Question 1

Which statement is NOT true according to standard economic theory?

Accepted Answer

A)  Resources are scarce when they can satisfy everyone's wants. 
B)  The true cost of a choice is what you must give up to enjoy that choice. 
C)  People typically make choices that will make them better off. 
D)  Rational people use marginal analysis when making "how much" decisions. 
A)  Resources are scarce when they can satisfy everyone's wants. 
B)  The true cost of a choice is what you must give up to enjoy that choice. 
C)  People typically make choices that will make them better off. 
D)  Rational people use marginal analysis when making "how much" decisions.

Question 2

When we are forced to make choices, we are facing the concept of:

Accepted Answer

A)  human capital. 
B)  inflation. 
C)  scarcity. 
D)  market failure. 
A)  human capital. 
B)  inflation. 
C)  scarcity. 
D)  market failure.

Question 3

Economists use the term equilibrium to describe situation when:

Accepted Answer

A)  individuals are equal. 
B)  goods are distributed equitably . 
C)  there are equal number of buyers and sellers.. 
D)  no individual would be better off taking a different action or no individual has an incentive to change his or her behavior. 
A)  individuals are equal. 
B)  goods are distributed equitably . 
C)  there are equal number of buyers and sellers.. 
D)  no individual would be better off taking a different action or no individual has an incentive to change his or her behavior.

Question 4

Scarcity in economics means that:

Accepted Answer

A)  we often do not have sufficient resources to achieve our objectives. 
B)  the wants of people are limited. 
C)  there must be poor people in rich countries. 
D)  shortages exist in nearly all markets. 
A)  we often do not have sufficient resources to achieve our objectives. 
B)  the wants of people are limited. 
C)  there must be poor people in rich countries. 
D)  shortages exist in nearly all markets.

Question 5

Which statement is NOT one of the five principles for understanding how individual choices interact?

Accepted Answer

A)  There are gains from trade. 
B)  Markets move toward equilibrium. 
C)  Resources should be used as efficiently as possible to achieve society's goals. 
D)  Overall spending sometimes gets out of line with the economy's productive capability. 
A)  There are gains from trade. 
B)  Markets move toward equilibrium. 
C)  Resources should be used as efficiently as possible to achieve society's goals. 
D)  Overall spending sometimes gets out of line with the economy's productive capability.

Question 6

An increase in efficiency means that an economy has:

Accepted Answer

A)  reduced its opportunity costs. 
B)  increased the equity of its distribution of goods and services. 
C)  made more people better off without making others worse off. 
D)  increased the incentives for its citizens to follow their own self-interest. 
A)  reduced its opportunity costs. 
B)  increased the equity of its distribution of goods and services. 
C)  made more people better off without making others worse off. 
D)  increased the incentives for its citizens to follow their own self-interest.

Question 7

The student center on campus has burritos, bagels, or burgers for lunch, and they all cost the same. You decide to have a burger today, but if they were out of burgers, you would have bought a bagel. Your opportunity cost of buying a burger is your enjoyment of the:

Accepted Answer

A)  burger. 
B)  bagel. 
C)  burrito. 
D)  bagel and the burrito. 
A)  burger. 
B)  bagel. 
C)  burrito. 
D)  bagel and the burrito.

Question 8

The phrase gains from trade refers to the:

Accepted Answer

A)  profits obtained from sales of a good or service. 
B)  increase in total output that is realized when individuals specialize in particular tasks and trade with each other. 
C)  gains that one obtains by taking advantage of an uninformed buyer and selling at a higher than average price. 
D)  gains that one obtains by taking advantage of a temporary discount, or sale price. 
A)  profits obtained from sales of a good or service. 
B)  increase in total output that is realized when individuals specialize in particular tasks and trade with each other. 
C)  gains that one obtains by taking advantage of an uninformed buyer and selling at a higher than average price. 
D)  gains that one obtains by taking advantage of a temporary discount, or sale price.

Question 9

If every individual were required to be self-sufficient:

Accepted Answer

A)  living standards would fall. 
B)  living standards for some individuals would fall, but for others they would rise. 
C)  living standards would rise. 
D)  it's impossible to say how living standards would change. 
A)  living standards would fall. 
B)  living standards for some individuals would fall, but for others they would rise. 
C)  living standards would rise. 
D)  it's impossible to say how living standards would change.

Question 10

Intel finds it difficult to hire enough skilled computer engineers. Which economic concept does this statement BEST represent?

Accepted Answer

A)  scarcity 
B)  specialization 
C)  ceteris paribus 
D)  trade-off 
A)  scarcity 
B)  specialization 
C)  ceteris paribus 
D)  trade-off

Question 11

The basic concern of microeconomics is to:

Accepted Answer

A)  keep business firms from losing money. 
B)  prove that capitalism is better than socialism. 
C)  study the choices people make. 
D)  use unlimited resources to produce goods and services to satisfy limited wants. 
A)  keep business firms from losing money. 
B)  prove that capitalism is better than socialism. 
C)  study the choices people make. 
D)  use unlimited resources to produce goods and services to satisfy limited wants.

Question 12

In 2003, Congress passed a tax cut. The country did NOT incur any opportunity cost from this decision.

Accepted Answer

A) True 
 B)False

Question 13

An economic situation is in equilibrium when no individual would be better off taking a different action.

Accepted Answer

A) True 
 B)False

Question 14

Your elderly grandma tells you: "I haven't been taking my beloved walks because I'm concerned about falling and getting hurt. See, there is always a cost to doing something. But if you don't do anything, then there is no cost." Your grandma does not understand the economic concept of:

Accepted Answer

A)  scarcity. 
B)  efficiency. 
C)  opportunity cost. 
D)  marginal analysis. 
A)  scarcity. 
B)  efficiency. 
C)  opportunity cost. 
D)  marginal analysis.

Question 15

Manny is attending college and majoring in economics. By doing so, Manny is improving his:

Accepted Answer

A)  land. 
B)  labor. 
C)  capital. 
D)  human capital. 
A)  land. 
B)  labor. 
C)  capital. 
D)  human capital.

Question 16

The Taco Hut charges the same price for everything on its menu: $3 will buy a taco, a burrito, or nachos. You buy the taco and think that if you had not purchased the taco, you would have purchased the burrito. The opportunity cost of the taco is:

Accepted Answer

A)  $3. 
B)  your enjoyment of the burrito. 
C)  $3 and your enjoyment of the burrito. 
D)  $3, your enjoyment of the burrito, and your enjoyment of the nachos. 
A)  $3. 
B)  your enjoyment of the burrito. 
C)  $3 and your enjoyment of the burrito. 
D)  $3, your enjoyment of the burrito, and your enjoyment of the nachos.

Question 17

Because people usually exploit opportunities to make themselves better off, to encourage young people to go to college in their home state, state universities can:

Accepted Answer

A)  charge higher tuition to in-state students. 
B)  award special scholarships to out-of-state students. 
C)  offer high-interest loans to in-state students. 
D)  offer lower tuition to in-state students. 
A)  charge higher tuition to in-state students. 
B)  award special scholarships to out-of-state students. 
C)  offer high-interest loans to in-state students. 
D)  offer lower tuition to in-state students.

Question 18

If you decide to go to Cancún with your friends during spring break, you cannot go to Paris with your sister in the summer. Which economic principle does this statement BEST represent?

Accepted Answer

A)  The true cost of something is its opportunity cost. 
B)  "How much" is a decision at the margin. 
C)  People usually respond to incentives, exploiting opportunities to make themselves better off. 
D)  There are gains from trade. 
A)  The true cost of something is its opportunity cost. 
B)  "How much" is a decision at the margin. 
C)  People usually respond to incentives, exploiting opportunities to make themselves better off. 
D)  There are gains from trade.

Question 19

Which method of discouraging speeding is likely to be MOST effective given that people usually exploit opportunities to make themselves better off?

Accepted Answer

A)  increasing the number of signs stating the speed limit 
B)  increasing the fine associated with speeding tickets 
C)  public service announcements reminding drivers of the dangers of speeding 
D)  asking drivers to reduce speed 
A)  increasing the number of signs stating the speed limit 
B)  increasing the fine associated with speeding tickets 
C)  public service announcements reminding drivers of the dangers of speeding 
D)  asking drivers to reduce speed

Question 20

Which statement demonstrates one of the three principles of economy-wide interactions?

