Question 1

Define productive efficiency.Does productive efficiency imply allocative efficiency? Explain.

Accepted Answer

Productive efficiency is an efficiency c

Question 2

If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets,then the difference of $120 is the marginal cost of producing the 4th suede jacket.

Accepted Answer

A) True 
 B)False

Question 3

Explain the economic idea that 'people respond to incentives.'

Accepted Answer

Human beings act from a variety of motiv

Question 4

Suppose when the price of laptops falls,university students buy more laptops.This implies that

Accepted Answer

A)  there is a positive relationship between laptop prices and quantities purchased by university students. 
B)  there is a negative relationship between laptop prices and quantities purchased by university students. 
C)  there is a direct relationship between laptop prices and quantities purchased by university students. 
D)  there is a one-to-one relationship between laptop prices and quantities purchased by university students. 
A)  there is a positive relationship between laptop prices and quantities purchased by university students. 
B)  there is a negative relationship between laptop prices and quantities purchased by university students. 
C)  there is a direct relationship between laptop prices and quantities purchased by university students. 
D)  there is a one-to-one relationship between laptop prices and quantities purchased by university students.

Question 5

Explain why economics is considered a social science.

Accepted Answer

Economics is a social science

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

In economics,the 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

The term 'market' refers to trading arrangements by which buyers and sellers come together.

Accepted Answer

A) True 
 B)False

Question 9

What is an economic model?

Accepted Answer

An economic model is a simplif

Question 10

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 11

'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 12

________ is a problem that occurs when one concludes that a change in variable X caused a change in variable Y when,in actual fact,it was a change in variable Y that caused a change in variable X.

Accepted Answer

A)  The omitted variable 
B)  The positive-to-negative relationship 
C)  Reverse causality 
D)  Nonlinear slope 
A)  The omitted variable 
B)  The positive-to-negative relationship 
C)  Reverse causality 
D)  Nonlinear slope

Question 13

Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity.

Accepted Answer

A) True 
 B)False

Question 14

Assume that a doctor can earn an additional $20 000 of revenue each year from keeping his office open for one additional hour per week.What can you say about the additional cost of keeping the office open this additional hour per week to make staying open for the extra hour economically rational?

Accepted Answer

The additional cost of staying

Question 15

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 16

Voluntary exchange between buyers and sellers generates ________ in a market economy.

Accepted Answer

A)  scarcity 
B)  allocative efficiency 
C)  productive efficiency 
D)  equity 
A)  scarcity 
B)  allocative efficiency 
C)  productive efficiency 
D)  equity

Question 17

By definition,economics is the study of

Accepted Answer

A)  how to make money in the stock market. 
B)  how to make money in a market economy. 
C)  the choices people make to attain their goals, given their scarce resources. 
D)  supply and demand. 
A)  how to make money in the stock market. 
B)  how to make money in a market economy. 
C)  the choices people make to attain their goals, given their scarce resources. 
D)  supply and demand.

Question 18

The idea that,because of scarcity,producing more of one good or service means producing less of another good or service refers to the economic concept of

Accepted Answer

A)  optimisation. 
B)  efficiency. 
C)  trade-off. 
D)  equity. 
A)  optimisation. 
B)  efficiency. 
C)  trade-off. 
D)  equity.

Question 19

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 benefitting 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 benefitting 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 20

Which of the following is a normative economic statement?

Accepted Answer

A)  Rising corn prices have increased the price of corn-based ethanol. 
B)  With rising home prices and falling mortgage interest rates, the amount of home foreclosures has decreased. 
C)  The federal government is considering increasing regulations on the use of fossil fuels to promote the use of wind power. 
D)  Farmers should not be allowed to grow and sell genetically-modified crops. 
A)  Rising corn prices have increased the price of corn-based ethanol. 
B)  With rising home prices and falling mortgage interest rates, the amount of home foreclosures has decreased. 
C)  The federal government is considering increasing regulations on the use of fossil fuels to promote the use of wind power. 
D)  Farmers should not be allowed to grow and sell genetically-modified crops.

Define productive efficiency.Does productive efficiency imply allocative efficiency? Explain.

If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets,then the difference of $120 is the marginal cost of producing the 4th suede jacket.

Explain the economic idea that 'people respond to incentives.'

Suppose when the price of laptops falls,university students buy more laptops.This implies that

Explain why economics is considered a social science.

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

In economics,the term ________ means 'additional' or 'extra.'

The term 'market' refers to trading arrangements by which buyers and sellers come together.

What is an economic model?

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

'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.

________ is a problem that occurs when one concludes that a change in variable X caused a change in variable Y when,in actual fact,it was a change in variable Y that caused a change in variable X.

Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity.

Assume that a doctor can earn an additional $20 000 of revenue each year from keeping his office open for one additional hour per week.What can you say about the additional cost of keeping the office open this additional hour per week to make staying open for the extra hour economically rational?

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

Voluntary exchange between buyers and sellers generates ________ in a market economy.

By definition,economics is the study of

The idea that,because of scarcity,producing more of one good or service means producing less of another good or service refers to the economic concept of

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

Which of the following is a normative economic statement?

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 Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

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

Define productive efficiency.Does productive efficiency imply allocative efficiency? Explain.

If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets,then the difference of $120 is the marginal cost of producing the 4th suede jacket.

Explain the economic idea that 'people respond to incentives.'

Suppose when the price of laptops falls,university students buy more laptops.This implies that

Explain why economics is considered a social science.

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

In economics,the term ________ means 'additional' or 'extra.'

The term 'market' refers to trading arrangements by which buyers and sellers come together.

What is an economic model?

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

'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.

________ is a problem that occurs when one concludes that a change in variable X caused a change in variable Y when,in actual fact,it was a change in variable Y that caused a change in variable X.

Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity.

Assume that a doctor can earn an additional $20 000 of revenue each year from keeping his office open for one additional hour per week.What can you say about the additional cost of keeping the office open this additional hour per week to make staying open for the extra hour economically rational?

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

Voluntary exchange between buyers and sellers generates ________ in a market economy.

By definition,economics is the study of

The idea that,because of scarcity,producing more of one good or service means producing less of another good or service refers to the economic concept of

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

Which of the following is a normative economic statement?

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 Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

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

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