Question 1

What is an entrepreneur,and what decisions does an entrepreneur make in a market system?

Accepted Answer

An entrepreneur is someone who

Question 2

Which of the following are positive economic statements and which are normative economic statements?
a.An increase in the price of gasoline will decrease the quantity of gasoline 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 favor 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 3

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

Accepted Answer

A) True 
 B)False

Question 4

Optimal decisions are made at the point where marginal cost equals zero.

Accepted Answer

A) True 
 B)False

Question 5

One example of human capital is the amount of skills that you have.

Accepted Answer

A) True 
 B)False

Question 6

All of the following contributed to the downfall of the Soviet Union in 1991 except

Accepted Answer

A)  public dissatisfaction with low living standards and political repression. 
B)  an inability to produce low-cost consumer goods that households wanted. 
C)  lack of high-quality goods and services. 
D)  lack of a strong dictator who can coordinate economic activities. 
A)  public dissatisfaction with low living standards and political repression. 
B)  an inability to produce low-cost consumer goods that households wanted. 
C)  lack of high-quality goods and services. 
D)  lack of a strong dictator who can coordinate economic activities.

Question 7

Table 1-1
   Lydia runs a small nail salon in the town of New Hope. She is debating whether she should extend her hours of operation. Lydia figures that her sales revenue will depend on the number of hours the nail salon is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $10 per hour.
-Refer to Table 1-1.Using marginal analysis,how many hours should Lydia extend her nail salon's hours of operations?

Accepted Answer

A)  2 hours 
B)  3 hours 
C)  4 hours 
D)  5 hours 
E)  6 hours 
A)  2 hours 
B)  3 hours 
C)  4 hours 
D)  5 hours 
E)  6 hours

Question 8

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

Question 9

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 10

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 physical location people where people can physically get together for selling 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 physical location people where people can physically get together for selling goods, such as shopping malls 
D)  in any location where transactions can be monitored by consumer groups and taxed by the government

Question 11

Which of the following statements is true about scarcity?

Accepted Answer

A)  Scarcity refers to the situation in which unlimited wants exceed limited resources. 
B)  Scarcity is not a problem for the wealthy. 
C)  Scarcity is only a problem when a country has too large a population. 
D)  Scarcity arises when there is a wide disparity in income distribution. 
A)  Scarcity refers to the situation in which unlimited wants exceed limited resources. 
B)  Scarcity is not a problem for the wealthy. 
C)  Scarcity is only a problem when a country has too large a population. 
D)  Scarcity arises when there is a wide disparity in income distribution.

Question 12

Trinh quits his $80,000-a-year job to become a full-time volunteer at a museum.What is the opportunity cost of his decision?

Accepted Answer

A)  0 since he will no longer be earning a salary 
B)  depends on the "going rate" of museum employees 
C)  at least $80,000 
D)  the value he attributes to the joy of working at a museum 
A)  0 since he will no longer be earning a salary 
B)  depends on the "going rate" of museum employees 
C)  at least $80,000 
D)  the value he attributes to the joy of working at a museum

Question 13

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 14

All of the following is counted as "capital" in economics except

Accepted Answer

A)  money. 
B)  machine tools. 
C)  factory buildings. 
D)  warehouses. 
A)  money. 
B)  machine tools. 
C)  factory buildings. 
D)  warehouses.

Question 15

The highest valued alternative that must be given up to engage in an activity is the definition of

Accepted Answer

A)  economic equity. 
B)  marginal benefit. 
C)  opportunity cost. 
D)  marginal cost. 
A)  economic equity. 
B)  marginal benefit. 
C)  opportunity cost. 
D)  marginal cost.

Question 16

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 2008 and 2011.

Accepted Answer

A)  23.1% 
B)  23.8% 
C)  30% 
D)  42.9% 
A)  23.1% 
B)  23.8% 
C)  30% 
D)  42.9%

Question 17

Markets promote

Accepted Answer

A)  equity and competition. 
B)  voluntary exchange and equality. 
C)  equity and equality. 
D)  competition and voluntary exchange. 
A)  equity and competition. 
B)  voluntary exchange and equality. 
C)  equity and equality. 
D)  competition and voluntary exchange.

Question 18

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 19

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 20

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.

What is an entrepreneur,and what decisions does an entrepreneur make in a market system?

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

Optimal decisions are made at the point where marginal cost equals zero.

One example of human capital is the amount of skills that you have.

All of the following contributed to the downfall of the Soviet Union in 1991 except

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?

Which of the following is a microeconomics question?

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

Which of the following statements is true about scarcity?

Trinh quits his $80,000-a-year job to become a full-time volunteer at a museum.What is the opportunity cost of his decision?

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

All of the following is counted as "capital" in economics except

The highest valued alternative that must be given up to engage in an activity is the definition of

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 2008 and 2011.

Markets promote

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

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?

Making optimal decisions "at the margin" requires

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

Filters

Exam 1: Economics: Foundations and Models

What is an entrepreneur,and what decisions does an entrepreneur make in a market system?

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

Optimal decisions are made at the point where marginal cost equals zero.

One example of human capital is the amount of skills that you have.

All of the following contributed to the downfall of the Soviet Union in 1991 except

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?

Which of the following is a microeconomics question?

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

Which of the following statements is true about scarcity?

Trinh quits his $80,000-a-year job to become a full-time volunteer at a museum.What is the opportunity cost of his decision?

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

All of the following is counted as "capital" in economics except

The highest valued alternative that must be given up to engage in an activity is the definition of

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 2008 and 2011.

Markets promote

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

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?

Making optimal decisions "at the margin" requires

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

Filters