Question 1

________ is a situation in which a good or service is produced at the lowest possible cost.

Accepted Answer

A) Allocative efficiency 
B) Productive efficiency 
C) Equity 
D) Optimal marginalism 
A) Allocative efficiency 
B) Productive efficiency 
C) Equity 
D) Optimal marginalism

Question 2

Productive efficiency is achieved when

Accepted Answer

A) firms add a low profit margin to the goods and services they produce. 
B) firms produce the goods and services that consumers value most. 
C) firms produce goods and services at the lowest cost. 
D) there are no shortages or surpluses in the market. 
A) firms add a low profit margin to the goods and services they produce. 
B) firms produce the goods and services that consumers value most. 
C) firms produce goods and services at the lowest cost. 
D) there are no shortages or surpluses in the market.

Question 3

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

Accepted Answer

A) only the producers 
B) only consumers 
C) only the government 
D) all of the above 
A) only the producers 
B) only consumers 
C) only the government 
D) all of the above

Question 4

Figure 1-2
  
-Refer to Figure 1-2.Calculate the area of the triangle A.

Accepted Answer

A) $1.3 million 
B) $2.6 million 
C) $3.4 million 
D) $5.2 million 
A) $1.3 million 
B) $2.6 million 
C) $3.4 million 
D) $5.2 million

Question 5

Explain the difference between a firm's revenue and its profit.

Accepted Answer

A firm's revenue is the total amount rec

Question 6

When every good or service is produced up to the point where the last unit provides ________, allocative efficiency occurs.

Accepted Answer

A) a marginal benefit to society equal to the marginal cost of producing it 
B) a marginal benefit to society greater than the marginal cost of producing it 
C) a marginal benefit to society less than the marginal cost of producing it 
D) a marginal benefit to society equal to zero 
A) a marginal benefit to society equal to the marginal cost of producing it 
B) a marginal benefit to society greater than the marginal cost of producing it 
C) a marginal benefit to society less than the marginal cost of producing it 
D) a marginal benefit to society equal to zero

Question 7

When Mr.Peabody decides on the companies to which he will donate his time and money, a ________ issue is being addressed.

Accepted Answer

A) microeconomic 
B) macroeconomic 
C) positive economic 
D) normative economic 
A) microeconomic 
B) macroeconomic 
C) positive economic 
D) normative economic

Question 8

Allison's Auto Art is a company that applies pinstripes to vehicles.Allison's cost for a basic 1-color pinstriping job is $35, and she charges $95 for this service.For a total price of $175, Allison will apply a fancier 3-color pinstripe application to an automobile, a service that adds an additional $40 to the total cost of the package.What is the marginal cost of moving up from the 1-color application to the 3-color application?

Accepted Answer

A) $35 
B) $40 
C) $80 
D) $175 
A) $35 
B) $40 
C) $80 
D) $175

Question 9

Figure 1-1
  
-Refer to Figure 1-1.Using the information in the figure above, calculate the percentage change in sales of alcoholic beverages between 2012 and 2016.

Accepted Answer

A) 30% 
B) 50% 
C) 66.7% 
D) 100% 
A) 30% 
B) 50% 
C) 66.7% 
D) 100%

Question 10

________ have a horizontal and a vertical axis and are used in economics to illustrate relationships between two economic variables.

Accepted Answer

A) Two-dimensional graphs 
B) One-dimensional graphs 
C) Pie Charts 
D) Bar graphs 
A) Two-dimensional graphs 
B) One-dimensional graphs 
C) Pie Charts 
D) Bar graphs

Question 11

By definition, economics is the study of

Accepted Answer

A) how to make money in the stock market. 
B) how to make money in a market economy. 
C) the choices people make to attain their goals, given their scarce resources. 
D) supply and demand. 
A) how to make money in the stock market. 
B) how to make money in a market economy. 
C) the choices people make to attain their goals, given their scarce resources. 
D) supply and demand.

Question 12

Which of the following statements about the economic decisions consumers, firms, and the government have to make is false?

