Question 1

Communist countries worked on the premise that government officials were in the best position to allocate the economy's scarce resources.

Accepted Answer

A) True 
 B)False

Question 2

The term "productivity"

Accepted Answer

A)  means the same thing as "efficiency." 
B)  is seldom used by economists, as its meaning is not precise. 
C)  refers to the quantity of goods and services produced from each unit of labor input. 
D)  refers to the variety of goods and services from which households can choose when they shop. 
A)  means the same thing as "efficiency." 
B)  is seldom used by economists, as its meaning is not precise. 
C)  refers to the quantity of goods and services produced from each unit of labor input. 
D)  refers to the variety of goods and services from which households can choose when they shop.

Question 3

The principle that "trade can make everyone better off" applies to interactions and trade between

Accepted Answer

A)  families. 
B)  states within the United States. 
C)  nations. 
D)  All of the above are correct. 
A)  families. 
B)  states within the United States. 
C)  nations. 
D)  All of the above are correct.

Question 4

Explain the concept of externality and give an example.

Accepted Answer

The impact of one pe

Question 5

Almost all variation in living standards is attributable to differences in countries'

Accepted Answer

A)  population growth rates. 
B)  productivity. 
C)  systems of public education. 
D)  taxes. 
A)  population growth rates. 
B)  productivity. 
C)  systems of public education. 
D)  taxes.

Question 6

An example of an externality is the impact of

Accepted Answer

A)  bad weather on the income of farmers. 
B)  the personal income tax on a person's ability to purchase goods and services. 
C)  pollution from a factory on the health of people in the vicinity of the factory. 
D)  increases in health care costs on the health of individuals in society. 
A)  bad weather on the income of farmers. 
B)  the personal income tax on a person's ability to purchase goods and services. 
C)  pollution from a factory on the health of people in the vicinity of the factory. 
D)  increases in health care costs on the health of individuals in society.

Question 7

Guns and butter are used to represent the classic societal tradeoff between spending on

Accepted Answer

A)  durable and nondurable goods. 
B)  imports and exports. 
C)  national defense and consumer goods. 
D)  law enforcement and agriculture. 
A)  durable and nondurable goods. 
B)  imports and exports. 
C)  national defense and consumer goods. 
D)  law enforcement and agriculture.

Question 8

As a result of a successful attempt by government to cut the economic pie into more equal slices,

Accepted Answer

A)  the pie gets larger, and there will be more pie overall. 
B)  the pie gets smaller, and there will be less pie overall. 
C)  it increases the reward for working hard, resulting in people producing more goods and services. 
D)  those who earn more income pay less in taxes. 
A)  the pie gets larger, and there will be more pie overall. 
B)  the pie gets smaller, and there will be less pie overall. 
C)  it increases the reward for working hard, resulting in people producing more goods and services. 
D)  those who earn more income pay less in taxes.

Question 9

The willingness of citizens to pay for vaccinations does not include the benefit society receives from having vaccinated citizens who cannot transmit an illness to others. This extra benefit society gets from vaccinating its citizens is known as

Accepted Answer

A)  productivity. 
B)  an externality. 
C)  market power. 
D)  property rights. 
A)  productivity. 
B)  an externality. 
C)  market power. 
D)  property rights.

Question 10

The price of diamonds is high, in part because the majority of the world's diamonds are controlled by a single firm. This is an example of

Accepted Answer

A)  a market failure caused by an externality. 
B)  a market failure caused by market power. 
C)  a market failure caused by equality. 
D)  There is no market failure in this case. 
A)  a market failure caused by an externality. 
B)  a market failure caused by market power. 
C)  a market failure caused by equality. 
D)  There is no market failure in this case.

Question 11

The term refers to a small incremental adjustment to an existing plan of action.

Accepted Answer

The answer of The term refers to a small incremental...

Question 12

Olivia was accepted by Northwestern and by another university. She is trying to decide where to go. Which of the following should influence her decision?

Accepted Answer

A)  how much she spent applying to Northwestern, and the difference between living expenses at Northwestern and the other university 
B)  how much she spent applying to Northwestern, but not the difference between living expenses at Northwestern and the other university 
C)  the difference between living expenses at Northwestern and her second choice, but not how much she spent applying to Northwestern 
D)  neither how much she spent applying to Northwestern nor the difference between living expenses at Northwestern and her second choice 
A)  how much she spent applying to Northwestern, and the difference between living expenses at Northwestern and the other university 
B)  how much she spent applying to Northwestern, but not the difference between living expenses at Northwestern and the other university 
C)  the difference between living expenses at Northwestern and her second choice, but not how much she spent applying to Northwestern 
D)  neither how much she spent applying to Northwestern nor the difference between living expenses at Northwestern and her second choice

Question 13

A rational decisionmaker

Accepted Answer

A)  ignores marginal changes and focuses instead on "the big picture." 
B)  ignores the likely effects of government policies when he or she makes choices. 
C)  takes an action only if the marginal benefit of that action exceeds the marginal cost of that action. 
D)  takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions. 
A)  ignores marginal changes and focuses instead on "the big picture." 
B)  ignores the likely effects of government policies when he or she makes choices. 
C)  takes an action only if the marginal benefit of that action exceeds the marginal cost of that action. 
D)  takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions.

Question 14

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

Accepted Answer

A) True 
 B)False

Question 15

Thousands of people develop lung cancer from second-hand exposure to cigarette smoke. This is an example of

Accepted Answer

A)  a market failure caused by an externality. 
B)  a market failure caused by market power. 
C)  a market failure caused by equality. 
D)  There is no market failure in this case. 
A)  a market failure caused by an externality. 
B)  a market failure caused by market power. 
C)  a market failure caused by equality. 
D)  There is no market failure in this case.

Question 16

To improve living standards, policymakers should

Accepted Answer

A)  impose restrictions on foreign competition. 
B)  formulate policies designed to increase productivity. 
C)  impose tougher immigration policies. 
D)  provide tax breaks for the middle class. 
A)  impose restrictions on foreign competition. 
B)  formulate policies designed to increase productivity. 
C)  impose tougher immigration policies. 
D)  provide tax breaks for the middle class.

Question 17

Kyle is planning to take a roadtrip. After he makes his plans, he has to make some unexpected auto repairs. Also, he sees the price of gas has gone up. Which of these two events should Kyle consider in deciding if it is still worthwhile to go on the trip?

Accepted Answer

A)  the unexpected repairs and the increase in the price of gas 
B)  the unexpected increase for repairs, but not the increase in the price of gas 
C)  the increase in the price of gas, but not the unexpected repairs 
D)  neither the unexpected increase in the price of gas nor the unexpected repairs 
A)  the unexpected repairs and the increase in the price of gas 
B)  the unexpected increase for repairs, but not the increase in the price of gas 
C)  the increase in the price of gas, but not the unexpected repairs 
D)  neither the unexpected increase in the price of gas nor the unexpected repairs

Question 18

Which of the following statements best characterizes a basic difference between market economies and centrally- planned economies?

Accepted Answer

A)  Society relies more upon prices to allocate resources when the economy is centrally-planned than when it is market-based. 
B)  The self-interest of households is reflected more fully in the outcome of a centrally-planned economy than in the outcome of a market economy. 
C)  Government plays a larger role in the economic affairs of a market economy than in the economic affairs of a centrally-planned economy. 
D)  None of the above are correct. 
A)  Society relies more upon prices to allocate resources when the economy is centrally-planned than when it is market-based. 
B)  The self-interest of households is reflected more fully in the outcome of a centrally-planned economy than in the outcome of a market economy. 
C)  Government plays a larger role in the economic affairs of a market economy than in the economic affairs of a centrally-planned economy. 
D)  None of the above are correct.

Question 19

When calculating the cost of college, which of the following should you probably include?

Accepted Answer

A)  The cost of your meal plan for the cafeteria. 
B)  The cost of books required for college classes 
C)  The income you earn at your part-time job. 
D)  The cost of living in the dormitory. 
A)  The cost of your meal plan for the cafeteria. 
B)  The cost of books required for college classes 
C)  The income you earn at your part-time job. 
D)  The cost of living in the dormitory.

Question 20

Economists use the term to refer to a situation in which the market on its own fails to produce an efficient allocation of resources.

Accepted Answer

The answer of Economists use the term to refer to...

Communist countries worked on the premise that government officials were in the best position to allocate the economy's scarce resources.

The term "productivity"

The principle that "trade can make everyone better off" applies to interactions and trade between

Explain the concept of externality and give an example.

Almost all variation in living standards is attributable to differences in countries'

An example of an externality is the impact of

Guns and butter are used to represent the classic societal tradeoff between spending on

As a result of a successful attempt by government to cut the economic pie into more equal slices,

The willingness of citizens to pay for vaccinations does not include the benefit society receives from having vaccinated citizens who cannot transmit an illness to others. This extra benefit society gets from vaccinating its citizens is known as

The price of diamonds is high, in part because the majority of the world's diamonds are controlled by a single firm. This is an example of

The term refers to a small incremental adjustment to an existing plan of action.

Olivia was accepted by Northwestern and by another university. She is trying to decide where to go. Which of the following should influence her decision?

A rational decisionmaker

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

Thousands of people develop lung cancer from second-hand exposure to cigarette smoke. This is an example of

To improve living standards, policymakers should

Kyle is planning to take a roadtrip. After he makes his plans, he has to make some unexpected auto repairs. Also, he sees the price of gas has gone up. Which of these two events should Kyle consider in deciding if it is still worthwhile to go on the trip?

Which of the following statements best characterizes a basic difference between market economies and centrally- planned economies?

When calculating the cost of college, which of the following should you probably include?

Economists use the term to refer to a situation in which the market on its own fails to produce an efficient allocation of resources.

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

Communist countries worked on the premise that government officials were in the best position to allocate the economy's scarce resources.

The term "productivity"

The principle that "trade can make everyone better off" applies to interactions and trade between

Explain the concept of externality and give an example.

Almost all variation in living standards is attributable to differences in countries'

An example of an externality is the impact of

Guns and butter are used to represent the classic societal tradeoff between spending on

As a result of a successful attempt by government to cut the economic pie into more equal slices,

The willingness of citizens to pay for vaccinations does not include the benefit society receives from having vaccinated citizens who cannot transmit an illness to others. This extra benefit society gets from vaccinating its citizens is known as

The price of diamonds is high, in part because the majority of the world's diamonds are controlled by a single firm. This is an example of

The term refers to a small incremental adjustment to an existing plan of action.

Olivia was accepted by Northwestern and by another university. She is trying to decide where to go. Which of the following should influence her decision?

A rational decisionmaker

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

Thousands of people develop lung cancer from second-hand exposure to cigarette smoke. This is an example of

To improve living standards, policymakers should

Kyle is planning to take a roadtrip. After he makes his plans, he has to make some unexpected auto repairs. Also, he sees the price of gas has gone up. Which of these two events should Kyle consider in deciding if it is still worthwhile to go on the trip?

Which of the following statements best characterizes a basic difference between market economies and centrally- planned economies?

When calculating the cost of college, which of the following should you probably include?

Economists use the term to refer to a situation in which the market on its own fails to produce an efficient allocation of resources.

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