Question 1

Invisible hand is a term used by the economist in his 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

Accepted Answer

The answer of Invisible hand is a term used by...

Question 2

A rationale for government involvement in a market economy is

Accepted Answer

A)  markets sometimes fail to produce a fair distribution of economic well-being. 
B)  markets sometimes fail to produce an efficient allocation of resources. 
C)  property rights have to be enforced. 
D)  All of the above are correct. 
A)  markets sometimes fail to produce a fair distribution of economic well-being. 
B)  markets sometimes fail to produce an efficient allocation of resources. 
C)  property rights have to be enforced. 
D)  All of the above are correct.

Question 3

The government can potentially improve market outcomes if market inequalities or market failure exists.

Accepted Answer

A) True 
 B)False

Question 4

A barber currently cuts hair for 50 clients per week and earns a profit. He is considering expanding his operation in order to serve more clients. Should he expand?

Accepted Answer

A)  Yes, because cutting hair is profitable. 
B)  No, because he may not be able to sell more services. 
C)  It depends on the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients. 
D)  It depends on the average cost of serving more clients and the average revenue he will earn from serving more clients. 
A)  Yes, because cutting hair is profitable. 
B)  No, because he may not be able to sell more services. 
C)  It depends on the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients. 
D)  It depends on the average cost of serving more clients and the average revenue he will earn from serving more clients.

Question 5

To raise productivity, policymakers could

Accepted Answer

A)  increase spending on education. 
B)  provide tax credits to firms for capital improvements. 
C)  fund research and development. 
D)  All of the above are correct. 
A)  increase spending on education. 
B)  provide tax credits to firms for capital improvements. 
C)  fund research and development. 
D)  All of the above are correct.

Question 6

Melinda quits her job at a bank, which pays $30,000 a year, to enroll in a two-year graduate program. Her annual school expenses are $22,000 for tuition and fees and $2,000 for books. What is her opportunity cost of attending the two-year graduate program?

Accepted Answer

The answer of Melinda quits her job at a bank,...

Question 7

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 studying economics?

Accepted Answer

The enjoyment you wo

Question 8

In a market economy, economic activity is guided by

Accepted Answer

A)  the government. 
B)  central planners. 
C)  large businesses. 
D)  prices and self-interest. 
A)  the government. 
B)  central planners. 
C)  large businesses. 
D)  prices and self-interest.

Question 9

The principle that trade can make everyone better off applies to

Accepted Answer

A)  individuals. 
B)  families. 
C)  countries. 
D)  All of the above 
A)  individuals. 
B)  families. 
C)  countries. 
D)  All of the above

Question 10

In the United States, incomes have historically grown

Accepted Answer

A)  about 0.5 percent per year. 
B)  about 2 percent per year. 
C)  about 4 percent per year. 
D)  about 6 percent per year. 
A)  about 0.5 percent per year. 
B)  about 2 percent per year. 
C)  about 4 percent per year. 
D)  about 6 percent per year.

Question 11

Causes of market failure include

Accepted Answer

A)  externalities and market power. 
B)  market power and incorrect forecasts of consumer demand. 
C)  externalities and foreign competition. 
D)  incorrect forecasts of consumer demand and foreign competition. 
A)  externalities and market power. 
B)  market power and incorrect forecasts of consumer demand. 
C)  externalities and foreign competition. 
D)  incorrect forecasts of consumer demand and foreign competition.

Question 12

The business cycle refers to fluctuations in economic activity such as employment and production.

Accepted Answer

A) True 
 B)False

Question 13

The irregular and largely unpredictable fluctuations in economic activity are called

Accepted Answer

A)  market failure. 
B)  business cycle. 
C)  inflation. 
D)  unemployment. 
A)  market failure. 
B)  business cycle. 
C)  inflation. 
D)  unemployment.

Question 14

If the government were to intervene and set the rent for apartments in New York City below the market rent, then we would expect, relative to the market outcome,

Accepted Answer

A)  an increase in the number of people wanting to live in apartments in New York City. 
B)  a decrease in the number of people wanting to live in apartments in New York City. 
C)  an increase in the number of apartments available for rent in New York City. 
D)  None of the above is correct. 
A)  an increase in the number of people wanting to live in apartments in New York City. 
B)  a decrease in the number of people wanting to live in apartments in New York City. 
C)  an increase in the number of apartments available for rent in New York City. 
D)  None of the above is correct.

Question 15

In most societies, resources are allocated by

Accepted Answer

A)  a single central planner. 
B)  a small number of central planners. 
C)  those firms that use resources to provide goods and services. 
D)  the combined actions of millions of households and firms. 
A)  a single central planner. 
B)  a small number of central planners. 
C)  those firms that use resources to provide goods and services. 
D)  the combined actions of millions of households and firms.

Question 16

One effect of the government-imposed seat belt law in the U.S. has been

Accepted Answer

A)  a dramatic decrease in the number of pedestrian deaths. 
B)  safer driving. 
C)  an increase in the number of accidents. 
D)  a dramatic decrease in the number of driver deaths. 
A)  a dramatic decrease in the number of pedestrian deaths. 
B)  safer driving. 
C)  an increase in the number of accidents. 
D)  a dramatic decrease in the number of driver deaths.

