Question 1

Who receives the most of what is produced in a market economy?

Accepted Answer

A) lawmakers and other politically favoured groups 
B) those who are willing and able to buy them 
C) people who earn the highest incomes 
D) Everyone receives an equal amount. 
A) lawmakers and other politically favoured groups 
B) those who are willing and able to buy them 
C) people who earn the highest incomes 
D) Everyone receives an equal amount.

Question 2

The branch of economics which studies how households and firms interact in markets is called

Accepted Answer

A) macroeconomics. 
B) microeconomics. 
C) positive economics. 
D) normative economics. 
A) macroeconomics. 
B) microeconomics. 
C) positive economics. 
D) normative economics.

Question 3

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 4

The extra cost associated with undertaking an activity is called

Accepted Answer

A) net loss. 
B) marginal cost. 
C) opportunity cost. 
D) foregone cost. 
A) net loss. 
B) marginal cost. 
C) opportunity cost. 
D) foregone cost.

Question 5

________ 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 6

Suppose the extra cost for a doctor to keep his office open for one extra hour is $200.Then,the doctor should stay open for the extra hour if he can generate additional revenue of $200 for that hour.

Accepted Answer

A) True 
 B)False

Question 7

When voluntary exchange takes place,neither party gains from the exchange.

Accepted Answer

A) True 
 B)False

Question 8

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a Russian tea cake?

Accepted Answer

A) 2 1/2 cappuccinos 
B) 2/5 of a cappuccino 
C) $2.50 
D) $1.00 
A) 2 1/2 cappuccinos 
B) 2/5 of a cappuccino 
C) $2.50 
D) $1.00

Question 9

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 10

What is a marginal cost?

Accepted Answer

Marginal cost is the

Question 11

When voluntary exchange takes place,both parties gain from the exchange.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Making optimal decisions 'at the margin' requires

Accepted Answer

A) making decisions according to one's whims and fancies. 
B) making consistently irrational decisions. 
C) weighing the costs and benefits of a decision before deciding if it should be pursued. 
D) making borderline decisions. 
A) making decisions according to one's whims and fancies. 
B) making consistently irrational decisions. 
C) weighing the costs and benefits of a decision before deciding if it should be pursued. 
D) making borderline decisions.

Question 14

What is opportunity cost?

Accepted Answer

Opportunity cost refers to the highest-v

Question 15

The government makes all economic decisions in a market economy.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a problem inherent in centrally planned economies?

Accepted Answer

A) Households and firms make poor decisions in choosing how resources are allocated. 
B) There is too little production of low-cost,high-quality goods and services. 
C) Production managers are more concerned with satisfying consumer wants than with satisfying government's orders. 
D) Exports tend to exceed imports. 
A) Households and firms make poor decisions in choosing how resources are allocated. 
B) There is too little production of low-cost,high-quality goods and services. 
C) Production managers are more concerned with satisfying consumer wants than with satisfying government's orders. 
D) Exports tend to exceed imports.

Question 17

What is a centrally planned economy?

Accepted Answer

A centrally planned economy is

Question 18

Which of the following statements is false?

Accepted Answer

A) An inverse relationship has a negative slope value. 
B) A direct relationship has a positive slope value. 
C) A curved line has slope values that change at every point. 
D) A straight line has a slope of zero. 
A) An inverse relationship has a negative slope value. 
B) A direct relationship has a positive slope value. 
C) A curved line has slope values that change at every point. 
D) A straight line has a slope of zero.

Question 19

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

Accepted Answer

A) True 
 B)False

Question 20

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.

Who receives the most of what is produced in a market economy?

The branch of economics which studies how households and firms interact in markets is called

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.

The extra cost associated with undertaking an activity is called

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

Suppose the extra cost for a doctor to keep his office open for one extra hour is $200.Then,the doctor should stay open for the extra hour if he can generate additional revenue of $200 for that hour.

When voluntary exchange takes place,neither party gains from the exchange.

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a Russian tea cake?

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

What is a marginal cost?

When voluntary exchange takes place,both parties gain from the exchange.

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

Making optimal decisions 'at the margin' requires

What is opportunity cost?

The government makes all economic decisions in a market economy.

Which of the following is a problem inherent in centrally planned economies?

What is a centrally planned economy?

Which of the following statements is false?

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

Productive efficiency is achieved when

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

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

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

Who receives the most of what is produced in a market economy?

The branch of economics which studies how households and firms interact in markets is called

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.

The extra cost associated with undertaking an activity is called

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

Suppose the extra cost for a doctor to keep his office open for one extra hour is $200.Then,the doctor should stay open for the extra hour if he can generate additional revenue of $200 for that hour.

When voluntary exchange takes place,neither party gains from the exchange.

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a Russian tea cake?

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

What is a marginal cost?

When voluntary exchange takes place,both parties gain from the exchange.

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

Making optimal decisions 'at the margin' requires

What is opportunity cost?

The government makes all economic decisions in a market economy.

Which of the following is a problem inherent in centrally planned economies?

What is a centrally planned economy?

Which of the following statements is false?

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

Productive efficiency is achieved when

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

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters