Question 1

The market power that your university's bookstore has now, compared with the 1990s, is limited by

Accepted Answer

A) new competition laws. 
B) public goods provided by the government. 
C) university policies against monopoly power. 
D) increased access to other booksellers provided by the internet. 
A) new competition laws. 
B) public goods provided by the government. 
C) university policies against monopoly power. 
D) increased access to other booksellers provided by the internet.

Question 2

An increase in the price of beef provides

Accepted Answer

A) no information because prices in a market system are managed by planning boards. 
B) information which tells consumers to buy less pork. 
C) information which tells producers to produce more beef. 
D) information which tells consumers to buy more beef. 
A) no information because prices in a market system are managed by planning boards. 
B) information which tells consumers to buy less pork. 
C) information which tells producers to produce more beef. 
D) information which tells consumers to buy more beef.

Question 3

Inflation reduces

Accepted Answer

A) the price level. 
B) employment. 
C) the money supply. 
D) the value of money. 
A) the price level. 
B) employment. 
C) the money supply. 
D) the value of money.

Question 4

Suppose you are considering going to the cinema, and you place a r₁80 value on your anticipated enjoyment of the film.The ticket price is R90 and you would be giving up two hours of work, where you earn R75 per hour.You would go to

Accepted Answer

A) work as the opportunity cost of the movies exceeds the expected benefit. 
B) see the film as your incentive is the R90 excess expected benefit. 
C) see the film as your enjoyment will exceed the lost wages by R30. 
D) see the film as the benefit of R270 exceeds the lost wages. 
A) work as the opportunity cost of the movies exceeds the expected benefit. 
B) see the film as your incentive is the R90 excess expected benefit. 
C) see the film as your enjoyment will exceed the lost wages by R30. 
D) see the film as the benefit of R270 exceeds the lost wages.

Question 5

Adam Smith argues in the Wealth of Nations that an economy will produce more goods and services if

Accepted Answer

A) people act in the public interest, rather than if they act in their own self-interest. 
B) people act in their own self-interest, rather than if the government directs economic activity. 
C) the government controls the use of the nation's scarce resources. 
D) people ignore their own interests and contribute to national wealth as a whole. 
A) people act in the public interest, rather than if they act in their own self-interest. 
B) people act in their own self-interest, rather than if the government directs economic activity. 
C) the government controls the use of the nation's scarce resources. 
D) people ignore their own interests and contribute to national wealth as a whole.

Question 6

Almost all variation in living standards in different countries

Accepted Answer

A) is attributable to variations in productivity. 
B) is attributable to differences in countries' endowments of natural resources. 
C) is attributable to differences in climate. 
D) is attributable to variation in population sizes. 
A) is attributable to variations in productivity. 
B) is attributable to differences in countries' endowments of natural resources. 
C) is attributable to differences in climate. 
D) is attributable to variation in population sizes.

Question 7

Outline one example of the principle of 'thinking at the margin.'

Accepted Answer

Rational people think at the margin.They

Question 8

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort.This law is likely to

Accepted Answer

A) increase efficiency and increase equality. 
B) increase efficiency but decrease equality. 
C) decrease efficiency but increase equality. 
D) decrease efficiency and decrease equality. 
A) increase efficiency and increase equality. 
B) increase efficiency but decrease equality. 
C) decrease efficiency but increase equality. 
D) decrease efficiency and decrease equality.

Question 9

Explain why there is a short-run trade-off between inflation and unemployment.

Accepted Answer

Over a period of a year or two, many eco

Question 10

A rational person does not act unless

Accepted Answer

A) the action is ethical. 
B) the action produces marginal costs that exceed marginal benefits. 
C) the action produces marginal benefits that exceed marginal costs. 
D) the action makes money for the person. 
E) None of these answers. 
A) the action is ethical. 
B) the action produces marginal costs that exceed marginal benefits. 
C) the action produces marginal benefits that exceed marginal costs. 
D) the action makes money for the person. 
E) None of these answers.

Question 11

Both the production of goods and services and the unemployment rate are used to measure

Accepted Answer

A) the business cycle. 
B) productivity. 
C) the interest rate. 
D) inflation. 
A) the business cycle. 
B) productivity. 
C) the interest rate. 
D) inflation.

Question 12

The business cycle is the

Accepted Answer

A) relationship between unemployment and inflation. 
B) irregular fluctuations in economic activity. 
C) positive relationship between the quantity of money in an economy and inflation. 
D) predictable changes in economic activity due to changes in government spending and taxes. 
A) relationship between unemployment and inflation. 
B) irregular fluctuations in economic activity. 
C) positive relationship between the quantity of money in an economy and inflation. 
D) predictable changes in economic activity due to changes in government spending and taxes.

Question 13

A nation's standard of living can be increased by

Accepted Answer

A) improvements in technology and international trade. 
B) improvements in technology but not international trade. 
C) international trade but not improvements in technology. 
D) neither international trade nor improvements in technology. 
A) improvements in technology and international trade. 
B) improvements in technology but not international trade. 
C) international trade but not improvements in technology. 
D) neither international trade nor improvements in technology.