Question 17

When the government prevents prices from adjusting naturally to supply and demand,

Accepted Answer

A)  it equates the amount buyers want to buy with the amount sellers want to sell. 
B)  it adversely affects the allocation of resources. 
C)  it improves equality and efficiency. 
D)  it improves efficiency but reduces equality. 
A)  it equates the amount buyers want to buy with the amount sellers want to sell. 
B)  it adversely affects the allocation of resources. 
C)  it improves equality and efficiency. 
D)  it improves efficiency but reduces equality.

Question 18

Suppose the Federal Reserve announces that it will be making a change to a key interest rate to increase the money supply. This is likely because

Accepted Answer

A)  the Federal Reserve is worried about inflation. 
B)  the Federal Reserve is worried about unemployment. 
C)  the Federal Reserve is hoping to reduce the demand for goods and services. 
D)  the Federal Reserve is worried that the economy is growing too quickly. 
A)  the Federal Reserve is worried about inflation. 
B)  the Federal Reserve is worried about unemployment. 
C)  the Federal Reserve is hoping to reduce the demand for goods and services. 
D)  the Federal Reserve is worried that the economy is growing too quickly.

Question 19

After much consideration, you have chosen Cancun over Ft. Lauderdale as your Spring Break destination this year. However, Spring Break is still months away, and you may reverse this decision. Which of the following events would prompt you to reverse this decision?

Accepted Answer

A)  The marginal benefit of going to Cancun increases. 
B)  The marginal cost of going to Cancun decreases. 
C)  The marginal benefit of going to Ft. Lauderdale decreases. 
D)  The marginal cost of going to Ft. Lauderdale decreases. 
A)  The marginal benefit of going to Cancun increases. 
B)  The marginal cost of going to Cancun decreases. 
C)  The marginal benefit of going to Ft. Lauderdale decreases. 
D)  The marginal cost of going to Ft. Lauderdale decreases.

Question 20

Which of the following statements does not apply to a market economy?

Accepted Answer

A)  Firms decide whom to hire and what to produce. 
B)  The "invisible hand" usually maximizes the well­being of society as a whole. 
C)  Households decide which firms to work for and what to buy with their incomes. 
D)  Government policies are the primary forces that guide the decisions of firms and households. 
A)  Firms decide whom to hire and what to produce. 
B)  The "invisible hand" usually maximizes the well­being of society as a whole. 
C)  Households decide which firms to work for and what to buy with their incomes. 
D)  Government policies are the primary forces that guide the decisions of firms and households.

Invisible hand is a term used by the economist in his 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

A rationale for government involvement in a market economy is

The government can potentially improve market outcomes if market inequalities or market failure exists.

A barber currently cuts hair for 50 clients per week and earns a profit. He is considering expanding his operation in order to serve more clients. Should he expand?

To raise productivity, policymakers could

Melinda quits her job at a bank, which pays $30,000 a year, to enroll in a two-year graduate program. Her annual school expenses are $22,000 for tuition and fees and $2,000 for books. What is her opportunity cost of attending the two-year graduate program?

In a market economy, economic activity is guided by

The principle that trade can make everyone better off applies to

In the United States, incomes have historically grown

Causes of market failure include

The business cycle refers to fluctuations in economic activity such as employment and production.

The irregular and largely unpredictable fluctuations in economic activity are called

If the government were to intervene and set the rent for apartments in New York City below the market rent, then we would expect, relative to the market outcome,

In most societies, resources are allocated by

One effect of the government-imposed seat belt law in the U.S. has been

When the government prevents prices from adjusting naturally to supply and demand,

Suppose the Federal Reserve announces that it will be making a change to a key interest rate to increase the money supply. This is likely because

After much consideration, you have chosen Cancun over Ft. Lauderdale as your Spring Break destination this year. However, Spring Break is still months away, and you may reverse this decision. Which of the following events would prompt you to reverse this decision?

Which of the following statements does not apply to a market economy?

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

Invisible hand is a term used by the economist in his 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

A rationale for government involvement in a market economy is

The government can potentially improve market outcomes if market inequalities or market failure exists.

A barber currently cuts hair for 50 clients per week and earns a profit. He is considering expanding his operation in order to serve more clients. Should he expand?

To raise productivity, policymakers could

Melinda quits her job at a bank, which pays $30,000 a year, to enroll in a two-year graduate program. Her annual school expenses are $22,000 for tuition and fees and $2,000 for books. What is her opportunity cost of attending the two-year graduate program?

In a market economy, economic activity is guided by

The principle that trade can make everyone better off applies to

In the United States, incomes have historically grown

Causes of market failure include

The business cycle refers to fluctuations in economic activity such as employment and production.

The irregular and largely unpredictable fluctuations in economic activity are called

If the government were to intervene and set the rent for apartments in New York City below the market rent, then we would expect, relative to the market outcome,

In most societies, resources are allocated by

One effect of the government-imposed seat belt law in the U.S. has been

When the government prevents prices from adjusting naturally to supply and demand,

Suppose the Federal Reserve announces that it will be making a change to a key interest rate to increase the money supply. This is likely because

After much consideration, you have chosen Cancun over Ft. Lauderdale as your Spring Break destination this year. However, Spring Break is still months away, and you may reverse this decision. Which of the following events would prompt you to reverse this decision?

Which of the following statements does not apply to a market economy?

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