Question 1

To say that government intervenes in the economy to promote equality is to say that government is aiming to

Accepted Answer

A)   create a more fair distribution of income.
B)   change the ingredients that are used to "bake" the economic pie.
C)   enlarge the economic pie.
D)   All of the above are correct.E) A) and D)
F) None of the above

Question 2

Most economists believe that an increase in the quantity of money results in

Accepted Answer

A)   an increase in the demand for goods and services.
B)   lower unemployment in the short run.
C)   higher inflation in the long run.
D)   All of the above are correct.E) A) and D)
F) A) and B)

Question 3

When society gets the most it can from its scarce resources, then the outcome is called

Accepted Answer

A)   equitable.
B)   efficient.
C)   normal.
D)   efficacious.E) C) and D)
F) A) and B)

Question 4

The amount of goods and services produced from each unit of labor input is called

Accepted Answer

A)   opportunity cost.
B)   productivity.
C)   externality.
D)   marginal benefit.E) B) and D)
F) A) and B)

Question 5

Prices usually reflect

Accepted Answer

A)   only the value of a good to society.
B)   only the cost to society of making a good.
C)   both the value of a good to society and the cost to society of making the good.
D)   neither the value of a good to society nor the cost to society of making the good.E) B) and C)
F) A) and C)

Question 6

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.E) B) and C)
F) A) and B)

Question 7

Economics deals primarily with the concept of

Accepted Answer

A)   scarcity.
B)   money.
C)   poverty.
D)   banking.E) A) and B)
F) A) and C)

Question 8

Rational people make decisions "at the margin" by comparing .

Accepted Answer

marginal c...

Question 9

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.E) A) and C)
F) B) and D)

Question 10

Which of the following is true?

Accepted Answer

A)   Efficiency refers to the size of the economic pie; equality refers to how the pie is divided.
B)   Government policies usually improve upon both equality and efficiency.
C)   As long as the economic pie continually gets larger, no one will have to go hungry.
D)   Efficiency and equality can both be achieved if the economic pie is cut into equal pieces.E) A) and B)
F) All of the above

Question 11

The word "economy" comes from the Greek word oikonomos, which means

Accepted Answer

A)   "environment."
B)   "production."
C)   "one who manages a household."
D)   "one who makes decisions."E) B) and C)
F) A) and B)

Question 12

Trade can make everyone better off except in the case where one person is better at doing everything.

Accepted Answer

A) True 
 B)False

Question 13

One way that governments can improve market outcomes is to ensure that individuals are able to own and exercise control over their scarce resources.

Accepted Answer

A) True 
 B)False

Question 14

In which of the following decades was there both high inflation and rapid money supply growth in the US?

Accepted Answer

A)   the 1970's and the 1990's
B)   the 1970's but not the 1990's
C)   the 1990's but not the 1970's
D)   neither the 1970's nor the 1990'sE) All of the above
F) B) and D)

Question 15

Your professor loves her work, teaching economics. She has been offered other positions in the corporate world that would increase her income by 25 percent, but she has decided to continue working as a professor. Her decision would not change unless the marginal

Accepted Answer

A)   cost of teaching increased.
B)   benefit of teaching increased.
C)   cost of a corporate job increased.
D)   benefit of a corporate job decreased.E) B) and D)
F) All of the above

Question 16

Scenario 1-3
It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators.
-Refer to Scenario 1-3. What is the company's marginal cost?

Accepted Answer

The answer of Scenario 1-3
It costs a company $35,000 to...

Question 17

Betty's Bakery bakes fresh bread every morning. Any bread not sold by the end of the day is thrown away. A loaf of bread costs Betty $2.00 to produce, and she prices loaves of bread at $3.50 per loaf. Suppose near the end of one day Betty still has 12 loaves of bread on hand. Which of the following is correct?

Accepted Answer

A)   Betty should only sell the remaining bread for $3.50 per loaf since that is the regular price.
B)   Betty should only sell the remaining bread for $2.00 per loaf or more since that is what the bread costs to make.
C)   Betty should be willing to sell the remaining bread for any price above $0 per loaf since she will have to throw it away if she does not sell it for something.
D)   Betty should just throw the bread away and change the price of her bread starting tomorrow to make sure she sells all of her bread each day.E) C) and D)
F) B) and D)

Question 18

In 2011, the average American earned about $48,000 while the average Nigerian earned about $1,200. Which of the following statements is likely?

