are correct.

Question 6

People are likely to respond to a policy change

Accepted Answer

A)  only if they think the policy is a good one. 
B)  only if the policy change changes the costs of their behavior. 
C)  only if the policy change changes the benefits of their behavior. 
D)  if the policy changes either the costs or benefits of their behavior. 
A)  only if they think the policy is a good one. 
B)  only if the policy change changes the costs of their behavior. 
C)  only if the policy change changes the benefits of their behavior. 
D)  if the policy changes either the costs or benefits of their behavior.

Question 7

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 minimum price the company will charge for the 701th calculator?

Accepted Answer

The answer of Use the following Scenario to answer the...

Question 8

Prices usually reflect

Accepted Answer

A)  only the value of a good to society. 
B)  only the cost to society of making a good. 
C)  both the value of a good to society and the cost to society of making the good. 
D)  neither the value of a good to society nor the cost to society of making the good. 
A)  only the value of a good to society. 
B)  only the cost to society of making a good. 
C)  both the value of a good to society and the cost to society of making the good. 
D)  neither the value of a good to society nor the cost to society of making the good.

Question 9

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 marginal cost?

Accepted Answer

The answer of Use the following Scenario to answer the...

Question 10

The term "market failure"

Accepted Answer

A)  means the same thing as "market power." 
B)  refers to the dissolution of a market when firms decide to quit producing a certain product. 
C)  refers to the failure of a market to produce an efficient allocation of resources. 
D)  refers to government's failure to enforce the property rights of households or firms that participate in a certain market. 
A)  means the same thing as "market power." 
B)  refers to the dissolution of a market when firms decide to quit producing a certain product. 
C)  refers to the failure of a market to produce an efficient allocation of resources. 
D)  refers to government's failure to enforce the property rights of households or firms that participate in a certain market.

Question 11

The classic tradeoff between "guns and butter" states that when a society spends more on national defense, it has less to spend on consumer goods to raise the standard of living.

Accepted Answer

A) True 
 B)False

Question 12

The basic principles of economics suggest that

Accepted Answer

A)  markets are seldom, if ever, a good way to organize economic activity. 
B)  government should become involved in markets when trade between countries is involved. 
C)  government should become involved in markets when those markets fail to produce efficient or fair outcomes. 
D)  All of the above are correct. 
A)  markets are seldom, if ever, a good way to organize economic activity. 
B)  government should become involved in markets when trade between countries is involved. 
C)  government should become involved in markets when those markets fail to produce efficient or fair outcomes. 
D)  All of the above are correct.

Question 13

In a particular country in 1998, the average worker needed to work 25 hours to produce 40 units of output. In that same country in 2008, the average worker needed to work 40 hours to produce 68 units of output. In that country, the productivity of the average worker

Accepted Answer

A)  decreased by 1.7 percent between 1998 and 2008. 
B)  remained unchanged between 1998 and 2008. 
C)  increased by 4.75 percent between 1998 and 2008. 
D)  increased by 6.25 percent between 1998 and 2008. 
A)  decreased by 1.7 percent between 1998 and 2008. 
B)  remained unchanged between 1998 and 2008. 
C)  increased by 4.75 percent between 1998 and 2008. 
D)  increased by 6.25 percent between 1998 and 2008.

Question 14

In the short run, an increase in the money supply is likely to lead to inflation and unemployment.

Accepted Answer

The answer of In the short run, an increase in...

Question 15

Maureen's college raises the cost of room and board per semester. This increase raises Maureen's opportunity cost of attending college

Accepted Answer

A)  even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost reduces Maureen's incentive to attend college. 
B)  even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost increases Maureen's incentive to attend college. 
C)  only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost reduces Maureen's incentive to attend college. 
D)  only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost increases Maureen's incentive to attend college. 
A)  even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost reduces Maureen's incentive to attend college. 
B)  even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost increases Maureen's incentive to attend college. 
C)  only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost reduces Maureen's incentive to attend college. 
D)  only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost increases Maureen's incentive to attend college.

