Question 1

Which of the following is a positive economic statement?

Accepted Answer

A) People should not buy SUVs. 
B) The government should mandate electric automobiles. 
C) Scarcity necessitates that people make trade-offs. 
D) Foreign workers should not be allowed to work for lower wages than the citizens of a country. 
A) People should not buy SUVs. 
B) The government should mandate electric automobiles. 
C) Scarcity necessitates that people make trade-offs. 
D) Foreign workers should not be allowed to work for lower wages than the citizens of a country. C

Question 2

Examining the conditions that could lead to inflation in an economy is an example of microeconomics topic.

Accepted Answer

A) True 
 B)False  False

Question 3

Examining the conditions that could lead to economic growth is an example of macroeconomic topic.

Accepted Answer

A) True 
 B)False  True

Question 4

In market economies,income distribution is always going to be completely equitable.

Accepted Answer

A) True 
 B)False

Question 5

Scenario 1-3
Suppose a t-shirt manufacturer currently sells 5,000 t-shirts per week and makes a profit of $10,000 per week.A manager at the plant observes, "Although the last 400 t-shirts we produced and sold increased our revenue by $4,000 and our costs by $4,800, we are still making an overall profit of $10,000 per week so I think we're on the right track.We are producing the optimal number of t-shirts."
-Refer to Scenario 1-3.Had the firm not produced and sold the last 400 t-shirts,would its profit be higher or lower,and if so by how much?

Accepted Answer

A) Its profit will be $4,800 higher. 
B) Its profit will be $800 higher. 
C) Its profit will be $800 lower. 
D) Its profit will be $4,000 lower. 
A) Its profit will be $4,800 higher. 
B) Its profit will be $800 higher. 
C) Its profit will be $800 lower. 
D) Its profit will be $4,000 lower.

Question 6

Which of the following generates allocative efficiency in a market economy?

Accepted Answer

A) national government intervention 
B) voluntary exchange between buyers and sellers 
C) United Nations rules for competition 
D) equity 
A) national government intervention 
B) voluntary exchange between buyers and sellers 
C) United Nations rules for competition 
D) equity

Question 7

All ________ economies have been political dictatorships.

Accepted Answer

A) centrally planned 
B) mixed 
C) market 
D) mixed and market 
A) centrally planned 
B) mixed 
C) market 
D) mixed and market

Question 8

In economics,choices must be made because we live in a world of

Accepted Answer

A) unemployment. 
B) scarcity. 
C) greed. 
D) unlimited resources. 
A) unemployment. 
B) scarcity. 
C) greed. 
D) unlimited resources.

Question 9

In economics,the term "equity" means

Accepted Answer

A) everyone has an equal standard of living. 
B) the hardest working individuals consume all they want. 
C) only elected officials have high standards of living. 
D) economic benefits are distributed fairly. 
A) everyone has an equal standard of living. 
B) the hardest working individuals consume all they want. 
C) only elected officials have high standards of living. 
D) economic benefits are distributed fairly.

Question 10

Consider the following statements:
a.Consumers rent more DVDs from a video store that rents DVDs at a lower price than other rival video stores in the area.
b.Department stores take steps to increase security since they believe it is more costly to allow shoplifting than to install expensive security monitoring equipment.
c.Farmers produce more cotton when its selling price falls.
Which of the above statements demonstrates that economic agents respond to incentives?

Accepted Answer

A) a only. 
B) b only. 
C) c only. 
D) a and b. 
E) a, b, and c. 
A) a only. 
B) b only. 
C) c only. 
D) a and b. 
E) a, b, and c.

Question 11

Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a macroeconomics question?

Accepted Answer

A) What determines the inflation rate? 
B) What determines the production of DVDs? 
C) What factors determine the price of carrots? 
D) What determines the wage of auto workers? 
A) What determines the inflation rate? 
B) What determines the production of DVDs? 
C) What factors determine the price of carrots? 
D) What determines the wage of auto workers?

Question 13

Making "how much" decisions involve

Accepted Answer

A) calculating the total benefits of the activity and determining if you are satisfied with that amount. 
B) calculating the total costs of the activity and determining if you can afford to incur that expenditure. 
C) calculating the average benefit and the average cost of an activity to determine if it is worthwhile undertaking that activity. 
D) determining the additional benefits and the additional costs of that activity. 
A) calculating the total benefits of the activity and determining if you are satisfied with that amount. 
B) calculating the total costs of the activity and determining if you can afford to incur that expenditure. 
C) calculating the average benefit and the average cost of an activity to determine if it is worthwhile undertaking that activity. 
D) determining the additional benefits and the additional costs of that activity.

