Question 1

When a single person (or small group) has the ability to influence market prices, there is

Accepted Answer

A)  competition. 
B)  market power. 
C)  an externality. 
D)  a lack of property rights. 
A)  competition. 
B)  market power. 
C)  an externality. 
D)  a lack of property rights.

Question 2

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 3

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 4

Efficiency means everyone in the economy should receive an equal share of the goods and services produced.

Accepted Answer

A) True 
 B)False

Question 5

With the understanding that people respond to incentives, outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

Accepted Answer

The concept of working longer per year w

Question 6

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 7

You go to the movieplex where movies ordinarily cost $9. You are intending to see a movie for which you have a $3 off coupon good for only that movie at that time. However, when you get there you see a friend who asks if you would rather see a new release. Both movies start and end at the same time. If you decide to see the new release with your friend, what is your opportunity cost?

Accepted Answer

A)  the amount you value the first movie + $3 
B)  the amount you value the first movie + $9 
C)  $3 
D)  $9 
A)  the amount you value the first movie + $3 
B)  the amount you value the first movie + $9 
C)  $3 
D)  $9

Question 8

Resources are

Accepted Answer

A)  scarce for households but plentiful for economies. 
B)  plentiful for households but scarce for economies. 
C)  scarce for households and scarce for economies. 
D)  plentiful for households and plentiful for economies. 
A)  scarce for households but plentiful for economies. 
B)  plentiful for households but scarce for economies. 
C)  scarce for households and scarce for economies. 
D)  plentiful for households and plentiful for economies.

Question 9

A rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit.

Accepted Answer

A) True 
 B)False

Question 10

You are considering staying in college another semester so that you can complete a major in economics. In deciding whether or not to stay you should

Accepted Answer

A)  compare the total cost of your education to the total benefits of your education. 
B)  compare the total cost of your education to the benefits of staying one more semester. 
C)  compare the cost of staying one more semester to the benefits of staying one more semester. 
D)  compare the total benefits of your education to the cost of staying one more semester. 
A)  compare the total cost of your education to the total benefits of your education. 
B)  compare the total cost of your education to the benefits of staying one more semester. 
C)  compare the cost of staying one more semester to the benefits of staying one more semester. 
D)  compare the total benefits of your education to the cost of staying one more semester.

Question 11

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 12

The phrase "no such thing as a free lunch" means

Accepted Answer

A)  people must face tradeoffs. 
B)  rational people think at the margin. 
C)  people respond to incentives. 
D)  trade can make everyone better off. 
A)  people must face tradeoffs. 
B)  rational people think at the margin. 
C)  people respond to incentives. 
D)  trade can make everyone better off.

Question 13

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 14

When Ukraine trades with Italy,

Accepted Answer

A)  both countries are likely made better off. 
B)  only Italy benefits since Ukraine can produce all goods at a higher level of quality than Italy. 
C)  only Ukraine benefits since Italy's low wages guarantee that Italian firms will be profitable regardless of trade. 
D)  neither country will benefit since Ukraine is more efficient than Italy in the production of all goods. 
A)  both countries are likely made better off. 
B)  only Italy benefits since Ukraine can produce all goods at a higher level of quality than Italy. 
C)  only Ukraine benefits since Italy's low wages guarantee that Italian firms will be profitable regardless of trade. 
D)  neither country will benefit since Ukraine is more efficient than Italy in the production of all goods.

Question 15

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 16

DeShawn has spent $600 purchasing and repairing an old fishing boat, which he expects to sell for $900 once the repairs are complete. DeShawn discovers that, in addition to the $600 he has already spent, he needs to make an additional repair, which will cost another $400, in order to make the boat worth $900 to potential buyers. He can sell the boat as it is now for $400. What should he do?

Accepted Answer

A)  He should sell the boat as it is now for $400. 
B)  He should keep the boat since it would not be rational to spend $1,000 on repairs and then sell the boat for $900. 
C)  He should complete the repairs and sell the boat for $900. 
D)  It does not matter which action he takes; the outcome is the same either way. 
A)  He should sell the boat as it is now for $400. 
B)  He should keep the boat since it would not be rational to spend $1,000 on repairs and then sell the boat for $900. 
C)  He should complete the repairs and sell the boat for $900. 
D)  It does not matter which action he takes; the outcome is the same either way.

Question 17

The tradeoff between inflation and unemployment

Accepted Answer

A)  implies that policies designed to reduce unemployment also reduce inflation. 
B)  was eliminated by improved economic policies in the 1900s. 
C)  is a long-run tradeoff, persisting for decades, according to most economists. 
D)  None of the above are correct. 
A)  implies that policies designed to reduce unemployment also reduce inflation. 
B)  was eliminated by improved economic policies in the 1900s. 
C)  is a long-run tradeoff, persisting for decades, according to most economists. 
D)  None of the above are correct.

Question 18

Irregular fluctuations in economic activity are known as the

Accepted Answer

A)  business cycle. 
B)  broken window fallacy. 
C)  tradeoff between inflation and unemployment. 
D)  ten principles of economics. 
A)  business cycle. 
B)  broken window fallacy. 
C)  tradeoff between inflation and unemployment. 
D)  ten principles of economics.

Question 19

Economics is the study of ______.

Accepted Answer

how societ

Question 20

What does the "invisible hand" refers to?

Accepted Answer

How the decisions of

Exam 1: Ten Principles of Economics

When a single person (or small group) has the ability to influence market prices, there is

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

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

Efficiency means everyone in the economy should receive an equal share of the goods and services produced.

With the understanding that people respond to incentives, outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

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.

Resources are

A rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit.

You are considering staying in college another semester so that you can complete a major in economics. In deciding whether or not to stay you should

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

The phrase "no such thing as a free lunch" means

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?

When Ukraine trades with Italy,

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.

The tradeoff between inflation and unemployment

Irregular fluctuations in economic activity are known as the

Economics is the study of ______.

What does the "invisible hand" refers to?

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

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 Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters