Question 1

A nation will engage in voluntary trade if

Accepted Answer

A)  the terms are mutually beneficial for both parties. 
B)  the trade is approved by the World Trade Center. 
C)  there are no domestic costs associated with trade. 
D)  it allows a trade partner to specialize. 
E)  it lacks a comparative advantage in the production of every good. 
A)  the terms are mutually beneficial for both parties. 
B)  the trade is approved by the World Trade Center. 
C)  there are no domestic costs associated with trade. 
D)  it allows a trade partner to specialize. 
E)  it lacks a comparative advantage in the production of every good. A

Question 2

Marginal decisions are said to be made on the units) under consideration.

Accepted Answer

A)  total 
B)  additional 
C)  average of 
D)  sum of 
E)  previous 
A)  total 
B)  additional 
C)  average of 
D)  sum of 
E)  previous B

Question 3

Without scarcity, the study of_______ would be unnecessary.

Accepted Answer

A)  positive incentives 
B)  negative incentives 
C)  resource allocation 
D)  economics 
E)  productivity 
A)  positive incentives 
B)  negative incentives 
C)  resource allocation 
D)  economics 
E)  productivity D

Question 4

Isaac has four potential jobs to consider, each with different salary offers. From highest to lowest, the salaries are: $47,500, $46,000, $45,000, and $42,000. Based on the information provided, if Isaac accepts the highest-paying position, what is his opportunity cost of this position?

Accepted Answer

A)  $46,000 
B)  $42,000 
C)  $47,500 
D)  $133,000 
E)  $1,500 
A)  $46,000 
B)  $42,000 
C)  $47,500 
D)  $133,000 
E)  $1,500

Question 5

According to marginal thinking, an individual will continue to consume until after the benefit of additional consumption _______ its cost.

Accepted Answer

A)  is equal to 
B)  totals 
C)  is greater than 
D)  is less than 
E)  marginalizes 
A)  is equal to 
B)  totals 
C)  is greater than 
D)  is less than 
E)  marginalizes

Question 6

Public buildings in the United States are required to be accessible to the disabled and, as a result, almost all have an elevator. What would be an example of a positive direct incentive for those who can to use stairs?

Accepted Answer

A)  Using the stairs will make it seem that they care about their health and that they aren't lazy. 
B)  Using the stairs will increase the risk of tripping and falling. 
C)  Using the stairs will take more time than taking the elevator and will increase the risk of missing an important meeting. 
D)  Using the stairs will give them some exercise and make them healthier. 
E)  Using the stairs will put elevator repair professionals out of work. 
A)  Using the stairs will make it seem that they care about their health and that they aren't lazy. 
B)  Using the stairs will increase the risk of tripping and falling. 
C)  Using the stairs will take more time than taking the elevator and will increase the risk of missing an important meeting. 
D)  Using the stairs will give them some exercise and make them healthier. 
E)  Using the stairs will put elevator repair professionals out of work.

Question 7

A mother takes her daughter on an outing and promises her ice cream if she behaves. In addition, she warns her that if she misbehaves, she won't be allowed to play with her toys at home. The latter is an example of an)_______ incentive and reinforces the efficacy of the ice cream, an) _______incentive.

Accepted Answer

A)  direct; indirect 
B)  indirect; direct 
C)  negative; positive 
D)  positive; negative 
E)  negative; direct 
A)  direct; indirect 
B)  indirect; direct 
C)  negative; positive 
D)  positive; negative 
E)  negative; direct

Question 8

Bea bakes pastries well, and Lucian raises great herbs. If Lucian trades parsley with Bea in exchange for cupcakes, then

Accepted Answer

A)  both Bea and Lucian are made better off by trade. 
B)  neither Bea nor Lucian are made better off by trade. 
C)  only Bea is made better off by trade. 
D)  only Lucian is made better off by trade. 
E)  either Bea or Lucian is made better off by trade, but not both. 
A)  both Bea and Lucian are made better off by trade. 
B)  neither Bea nor Lucian are made better off by trade. 
C)  only Bea is made better off by trade. 
D)  only Lucian is made better off by trade. 
E)  either Bea or Lucian is made better off by trade, but not both.

Question 9

A dangerous habit among those who own cell phones is driving while talking or texting. Although a great deal has been done to inform drivers of the risks of doing multiple tasks while driving, this informational campaign has been ineffective in the face of increased ownership of cell phones. If you were a policymaker, what types of negative incentives would you suggest to discourage individuals from driving, talking, and texting at the same time?

Accepted Answer

Some possible answers would include maki

Question 10

The basic goal of economics is to

Accepted Answer

A)  control the effects of government action. 
B)  determine how to distribute all that is produced in an economy. 
C)  address the scarcity problem created because the population's desire for goods exceeds the ability to produce them. 
D)  match limited resources to people's limited wants and needs. 
E)  control tastes and wishes so that there will be enough resources to produce all the goods and services that people want. 
A)  control the effects of government action. 
B)  determine how to distribute all that is produced in an economy. 
C)  address the scarcity problem created because the population's desire for goods exceeds the ability to produce them. 
D)  match limited resources to people's limited wants and needs. 
E)  control tastes and wishes so that there will be enough resources to produce all the goods and services that people want.

Question 11

List and briefly explain each of the five foundations of economic thought.

Accepted Answer

The five foundations of economic thought

Question 12

When consumers discard their gasoline-powered automobiles for electric-powered ones, this partially reflects the of _______ gasoline.

Accepted Answer

A)  scarcity 
B)  luxury 
C)  necessity 
D)  specialization 
E)  incentive 
A)  scarcity 
B)  luxury 
C)  necessity 
D)  specialization 
E)  incentive

Question 13

If Alexander doesn't like changing the oil in his car and pays his father to do it for him, he has provided his father with an) _______incentive.

Accepted Answer

A)  direct 
B)  indirect 
C)  neutral 
D)  complementary 
E)  unintended 
A)  direct 
B)  indirect 
C)  neutral 
D)  complementary 
E)  unintended

Question 14

Wages are higher in Country X than in Country Y. If the countries decide to trade, then who will benefit?

Accepted Answer

A)  Neither country can benefit unless one knows the product that is traded. 
B)  Both countries can benefit regardless of the products traded. 
C)  Only the country that can produce the product more efficiently will benefit. 
D)  Only the country that can produce the product at a lower opportunity cost will benefit. 
E)  Both countries will benefit, but only if a trade agreement for specific products is made by their respective governments. 
A)  Neither country can benefit unless one knows the product that is traded. 
B)  Both countries can benefit regardless of the products traded. 
C)  Only the country that can produce the product more efficiently will benefit. 
D)  Only the country that can produce the product at a lower opportunity cost will benefit. 
E)  Both countries will benefit, but only if a trade agreement for specific products is made by their respective governments.

Question 15

Laura leaves her job as an accountant, where she earns $80,000 per year, to start her own business. After the first year, her business earns a profit of $60,000. How would an economist describe the profitability of Laura's career change?

Accepted Answer

A)  Laura had a profit of $140,000. 
B)  Laura had a loss of $20,000. 
C)  Laura had a profit of $20,000. 
D)  Laura had a profit of $60,000. 
E)  Laura had a loss of $80,000. 
A)  Laura had a profit of $140,000. 
B)  Laura had a loss of $20,000. 
C)  Laura had a profit of $20,000. 
D)  Laura had a profit of $60,000. 
E)  Laura had a loss of $80,000.

Question 16

According to economic thinking, the presence of scarcity requires

Accepted Answer

A)  incentives. 
B)  choices. 
C)  intelligence. 
D)  a dismal outlook. 
E)  unintended consequences. 
A)  incentives. 
B)  choices. 
C)  intelligence. 
D)  a dismal outlook. 
E)  unintended consequences.

Question 17

According to economists, one reason few professional athletes have PhD's is that the

Accepted Answer

A)  opportunity cost of going to graduate school is too high. 
B)  marginal benefit of going to graduate school is too high. 
C)  marginal cost of going to graduate school is too high. 
D)  comparative cost of going to graduate school is too high. 
E)  explicit cost of going to graduate school would be too high. 
A)  opportunity cost of going to graduate school is too high. 
B)  marginal benefit of going to graduate school is too high. 
C)  marginal cost of going to graduate school is too high. 
D)  comparative cost of going to graduate school is too high. 
E)  explicit cost of going to graduate school would be too high.

Question 18

An economist is an individual who would be LEAST able to answer which research question?

Accepted Answer

A)  how much of a product is purchased at a specific price 
B)  how the tastes and preferences of consumers are determined 
C)  what firms decide to produce 
D)  how goods and services are distributed to the population 
E)  how firms decide to produce a good or service 
A)  how much of a product is purchased at a specific price 
B)  how the tastes and preferences of consumers are determined 
C)  what firms decide to produce 
D)  how goods and services are distributed to the population 
E)  how firms decide to produce a good or service

Question 19

A car insurance company is willing to offer accident-free drivers a discount. This is an example of

Accepted Answer

A)  a positive incentive. 
B)  a negative incentive. 
C)  an opportunity cost. 
D)  a comparative advantage. 
E)  scarcity. 
A)  a positive incentive. 
B)  a negative incentive. 
C)  an opportunity cost. 
D)  a comparative advantage. 
E)  scarcity.

Question 20

Kelly is an architect, and she is trying to decide whether to hire Lawrence, a draftsman, to assist with her work. Kelly could hire Lawrence at $20 per hour, but it would take him three times as long to complete a task as it takes Kelly. Kelly is able to earn $90 per hour and has more architectural jobs than she is able to handle. Which of the following is true?

Accepted Answer

A)  Kelly should not hire Lawrence because it would be faster for her to do the work herself. 
B)  Kelly should do the drafting work herself because she has the lower opportunity cost. 
C)  Lawrence should be hired at the $20 per hour wage rate. 
D)  Lawrence should be hired, but only if he is paid more than $30 per hour. 
E)  Kelly should hire someone who earns minimum wage instead of Lawrence. 
A)  Kelly should not hire Lawrence because it would be faster for her to do the work herself. 
B)  Kelly should do the drafting work herself because she has the lower opportunity cost. 
C)  Lawrence should be hired at the $20 per hour wage rate. 
D)  Lawrence should be hired, but only if he is paid more than $30 per hour. 
E)  Kelly should hire someone who earns minimum wage instead of Lawrence.

A nation will engage in voluntary trade if

Marginal decisions are said to be made on the units) under consideration.

Without scarcity, the study of_______ would be unnecessary.

Isaac has four potential jobs to consider, each with different salary offers. From highest to lowest, the salaries are: $47,500, $46,000, $45,000, and $42,000. Based on the information provided, if Isaac accepts the highest-paying position, what is his opportunity cost of this position?

According to marginal thinking, an individual will continue to consume until after the benefit of additional consumption _______ its cost.

Public buildings in the United States are required to be accessible to the disabled and, as a result, almost all have an elevator. What would be an example of a positive direct incentive for those who can to use stairs?

A mother takes her daughter on an outing and promises her ice cream if she behaves. In addition, she warns her that if she misbehaves, she won't be allowed to play with her toys at home. The latter is an example of an)_ incentive and reinforces the efficacy of the ice cream, an) _incentive.

Bea bakes pastries well, and Lucian raises great herbs. If Lucian trades parsley with Bea in exchange for cupcakes, then

The basic goal of economics is to

List and briefly explain each of the five foundations of economic thought.

When consumers discard their gasoline-powered automobiles for electric-powered ones, this partially reflects the of _______ gasoline.

If Alexander doesn't like changing the oil in his car and pays his father to do it for him, he has provided his father with an) _______incentive.

Wages are higher in Country X than in Country Y. If the countries decide to trade, then who will benefit?

Laura leaves her job as an accountant, where she earns $80,000 per year, to start her own business. After the first year, her business earns a profit of $60,000. How would an economist describe the profitability of Laura's career change?

According to economic thinking, the presence of scarcity requires

According to economists, one reason few professional athletes have PhD's is that the

An economist is an individual who would be LEAST able to answer which research question?

A car insurance company is willing to offer accident-free drivers a discount. This is an example of

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Market Outcomes and Tax Incidence

Price Controls

Introduction to Macroeconomics and Gross Domestic Product

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy Learning Objectives

International Trade

International Finance

Filters

Exam 1: Five Foundations of Economics

A nation will engage in voluntary trade if

Marginal decisions are said to be made on the units) under consideration.

Without scarcity, the study of_______ would be unnecessary.

Isaac has four potential jobs to consider, each with different salary offers. From highest to lowest, the salaries are: $47,500, $46,000, $45,000, and $42,000. Based on the information provided, if Isaac accepts the highest-paying position, what is his opportunity cost of this position?

According to marginal thinking, an individual will continue to consume until after the benefit of additional consumption _______ its cost.

Public buildings in the United States are required to be accessible to the disabled and, as a result, almost all have an elevator. What would be an example of a positive direct incentive for those who can to use stairs?

Bea bakes pastries well, and Lucian raises great herbs. If Lucian trades parsley with Bea in exchange for cupcakes, then

The basic goal of economics is to

List and briefly explain each of the five foundations of economic thought.

When consumers discard their gasoline-powered automobiles for electric-powered ones, this partially reflects the of _______ gasoline.

If Alexander doesn't like changing the oil in his car and pays his father to do it for him, he has provided his father with an) _______incentive.

Wages are higher in Country X than in Country Y. If the countries decide to trade, then who will benefit?

Laura leaves her job as an accountant, where she earns $80,000 per year, to start her own business. After the first year, her business earns a profit of $60,000. How would an economist describe the profitability of Laura's career change?

According to economic thinking, the presence of scarcity requires

According to economists, one reason few professional athletes have PhD's is that the

An economist is an individual who would be LEAST able to answer which research question?

A car insurance company is willing to offer accident-free drivers a discount. This is an example of

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Market Outcomes and Tax Incidence

Price Controls

Introduction to Macroeconomics and Gross Domestic Product

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy Learning Objectives

International Trade

International Finance

Filters