Question 1

If the marginal cost of keeping a doctor's office open one additional hour per day is $200,then the doctor should keep the office open for one extra hour

Accepted Answer

A) only if the marginal benefit she receives is greater than $200 plus an acceptable profit margin. 
B) as long as the marginal benefit she receives is just equal to or greater than $200. 
C) as long as the marginal cost does not rise. 
D) until the marginal benefit she receives reaches zero. 
A) only if the marginal benefit she receives is greater than $200 plus an acceptable profit margin. 
B) as long as the marginal benefit she receives is just equal to or greater than $200. 
C) as long as the marginal cost does not rise. 
D) until the marginal benefit she receives reaches zero.

Question 2

Suppose a doctor can earn an additional $25 000 in revenue per year by keeping her office open on Sundays.At what additional cost would keeping the office open on Sundays not be considered economically rational?

Accepted Answer

If the additional cost of keep

Question 3

Which of the following are positive economic statements and which are normative economic statements?
a.An increase in the price of petrol will decrease the quantity of petrol purchased.
b.The government should eliminate the minimum wage.
c.All states should raise the minimum wage to at least $10 per hour.
d.The government should scrap its current income tax structure in favour of a flat tax.
e.Unemployment has increased since the onset of the recession.
f.The government should not bail out investment banks during a financial crisis.

Accepted Answer

Statements a and e are positiv

Question 4

Society faces a trade-off in all of the following situations except

Accepted Answer

A) when deciding who will receive the goods and services produced. 
B) when deciding what goods and services will be produced. 
C) when deciding how goods and services will be produced. 
D) when some previously unemployed workers find jobs. 
A) when deciding who will receive the goods and services produced. 
B) when deciding what goods and services will be produced. 
C) when deciding how goods and services will be produced. 
D) when some previously unemployed workers find jobs.

Question 5

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 6

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 7

Which of the following is a microeconomics question?

Accepted Answer

A) How much will be saved and how much will be produced in the entire economy? 
B) What will the level of economic growth be in the entire economy? 
C) What factors determine the price of carrots? 
D) What determines the average price level and inflation? 
A) How much will be saved and how much will be produced in the entire economy? 
B) What will the level of economic growth be in the entire economy? 
C) What factors determine the price of carrots? 
D) What determines the average price level and inflation?

Question 8

All of the following are part of an economic model except

Accepted Answer

A) assumptions. 
B) hypotheses. 
C) data. 
D) opinions. 
A) assumptions. 
B) hypotheses. 
C) data. 
D) opinions.

Question 9

Which of the following statements is true about competition in a market?

Accepted Answer

A) Competition forces firms to outsource the production of their labour-intensive products. 
B) Competition forces firms to undercut their selling price,thus benefiting consumers who will be able to purchase products at the lowest price possible. 
C) Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production. 
D) Competition forces firms to add only low profit margins to their costs of production. 
A) Competition forces firms to outsource the production of their labour-intensive products. 
B) Competition forces firms to undercut their selling price,thus benefiting consumers who will be able to purchase products at the lowest price possible. 
C) Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production. 
D) Competition forces firms to add only low profit margins to their costs of production.

Question 10

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10,the slope of this line is

Accepted Answer

A) negative 11 divided by 6. 
B) seven tenths. 
C) negative seven tenths. 
D) 6 divided by 11. 
A) negative 11 divided by 6. 
B) seven tenths. 
C) negative seven tenths. 
D) 6 divided by 11.

Question 11

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 12

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

Accepted Answer

A) True 
 B)False

Question 13

Damian shares a small food truck with his sister.His share of the expenses is $500 per month.He has decided to get his own,newer food truck which he will not have to share with anyone.His expenses for the newer truck are $1400 per month.Damian is as rational as any other person.As an economics major,you rightly conclude that

Accepted Answer

A) Damian cannot afford the newer truck and will have to go back to sharing a truck with his sister. 
B) Damian figures that the additional benefit of having his own truck (as opposed to sharing)is at least $900. 
C) Damian figures that the benefit of having his own truck (as opposed to sharing)is at least $1400. 
D) the cost of having one's own truck outweighs the benefits. 
A) Damian cannot afford the newer truck and will have to go back to sharing a truck with his sister. 
B) Damian figures that the additional benefit of having his own truck (as opposed to sharing)is at least $900. 
C) Damian figures that the benefit of having his own truck (as opposed to sharing)is at least $1400. 
D) the cost of having one's own truck outweighs the benefits.

Question 14

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.Should DeShawn continue to offer the engine detailing service?

Accepted Answer

A) Yes,he still makes a profit by selling the engine detailing service with the basic detailing package. 
B) Yes,but only if he raises the price of the basic detailing package. 
C) No,his marginal benefit is less than his marginal cost. 
D) More information is needed for DeShawn to make this decision. 
A) Yes,he still makes a profit by selling the engine detailing service with the basic detailing package. 
B) Yes,but only if he raises the price of the basic detailing package. 
C) No,his marginal benefit is less than his marginal cost. 
D) More information is needed for DeShawn to make this decision.

Question 15

'A decrease in the price of tablet computers will decrease the demand for desktop computers.' This statement is an example of a normative economic statement.

Accepted Answer

A) True 
 B)False

Question 16

Scarcity is a problem that will eventually disappear as technology advances.

Accepted Answer

A) True 
 B)False

Question 17

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 18

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

Accepted Answer

A) True 
 B)False

Question 19

Consider the following economic agents:
A.the government
B.consumers
C.producers
Who,in a centrally planned economy,decides what goods and services will be produced with the scarce resources available in that economy?

Accepted Answer

A) the government 
B) producers 
C) consumers 
D) consumers and producers 
A) the government 
B) producers 
C) consumers 
D) consumers and producers

Question 20

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.

If the marginal cost of keeping a doctor's office open one additional hour per day is $200,then the doctor should keep the office open for one extra hour

Suppose a doctor can earn an additional $25 000 in revenue per year by keeping her office open on Sundays.At what additional cost would keeping the office open on Sundays not be considered economically rational?

Society faces a trade-off in all of the following situations except

Economists assume that rational people do all of the following except

Macroeconomics is the study of

Which of the following is a microeconomics question?

All of the following are part of an economic model except

Which of the following statements is true about competition in a market?

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10,the slope of this line is

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

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

'A decrease in the price of tablet computers will decrease the demand for desktop computers.' This statement is an example of a normative economic statement.

Scarcity is a problem that will eventually disappear as technology advances.

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.

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

Consider the following economic agents: A.the government B.consumers C.producers Who,in a centrally planned economy,decides what goods and services will be produced with the scarce resources available in that economy?

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?

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

If the marginal cost of keeping a doctor's office open one additional hour per day is $200,then the doctor should keep the office open for one extra hour

Suppose a doctor can earn an additional $25 000 in revenue per year by keeping her office open on Sundays.At what additional cost would keeping the office open on Sundays not be considered economically rational?

Society faces a trade-off in all of the following situations except

Economists assume that rational people do all of the following except

Macroeconomics is the study of

Which of the following is a microeconomics question?

All of the following are part of an economic model except

Which of the following statements is true about competition in a market?

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10,the slope of this line is

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

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

'A decrease in the price of tablet computers will decrease the demand for desktop computers.' This statement is an example of a normative economic statement.

Scarcity is a problem that will eventually disappear as technology advances.

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.

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

Consider the following economic agents: A.the government B.consumers C.producers Who,in a centrally planned economy,decides what goods and services will be produced with the scarce resources available in that economy?

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?

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

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