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

In economics,the term 'equity' means

Accepted Answer

A)  everyone has an equal standard of living. 
B)  the hardest working individuals consume all they want. 
C)  only elected officials have high standards of living. 
D)  economic benefits are distributed fairly. 
A)  everyone has an equal standard of living. 
B)  the hardest working individuals consume all they want. 
C)  only elected officials have high standards of living. 
D)  economic benefits are distributed fairly.

Question 3

What is meant by the statement that 'optimal decisions are made at the margin'?

Accepted Answer

In economics,the word 'marginal' means '

Question 4

Figure 1-1  
-Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2007 and 2011.

Accepted Answer

A)  30% 
B)  50% 
C)  66.7% 
D)  100% 
A)  30% 
B)  50% 
C)  66.7% 
D)  100%

Question 5

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1200.Then,the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1200 or more.

Accepted Answer

A) True 
 B)False

Question 6

Economists assume that individuals

Accepted Answer

A)  behave in unpredictable ways. 
B)  will never take action to help others. 
C)  prefer to live in a society that values fairness above all else. 
D)  are rational and respond to incentives. 
A)  behave in unpredictable ways. 
B)  will never take action to help others. 
C)  prefer to live in a society that values fairness above all else. 
D)  are rational and respond to incentives.

Question 7

The basic economic problem of ________ has always existed and will continue to exist.

Accepted Answer

A)  scarcity 
B)  efficiency 
C)  inflation 
D)  recession 
A)  scarcity 
B)  efficiency 
C)  inflation 
D)  recession

Question 8

________ 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 9

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 10

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 11

Where do economic agents,such as individuals,firms and nations,interact with each other?

Accepted Answer

A)  In public locations monitored by the government. 
B)  In any arena that brings together buyers and sellers. 
C)  In any location where people can physically get together to buy and sell goods, such as shopping malls. 
D)  In any location where transactions can be monitored by consumer groups and taxed by the government. 
A)  In public locations monitored by the government. 
B)  In any arena that brings together buyers and sellers. 
C)  In any location where people can physically get together to buy and sell goods, such as shopping malls. 
D)  In any location where transactions can be monitored by consumer groups and taxed by the government.

Question 12

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.

Question 13

'The distribution of income should be left to the market' is an example of a positive economic statement.

Accepted Answer

A) True 
 B)False

Question 14

Jewellery manufacturers produce a range of products such as rings,necklaces,bracelets and brooches.What fundamental economic question are they addressing by offering this range of items?

Accepted Answer

A)  How to produce goods that consumers want? 
B)  Why produce a variety of items? 
C)  What to produce? 
D)  Who to produce the items for? 
A)  How to produce goods that consumers want? 
B)  Why produce a variety of items? 
C)  What to produce? 
D)  Who to produce the items for?

Question 15

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

Accepted Answer

A)  The producers 
B)  The consumers 
C)  The government 
D)  All of the above 
A)  The producers 
B)  The consumers 
C)  The government 
D)  All of the above

Question 16

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 17

Holding all other personal characteristics-such as age,gender and income-constant,economists would expect that

Accepted Answer

A)  people with health insurance will be less likely to be overweight than people without health insurance. 
B)  people with health insurance will be more likely to be overweight than people without health insurance. 
C)  people with health insurance will be equally likely to be overweight as people without health insurance. 
D)  there is no correlation between having health insurance and being overweight. 
A)  people with health insurance will be less likely to be overweight than people without health insurance. 
B)  people with health insurance will be more likely to be overweight than people without health insurance. 
C)  people with health insurance will be equally likely to be overweight as people without health insurance. 
D)  there is no correlation between having health insurance and being overweight.

Question 18

Which of the following is a macroeconomics question?

Accepted Answer

A)  What determines the inflation rate? 
B)  What determines the production of DVDs? 
C)  What factors determine the price of carrots? 
D)  What determines the wage of auto workers? 
A)  What determines the inflation rate? 
B)  What determines the production of DVDs? 
C)  What factors determine the price of carrots? 
D)  What determines the wage of auto workers?

Question 19

Figure 1-2  
-Refer to Figure 1-2.Calculate the area of the triangle A.

Accepted Answer

A)  $1.3 million 
B)  $2.6 million 
C)  $3.4 million 
D)  $5.2 million 
A)  $1.3 million 
B)  $2.6 million 
C)  $3.4 million 
D)  $5.2 million

Question 20

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

Accepted Answer

A) True 
 B)False

Allocative efficiency is achieved when firms produce goods and services

In economics,the term 'equity' means

What is meant by the statement that 'optimal decisions are made at the margin'?

Figure 1-1 -Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2007 and 2011.

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1200.Then,the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1200 or more.

Economists assume that individuals

The basic economic problem of ________ has always existed and will continue to exist.

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

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 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?

Where do economic agents,such as individuals,firms and nations,interact with each other?

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?

'The distribution of income should be left to the market' is an example of a positive economic statement.

Jewellery manufacturers produce a range of products such as rings,necklaces,bracelets and brooches.What fundamental economic question are they addressing by offering this range of items?

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

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal benefit.

Holding all other personal characteristics-such as age,gender and income-constant,economists would expect that

Which of the following is a macroeconomics question?

Figure 1-2 -Refer to Figure 1-2.Calculate the area of the triangle A.

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

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

Allocative efficiency is achieved when firms produce goods and services

In economics,the term 'equity' means

What is meant by the statement that 'optimal decisions are made at the margin'?

Figure 1-1 -Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2007 and 2011.

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1200.Then,the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1200 or more.

Economists assume that individuals

The basic economic problem of ________ has always existed and will continue to exist.

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

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 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?

Where do economic agents,such as individuals,firms and nations,interact with each other?

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?

'The distribution of income should be left to the market' is an example of a positive economic statement.

Jewellery manufacturers produce a range of products such as rings,necklaces,bracelets and brooches.What fundamental economic question are they addressing by offering this range of items?

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

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal benefit.

Holding all other personal characteristics-such as age,gender and income-constant,economists would expect that

Which of the following is a macroeconomics question?

Figure 1-2 -Refer to Figure 1-2.Calculate the area of the triangle A.

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

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