Question 1

A resource is anything that:

Accepted Answer

A)  can be used in production. 
B)  you pay for. 
C)  is in scarce supply. 
D)  can be consumed. 
A)  can be used in production. 
B)  you pay for. 
C)  is in scarce supply. 
D)  can be consumed.

Question 2

The BEST measure of the opportunity cost of any choice is:

Accepted Answer

A)  the monetary cost of that choice. 
B)  whatever you have given up to make that choice, even if no monetary costs are involved. 
C)  the cost associated with not taking full advantage of the opportunity offered by that choice. 
D)  your hourly wage. 
A)  the monetary cost of that choice. 
B)  whatever you have given up to make that choice, even if no monetary costs are involved. 
C)  the cost associated with not taking full advantage of the opportunity offered by that choice. 
D)  your hourly wage.

Question 3

In an attempt to reduce shooting deaths, some cities have offered money to people who turn in illegal guns. This program is an example of the government using _____ to influence behavior.

Accepted Answer

A)  financial incentives 
B)  law 
C)  marginal analysis 
D)  the gains from trade 
A)  financial incentives 
B)  law 
C)  marginal analysis 
D)  the gains from trade

Question 4

Which statement is NOT one of the four principles that underlie individual choice?

Accepted Answer

A)  Choices are necessary because resources are scarce. 
B)  Overall spending sometimes gets out of line with the economy's productive capacity. 
C)  "How much" is a decision at the margin. 
D)  People usually respond to incentives, exploiting opportunities to make themselves better off. 
A)  Choices are necessary because resources are scarce. 
B)  Overall spending sometimes gets out of line with the economy's productive capacity. 
C)  "How much" is a decision at the margin. 
D)  People usually respond to incentives, exploiting opportunities to make themselves better off.

Question 5

If Allison drives to a large city 100 miles from her small community to do her back-to-school shopping, this will:

Accepted Answer

A)  hurt Allison's community because Allison's spending will be income for people in the large city. 
B)  hurt the city because Allison will take the goods that she purchases back home to her small town. 
C)  help Allison's community because Allison's shopping in the big city leaves more goods for the other small-town residents to buy. 
D)  help the city because people from small towns usually buy things that people in big cities don't want. 
A)  hurt Allison's community because Allison's spending will be income for people in the large city. 
B)  hurt the city because Allison will take the goods that she purchases back home to her small town. 
C)  help Allison's community because Allison's shopping in the big city leaves more goods for the other small-town residents to buy. 
D)  help the city because people from small towns usually buy things that people in big cities don't want.

Question 6

All children have to be immunized against polio, measles, mumps, and other diseases. If you don't have enough money to pay for the immunizations, they will be provided free at the county health clinic. Which economic principle does this statement BEST represent?

Accepted Answer

A)  People usually respond to incentives, exploiting opportunities to make themselves better off. 
B)  Resources should be used efficiently to achieve society's goals. 
C)  When markets don't achieve efficiency, government intervention can improve society's welfare. 
D)  Government policies can change spending. 
A)  People usually respond to incentives, exploiting opportunities to make themselves better off. 
B)  Resources should be used efficiently to achieve society's goals. 
C)  When markets don't achieve efficiency, government intervention can improve society's welfare. 
D)  Government policies can change spending.

Question 7

If equilibrium exists:

Accepted Answer

A)  all individuals must have an equal amount of income. 
B)  the price in that market will not fluctuate by more than 5%. 
C)  there will be no remaining opportunities for individuals to make themselves better off. 
D)  the number of buyers will equal the number of sellers. 
A)  all individuals must have an equal amount of income. 
B)  the price in that market will not fluctuate by more than 5%. 
C)  there will be no remaining opportunities for individuals to make themselves better off. 
D)  the number of buyers will equal the number of sellers.

Question 8

An economy is efficient when:

Accepted Answer

A)  the problem of scarcity is eliminated. 
B)  output is distributed equitably. 
C)  all opportunities to make some people better off without making other people worse off have been taken. 
D)  all opportunities to make some people worse off without making other people better off have been taken. 
A)  the problem of scarcity is eliminated. 
B)  output is distributed equitably. 
C)  all opportunities to make some people better off without making other people worse off have been taken. 
D)  all opportunities to make some people worse off without making other people better off have been taken.

