Question 1

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 2

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service.For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package.What is DeShawn's marginal benefit if he sells a basic detailing package?

Accepted Answer

A) $35 
B) $75 
C) He incurs a marginal loss of $15, not a marginal benefit. 
D) The marginal benefit cannot be determined. 
A) $35 
B) $75 
C) He incurs a marginal loss of $15, not a marginal benefit. 
D) The marginal benefit cannot be determined.

Question 3

Economists reason that the optimal decision is to continue any activity up to the point where the________.

Accepted Answer

A) marginal benefit is zero. 
B) marginal benefit is greater than the marginal cost. 
C) marginal cost is zero. 
D) marginal benefit equals the marginal cost. 
A) marginal benefit is zero. 
B) marginal benefit is greater than the marginal cost. 
C) marginal cost is zero. 
D) marginal benefit equals the marginal cost.

Question 4

What is an economic variable?
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

An economic variable is someth

Question 5

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

Accepted Answer

A) $35 
B) $60 
C) $95 
D) The marginal benefit cannot be determined. 
A) $35 
B) $60 
C) $95 
D) The marginal benefit cannot be determined.

Question 6

Which of the following questions or statements regarding medical school is normative?

Accepted Answer

A) How do changes in expected future incomes affect the decisions of medical students about which specialty to choose? 
B) Medical students who enter specialised fields make a larger contribution to society than do student who enter primary care. 
C) What role does tuition play in a student's decision about whether to attend medical school? 
D) Have tuition increases had a large effect or a small effect on the number of applications to medical school? 
A) How do changes in expected future incomes affect the decisions of medical students about which specialty to choose? 
B) Medical students who enter specialised fields make a larger contribution to society than do student who enter primary care. 
C) What role does tuition play in a student's decision about whether to attend medical school? 
D) Have tuition increases had a large effect or a small effect on the number of applications to medical school?

Question 7

In economics, what term means 'additional' or 'extra'?

Accepted Answer

A) Allocative 
B) Marginal 
C) Equity 
D) Optimal 
A) Allocative 
B) Marginal 
C) Equity 
D) Optimal

Question 8

A university must decide if it wants to offer more adult literacy classes.This decision involves answering the economic question of 'for whom to produce.'

Accepted Answer

A) True 
 B)False

Question 9

A situation in which a good or service is produced at the lowest possible cost is:

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 10

If it costs Danitra $225 to create 4 necklaces and $275 to create 5 necklaces, then $50 is the marginal cost of producing the 5th necklace.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service.For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package.What is the marginal cost of adding the engine detailing to the basic detailing package?

Accepted Answer

A) $20 
B) $30 
C) $60 
D) $60 plus the value of his time 
A) $20 
B) $30 
C) $60 
D) $60 plus the value of his time

Question 13

Why is it necessary for all economic systems to not only provide people with goods and services, but also restrict them from getting as much of these goods and services as they wish?

Accepted Answer

A) Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others. 
B) Failure to do this could lead to an inequitable allocation of goods and services produced. 
C) Failure to do this could lead to drastic shortages of goods and services. 
D) Failure to do this could reduce efficiency and lead to an inequitable allocation of output. 
A) Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others. 
B) Failure to do this could lead to an inequitable allocation of goods and services produced. 
C) Failure to do this could lead to drastic shortages of goods and services. 
D) Failure to do this could reduce efficiency and lead to an inequitable allocation of output.

Question 14

________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

Accepted Answer

A) Competition 
B) Voluntary exchange 
C) Equity 
D) A centrally planned economy 
A) Competition 
B) Voluntary exchange 
C) Equity 
D) A centrally planned economy

Question 15

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 16

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

Accepted Answer

A) True 
 B)False

Question 17

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 18

What occurs when production reflects consumer preferences?

Accepted Answer

A) Allocative efficiency 
B) Productive efficiency 
C) Equity 
D) Efficient central planning 
A) Allocative efficiency 
B) Productive efficiency 
C) Equity 
D) Efficient central planning

Question 19

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 20

Which of the following statements is true?

Accepted Answer

A) Anytime you have to decide which action to take, you are experiencing economic equity. 
B) Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale. 
C) Every individual, no matter how rich or poor, is faced with making trade-offs. 
D) Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited. 
A) Anytime you have to decide which action to take, you are experiencing economic equity. 
B) Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale. 
C) Every individual, no matter how rich or poor, is faced with making trade-offs. 
D) Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited.

Allocative efficiency is achieved when firms produce goods and services________.

Economists reason that the optimal decision is to continue any activity up to the point where the________.

What is an economic variable? __________________________________________________________________________________________________________________________________________________________________________________________

Which of the following questions or statements regarding medical school is normative?

In economics, what term means 'additional' or 'extra'?

A university must decide if it wants to offer more adult literacy classes.This decision involves answering the economic question of 'for whom to produce.'

A situation in which a good or service is produced at the lowest possible cost is:

If it costs Danitra $225 to create 4 necklaces and $275 to create 5 necklaces, then $50 is the marginal cost of producing the 5th necklace.

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

Why is it necessary for all economic systems to not only provide people with goods and services, but also restrict them from getting as much of these goods and services as they wish?

________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

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.

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

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

What occurs when production reflects consumer preferences?

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

Which of the following statements is true?

Choices and Trade-Offs in the Market

Where Prices Come From: The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition: The Competitive Model in a More Realistic

Oligopoly: Markets With Few Competitors

The Markets for Labour and Other Factors of Production

Comparative Advantage and the Gains From International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 1: Economics: Foundations and Models

Allocative efficiency is achieved when firms produce goods and services________.

Economists reason that the optimal decision is to continue any activity up to the point where the________.

What is an economic variable? __________________________________________________________________________________________________________________________________________________________________________________________

Which of the following questions or statements regarding medical school is normative?

In economics, what term means 'additional' or 'extra'?

A university must decide if it wants to offer more adult literacy classes.This decision involves answering the economic question of 'for whom to produce.'

A situation in which a good or service is produced at the lowest possible cost is:

If it costs Danitra $225 to create 4 necklaces and $275 to create 5 necklaces, then $50 is the marginal cost of producing the 5th necklace.

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

Why is it necessary for all economic systems to not only provide people with goods and services, but also restrict them from getting as much of these goods and services as they wish?

________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

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.

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

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

What occurs when production reflects consumer preferences?

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

Which of the following statements is true?

Choices and Trade-Offs in the Market

Where Prices Come From: The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition: The Competitive Model in a More Realistic

Oligopoly: Markets With Few Competitors

The Markets for Labour and Other Factors of Production

Comparative Advantage and the Gains From International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters