Question 1

Which of the following is an example of an activity undertaken by an entrepreneur?

Accepted Answer

A)  choosing the color scheme for your renovated kitchen 
B)  being promoted to the position of Chief of Police 
C)  being appointed to the U.S. Supreme Court 
D)  starting your own snow cone business 
A)  choosing the color scheme for your renovated kitchen 
B)  being promoted to the position of Chief of Police 
C)  being appointed to the U.S. Supreme Court 
D)  starting your own snow cone business

Question 2

Table 1-6
   Ivan runs a custom jewelry shop in Sparkle City. He is debating whether he should extend his hours of operation. Ivan figures that his sales revenue will depend on the number of hours the jewelry shop is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $25 per hour.
-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 3

A university must decide if it should stop offering foreign language classes. This decision involves answering the economic question of "how to produce."

Accepted Answer

A) True 
 B)False

Question 4

Figure 1-5  
-Refer to Figure 1-5. Calculate the area of the triangle A.

Accepted Answer

A)  $8.4 million 
B)  $6.3 million 
C)  $3.15 million 
D)  $2.1 million 
A)  $8.4 million 
B)  $6.3 million 
C)  $3.15 million 
D)  $2.1 million

Question 5

Human capital refers to the accumulated skills and training that workers possess.

Accepted Answer

A) True 
 B)False

Question 6

Who receives the goods and services produced in the United States depends largely on

Accepted Answer

A)  how income is distributed. 
B)  how the goods and services are produced. 
C)  what goods and services are produced. 
D)  government redistribution. 
A)  how income is distributed. 
B)  how the goods and services are produced. 
C)  what goods and services are produced. 
D)  government redistribution.

Question 7

Physical capital refers to stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 8

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 9

Suppose when the price of hybrid automobiles rises, consumers buy fewer hybrid automobiles. This implies that

Accepted Answer

A)  there is a positive relationship between hybrid automobile prices and quantities purchased by consumers. 
B)  there is a negative relationship between hybrid automobile prices and quantities purchased by consumers. 
C)  there is a direct relationship between hybrid automobile prices and quantities purchased by consumers. 
D)  there is a one-to-one relationship between hybrid automobile prices and quantities purchased by consumers. 
A)  there is a positive relationship between hybrid automobile prices and quantities purchased by consumers. 
B)  there is a negative relationship between hybrid automobile prices and quantities purchased by consumers. 
C)  there is a direct relationship between hybrid automobile prices and quantities purchased by consumers. 
D)  there is a one-to-one relationship between hybrid automobile prices and quantities purchased by consumers.

Question 10

Table 1-6
   Ivan runs a custom jewelry shop in Sparkle City. He is debating whether he should extend his hours of operation. Ivan figures that his sales revenue will depend on the number of hours the jewelry shop is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $25 per hour.
-The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal benefit.

Accepted Answer

A) True 
 B)False

Question 11

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 12

________ occurs when economic benefits are distributed fairly.

Accepted Answer

A)  Productive efficiency 
B)  Allocative efficiency 
C)  Equality 
D)  Equity 
A)  Productive efficiency 
B)  Allocative efficiency 
C)  Equality 
D)  Equity

Question 13

What is opportunity cost?

Accepted Answer

Opportunity cost refers to the highest-v

Question 14

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 15

Which of the following is motivated by an efficiency concern?

Accepted Answer

A)  In 2009, the Obama administration increased unemployment benefits. 
B)  As part of an economic stimulus package, each taxpayer received a $3,000 tax rebate check. 
C)  Following a six-month drought, a city banned homeowners from watering their lawns in an effort to conserve water. 
D)  Some U.S. colleges have cut back on merit scholarships since these programs siphon money from need-based programs, thus harming lower-income students with greater financial need. 
A)  In 2009, the Obama administration increased unemployment benefits. 
B)  As part of an economic stimulus package, each taxpayer received a $3,000 tax rebate check. 
C)  Following a six-month drought, a city banned homeowners from watering their lawns in an effort to conserve water. 
D)  Some U.S. colleges have cut back on merit scholarships since these programs siphon money from need-based programs, thus harming lower-income students with greater financial need.

Question 16

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

Accepted Answer

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

Question 17

In economics, choices must be made because we live in a world of

Accepted Answer

A)  unemployment. 
B)  scarcity. 
C)  greed. 
D)  unlimited resources. 
A)  unemployment. 
B)  scarcity. 
C)  greed. 
D)  unlimited resources.

Question 18

What is the difference between accounting profit and economic profit?

Accepted Answer

Profit is the difference between revenue

Question 19

Marginal benefit is the benefit that your activity provides to someone else.

Accepted Answer

A) True 
 B)False

Question 20

Trade-offs force society to make choices when answering what three fundamental questions?

Accepted Answer

A)  What will be the prices of goods and services; how will these goods and services be produced; and who will receive them? 
B)  What goods and services to produce; how will these goods and services be produced; and who receives them? 
C)  Who gets jobs; what wages do workers earn; and who owns what property? 
D)  How much will be saved; what will be produced; and how can these goods and services be fairly distributed? 
A)  What will be the prices of goods and services; how will these goods and services be produced; and who will receive them? 
B)  What goods and services to produce; how will these goods and services be produced; and who receives them? 
C)  Who gets jobs; what wages do workers earn; and who owns what property? 
D)  How much will be saved; what will be produced; and how can these goods and services be fairly distributed?

Exam 1: Economics: Foundations and Models

Which of the following is an example of an activity undertaken by an entrepreneur?

A university must decide if it should stop offering foreign language classes. This decision involves answering the economic question of "how to produce."

Figure 1-5 -Refer to Figure 1-5. Calculate the area of the triangle A.

Human capital refers to the accumulated skills and training that workers possess.

Who receives the goods and services produced in the United States depends largely on

Physical capital refers to stocks and bonds.

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

Suppose when the price of hybrid automobiles rises, consumers buy fewer hybrid automobiles. This implies that

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

________ occurs when economic benefits are distributed fairly.

What is opportunity cost?

Economists assume that rational people do all of the following except

Which of the following is motivated by an efficiency concern?

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

In economics, choices must be made because we live in a world of

What is the difference between accounting profit and economic profit?

Marginal benefit is the benefit that your activity provides to someone else.

Trade-offs force society to make choices when answering what three fundamental questions?

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

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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