Question 9

A dozen friends got together to celebrate a birthday. If the birthday cake is cut into 12 pieces of the same size and each of the 12 partygoers gets a slice, this cake distribution is:

Accepted Answer

A)  efficient but not equitable. 
B)  equitable but not efficient. 
C)  efficient and equitable. 
D)  equitable. 
A)  efficient but not equitable. 
B)  equitable but not efficient. 
C)  efficient and equitable. 
D)  equitable.

Question 10

In most cases, economic efficiency is achieved through:

Accepted Answer

A)  incentives built into a market economy. 
B)  reducing regulation. 
C)  individuals seeking out opportunities that involve no risk. 
D)  maximizing equity. 
A)  incentives built into a market economy. 
B)  reducing regulation. 
C)  individuals seeking out opportunities that involve no risk. 
D)  maximizing equity.

Question 11

Freshwater is considered a scarce good because:

Accepted Answer

A)  not enough of it is available for all needs. 
B)  it does not have any uses. 
C)  scarce goods are not expensive. 
D)  not enough of it is available for all needs and because it is not expensive. 
A)  not enough of it is available for all needs. 
B)  it does not have any uses. 
C)  scarce goods are not expensive. 
D)  not enough of it is available for all needs and because it is not expensive.

Question 12

You decide to join the economics club, but this means you can't join the accounting club because it meets at the same time. Which economic prinicple 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 13

Increases in total output realized when individuals specialize in particular tasks and trade are known as:

Accepted Answer

A)  the gains from trade. 
B)  the profits obtained from sales of a good or service. 
C)  marginal analysis. 
D)  a trade-off. 
A)  the gains from trade. 
B)  the profits obtained from sales of a good or service. 
C)  marginal analysis. 
D)  a trade-off.

Question 14

Which statement is TRUE?

Accepted Answer

A)  The concept of equilibrium requires that all individuals have an equal amount of income. 
B)  If a market is in equilibrium, the price in that market will not fluctuate by more than 5%. 
C)  If a market is in equilibrium, there will be no remaining opportunities for individuals to make themselves better off. 
D)  A market is in equilibrium when the number of buyers is equal to the number of sellers. 
A)  The concept of equilibrium requires that all individuals have an equal amount of income. 
B)  If a market is in equilibrium, the price in that market will not fluctuate by more than 5%. 
C)  If a market is in equilibrium, there will be no remaining opportunities for individuals to make themselves better off. 
D)  A market is in equilibrium when the number of buyers is equal to the number of sellers.

Question 15

The economic way of thinking entails:

Accepted Answer

A)  the analysis of benefits but not costs. 
B)  the analysis of costs but not benefits. 
C)  making choices at the margin. 
D)  making the distinction between microeconomics and macroeconomics. 
A)  the analysis of benefits but not costs. 
B)  the analysis of costs but not benefits. 
C)  making choices at the margin. 
D)  making the distinction between microeconomics and macroeconomics.

Question 16

In Ventura County, California, strawberry production is limited by the number of acres available for agriculture production. Which economic concept does this statement BEST represent?

Accepted Answer

A)  Scarcity 
B)  Marginal Analysis. 
C)  Equilibrium. 
D)  Opportunity Cost. 
A)  Scarcity 
B)  Marginal Analysis. 
C)  Equilibrium. 
D)  Opportunity Cost.

Question 17

Corner offices in high-rise office buildings usually cost more to rent than other offices. This BEST illustrates the economic concept of:

Accepted Answer

A)  specialization. 
B)  scarcity. 
C)  equilibrium. 
D)  opportunity costs. 
A)  specialization. 
B)  scarcity. 
C)  equilibrium. 
D)  opportunity costs.