Question 14

Consider the following economic agents:
a.the government
b.consumers
c.producers
Who,in a centrally planned economy,decides what goods and services will be produced with the scarce resources available in that economy?

Accepted Answer

A) the government 
B) producers 
C) consumers 
D) consumers and producers 
E) the government, consumers and producers 
A) the government 
B) producers 
C) consumers 
D) consumers and producers 
E) the government, consumers and producers

Question 15

Which of the following is a normative economic statement?

Accepted Answer

A) The price of milk is too high. 
B) The current high price of milk is the result of reduced worldwide supply. 
C) When the price of milk rises, the quantity of milk purchased falls. 
D) When the price of milk rises, the cost of milk-based products rises. 
A) The price of milk is too high. 
B) The current high price of milk is the result of reduced worldwide supply. 
C) When the price of milk rises, the quantity of milk purchased falls. 
D) When the price of milk rises, the cost of milk-based products rises.

Question 16

Pookie's Pinball Palace restores old Pinball machines.Pookie has just spent $300 purchasing and cleaning a 1960s-era machine which he expects to sell for $2,000 once he is finished with the restoration.After having spent $300,Pookie discovers that he will need to rewire the entire machine at a cost of $1,100 in order to finish the restoration.Alternatively,he can sell the machine "as is" now for $1,000.What is the marginal cost of completing the task?

Accepted Answer

A) $300 
B) $800 
C) $1,100 
D) $1,400 
A) $300 
B) $800 
C) $1,100 
D) $1,400

Question 17

In a market economy,who decides what goods and services will be produced?

Accepted Answer

A) only the producers 
B) only consumers 
C) consumers and producers 
D) the government 
A) only the producers 
B) only consumers 
C) consumers and producers 
D) the government

Question 18

Productive efficiency is achieved when firms produce goods and services

Accepted Answer

A) most desired by society. 
B) at the highest profit margin. 
C) at the lowest cost. 
D) of the highest quality. 
A) most desired by society. 
B) at the highest profit margin. 
C) at the lowest cost. 
D) of the highest quality.

Question 19

Economists assume that rational people do all of the following except

Accepted Answer

A) use all available information as they act to achieve their goals. 
B) undertake activities that benefit others and hurt themselves. 
C) weigh the benefits and costs of all possible alternative actions. 
D) respond to economic incentives. 
A) use all available information as they act to achieve their goals. 
B) undertake activities that benefit others and hurt themselves. 
C) weigh the benefits and costs of all possible alternative actions. 
D) respond to economic incentives.

Question 20

Which of the following is part of an economic model?

Accepted Answer

A) norms 
B) hypotheses 
C) opinions 
D) preferences of economic agents 
A) norms 
B) hypotheses 
C) opinions 
D) preferences of economic agents

Which of the following is a positive economic statement?

Examining the conditions that could lead to inflation in an economy is an example of microeconomics topic.

Examining the conditions that could lead to economic growth is an example of macroeconomic topic.

In market economies,income distribution is always going to be completely equitable.

Which of the following generates allocative efficiency in a market economy?

All ________ economies have been political dictatorships.

In economics,choices must be made because we live in a world of

In economics,the term "equity" means

Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity.

Which of the following is a macroeconomics question?

Making "how much" decisions involve

Consider the following economic agents: a.the government b.consumers c.producers Who,in a centrally planned economy,decides what goods and services will be produced with the scarce resources available in that economy?

Which of the following is a normative economic statement?

In a market economy,who decides what goods and services will be produced?

Productive efficiency is achieved when firms produce goods and services

Economists assume that rational people do all of the following except

Which of the following is part of an economic model?

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 1: Economics: Foundations and Models

Which of the following is a positive economic statement?

Examining the conditions that could lead to inflation in an economy is an example of microeconomics topic.

Examining the conditions that could lead to economic growth is an example of macroeconomic topic.

In market economies,income distribution is always going to be completely equitable.

Which of the following generates allocative efficiency in a market economy?

All ________ economies have been political dictatorships.

In economics,choices must be made because we live in a world of

In economics,the term "equity" means

Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity.

Which of the following is a macroeconomics question?

Making "how much" decisions involve

Consider the following economic agents: a.the government b.consumers c.producers Who,in a centrally planned economy,decides what goods and services will be produced with the scarce resources available in that economy?

Which of the following is a normative economic statement?

In a market economy,who decides what goods and services will be produced?

Productive efficiency is achieved when firms produce goods and services

Economists assume that rational people do all of the following except

Which of the following is part of an economic model?

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters