Question 1

Explain the difference between poverty and scarcity.

Accepted Answer

The answer of Explain the difference between poverty and scarcity....

Question 2

Tractors, shovels, copy machines and computer programming expertise are all examples of scarce resources.

Accepted Answer

A) True 
 B)False

Question 3

Resources are costly because they have alternative uses.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is true with regard to economic growth?​

Accepted Answer

A) ​Small differences in economic growth rates make small differences in Real GDP over time. 
B) ​Once a country is richer than other countries, it will remain richer regardless of differences in economic growth rates. 
C) ​Economic growth rates tell us nothing about the distribution of output and income in a country. 
D) ​All of the above are true.

Question 5

To economists, the resource category land includes all of the following except:

Accepted Answer

A) ​trees. 
B) ​a sawmill. 
C) ​a water body. 
D) ​a limestone deposit.

Question 6

The opportunity cost of an action is equal to:

Accepted Answer

A) ​only the monetary payment the action required. 
B) ​the total time spent by all parties in carrying out the action. 
C) ​the highest valued opportunity that must be sacrificed in order to take the action. 
D) ​the value of all of the alternative actions that could have been taken.

Question 7

How can market failure occur in the market for hybrid automobiles? What could the government try to do to improve the situation?
​

Accepted Answer

The answer of How can market failure occur in the...

Question 8

Which of the following are consequences of inflation?

Accepted Answer

A) ​It increases the burdens on people with fixed incomes when inflation is not anticipated. 
B) ​It hurts savers who did not anticipate how high the inflation was, but helps those who have borrowed at a fixed rate before the inflation became apparent. 
C) ​Inflation imposes costs on people who devote resources to protecting themselves from expected inflation. 
D) ​all of the above

Question 9

Market failure is a term used to describe what happens when market arrangements do not allocate resources efficiently.​

Accepted Answer

A) True 
 B)False

Question 10

Tom is a castaway who washes up on a remote island. He can kill eight birds per hour or catch ten fish per day. The natives on the island can kill ten birds per day or catch twenty fish per day. According to comparative advantage,

Accepted Answer

A) ​Tom should kill more birds and fish less, then trade birds for fish. 
B) ​Tom should kill fewer birds and fish more, then trade fish for birds. 
C) ​Both, Tom should kill more birds and fish less. 
D) ​Both, Tom should kill fewer birds and fish more.

Question 11

Al B. Core works at a Fresh Fish Market. The market sells fresh fish from 9 am.until 7 p.m.every day.The store does not sell day-old fish, so all unsold fish are thrown away at 7 p.m.each day.If Al has lots of fresh fish left at the end of the day that cost him $300 to acquire, what should Al do?​

Accepted Answer

A) ​Lower the price of the remaining fish, even if he can't recover his $300. 
B) ​Lower the price of the remaining fish, but under no circumstances should the price fall below $300 for the remaining fish. 
C) ​Throw the fish away even if he could sell some of them at a discounted price. 
D) ​Starting tomorrow, lower the price on all fish so they will all be sold by mid-day.

Question 12

Which of the following is an example of a capital resource?

Accepted Answer

A) ​redwood trees 
B) ​unskilled labor 
C) ​stocks and bonds 
D) ​an oil rig

Question 13

The marginal cost of a vacation in Jamaica is $3,000. The marginal benefit to Jordan of a vacation in Jamaica is $3,500.

Accepted Answer

A) ​According to the rule of rational choice, Jordan should choose not to vacation in Jamaica at this time. 
B) ​According to the rule of rational choice, Jordan will experience a net gain of $500 if he vacations in Jamaica. 
C) ​According to the rule of rational choice, Jordan will experience a net gain of $3,500 if he vacations in Jamaica. 
D) ​According to the rule of rational choice, Jordan will experience a net gain of $3,000 if he vacations in Jamaica.

Question 14

The opportunity cost of an action is:

Accepted Answer

A) ​the value of the best foregone alternative. 
B) ​the difference between the benefits that result and the expenses incurred as a result of the action. 
C) ​the same as the expected benefit of the action. 
D) ​the same for everyone who undertakes the action.

Question 15

It is difficult to make the concept of need useful because it is difficult to define and compare "needs" among people.

Accepted Answer

A) True 
 B)False

Question 16

The opportunity cost of attending a university for a year is measured by:

Accepted Answer

A) ​the tuition fees incurred. 
B) ​the size of the student loans the student becomes responsible for. 
C) ​the sum of all expenditures on rent, food, books, and tuition incurred during the school year. 
D) ​the value of the best opportunity or opportunities foregone in order to enroll for the year.

Question 17

Lance's boss offers him twice his usual wage rate to work tonight instead of taking his girlfriend on a romantic date. This offer will likely:

Accepted Answer

A) ​not affect the opportunity cost of going on the date. 
B) ​reduce the opportunity cost of going on the date because giving up the additional work dollars will make his girlfriend feel even more appreciated. 
C) ​increase the opportunity cost of going on the date. 
D) ​reduce the opportunity cost of working.

Question 18

According to the rule of rational choice, an individual will undertake an activity as long as:​

Accepted Answer

A) ​the expected marginal benefits are less than the expected marginal costs. 
B) ​the expected marginal benefits are greater than the expected marginal costs. 
C) ​total expected costs exceed total expected benefits. 
D) ​total expected benefits exceed total expected costs.

Question 19

If you made a wish list of things you wanted but did not now have, they you became able to have the things on that list, scarcity would be eliminated.

Accepted Answer

A) True 
 B)False

Question 20

Opportunity costs:

Accepted Answer

A) ​only include explicit costs paid out-of-pocket. 
B) ​never involve costs paid out-of-pocket. 
C) ​may or may not involve costs paid out-of-pocket. 
D) ​are always measured in terms of time.

Exam 2: Eight Powerful Ideas

Explain the difference between poverty and scarcity.

Tractors, shovels, copy machines and computer programming expertise are all examples of scarce resources.

Resources are costly because they have alternative uses.

Which of the following is true with regard to economic growth?​

To economists, the resource category land includes all of the following except:

The opportunity cost of an action is equal to:

How can market failure occur in the market for hybrid automobiles? What could the government try to do to improve the situation? ​

Which of the following are consequences of inflation?

Market failure is a term used to describe what happens when market arrangements do not allocate resources efficiently.​

Tom is a castaway who washes up on a remote island. He can kill eight birds per hour or catch ten fish per day. The natives on the island can kill ten birds per day or catch twenty fish per day. According to comparative advantage,

Which of the following is an example of a capital resource?

The marginal cost of a vacation in Jamaica is $3,000. The marginal benefit to Jordan of a vacation in Jamaica is $3,500.

The opportunity cost of an action is:

It is difficult to make the concept of need useful because it is difficult to define and compare "needs" among people.

The opportunity cost of attending a university for a year is measured by:

Lance's boss offers him twice his usual wage rate to work tonight instead of taking his girlfriend on a romantic date. This offer will likely:

According to the rule of rational choice, an individual will undertake an activity as long as:​

If you made a wish list of things you wanted but did not now have, they you became able to have the things on that list, scarcity would be eliminated.

Opportunity costs:

Which of the following is true with regard to economic growth?

How can market failure occur in the market for hybrid automobiles? What could the government try to do to improve the situation?

Market failure is a term used to describe what happens when market arrangements do not allocate resources efficiently.

According to the rule of rational choice, an individual will undertake an activity as long as: