Question 1

An individual's value for a good or service is the​

Accepted Answer

A) ​The amount of money he or she used to pay for a good 
B) The amount of money he or she is willing to pay for it 
C) The amount of money he or she has to spend on goods 
D) ​None of the above 
A) ​The amount of money he or she used to pay for a good 
B) The amount of money he or she is willing to pay for it 
C) The amount of money he or she has to spend on goods 
D) ​None of the above B

Question 2

​If company X is successfully outsourcing its production of T-shirts to China,it is

Accepted Answer

A) ​Creating wealth by moving labor in China from lower value use to higher value use 
B) Should be stopped on economic grounds since it is destroying wealth 
C) Destroying wealth by acquiring cheaper labor from China 
D) ​Both A & C 
A) ​Creating wealth by moving labor in China from lower value use to higher value use 
B) Should be stopped on economic grounds since it is destroying wealth 
C) Destroying wealth by acquiring cheaper labor from China 
D) ​Both A & C A

Question 3

​Wealth creating transactions are more likely to occur

Accepted Answer

A) ​With private property rights 
B) With contract enforcement 
C) Both a and b 
D) ​None of the above 
A) ​With private property rights 
B) With contract enforcement 
C) Both a and b 
D) ​None of the above C

Question 4

The difference between the maximum price the consumer is willing to pay and the price the consumer actually pays for a product is referred to as:​

Accepted Answer

A) ​market surplus. 
B) market shortage. 
C) consumer surplus. 
D) ​producer surplus. 
A) ​market surplus. 
B) market shortage. 
C) consumer surplus. 
D) ​producer surplus.

Question 5

​Price ceilings are primarily intended to help

Accepted Answer

A) ​No one 
B) Consumers 
C) Producers 
D) ​Government 
A) ​No one 
B) Consumers 
C) Producers 
D) ​Government

Question 6

​A good policy ________________ and a bad policy _________________.

Accepted Answer

A) ​Moves an asset to higher value use;moves an asset to lower value use 
B) Moves an asset to lower value use;moves an asset to higher value use 
C) Refrains from any government intervention;concentrates on government intervention 
D) ​Concentrates on government intervention;refrains from government intervention 
A) ​Moves an asset to higher value use;moves an asset to lower value use 
B) Moves an asset to lower value use;moves an asset to higher value use 
C) Refrains from any government intervention;concentrates on government intervention 
D) ​Concentrates on government intervention;refrains from government intervention

Question 7

Moving Water Around
The San Diablo dam has electricity generating turbines on a chute that connects lower and upper reservoirs.During the day,water is drained from the upper reservoir to the lower to produce electricity.But at night,electricity is used to pump the water back up to the upper reservoir.Since the water is just going back and forth,how can wealth be generated?

Accepted Answer

Peak demand for electricity is during th

Question 8

​If you are willing to sell your car business for $500,000 and someone offers you $420,000 for it,this transaction will generate:

Accepted Answer

A) ​There is no surplus created 
B) $80,000 worth of seller surplus and unknown amount of buyer surplus 
C) $40,000 worth of buyer surplus and $40,000 of seller surplus 
D) ​$80,000 worth of buyer surplus and unknown amount of seller surplus 
A) ​There is no surplus created 
B) $80,000 worth of seller surplus and unknown amount of buyer surplus 
C) $40,000 worth of buyer surplus and $40,000 of seller surplus 
D) ​$80,000 worth of buyer surplus and unknown amount of seller surplus

Question 9

​Taxes cause:

Accepted Answer

A) ​Market distortions 
B) A reduction in incentives to work 
C) A decrease in wealth creating transactions 
D) ​All of the above 
A) ​Market distortions 
B) A reduction in incentives to work 
C) A decrease in wealth creating transactions 
D) ​All of the above

Question 10

​Price gouging

Accepted Answer

A) ​Outlaw trade at prices above a certain price level 
B) Outlaw trade at prices below a certain price level 
C) Is an act of charging a high price to take advantage of shortages created by natural disasters 
D) ​None of the above 
A) ​Outlaw trade at prices above a certain price level 
B) Outlaw trade at prices below a certain price level 
C) Is an act of charging a high price to take advantage of shortages created by natural disasters 
D) ​None of the above

Question 11

​The Indian government constructs houses for the homeless,to move them out of the slums.Soon as these houses are constructed,the homeless,rent them out and moved to another slum.Where could the policy have gone wrong?

