Question 1

Where do economic agents such as individuals,firms,and nations interact with each other?

Accepted Answer

A)  in public locations monitored by the government 
B)  in any arena that brings together buyers and sellers 
C)  in any physical location where people can physically get together for selling goods, such as shopping malls 
D)  in any location where transactions can be monitored by consumer groups and taxed by the government 
A)  in public locations monitored by the government 
B)  in any arena that brings together buyers and sellers 
C)  in any physical location where people can physically get together for selling goods, such as shopping malls 
D)  in any location where transactions can be monitored by consumer groups and taxed by the government

Question 2

In a centrally planned economy,the households and firms decide how economic resources will be allocated.

Accepted Answer

A) True 
 B)False

Question 3

One example of physical capital is the amount of savings that you have.

Accepted Answer

A) True 
 B)False

Question 4

Economic models do all of the following except

Accepted Answer

A)  answer economic questions. 
B)  portray reality in all its minute details. 
C)  make economic ideas explicit and concrete for use by decision makers. 
D)  simplify some aspect of economic life. 
A)  answer economic questions. 
B)  portray reality in all its minute details. 
C)  make economic ideas explicit and concrete for use by decision makers. 
D)  simplify some aspect of economic life.

Question 5

The additional cost to a producer of hiring an additional unit of labor is called the marginal cost.

Accepted Answer

A) True 
 B)False

Question 6

If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16,the slope of this line is

Accepted Answer

A)  negative 8 divided by 4. 
B)  seven-tenths. 
C)  negative one-half. 
D)  one and one-half. 
A)  negative 8 divided by 4. 
B)  seven-tenths. 
C)  negative one-half. 
D)  one and one-half.

Question 7

At a recent company meeting,Geraldine Erwin,sales manager of Dastoria,a flavored-beverage producer announced,"We have increased our sales by 8 percent in just six months." Suppose six months ago,its sales amounted to $452,000,what is the value of its sales today?

Accepted Answer

A)  $36,160 
B)  $415,840 
C)  $488,160 
D)  $565,000 
A)  $36,160 
B)  $415,840 
C)  $488,160 
D)  $565,000

Question 8

In 2017,Smileytown consumed 50,000 tubes of toothpaste.In 2018,toothpaste consumption rose to 62,000 tubes.Calculate the percentage change in toothpaste consumption.

Accepted Answer

A)  12% 
B)  16.42% 
C)  19.35% 
D)  24% 
A)  12% 
B)  16.42% 
C)  19.35% 
D)  24%

Question 9

Which of the following statements is true?

Accepted Answer

A)  Only government policymakers can improve decision making by using economic principles. 
B)  Only government policymakers and business managers can improve decision making by using economic principles. 
C)  Only business managers and individuals can improve decision making by using economic principles. 
D)  Government policymakers, business managers, and individuals can all improve decision making by using economic principles. 
A)  Only government policymakers can improve decision making by using economic principles. 
B)  Only government policymakers and business managers can improve decision making by using economic principles. 
C)  Only business managers and individuals can improve decision making by using economic principles. 
D)  Government policymakers, business managers, and individuals can all improve decision making by using economic principles.

Question 10

Which of the following is a positive economic statement?

Accepted Answer

A)  The inflation rate in the United States is too high. 
B)  Unemployment insurance payments increase when the unemployment rate rises. 
C)  The government should defund Obamacare. 
D)  States should be able to enact their own marijuana legalization laws. 
A)  The inflation rate in the United States is too high. 
B)  Unemployment insurance payments increase when the unemployment rate rises. 
C)  The government should defund Obamacare. 
D)  States should be able to enact their own marijuana legalization laws.

Question 11

Allocative efficiency best explains ________,and productive efficiency best explains ________.

Accepted Answer

A)  how something will be produced; when something will be produced 
B)  when something will be produced; why something will be produced 
C)  why something will be produced; what will be produced 
D)  what will be produced; how something will be produced 
A)  how something will be produced; when something will be produced 
B)  when something will be produced; why something will be produced 
C)  why something will be produced; what will be produced 
D)  what will be produced; how something will be produced

Question 12

Which of the following generates productive efficiency?

Accepted Answer

A)  competition among sellers 
B)  competition among buyers 
C)  government inspectors 
D)  government production rules and regulations 
A)  competition among sellers 
B)  competition among buyers 
C)  government inspectors 
D)  government production rules and regulations

Question 13

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.

Question 14

Which of the following statements about positive economic analysis is true?

Accepted Answer

A)  Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. 
B)  There is much less disagreement among economists over normative economic analysis than over positive economic analysis. 
C)  There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D)  Unlike positive economic analysis, normative economic analysis can be tested. 
A)  Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. 
B)  There is much less disagreement among economists over normative economic analysis than over positive economic analysis. 
C)  There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D)  Unlike positive economic analysis, normative economic analysis can be tested.

Question 15

What is a marginal benefit?

Accepted Answer

Marginal benefit is

Question 16

Economists assume that individuals

Accepted Answer

A)  behave in unpredictable ways. 
B)  will never take actions to help others. 
C)  prefer to live in a society that values fairness above all else. 
D)  are rational and respond to incentives. 
A)  behave in unpredictable ways. 
B)  will never take actions to help others. 
C)  prefer to live in a society that values fairness above all else. 
D)  are rational and respond to incentives.

Question 17

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 18

Consider the following statements:
A.Consumers buy more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area.
B.Schools take steps to increase security since they believe it is more costly to allow vandalism than to hire additional security guards.
C.Citrus growers produce more oranges when the selling price of oranges 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 19

Allocative efficiency is achieved when firms produce goods and services

Accepted Answer

A)  at the lowest possible cost. 
B)  that consumers value most. 
C)  at the lowest opportunity cost. 
D)  at a marginal cost of zero. 
A)  at the lowest possible cost. 
B)  that consumers value most. 
C)  at the lowest opportunity cost. 
D)  at a marginal cost of zero.

Question 20

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

Where do economic agents such as individuals,firms,and nations interact with each other?

In a centrally planned economy,the households and firms decide how economic resources will be allocated.

One example of physical capital is the amount of savings that you have.

Economic models do all of the following except

The additional cost to a producer of hiring an additional unit of labor is called the marginal cost.

If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16,the slope of this line is

At a recent company meeting,Geraldine Erwin,sales manager of Dastoria,a flavored-beverage producer announced,"We have increased our sales by 8 percent in just six months." Suppose six months ago,its sales amounted to $452,000,what is the value of its sales today?

In 2017,Smileytown consumed 50,000 tubes of toothpaste.In 2018,toothpaste consumption rose to 62,000 tubes.Calculate the percentage change in toothpaste consumption.

Which of the following statements is true?

Which of the following is a positive economic statement?

Allocative efficiency best explains ,and productive efficiency best explains .

Which of the following generates productive efficiency?

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

Which of the following statements about positive economic analysis is true?

What is a marginal benefit?

Economists assume that individuals

Allocative efficiency is achieved when firms produce goods and services

All ________ economies have been political dictatorships.

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

Where do economic agents such as individuals,firms,and nations interact with each other?

In a centrally planned economy,the households and firms decide how economic resources will be allocated.

One example of physical capital is the amount of savings that you have.

Economic models do all of the following except

The additional cost to a producer of hiring an additional unit of labor is called the marginal cost.

If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16,the slope of this line is

At a recent company meeting,Geraldine Erwin,sales manager of Dastoria,a flavored-beverage producer announced,"We have increased our sales by 8 percent in just six months." Suppose six months ago,its sales amounted to $452,000,what is the value of its sales today?

In 2017,Smileytown consumed 50,000 tubes of toothpaste.In 2018,toothpaste consumption rose to 62,000 tubes.Calculate the percentage change in toothpaste consumption.

Which of the following statements is true?

Which of the following is a positive economic statement?

Allocative efficiency best explains ________,and productive efficiency best explains ________.

Which of the following generates productive efficiency?

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

Which of the following statements about positive economic analysis is true?

What is a marginal benefit?

Economists assume that individuals

Allocative efficiency is achieved when firms produce goods and services

All ________ economies have been political dictatorships.

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

Allocative efficiency best explains ,and productive efficiency best explains .