Question 16

US citizens have better nutrition, better healthcare, and a longer life expectancy than citizens of Ghana. Which of the following conclusions can be drawn from this statement?

Accepted Answer

A)  Average income in the US is higher than the average income in Ghana. 
B)  The US has a higher standard of living than Ghana. 
C)  Productivity in the US is higher than productivity in Ghana. 
D)  All of the above are correct. 
A)  Average income in the US is higher than the average income in Ghana. 
B)  The US has a higher standard of living than Ghana. 
C)  Productivity in the US is higher than productivity in Ghana. 
D)  All of the above are correct.

Question 17

In economics, the cost of something is

Accepted Answer

A)  the dollar amount of obtaining it. 
B)  always measured in units of time given up to get it. 
C)  what you give up to get it. 
D)  often impossible to quantify, even in principle. 
A)  the dollar amount of obtaining it. 
B)  always measured in units of time given up to get it. 
C)  what you give up to get it. 
D)  often impossible to quantify, even in principle.

Question 18

Inflation is the primary determinant of a country's living standards.

Accepted Answer

A) True 
 B)False

Question 19

The term refers to the size of the economic pie, and the term refers to how the pie is divided.

Accepted Answer

efficiency

Question 20

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

Accepted Answer

A) True 
 B)False

Economics is the study of how society manages its

Which of the following firms is likely to have the greatest market power?

Ashley eats two bananas during a particular day. The marginal benefit she enjoys from eating the second banana

Senator Bright, who understands economic principles, is trying to convince workers in her district that trade with other countries is beneficial. Senator Bright should argue that trade can be beneficial

Which of the following is a decision that economists study?

People are likely to respond to a policy change

Prices usually reflect

The term "market failure"

The classic tradeoff between "guns and butter" states that when a society spends more on national defense, it has less to spend on consumer goods to raise the standard of living.

The basic principles of economics suggest that

In a particular country in 1998, the average worker needed to work 25 hours to produce 40 units of output. In that same country in 2008, the average worker needed to work 40 hours to produce 68 units of output. In that country, the productivity of the average worker

In the short run, an increase in the money supply is likely to lead to inflation and unemployment.

Maureen's college raises the cost of room and board per semester. This increase raises Maureen's opportunity cost of attending college

US citizens have better nutrition, better healthcare, and a longer life expectancy than citizens of Ghana. Which of the following conclusions can be drawn from this statement?

In economics, the cost of something is

Inflation is the primary determinant of a country's living standards.

The term refers to the size of the economic pie, and the term refers to how the pie is divided.

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

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

Economics is the study of how society manages its

Which of the following firms is likely to have the greatest market power?

Ashley eats two bananas during a particular day. The marginal benefit she enjoys from eating the second banana

Senator Bright, who understands economic principles, is trying to convince workers in her district that trade with other countries is beneficial. Senator Bright should argue that trade can be beneficial

Which of the following is a decision that economists study?

People are likely to respond to a policy change

Prices usually reflect

The term "market failure"

The classic tradeoff between "guns and butter" states that when a society spends more on national defense, it has less to spend on consumer goods to raise the standard of living.

The basic principles of economics suggest that

In a particular country in 1998, the average worker needed to work 25 hours to produce 40 units of output. In that same country in 2008, the average worker needed to work 40 hours to produce 68 units of output. In that country, the productivity of the average worker

In the short run, an increase in the money supply is likely to lead to inflation and unemployment.

Maureen's college raises the cost of room and board per semester. This increase raises Maureen's opportunity cost of attending college

US citizens have better nutrition, better healthcare, and a longer life expectancy than citizens of Ghana. Which of the following conclusions can be drawn from this statement?

In economics, the cost of something is

Inflation is the primary determinant of a country's living standards.

The term refers to the size of the economic pie, and the term refers to how the pie is divided.

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

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