Accepted Answer

A) ​The policy would have been much more effective had the poor been given the cash equivalent of the house,to allocate effectively by themselves. 
B) The government did not allocate the funds to their highest use,as per the needs of the homeless. 
C) The government failed to run the policy effectively. 
D) ​Both A & B 
A) ​The policy would have been much more effective had the poor been given the cash equivalent of the house,to allocate effectively by themselves. 
B) The government did not allocate the funds to their highest use,as per the needs of the homeless. 
C) The government failed to run the policy effectively. 
D) ​Both A & B

Question 12

A consumer values a car at $30,000 and a producer values the same car at $20,000.What amount of tax will result in unconsummated transaction?

Accepted Answer

A) ​$4,000 
B) $9,000 
C) $15,000 
D) ​$2,000 
A) ​$4,000 
B) $9,000 
C) $15,000 
D) ​$2,000

Question 13

A consumer values a house at $525,000 and a producer values the same house at $485,000.If the transaction is completed at $510,000,what amount of tax will result in unconsummated transaction?​

Accepted Answer

A) ​A tax of $9,000 
B) A tax of $14,000 
C) A tax of $15,000 
D) ​A tax of $18,000 
A) ​A tax of $9,000 
B) A tax of $14,000 
C) A tax of $15,000 
D) ​A tax of $18,000

Question 14

​When the market is in equilibrium,with no government intervention,

Accepted Answer

A) ​Total surplus is minimized 
B) Total surplus is maximized 
C) Government maximizes total revenue 
D) ​None of the above 
A) ​Total surplus is minimized 
B) Total surplus is maximized 
C) Government maximizes total revenue 
D) ​None of the above

Question 15

​When taxes are levied on transactions,irrespective of the party they are levied on,

Accepted Answer

A) ​The government can absorb all the consumer surplus from the transactions as revenue 
B) The government can absorb all the producer surplus from the transactions as revenue 
C) The government can absorb some of the surplus,but also creates a social loss since some of the wealth creating transactions are discouraged 
D) ​The government can absorb all of the surplus (producer and consumer) 
A) ​The government can absorb all the consumer surplus from the transactions as revenue 
B) The government can absorb all the producer surplus from the transactions as revenue 
C) The government can absorb some of the surplus,but also creates a social loss since some of the wealth creating transactions are discouraged 
D) ​The government can absorb all of the surplus (producer and consumer)

Question 16

​If you are willing to purchase a house for $500,000 and you purchase the house for $500,000,this transaction will generate:

Accepted Answer

A) ​There is no surplus created for either of the party. 
B) $0 worth of seller surplus and unknown amount of buyer surplus. 
C) $0 worth of buyer surplus and unknown amount of seller surplus. 
D) ​No information provided. 
A) ​There is no surplus created for either of the party. 
B) $0 worth of seller surplus and unknown amount of buyer surplus. 
C) $0 worth of buyer surplus and unknown amount of seller surplus. 
D) ​No information provided.

Question 17

Baseball Cards
Your favorite uncle left you his baseball card collection in his will.Since you are not a fan,you auction them off on an Internet website.Since nothing was created,how could this decision have created wealth?​

Accepted Answer

The transaction moved the base

Question 18

​The difference between Capitalism and Socialism is that

Accepted Answer

A) ​Capitalism is concerned more about how to slice up the "pie" 
B) Socialism is concerned with making the "pie" as large as possible 
C) Capitalism is concerned with making the "pie" as large as possible 
D) ​Both A and B 
A) ​Capitalism is concerned more about how to slice up the "pie" 
B) Socialism is concerned with making the "pie" as large as possible 
C) Capitalism is concerned with making the "pie" as large as possible 
D) ​Both A and B

Question 19

​Which of the following describes a firm?

Accepted Answer

A) ​Purchases labor hours from workers 
B) Borrows capital from investors 
C) Combines labor and capital to create production,moving them from their low value use to high value use 
D) ​All of the above 
A) ​Purchases labor hours from workers 
B) Borrows capital from investors 
C) Combines labor and capital to create production,moving them from their low value use to high value use 
D) ​All of the above

Question 20

​A consumer values a house at $525,000 and a producer values the same house at $485,000.If the transaction is completed at $510,000,what level of tax rate will result in unconsummated transaction?