Accepted Answer

A)   The average American purchases more televisions than the average Nigerian.
B)   The average American has better nutrition and healthcare than the average Nigerian.
C)   The average American has a longer life expectancy than the average Nigerian.
D)   All of the above are correct.E) A) and B)
F) A) and D)

Question 19

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

Accepted Answer

A)   trade can make everyone better off.
B)   people face trade-offs.
C)   rational people think at the margin.
D)   people respond to incentives.E) All of the above
F) C) and D)

Question 20

One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new, fuel-efficient aircraft.

Accepted Answer

A) True 
 B)False

Exam 1: Ten Principles of Economics

The word "economy" comes from the Greek word oikonomos, which means

Correct Answer
verified

The amount of goods and services produced from each unit of labor input is called

Correct Answer
verified

Scenario 1-3 It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators. -Refer to Scenario 1-3. What is the company's marginal cost?

Correct Answer
verified

One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new, fuel-efficient aircraft.

Correct Answer
verified

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

Correct Answer
verified

To say that government intervenes in the economy to promote equality is to say that government is aiming to

Correct Answer
verified

Which of the following is true?

Correct Answer
verified

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

Correct Answer
verified

Your professor loves her work, teaching economics. She has been offered other positions in the corporate world that would increase her income by 25 percent, but she has decided to continue working as a professor. Her decision would not change unless the marginal

Correct Answer
verified

One way that governments can improve market outcomes is to ensure that individuals are able to own and exercise control over their scarce resources.

Correct Answer
verified

Economics deals primarily with the concept of

Correct Answer
verified

In 2011, the average American earned about $48,000 while the average Nigerian earned about $1,200. Which of the following statements is likely?

Correct Answer
verified

Trade can make everyone better off except in the case where one person is better at doing everything.

Correct Answer
verified

When society gets the most it can from its scarce resources, then the outcome is called

Correct Answer
verified

In which of the following decades was there both high inflation and rapid money supply growth in the US?

Correct Answer
verified

Rational people make decisions "at the margin" by comparing .

Correct Answer
verified
marginal c...
View Answer

Correct Answer
verified

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

Correct Answer
verified

Prices usually reflect

Correct Answer
verified

Most economists believe that an increase in the quantity of money results in

Correct Answer
verified

Exam 1: Ten Principles of Economics

The word "economy" comes from the Greek word oikonomos, which means

Correct AnswerverifiedShow Answer

The amount of goods and services produced from each unit of labor input is called

Correct AnswerverifiedShow Answer

Scenario 1-3 It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators. -Refer to Scenario 1-3. What is the company's marginal cost?

Correct AnswerverifiedShow Answer

One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new, fuel-efficient aircraft.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

To say that government intervenes in the economy to promote equality is to say that government is aiming to

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

Correct AnswerverifiedShow Answer

Your professor loves her work, teaching economics. She has been offered other positions in the corporate world that would increase her income by 25 percent, but she has decided to continue working as a professor. Her decision would not change unless the marginal

Correct AnswerverifiedShow Answer

One way that governments can improve market outcomes is to ensure that individuals are able to own and exercise control over their scarce resources.

Correct AnswerverifiedShow Answer

Economics deals primarily with the concept of

Correct AnswerverifiedShow Answer

In 2011, the average American earned about $48,000 while the average Nigerian earned about $1,200. Which of the following statements is likely?

Correct AnswerverifiedShow Answer

Trade can make everyone better off except in the case where one person is better at doing everything.

Correct AnswerverifiedShow Answer

When society gets the most it can from its scarce resources, then the outcome is called

Correct AnswerverifiedShow Answer

In which of the following decades was there both high inflation and rapid money supply growth in the US?

Correct AnswerverifiedShow Answer

Rational people make decisions "at the margin" by comparing .

Correct Answerverifiedmarginal c...View AnswerShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Prices usually reflect

Correct AnswerverifiedShow Answer

Most economists believe that an increase in the quantity of money results in

Correct AnswerverifiedShow Answer

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marginal c...
View Answer

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