Question 18

Grades are low in your biology class, so your professor offers an optional 10-point extra-credit assignment. Most of the students turn in the assignment. Which economic prinicple 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

The student center on campus has burritos, bagels, or burgers for lunch, and they all cost the same. You love burgers and bagels, but you decide to have a burger today. If they were out of burgers, you would have bought a bagel. 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)  One person's spending is another person's income. 
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)  One person's spending is another person's income. 
D)  There are gains from trade.

Question 20

As long as individuals know that they can find the goods and services they want in the market, they are willing to forgo being self-sufficient and are willing to specialize.

Accepted Answer

A) True 
 B)False

A resource is anything that:

The BEST measure of the opportunity cost of any choice is:

In an attempt to reduce shooting deaths, some cities have offered money to people who turn in illegal guns. This program is an example of the government using _____ to influence behavior.

Which statement is NOT one of the four principles that underlie individual choice?

If Allison drives to a large city 100 miles from her small community to do her back-to-school shopping, this will:

All children have to be immunized against polio, measles, mumps, and other diseases. If you don't have enough money to pay for the immunizations, they will be provided free at the county health clinic. Which economic principle does this statement BEST represent?

If equilibrium exists:

An economy is efficient when:

A dozen friends got together to celebrate a birthday. If the birthday cake is cut into 12 pieces of the same size and each of the 12 partygoers gets a slice, this cake distribution is:

In most cases, economic efficiency is achieved through:

Freshwater is considered a scarce good because:

You decide to join the economics club, but this means you can't join the accounting club because it meets at the same time. Which economic prinicple does this statement BEST represent?

Increases in total output realized when individuals specialize in particular tasks and trade are known as:

Which statement is TRUE?

The economic way of thinking entails:

In Ventura County, California, strawberry production is limited by the number of acres available for agriculture production. Which economic concept does this statement BEST represent?

Corner offices in high-rise office buildings usually cost more to rent than other offices. This BEST illustrates the economic concept of:

Grades are low in your biology class, so your professor offers an optional 10-point extra-credit assignment. Most of the students turn in the assignment. Which economic prinicple does this statement BEST represent?

The student center on campus has burritos, bagels, or burgers for lunch, and they all cost the same. You love burgers and bagels, but you decide to have a burger today. If they were out of burgers, you would have bought a bagel. Which economic principle does this statement BEST represent?

As long as individuals know that they can find the goods and services they want in the market, they are willing to forgo being self-sufficient and are willing to specialize.

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

A resource is anything that:

The BEST measure of the opportunity cost of any choice is:

In an attempt to reduce shooting deaths, some cities have offered money to people who turn in illegal guns. This program is an example of the government using _____ to influence behavior.

Which statement is NOT one of the four principles that underlie individual choice?

If Allison drives to a large city 100 miles from her small community to do her back-to-school shopping, this will:

All children have to be immunized against polio, measles, mumps, and other diseases. If you don't have enough money to pay for the immunizations, they will be provided free at the county health clinic. Which economic principle does this statement BEST represent?

If equilibrium exists:

An economy is efficient when:

A dozen friends got together to celebrate a birthday. If the birthday cake is cut into 12 pieces of the same size and each of the 12 partygoers gets a slice, this cake distribution is:

In most cases, economic efficiency is achieved through:

Freshwater is considered a scarce good because:

You decide to join the economics club, but this means you can't join the accounting club because it meets at the same time. Which economic prinicple does this statement BEST represent?

Increases in total output realized when individuals specialize in particular tasks and trade are known as:

Which statement is TRUE?

The economic way of thinking entails:

In Ventura County, California, strawberry production is limited by the number of acres available for agriculture production. Which economic concept does this statement BEST represent?

Corner offices in high-rise office buildings usually cost more to rent than other offices. This BEST illustrates the economic concept of:

Grades are low in your biology class, so your professor offers an optional 10-point extra-credit assignment. Most of the students turn in the assignment. Which economic prinicple does this statement BEST represent?

The student center on campus has burritos, bagels, or burgers for lunch, and they all cost the same. You love burgers and bagels, but you decide to have a burger today. If they were out of burgers, you would have bought a bagel. Which economic principle does this statement BEST represent?

As long as individuals know that they can find the goods and services they want in the market, they are willing to forgo being self-sufficient and are willing to specialize.

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