Question 14

The opportunity cost of building additional parking at your university is

Accepted Answer

A) the cost of the labour, concrete, etc.used to build the parking. 
B) the value of the land used in its next best alternative use, and the cost of the labour, concrete, etc.used to build the parking. 
C) the value of the land and resources used in all of their alternative uses. 
D) infinite; we cannot estimate it. 
A) the cost of the labour, concrete, etc.used to build the parking. 
B) the value of the land used in its next best alternative use, and the cost of the labour, concrete, etc.used to build the parking. 
C) the value of the land and resources used in all of their alternative uses. 
D) infinite; we cannot estimate it.

Question 15

Which of the following statements is true about a market economy?

Accepted Answer

A) With a large enough computer, central planners could guide production more efficiently than markets. 
B) Market participants act as if guided by an invisible hand to produce outcomes that maximise social welfare. 
C) The strength of a market system is that it tends to distribute resources evenly across consumers. 
D) Taxes help prices communicate costs and benefits to producers and consumers. 
A) With a large enough computer, central planners could guide production more efficiently than markets. 
B) Market participants act as if guided by an invisible hand to produce outcomes that maximise social welfare. 
C) The strength of a market system is that it tends to distribute resources evenly across consumers. 
D) Taxes help prices communicate costs and benefits to producers and consumers.

Question 16

How does the study of economics depend upon the phenomenon of scarcity?

Accepted Answer

Because economics is the study of how so

Question 17

High and persistent inflation is caused by excessive growth in the quantity of money in the economy.

Accepted Answer

A) True 
 B)False

Question 18

Andile is better at cleaning and Joe is better at cooking.It will take fewer hours to eat and clean if Joe specialises in cooking and Andile specialises in cleaning than if they share the household duties evenly.

Accepted Answer

A) True 
 B)False

Question 19

There are three questions that any economy has to face: What goods and services should be produced? How should these goods and services be produced? ___________________?

Accepted Answer

A) How many goods and services should be produced? 
B) When should the goods and services be produced? 
C) Why should the goods and services be produced? 
D) Who should get the goods and services that have been produced? 
A) How many goods and services should be produced? 
B) When should the goods and services be produced? 
C) Why should the goods and services be produced? 
D) Who should get the goods and services that have been produced?

Question 20

Under what conditions might government intervention in a market economy improve the economy's performance?

Accepted Answer

If there is a market failure, such as an

The market power that your university's bookstore has now, compared with the 1990s, is limited by

An increase in the price of beef provides

Inflation reduces

Suppose you are considering going to the cinema, and you place a r₁80 value on your anticipated enjoyment of the film.The ticket price is R90 and you would be giving up two hours of work, where you earn R75 per hour.You would go to

Adam Smith argues in the Wealth of Nations that an economy will produce more goods and services if

Almost all variation in living standards in different countries

Outline one example of the principle of 'thinking at the margin.'

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort.This law is likely to

Explain why there is a short-run trade-off between inflation and unemployment.

A rational person does not act unless

Both the production of goods and services and the unemployment rate are used to measure

The business cycle is the

A nation's standard of living can be increased by

The opportunity cost of building additional parking at your university is

Which of the following statements is true about a market economy?

How does the study of economics depend upon the phenomenon of scarcity?

High and persistent inflation is caused by excessive growth in the quantity of money in the economy.

Andile is better at cleaning and Joe is better at cooking.It will take fewer hours to eat and clean if Joe specialises in cooking and Andile specialises in cleaning than if they share the household duties evenly.

There are three questions that any economy has to face: What goods and services should be produced? How should these goods and services be produced? ___________________?

Under what conditions might government intervention in a market economy improve the economy's performance?

Thinking Like an Economist

Measuring a Nations Well-Being

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Business Cycles

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade-Off Between Inflation and Unemployment

Supply Side Policies

The Financial Crisis and Sovereign Debt

Common Currency Areas and European Monetary Union

Filters

Exam 1: What Is Economics

The market power that your university's bookstore has now, compared with the 1990s, is limited by

An increase in the price of beef provides

Inflation reduces

Suppose you are considering going to the cinema, and you place a r₁80 value on your anticipated enjoyment of the film.The ticket price is R90 and you would be giving up two hours of work, where you earn R75 per hour.You would go to

Adam Smith argues in the Wealth of Nations that an economy will produce more goods and services if

Almost all variation in living standards in different countries

Outline one example of the principle of 'thinking at the margin.'

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort.This law is likely to

Explain why there is a short-run trade-off between inflation and unemployment.

A rational person does not act unless

Both the production of goods and services and the unemployment rate are used to measure

The business cycle is the

A nation's standard of living can be increased by

The opportunity cost of building additional parking at your university is

Which of the following statements is true about a market economy?

How does the study of economics depend upon the phenomenon of scarcity?

High and persistent inflation is caused by excessive growth in the quantity of money in the economy.

Andile is better at cleaning and Joe is better at cooking.It will take fewer hours to eat and clean if Joe specialises in cooking and Andile specialises in cleaning than if they share the household duties evenly.

There are three questions that any economy has to face: What goods and services should be produced? How should these goods and services be produced? ___________________?

Under what conditions might government intervention in a market economy improve the economy's performance?

Thinking Like an Economist

Measuring a Nations Well-Being

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Business Cycles

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade-Off Between Inflation and Unemployment

Supply Side Policies

The Financial Crisis and Sovereign Debt

Common Currency Areas and European Monetary Union

Filters