Accepted Answer

A) Governments face the problem of scarcity in making economic decisions. 
B) Only individuals face scarcity; firms and the government do not. 
C) Both firms and individuals face scarcity. 
D) Each faces the problem of scarcity which necessitates trade-offs in making economic decisions. 
A) Governments face the problem of scarcity in making economic decisions. 
B) Only individuals face scarcity; firms and the government do not. 
C) Both firms and individuals face scarcity. 
D) Each faces the problem of scarcity which necessitates trade-offs in making economic decisions.

Question 13

Mr.Peabody chooses to invest in companies that produce goods and services at the lowest possible cost.Mr.Peabody is investing in companies that are

Accepted Answer

A) allocatively efficient. 
B) productively efficient. 
C) guaranteed to make a profit. 
D) all of the above 
A) allocatively efficient. 
B) productively efficient. 
C) guaranteed to make a profit. 
D) all of the above

Question 14

Suppose the U.S.government encouraged consumers to trade in their old automobiles for more efficient, new models by paying up to $5,000 for the old automobiles.These consumers who did trade in their old automobiles to take advantage of the government offer would be 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 15

How are the fundamental economic decisions determined in North Korea?

Accepted Answer

A) Individuals, firms, and the government interact in a market to make these economic decisions. 
B) These decisions are made by the country's elders who have had much experience in answering these questions. 
C) The government decides because North Korea is a centrally planned economy. 
D) The United Nations decides because North Korea is a developing economy. 
A) Individuals, firms, and the government interact in a market to make these economic decisions. 
B) These decisions are made by the country's elders who have had much experience in answering these questions. 
C) The government decides because North Korea is a centrally planned economy. 
D) The United Nations decides because North Korea is a developing economy.

Question 16

In the United States in 2012, the CDC estimated that the total number of people with diabetes (both diagnosed and undiagnosed cases)was highest for people in the age range of ________, and the percentage of people with diabetes was highest for people in the age range of ________.

Accepted Answer

A) 20-44; 45-64 
B) 45-64; 65 and older 
C) 65 and older; 65 and older 
D) 65 and older; 20-44 
A) 20-44; 45-64 
B) 45-64; 65 and older 
C) 65 and older; 65 and older 
D) 65 and older; 20-44

Question 17

Which of the following is motivated by an efficiency concern?

Accepted Answer

A) In December 2006, the Bush administration restarted a short-term housing assistance program for victims of Hurricane Katrina. 
B) Each year, the University of Notre Dame conducts a lottery to parcel out the 30,000 seats available to contributors, former athletes, and parents in the 80,000-seat stadium. 
C) The United Network for Organ Sharing advocates a system of rationing scarce kidneys that would favor young patients over old in an effort to wring more life out of donated organs. 
D) The federal government's housing choice voucher program assists very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. 
A) In December 2006, the Bush administration restarted a short-term housing assistance program for victims of Hurricane Katrina. 
B) Each year, the University of Notre Dame conducts a lottery to parcel out the 30,000 seats available to contributors, former athletes, and parents in the 80,000-seat stadium. 
C) The United Network for Organ Sharing advocates a system of rationing scarce kidneys that would favor young patients over old in an effort to wring more life out of donated organs. 
D) The federal government's housing choice voucher program assists very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market.

Question 18

Even if the population declines, scarcity will still exist.

Accepted Answer

A) True 
 B)False

Question 19

In an effort to serve consumers who have become more health conscious, a number of firms have begun developing small electronic devices which allow people to monitor various health conditions.These firms are reacting to which of the three key economic ideas?

Accepted Answer

A) people are rational 
B) people respond to economic incentives 
C) optimal decisions are made at the margin 
D) firms attempt to maximize revenues 
A) people are rational 
B) people respond to economic incentives 
C) optimal decisions are made at the margin 
D) firms attempt to maximize revenues

Question 20

Which of the following is an example of an efficiency-equity trade-off faced by economic agents?

Accepted Answer

A) According to an article by in the American Journal of Public Health by Edward Kaplan and Michael Merson of Yale University School of Medicine, the federal government's current method of allocating HIV-prevention resources is not cost-effective. Instead of allocating resources to states in proportion to reported AIDS cases, resources should flow first to those activities that prevent more infections per dollar and then to less and less effective combinations of programs and populations until funds are exhausted, even if it means that some populations would be left without any prevention services. 
B) Concerned about the falling birth rate, the French government has pledged more money for families with three children, in an effort to encourage working women to have more babies. 
C) Some U.S. colleges are actively recruiting foreign students for their technology-based programs. 
D) All New York City art museums are considering adopting a free-admission policy for local residents one weekend per month. 
A) According to an article by in the American Journal of Public Health by Edward Kaplan and Michael Merson of Yale University School of Medicine, the federal government's current method of allocating HIV-prevention resources is not cost-effective. Instead of allocating resources to states in proportion to reported AIDS cases, resources should flow first to those activities that prevent more infections per dollar and then to less and less effective combinations of programs and populations until funds are exhausted, even if it means that some populations would be left without any prevention services. 
B) Concerned about the falling birth rate, the French government has pledged more money for families with three children, in an effort to encourage working women to have more babies. 
C) Some U.S. colleges are actively recruiting foreign students for their technology-based programs. 
D) All New York City art museums are considering adopting a free-admission policy for local residents one weekend per month.

________ is a situation in which a good or service is produced at the lowest possible cost.

Productive efficiency is achieved when

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

Figure 1-2 -Refer to Figure 1-2.Calculate the area of the triangle A.

Explain the difference between a firm's revenue and its profit.

When every good or service is produced up to the point where the last unit provides ________, allocative efficiency occurs.

When Mr.Peabody decides on the companies to which he will donate his time and money, a ________ issue is being addressed.

Figure 1-1 -Refer to Figure 1-1.Using the information in the figure above, calculate the percentage change in sales of alcoholic beverages between 2012 and 2016.

________ have a horizontal and a vertical axis and are used in economics to illustrate relationships between two economic variables.

By definition, economics is the study of

Which of the following statements about the economic decisions consumers, firms, and the government have to make is false?

Mr.Peabody chooses to invest in companies that produce goods and services at the lowest possible cost.Mr.Peabody is investing in companies that are

How are the fundamental economic decisions determined in North Korea?

In the United States in 2012, the CDC estimated that the total number of people with diabetes (both diagnosed and undiagnosed cases)was highest for people in the age range of , and the percentage of people with diabetes was highest for people in the age range of .

Which of the following is motivated by an efficiency concern?

Even if the population declines, scarcity will still exist.

In an effort to serve consumers who have become more health conscious, a number of firms have begun developing small electronic devices which allow people to monitor various health conditions.These firms are reacting to which of the three key economic ideas?

Which of the following is an example of an efficiency-equity trade-off faced by economic agents?

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters

Exam 1: Economics: Foundations and Models

________ is a situation in which a good or service is produced at the lowest possible cost.

Productive efficiency is achieved when

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

Figure 1-2 -Refer to Figure 1-2.Calculate the area of the triangle A.

Explain the difference between a firm's revenue and its profit.

When every good or service is produced up to the point where the last unit provides ________, allocative efficiency occurs.

When Mr.Peabody decides on the companies to which he will donate his time and money, a ________ issue is being addressed.

Figure 1-1 -Refer to Figure 1-1.Using the information in the figure above, calculate the percentage change in sales of alcoholic beverages between 2012 and 2016.

________ have a horizontal and a vertical axis and are used in economics to illustrate relationships between two economic variables.

By definition, economics is the study of

Which of the following statements about the economic decisions consumers, firms, and the government have to make is false?

Mr.Peabody chooses to invest in companies that produce goods and services at the lowest possible cost.Mr.Peabody is investing in companies that are

How are the fundamental economic decisions determined in North Korea?

In the United States in 2012, the CDC estimated that the total number of people with diabetes (both diagnosed and undiagnosed cases)was highest for people in the age range of ________, and the percentage of people with diabetes was highest for people in the age range of ________.

Which of the following is motivated by an efficiency concern?

Even if the population declines, scarcity will still exist.

In an effort to serve consumers who have become more health conscious, a number of firms have begun developing small electronic devices which allow people to monitor various health conditions.These firms are reacting to which of the three key economic ideas?

Which of the following is an example of an efficiency-equity trade-off faced by economic agents?

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters

In the United States in 2012, the CDC estimated that the total number of people with diabetes (both diagnosed and undiagnosed cases)was highest for people in the age range of , and the percentage of people with diabetes was highest for people in the age range of .