Question 1

"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 2

Households ________ factors of production and ________ goods and services.

Accepted Answer

A)  supply; demand 
B)  supply; supply 
C)  demand; supply 
D)  demand; demand 
A)  supply; demand 
B)  supply; supply 
C)  demand; supply 
D)  demand; demand

Question 3

Table 1-3
   Santiago runs a comic book store in the town of East Arbor. He is debating whether he should extend his hours of operation. Santiago figures that his sales revenue will depend on the number of hours the store is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $18 per hour.
-Refer to Table 1-3.Using marginal analysis,determine how many hours should Santiago extend his store'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 4

How are the fundamental economic decisions determined in China?

Accepted Answer

A)  Individuals, firms, and the government interact in a market to make these economic decisions. 
B)  These decisions are made by the country's elders who have had much experience in answering these questions. 
C)  The government decides because China is a centrally planned economy. 
D)  The United Nations decides because China is a developing economy. 
A)  Individuals, firms, and the government interact in a market to make these economic decisions. 
B)  These decisions are made by the country's elders who have had much experience in answering these questions. 
C)  The government decides because China is a centrally planned economy. 
D)  The United Nations decides because China is a developing economy.

Question 5

Which of the following questions or statements regarding medical school is normative?

Accepted Answer

A)  How do changes in expected future incomes affect the decisions of medical students about which specialty to choose? 
B)  Medical students who enter specialized fields make a larger contribution to society than do student who enter primary care. 
C)  What role does tuition play in a student's decision about whether to attend medical school? 
D)  Have tuition increases had a large effect or a small effect on the number of applications to medical school? 
A)  How do changes in expected future incomes affect the decisions of medical students about which specialty to choose? 
B)  Medical students who enter specialized fields make a larger contribution to society than do student who enter primary care. 
C)  What role does tuition play in a student's decision about whether to attend medical school? 
D)  Have tuition increases had a large effect or a small effect on the number of applications to medical school?

Question 6

Which of the following is a problem inherent in centrally planned economies?

Accepted Answer

A)  Households and firms make poor decisions in choosing how resources are allocated. 
B)  There is too little production of low-cost, high-quality goods and services. 
C)  Production managers are more concerned with satisfying consumer wants than with satisfying government's orders. 
D)  Exports tend to exceed imports. 
A)  Households and firms make poor decisions in choosing how resources are allocated. 
B)  There is too little production of low-cost, high-quality goods and services. 
C)  Production managers are more concerned with satisfying consumer wants than with satisfying government's orders. 
D)  Exports tend to exceed imports.

Question 7

Which of the following is a macroeconomics question?

Accepted Answer

A)  What determines the growth rate of gross domestic product? 
B)  How is the production quantity of snowboards determined? 
C)  What factors determine the price of electronic cigarettes? 
D)  What determines the salaries of Wall Street executives? 
A)  What determines the growth rate of gross domestic product? 
B)  How is the production quantity of snowboards determined? 
C)  What factors determine the price of electronic cigarettes? 
D)  What determines the salaries of Wall Street executives?

Question 8

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

Accepted Answer

A)  deciding whether to purchase a gasoline-powered automobile or an electric vehicle 
B)  being appointed as the head of a charitable organization 
C)  running for a seat on the city council 
D)  starting your own cigar manufacturing business 
A)  deciding whether to purchase a gasoline-powered automobile or an electric vehicle 
B)  being appointed as the head of a charitable organization 
C)  running for a seat on the city council 
D)  starting your own cigar manufacturing business

Question 9

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 10

Which of the following statements is true about profit?

Accepted Answer

A)  Profit refers to the revenue received from the sale of a quantity of goods. 
B)  Profit is calculated by multiplying price and quantity sold. 
C)  The terms "accounting profit" and "economic profit" can be used interchangeably. 
D)  Profit is the difference between revenue and cost. 
A)  Profit refers to the revenue received from the sale of a quantity of goods. 
B)  Profit is calculated by multiplying price and quantity sold. 
C)  The terms "accounting profit" and "economic profit" can be used interchangeably. 
D)  Profit is the difference between revenue and cost.

Question 11

Consider the following statements: 
a.Car owners purchase more gasoline from a gas station that sells gasoline at a lower price than other rival gas stations in the area.
b.Banks do not take steps to increase security since they believe it is less costly to allow some bank robberies than to install expensive security monitoring equipment.
c.Firms produce more of a particular DVD when its selling price rises.
Which of the above statements demonstrates that economic agents respond to incentives?

Accepted Answer

A)  a only. 
B)  b only. 
C)  c only. 
D)  a and b. 
E)  a, b, and c. 
A)  a only. 
B)  b only. 
C)  c only. 
D)  a and b. 
E)  a, b, and c.

Question 12

Arlene quits her $125,000-a-year job to take care of her ailing parents.What is the opportunity cost of her decision?

Accepted Answer

A)  zero, since she will no longer be earning a salary 
B)  It depends on the "going rate" for home-care providers. 
C)  at least $125,000 
D)  the value she attributes to the satisfaction she receives from taking care of her parents 
A)  zero, since she will no longer be earning a salary 
B)  It depends on the "going rate" for home-care providers. 
C)  at least $125,000 
D)  the value she attributes to the satisfaction she receives from taking care of her parents

Question 13

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 14

Marginal analysis involves undertaking an activity

Accepted Answer

A)  until its marginal costs start declining. 
B)  only when its marginal benefits are positive. 
C)  until its marginal benefits equal marginal costs. 
D)  only if its marginal costs are greater than its marginal benefits. 
A)  until its marginal costs start declining. 
B)  only when its marginal benefits are positive. 
C)  until its marginal benefits equal marginal costs. 
D)  only if its marginal costs are greater than its marginal benefits.

Question 15

Which of the following statements is false?

Accepted Answer

A)  An inverse relationship has a negative slope value. 
B)  A direct relationship has a positive slope value. 
C)  A curved line has slope values that change at every point. 
D)  A straight line has a slope of zero. 
A)  An inverse relationship has a negative slope value. 
B)  A direct relationship has a positive slope value. 
C)  A curved line has slope values that change at every point. 
D)  A straight line has a slope of zero.

Question 16

Which of the following is not an example of an economic trade-off that a firm has to make?

Accepted Answer

A)  whether it is cheaper to produce with more machines or with more workers 
B)  whether it is to outsource the production of a good or service 
C)  whether or not consumers will buy its products 
D)  whether it should produce more of its product 
A)  whether it is cheaper to produce with more machines or with more workers 
B)  whether it is to outsource the production of a good or service 
C)  whether or not consumers will buy its products 
D)  whether it should produce more of its product

Question 17

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 18

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

Accepted Answer

A) True 
 B)False

Question 19

Allocative efficiency best explains ________,and productive efficiency best explains ________.

Accepted Answer

A)  how something will be produced; when something will be produced 
B)  when something will be produced; why something will be produced 
C)  why something will be produced; what will be produced 
D)  what will be produced; how something will be produced 
A)  how something will be produced; when something will be produced 
B)  when something will be produced; why something will be produced 
C)  why something will be produced; what will be produced 
D)  what will be produced; how something will be produced

Question 20

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

Accepted Answer

A) True 
 B)False

"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.

Households factors of production and goods and services.

How are the fundamental economic decisions determined in China?

Which of the following questions or statements regarding medical school is normative?

Which of the following is a problem inherent in centrally planned economies?

Which of the following is a macroeconomics question?

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

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?

Which of the following statements is true about profit?

Arlene quits her $125,000-a-year job to take care of her ailing parents.What is the opportunity cost of her decision?

Which of the following is a macroeconomics question?

Marginal analysis involves undertaking an activity

Which of the following statements is false?

Which of the following is not an example of an economic trade-off that a firm has to make?

In economics,the term "equity" means

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

Allocative efficiency best explains ,and productive efficiency best explains .

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

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

"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.

Households ________ factors of production and ________ goods and services.

How are the fundamental economic decisions determined in China?

Which of the following questions or statements regarding medical school is normative?

Which of the following is a problem inherent in centrally planned economies?

Which of the following is a macroeconomics question?

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

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?

Which of the following statements is true about profit?

Arlene quits her $125,000-a-year job to take care of her ailing parents.What is the opportunity cost of her decision?

Which of the following is a macroeconomics question?

Marginal analysis involves undertaking an activity

Which of the following statements is false?

Which of the following is not an example of an economic trade-off that a firm has to make?

In economics,the term "equity" means

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

Allocative efficiency best explains ________,and productive efficiency best explains ________.

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

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

Households factors of production and goods and services.

Allocative efficiency best explains ,and productive efficiency best explains .