Question 1

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal cost.

Accepted Answer

A) True 
 B)False  False

Question 2

The Farm Factory,a booth at the local Farmer's Market,sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon.What is the opportunity cost of buying a dozen eggs?

Accepted Answer

A)  1 2/3 gallons of milk
B)  3/5 of a gallon of milk
C)  $2.50
D)  $1.50 B

Question 3

More chief executive officers of Fortune 500 companies majored in economics than in any other subject.

Accepted Answer

A) True 
 B)False  True

Question 4

The decisions General Motors makes in determining production levels for its Chevy Volt is an example of a microeconomic topic.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is motivated by an equity concern?

Accepted Answer

A)  Some U.S.colleges have cut back on merit scholarships since these programs siphon money from need-based programs,thus harming lower-income students with greater financial need.
B)  Following the removal of subsidies in urban water use,household demand for water decreased quite significantly in Bogor,Indonesia.
C)  In November 2003,the Federal Communications Commission implemented the "local number portability" rule which gives cell phone customers the option of keeping their number when they switch carriers within the same geographic region.
D)  The United States protects intellectual property rights,allowing inventors to prevent others from using their inventions without payment.

Question 6

The decision about what goods and services will be produced in a market economy is made by

Accepted Answer

A)  lawmakers in the government voting on what will be produced.
B)  workers deciding to produce only what the boss says must be produced.
C)  producers deciding what society wants most.
D)  consumers and firms choosing which goods and services to buy or produce.
E)  consumers dictating to firms what they need most.

Question 7

Trade-offs force society to make choices when answering what three fundamental questions?

Accepted Answer

The answer of Trade-offs force society to make choices when...

Question 8

Skeeter's Skeeball Castle has seen its business slow down ever since Kerrie's Off-Key Karaoke opened up next door.Since the opening of Kerrie's Off-Key Karaoke,the opportunity cost of playing skeeball at Skeeter's has

Accepted Answer

A)  decreased.
B)  increased.
C)  fallen to zero.
D)  not changed.

Question 9

When voluntary exchange takes place,only one party gains from the exchange.

Accepted Answer

A) True 
 B)False

Question 10

A primary role of ________ is to describe how choices are made,analyze the results of those choices,and advise on how better decisions can be made.

Accepted Answer

A)  economists
B)  government policymakers
C)  a market economy
D)  marginal analysis

Question 11

Which of the following contributes to the efficiency of markets?

Accepted Answer

A)  Governments play an active role in the day-to-day operations of markets.
B)  Markets are able to bring about an equitable distribution of goods and services.
C)  Markets promote equal standards of living.
D)  Markets promote competition and voluntary exchange.

Question 12

Dr.Goldfinger decides to invest in companies which he believes can "improve the productivity and efficiency" of health care services.What would Dr.Goldfinger need to do to try to achieve allocative efficiency?

Accepted Answer

A)  invest in companies that produce goods and services based on consumer preferences
B)  invest in companies that produce goods and services at the lowest possible cost
C)  invest in companies that fairly distribute their products and services
D)  invest in companies that produce up to the point where the marginal cost of the last unit produced is zero

Question 13

If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8,the slope of this line is

Accepted Answer

A)  negative 8 divided by 4.
B)  seven tenths.
C)  negative one half.
D)  one -and one half.

Question 14

Zane's Vanes is a service that restores old weather vanes.Zane has just spent $125 purchasing a 1920s-era weather vane which he expects to restore and sell for $500 once the work is completed.After having spent $125,Zane realizes that he will need to spend an additional $200 on materials to complete the restoration.Alternatively,he can sell the weather vane without restoring it for $200.What should he do?

Accepted Answer

A)  He should sell the weather vane now to make the most profit.
B)  It does not matter what he does; he is going to take a loss on the project.
C)  He should finish the restoration and then sell the weather vane.
D)  He should sell the weather vane back to the party he purchased it from and cut his losses.

Question 15

Article Summary
In a January,2017 report,the World Economic Forum stated that the growing income gap has become one of the biggest threats to the global economy and cannot be remedied solely by higher economic growth.Although income inequality has fallen over the past 30 years on a global level,in high-income countries like the United States and the United Kingdom,the top 1% of income earners have benefitted disproportionately from economic growth.This has led a growing belief that the traditional model for economic growth does not result in a population-wide increase in income.According to the report,"The growing mood of anti-establishment populism suggests we may have passed the stage where [reviving economic growth] alone would remedy fractures in society: reforming market capitalism must also be added to the agenda." 
Source: Lauren Gensler,"Rising Income Inequality Is Throwing The Future Of Capitalism Into Question,Says World Economic Forum," Forbes,January 11,2017.
-Refer to the Article Summary.The article discusses income inequality and how economic growth alone is no longer resulting in a more equitable distribution of income.Would an equitable distribution of income necessarily be the most efficient distribution of income?

Accepted Answer

A)  Yes,equitable and efficient are two different words which have the same definition.
B)  Yes,in order for the distribution to be equitable,it must also be efficient.
C)  No,it is impossible to have an economically efficient distribution which is also an equitable distribution.
D)  No,an economically efficient distribution of income would not necessarily be equitable.

Question 16

Table 1-1
  Eva runs a small bakery in the village of Roggerli.She is debating whether she should extend her hours of operation.Eva figures that her sales revenue will depend on the number of additional hours the bakery is open as shown in the table above.She would have to hire a worker for those hours at a wage rate of $12 per hour.
-Refer to Table 1-1.Using marginal analysis,how many hours should Eva extend her bakery's hours of operations?

Accepted Answer

A)  2 hours
B)  3 hours
C)  4 hours
D)  5 hours
E)  6 hours

Question 17

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics?
a.college tuition rates
b.farm subsidies
c.national income
d.automobile prices
e.air traffic congestion
f.economic recession

Accepted Answer

The answer of Which of the following are primarily macroeconomic...

Question 18

Which of the following statements about economic resources is false?

Accepted Answer

A)  Economic resources include financial capital and money.
B)  Economic resources are also called factors of production.
C)  Economic resources are used to produce goods and services.
D)  Some economic resources are human-made while others are found in nature.

Question 19

Table 1-2
  Julius runs a small tailor shop in the city of Bloomfield.He is debating whether he should extend his hours of operation.Julius figures that his sales revenue will depend on the number of additional hours the tailor shop is open as shown in the table above.He would have to hire a worker for those hours at a wage rate of $18 per hour.
-Refer to Table 1-2.What is Julius's marginal benefit if he decides to stay open for three hours instead of two hours?

Accepted Answer

A)  $15
B)  $25
C)  $65
D)  $80

Question 20

In market economies,income distribution is always going to be completely equitable.

Accepted Answer

A) True 
 B)False

Exam 1: Economics: Foundations and Models

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal cost.

The Farm Factory,a booth at the local Farmer's Market,sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon.What is the opportunity cost of buying a dozen eggs?

More chief executive officers of Fortune 500 companies majored in economics than in any other subject.

The decisions General Motors makes in determining production levels for its Chevy Volt is an example of a microeconomic topic.

Which of the following is motivated by an equity concern?

The decision about what goods and services will be produced in a market economy is made by

Trade-offs force society to make choices when answering what three fundamental questions?

Skeeter's Skeeball Castle has seen its business slow down ever since Kerrie's Off-Key Karaoke opened up next door.Since the opening of Kerrie's Off-Key Karaoke,the opportunity cost of playing skeeball at Skeeter's has

When voluntary exchange takes place,only one party gains from the exchange.

A primary role of ________ is to describe how choices are made,analyze the results of those choices,and advise on how better decisions can be made.

Which of the following contributes to the efficiency of markets?

Dr.Goldfinger decides to invest in companies which he believes can "improve the productivity and efficiency" of health care services.What would Dr.Goldfinger need to do to try to achieve allocative efficiency?

If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8,the slope of this line is

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics? a.college tuition rates b.farm subsidies c.national income d.automobile prices e.air traffic congestion f.economic recession

Which of the following statements about economic resources is false?

In market economies,income distribution is always going to be completely equitable.