Question 1

The ________ the sale of an additional unit of a product is a marginal benefit to the firm.

Accepted Answer

A) revenue received from 
B) extra cost of 
C) total value of 
D) sales tax on 
A) revenue received from 
B) extra cost of 
C) total value of 
D) sales tax on

Question 2

Which of the following correctly describes the relationship between economic efficiency and economic equity?

Accepted Answer

A) They are both automatically achieved in a free market economy. 
B) They always call for opposite outcomes. 
C) There is no conflict between the two goals. 
D) There is often a trade-off between the two. 
A) They are both automatically achieved in a free market economy. 
B) They always call for opposite outcomes. 
C) There is no conflict between the two goals. 
D) There is often a trade-off between the two.

Question 3

The distribution of income primarily determines which of the fundamental economic questions?

Accepted Answer

A) What goods and services are to be produced? 
B) How are the goods and services to be produced? 
C) Who will receive the goods and services produced? 
D) How will the economy be planned? 
A) What goods and services are to be produced? 
B) How are the goods and services to be produced? 
C) Who will receive the goods and services produced? 
D) How will the economy be planned?

Question 4

The decision about what goods and services will be produced in a market economy is made by:

Accepted Answer

A) lawmakers in the government voting on what will be produced. 
B) workers deciding to produce only what the boss says must be produced. 
C) producers deciding what society wants most. 
D) consumers and firms choosing which goods and services to buy or produce. 
A) lawmakers in the government voting on what will be produced. 
B) workers deciding to produce only what the boss says must be produced. 
C) producers deciding what society wants most. 
D) consumers and firms choosing which goods and services to buy or produce.

Question 5

What is a 'marginal benefit'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Marginal benefit is

Question 6

Economists assume that rational behaviour is useful in explaining choices people make:

Accepted Answer

A) because irrational people do not make economic choices. 
B) even though people may not behave rationally all the time. 
C) because individuals act rationally all the time in all circumstances. 
D) even though people rarely, if ever, behave in a rational manner. 
A) because irrational people do not make economic choices. 
B) even though people may not behave rationally all the time. 
C) because individuals act rationally all the time in all circumstances. 
D) even though people rarely, if ever, behave in a rational manner.

Question 7

Suppose that some investors have decided that economic and financial uncertainty have made the prospect of investing in domestic stock markets more risky than investing in foreign stock markets, and therefore choose to invest in foreign markets. By using all available information as they act to achieve their goals, these investors are exemplifying the economic idea that:

Accepted Answer

A) people are rational. 
B) people respond to economic incentives. 
C) optimal decisions are made at the margin. 
D) equity is more important than efficiency. 
A) people are rational. 
B) people respond to economic incentives. 
C) optimal decisions are made at the margin. 
D) equity is more important than efficiency.

Question 8

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes. A student concludes that it is likely that living in a nursing home causes Alzheimer's dementia. What is the flaw in the student's reasoning?

Accepted Answer

A) The student has failed to take into account other causes of Alzheimer's disease. 
B) The student is drawing a false conclusion; he is confusing cause and effect. 
C) The student is using an inadequate sample size. 
D) The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents. 
A) The student has failed to take into account other causes of Alzheimer's disease. 
B) The student is drawing a false conclusion; he is confusing cause and effect. 
C) The student is using an inadequate sample size. 
D) The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents.

Question 9

Figure 1.4
  
-Refer to Figure 1.4. Which of the following statements is false?

Accepted Answer

A) The slope of the tangent at E is positive. 
B) The slope of the tangent at F is negative. 
C) The slope of the tangent at E and the slope of the tangent at F are equal. 
D) Neither the slope of the tangent at E nor the slope of the tangent at F are equal to zero. 
A) The slope of the tangent at E is positive. 
B) The slope of the tangent at F is negative. 
C) The slope of the tangent at E and the slope of the tangent at F are equal. 
D) Neither the slope of the tangent at E nor the slope of the tangent at F are equal to zero.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

What is 'equity', and how does it differ from 'efficiency'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Equity refers to the fair distribution o

Question 12

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 13

The relationship between consumer spending and disposable personal income is:

Accepted Answer

A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) independent. 
A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) independent.

Question 14

'Macroeconomics' is the study of:

Accepted Answer

A) how households make choices. 
B) how firms make choices. 
C) how households and firms make choices. 
D) the economy as a whole. 
A) how households make choices. 
B) how firms make choices. 
C) how households and firms make choices. 
D) the economy as a whole.

Question 15

The decisions Apple made in determining production levels for its iPhone is an example of a microeconomics topic.

Accepted Answer

A) True 
 B)False

Question 16

Economics does not study correct or incorrect behaviours but rather it assumes that economic agents behave ________, meaning they make the best decisions given their knowledge of the costs and benefits.

