Question 1

Trade between the United States and Guatemala

Accepted Answer

A)  benefits both the United States and Guatemala. 
B)  is a losing proposition for the United States because Guatemalan labor is less expensive than U.S. labor. 
C)  is a losing proposition for Guatemala because capital is much more abundant in the U.S. than in Guatemala. 
D)  is a losing proposition for Guatemala because U.S. workers are more productive than Guatemalan workers. 
A)  benefits both the United States and Guatemala. 
B)  is a losing proposition for the United States because Guatemalan labor is less expensive than U.S. labor. 
C)  is a losing proposition for Guatemala because capital is much more abundant in the U.S. than in Guatemala. 
D)  is a losing proposition for Guatemala because U.S. workers are more productive than Guatemalan workers.

Question 2

When the government attempts to improve equality in an economy the result is often

Accepted Answer

A)  an increase in overall output in the economy. 
B)  additional government revenue since overall income will increase. 
C)  a reduction in equality. 
D)  a reduction in efficiency. 
A)  an increase in overall output in the economy. 
B)  additional government revenue since overall income will increase. 
C)  a reduction in equality. 
D)  a reduction in efficiency.

Question 3

Which of the following would a permanent increase in the growth rate of the money supply change permanently?

Accepted Answer

A)  inflation 
B)  unemployment 
C)  both inflation and unemployment 
D)  neither inflation nor unemployment 
A)  inflation 
B)  unemployment 
C)  both inflation and unemployment 
D)  neither inflation nor unemployment

Question 4

Productivity is defined as the quantity of goods and services produced from each unit of labor input.

Accepted Answer

A) True 
 B)False

Question 5

You have driven 800 miles on a vacation and then you notice that you are only 15 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

Accepted Answer

A)  both the cost of driving the first 800 miles and the next 15 miles. 
B)  the cost of driving the first 800 miles, but not the cost of driving the next 15 miles. 
C)  the cost of driving the next 15 miles, but not the cost of driving the first 800 miles. 
D)  neither the cost of driving the first 800 miles nor the cost of driving the next 15 miles. 
A)  both the cost of driving the first 800 miles and the next 15 miles. 
B)  the cost of driving the first 800 miles, but not the cost of driving the next 15 miles. 
C)  the cost of driving the next 15 miles, but not the cost of driving the first 800 miles. 
D)  neither the cost of driving the first 800 miles nor the cost of driving the next 15 miles.

Question 6

Explain how trade with other countries is beneficial.

Accepted Answer

Trade allows countri

Question 7

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 8

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 9

Yvette buys and sells real estate. Two weeks ago, she paid $300,000 for a house on Pine Street, intending to spend $50,000 on repairs and then sell the house for $400,000. Last week, the city government announced a plan to build a new landfill on Pine Street just down the street from the house Yvette purchased. As a result of the city's announced plan, Yvette is weighing two alternatives: She can go ahead with the $50,000 in repairs and then sell the house for $290,000, or she can forgo the repairs and sell the house as it is for $250,000. She should

Accepted Answer

A)  keep the house and live in it. 
B)  go ahead with the $50,000 in repairs and sell the house for $290,000. 
C)  forgo the repairs and sell the house as it is for $250,000. 
D)  move the house from Pine Street to a more desirable location, regardless of the cost of doing so. 
A)  keep the house and live in it. 
B)  go ahead with the $50,000 in repairs and sell the house for $290,000. 
C)  forgo the repairs and sell the house as it is for $250,000. 
D)  move the house from Pine Street to a more desirable location, regardless of the cost of doing so.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Scenario 1-6
It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors.
-Refer to Scenario 1-6. What is the company's average cost?

Accepted Answer

The answer of Scenario 1-6
It costs a company $30,000 to...

Question 12

It costs a company $35,000 to produce 500 graphing calculators. The company's cost will be $35,080 if it produces an additional graphing calculator. If the company produces 501 graphing calculators then

Accepted Answer

A)  its average cost is greater than its marginal cost. 
B)  its average cost and its marginal cost are equal. 
C)  its average cost is less than its marginal cost. 
D)  This cannot be determined from the information given. 
A)  its average cost is greater than its marginal cost. 
B)  its average cost and its marginal cost are equal. 
C)  its average cost is less than its marginal cost. 
D)  This cannot be determined from the information given.

Question 13

The business cycle is the

Accepted Answer

A)  relationship between unemployment and inflation. 
B)  irregular fluctuations in economic activity. 
C)  positive relationship between the quantity of money in an economy and inflation. 
D)  predictable changes in economic activity due to changes in government spending and taxes. 
A)  relationship between unemployment and inflation. 
B)  irregular fluctuations in economic activity. 
C)  positive relationship between the quantity of money in an economy and inflation. 
D)  predictable changes in economic activity due to changes in government spending and taxes.

Question 14

Which of the following words and phrases best captures the notion of equality?

Accepted Answer

A)  minimum waste 
B)  maximum benefit 
C)  sameness 
D)  efficiency 
A)  minimum waste 
B)  maximum benefit 
C)  sameness 
D)  efficiency

Question 15

Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

Accepted Answer

A)  only Sam is made better off by trade. 
B)  only Annie is made better off by trade. 
C)  both Sam and Annie are made better off by trade. 
D)  neither Sam nor Annie are made better off by trade. 
A)  only Sam is made better off by trade. 
B)  only Annie is made better off by trade. 
C)  both Sam and Annie are made better off by trade. 
D)  neither Sam nor Annie are made better off by trade.

Question 16

Which of the following is not generally regarded by economists as a legitimate reason for the government to intervene in a market?

Accepted Answer

A)  to promote efficiency 
B)  to promote equality 
C)  to enforce property rights 
D)  to protect an industry from foreign competition 
A)  to promote efficiency 
B)  to promote equality 
C)  to enforce property rights 
D)  to protect an industry from foreign competition

Question 17

Which of the following is the primary cause of inflation?

Accepted Answer

A)  an increase in the quantity of money 
B)  an increase in government spending 
C)  an increase in unemployment 
D)  an increase in productivity 
A)  an increase in the quantity of money 
B)  an increase in government spending 
C)  an increase in unemployment 
D)  an increase in productivity

Question 18

Economists use the term to refer to an increase in the overall level of prices in the economy.

Accepted Answer

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

Question 19

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 20

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.

Exam 1: Ten Principles of Economics

Trade between the United States and Guatemala

When the government attempts to improve equality in an economy the result is often

Which of the following would a permanent increase in the growth rate of the money supply change permanently?

Productivity is defined as the quantity of goods and services produced from each unit of labor input.

You have driven 800 miles on a vacation and then you notice that you are only 15 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

Explain how trade with other countries is beneficial.

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?

The principle that trade can make everyone better off applies to

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

Scenario 1-6 It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors. -Refer to Scenario 1-6. What is the company's average cost?

It costs a company $35,000 to produce 500 graphing calculators. The company's cost will be $35,080 if it produces an additional graphing calculator. If the company produces 501 graphing calculators then

The business cycle is the

Which of the following words and phrases best captures the notion of equality?

Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

Which of the following is not generally regarded by economists as a legitimate reason for the government to intervene in a market?

Which of the following is the primary cause of inflation?

Economists use the term to refer to an increase in the overall level of prices in the economy.

In most societies, resources are allocated by

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

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