Accepted Answer

A) ​1% 
B) 5% 
C) 3% 
D) ​2% 
A) ​1% 
B) 5% 
C) 3% 
D) ​2%

An individual's value for a good or service is the

If company X is successfully outsourcing its production of T-shirts to China,it is

Wealth creating transactions are more likely to occur

The difference between the maximum price the consumer is willing to pay and the price the consumer actually pays for a product is referred to as:

Price ceilings are primarily intended to help

A good policy and a bad policy _.

If you are willing to sell your car business for $500,000 and someone offers you $420,000 for it,this transaction will generate:

Taxes cause:

Price gouging

The Indian government constructs houses for the homeless,to move them out of the slums.Soon as these houses are constructed,the homeless,rent them out and moved to another slum.Where could the policy have gone wrong?

A consumer values a car at $30,000 and a producer values the same car at $20,000.What amount of tax will result in unconsummated transaction?

A consumer values a house at $525,000 and a producer values the same house at $485,000.If the transaction is completed at $510,000,what amount of tax will result in unconsummated transaction?

When the market is in equilibrium,with no government intervention,

When taxes are levied on transactions,irrespective of the party they are levied on,

If you are willing to purchase a house for $500,000 and you purchase the house for $500,000,this transaction will generate:

Baseball Cards Your favorite uncle left you his baseball card collection in his will.Since you are not a fan,you auction them off on an Internet website.Since nothing was created,how could this decision have created wealth?

The difference between Capitalism and Socialism is that

Which of the following describes a firm?

A consumer values a house at $525,000 and a producer values the same house at $485,000.If the transaction is completed at $510,000,what level of tax rate will result in unconsummated transaction?

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

Exam 1: The One Lessor of Business

An individual's value for a good or service is the​

​If company X is successfully outsourcing its production of T-shirts to China,it is

​Wealth creating transactions are more likely to occur

The difference between the maximum price the consumer is willing to pay and the price the consumer actually pays for a product is referred to as:​

​Price ceilings are primarily intended to help

​A good policy ________________ and a bad policy _________________.

​If you are willing to sell your car business for $500,000 and someone offers you $420,000 for it,this transaction will generate:

​Taxes cause:

​Price gouging

​The Indian government constructs houses for the homeless,to move them out of the slums.Soon as these houses are constructed,the homeless,rent them out and moved to another slum.Where could the policy have gone wrong?

A consumer values a car at $30,000 and a producer values the same car at $20,000.What amount of tax will result in unconsummated transaction?

A consumer values a house at $525,000 and a producer values the same house at $485,000.If the transaction is completed at $510,000,what amount of tax will result in unconsummated transaction?​

​When the market is in equilibrium,with no government intervention,

​When taxes are levied on transactions,irrespective of the party they are levied on,

​If you are willing to purchase a house for $500,000 and you purchase the house for $500,000,this transaction will generate:

Baseball Cards Your favorite uncle left you his baseball card collection in his will.Since you are not a fan,you auction them off on an Internet website.Since nothing was created,how could this decision have created wealth?​

​The difference between Capitalism and Socialism is that

​Which of the following describes a firm?

​A consumer values a house at $525,000 and a producer values the same house at $485,000.If the transaction is completed at $510,000,what level of tax rate will result in unconsummated transaction?

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

An individual's value for a good or service is the

If company X is successfully outsourcing its production of T-shirts to China,it is

Wealth creating transactions are more likely to occur

The difference between the maximum price the consumer is willing to pay and the price the consumer actually pays for a product is referred to as:

Price ceilings are primarily intended to help

A good policy and a bad policy _.

If you are willing to sell your car business for $500,000 and someone offers you $420,000 for it,this transaction will generate:

Taxes cause:

Price gouging

The Indian government constructs houses for the homeless,to move them out of the slums.Soon as these houses are constructed,the homeless,rent them out and moved to another slum.Where could the policy have gone wrong?

A consumer values a house at $525,000 and a producer values the same house at $485,000.If the transaction is completed at $510,000,what amount of tax will result in unconsummated transaction?

When the market is in equilibrium,with no government intervention,

When taxes are levied on transactions,irrespective of the party they are levied on,

If you are willing to purchase a house for $500,000 and you purchase the house for $500,000,this transaction will generate:

Baseball Cards Your favorite uncle left you his baseball card collection in his will.Since you are not a fan,you auction them off on an Internet website.Since nothing was created,how could this decision have created wealth?

The difference between Capitalism and Socialism is that

Which of the following describes a firm?

A consumer values a house at $525,000 and a producer values the same house at $485,000.If the transaction is completed at $510,000,what level of tax rate will result in unconsummated transaction?