Accepted Answer

A) equitably 
B) rationally 
C) emotionally 
D) selfishly 
A) equitably 
B) rationally 
C) emotionally 
D) selfishly

Question 17

Voluntary exchange ________ economic efficiency because neither the buyer nor the seller would agree to a trade unless ________.

Accepted Answer

A) increases; they both benefit 
B) increases; only one party benefits 
C) decreases; neither benefit 
D) decreases; they both benefit 
A) increases; they both benefit 
B) increases; only one party benefits 
C) decreases; neither benefit 
D) decreases; they both benefit

Question 18

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1 200. Then, the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1 200 or more.

Accepted Answer

A) True 
 B)False

Question 19

An economic ________ is a simplified version of some aspect of economic life used to analyse an economic issue.

Accepted Answer

A) market 
B) trade-off 
C) variable 
D) model 
A) market 
B) trade-off 
C) variable 
D) model

Question 20

How are the fundamental economic questions answered in a market economy?

Accepted Answer

A) The government alone decides the answers. 
B) Individuals, firms and the government interact in markets to decide the answers to these questions. 
C) Households and firms interact in markets to decide the answers to these questions. 
D) Large corporations alone decide the answers. 
A) The government alone decides the answers. 
B) Individuals, firms and the government interact in markets to decide the answers to these questions. 
C) Households and firms interact in markets to decide the answers to these questions. 
D) Large corporations alone decide the answers.

The ________ the sale of an additional unit of a product is a marginal benefit to the firm.

Which of the following correctly describes the relationship between economic efficiency and economic equity?

The distribution of income primarily determines which of the fundamental economic questions?

The decision about what goods and services will be produced in a market economy is made by:

What is a 'marginal benefit'? _ _

Economists assume that rational behaviour is useful in explaining choices people make:

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes. A student concludes that it is likely that living in a nursing home causes Alzheimer's dementia. What is the flaw in the student's reasoning?

Figure 1.4 -Refer to Figure 1.4. Which of the following statements is false?

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

What is 'equity', and how does it differ from 'efficiency'? _ _

Economists assume that rational people do all of the following except:

The relationship between consumer spending and disposable personal income is:

'Macroeconomics' is the study of:

The decisions Apple made in determining production levels for its iPhone is an example of a microeconomics topic.

Economics does not study correct or incorrect behaviours but rather it assumes that economic agents behave ________, meaning they make the best decisions given their knowledge of the costs and benefits.

Voluntary exchange economic efficiency because neither the buyer nor the seller would agree to a trade unless .

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1 200. Then, the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1 200 or more.

An economic ________ is a simplified version of some aspect of economic life used to analyse an economic issue.

How are the fundamental economic questions answered in a market economy?

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Gdp: Measuring Total Production, Income and Economic Growth

Economic Growth, the Financial System and Business Cycles

Long-Run Economic Growth: Sources and Policies

Unemployment

Inflation

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 1: Economics: Foundations and Models

The ________ the sale of an additional unit of a product is a marginal benefit to the firm.

Which of the following correctly describes the relationship between economic efficiency and economic equity?

The distribution of income primarily determines which of the fundamental economic questions?

The decision about what goods and services will be produced in a market economy is made by:

What is a 'marginal benefit'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Economists assume that rational behaviour is useful in explaining choices people make:

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes. A student concludes that it is likely that living in a nursing home causes Alzheimer's dementia. What is the flaw in the student's reasoning?

Figure 1.4 -Refer to Figure 1.4. Which of the following statements is false?

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

What is 'equity', and how does it differ from 'efficiency'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Economists assume that rational people do all of the following except:

The relationship between consumer spending and disposable personal income is:

'Macroeconomics' is the study of:

The decisions Apple made in determining production levels for its iPhone is an example of a microeconomics topic.

Economics does not study correct or incorrect behaviours but rather it assumes that economic agents behave ________, meaning they make the best decisions given their knowledge of the costs and benefits.

Voluntary exchange ________ economic efficiency because neither the buyer nor the seller would agree to a trade unless ________.

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1 200. Then, the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1 200 or more.

An economic ________ is a simplified version of some aspect of economic life used to analyse an economic issue.

How are the fundamental economic questions answered in a market economy?

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Gdp: Measuring Total Production, Income and Economic Growth

Economic Growth, the Financial System and Business Cycles

Long-Run Economic Growth: Sources and Policies

Unemployment

Inflation

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

What is a 'marginal benefit'? _ _

What is 'equity', and how does it differ from 'efficiency'? _ _

Voluntary exchange economic efficiency because neither the buyer nor the seller would agree to a trade unless .