Accepted Answer

A)  A student chooses to rent a movie with friends, rather than study for an economics quiz. 
B)  Your roommate offers to pay for the movie tickets if you drive to the theater. 
C)  A city builds a new public park on the grounds of an abandoned warehouse. 
D)  In 2008, fearing a recession, Congress approved a White House proposal to rebate some taxes for 2007. 
A)  A student chooses to rent a movie with friends, rather than study for an economics quiz. 
B)  Your roommate offers to pay for the movie tickets if you drive to the theater. 
C)  A city builds a new public park on the grounds of an abandoned warehouse. 
D)  In 2008, fearing a recession, Congress approved a White House proposal to rebate some taxes for 2007.

Which statement is NOT true according to standard economic theory?

When we are forced to make choices, we are facing the concept of:

Economists use the term equilibrium to describe situation when:

Scarcity in economics means that:

Which statement is NOT one of the five principles for understanding how individual choices interact?

An increase in efficiency means that an economy has:

The student center on campus has burritos, bagels, or burgers for lunch, and they all cost the same. You decide to have a burger today, but if they were out of burgers, you would have bought a bagel. Your opportunity cost of buying a burger is your enjoyment of the:

The phrase gains from trade refers to the:

If every individual were required to be self-sufficient:

Intel finds it difficult to hire enough skilled computer engineers. Which economic concept does this statement BEST represent?

The basic concern of microeconomics is to:

In 2003, Congress passed a tax cut. The country did NOT incur any opportunity cost from this decision.

An economic situation is in equilibrium when no individual would be better off taking a different action.

Your elderly grandma tells you: "I haven't been taking my beloved walks because I'm concerned about falling and getting hurt. See, there is always a cost to doing something. But if you don't do anything, then there is no cost." Your grandma does not understand the economic concept of:

Manny is attending college and majoring in economics. By doing so, Manny is improving his:

The Taco Hut charges the same price for everything on its menu: $3 will buy a taco, a burrito, or nachos. You buy the taco and think that if you had not purchased the taco, you would have purchased the burrito. The opportunity cost of the taco is:

Because people usually exploit opportunities to make themselves better off, to encourage young people to go to college in their home state, state universities can:

If you decide to go to Cancún with your friends during spring break, you cannot go to Paris with your sister in the summer. Which economic principle does this statement BEST represent?

Which method of discouraging speeding is likely to be MOST effective given that people usually exploit opportunities to make themselves better off?

Which statement demonstrates one of the three principles of economy-wide interactions?

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

GDP and the CPI: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

Exam 1: First Principles

Which statement is NOT true according to standard economic theory?

When we are forced to make choices, we are facing the concept of:

Economists use the term equilibrium to describe situation when:

Scarcity in economics means that:

Which statement is NOT one of the five principles for understanding how individual choices interact?

An increase in efficiency means that an economy has:

The student center on campus has burritos, bagels, or burgers for lunch, and they all cost the same. You decide to have a burger today, but if they were out of burgers, you would have bought a bagel. Your opportunity cost of buying a burger is your enjoyment of the:

The phrase gains from trade refers to the:

If every individual were required to be self-sufficient:

Intel finds it difficult to hire enough skilled computer engineers. Which economic concept does this statement BEST represent?

The basic concern of microeconomics is to:

In 2003, Congress passed a tax cut. The country did NOT incur any opportunity cost from this decision.

An economic situation is in equilibrium when no individual would be better off taking a different action.

Your elderly grandma tells you: "I haven't been taking my beloved walks because I'm concerned about falling and getting hurt. See, there is always a cost to doing something. But if you don't do anything, then there is no cost." Your grandma does not understand the economic concept of:

Manny is attending college and majoring in economics. By doing so, Manny is improving his:

The Taco Hut charges the same price for everything on its menu: $3 will buy a taco, a burrito, or nachos. You buy the taco and think that if you had not purchased the taco, you would have purchased the burrito. The opportunity cost of the taco is:

Because people usually exploit opportunities to make themselves better off, to encourage young people to go to college in their home state, state universities can:

If you decide to go to Cancún with your friends during spring break, you cannot go to Paris with your sister in the summer. Which economic principle does this statement BEST represent?

Which method of discouraging speeding is likely to be MOST effective given that people usually exploit opportunities to make themselves better off?

Which statement demonstrates one of the three principles of economy-wide interactions?

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

GDP and the CPI: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters