Question 1

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

Accepted Answer

A)  only the producers 
B)  only consumers 
C)  only the government 
D)  all of the above 
A)  only the producers 
B)  only consumers 
C)  only the government 
D)  all of the above

Question 2

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 3

Making "how much" decisions involve

Accepted Answer

A)  calculating the total benefits of the activity and determining if you are satisfied with that amount. 
B)  calculating the total costs of the activity and determining if you can afford to incur that expenditure. 
C)  calculating the average benefit and the average cost of an activity to determine if it is worthwhile undertaking that activity. 
D)  determining the additional benefits and the additional costs of that activity. 
A)  calculating the total benefits of the activity and determining if you are satisfied with that amount. 
B)  calculating the total costs of the activity and determining if you can afford to incur that expenditure. 
C)  calculating the average benefit and the average cost of an activity to determine if it is worthwhile undertaking that activity. 
D)  determining the additional benefits and the additional costs of that activity.

Question 4

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 must the additional cost of keeping the office open this additional hour per week be to make staying open for the extra hour economically rational?

Accepted Answer

The additional cost of staying

Question 5

Scenario 1-2
Suppose a hat manufacturer currently sells 2,000 hats per week and makes a profit of $5,000 per week. The plant owner observes, "Although the last 300 hats we produced and sold increased our revenue by $1,000 and our costs by $1,100, we are still making an overall profit of $5,000 per week so I think we're on the right track. We are producing the optimal number of hats."
-Refer to Scenario 1-2.Using marginal analysis terminology,another economic term for the incremental cost of producing the last 300 hats is

Accepted Answer

A)  marginal cost. 
B)  operating cost. 
C)  explicit cost. 
D)  Any of the above terms are correct. 
A)  marginal cost. 
B)  operating cost. 
C)  explicit cost. 
D)  Any of the above terms are correct.

Question 6

What is a centrally planned economy?

Accepted Answer

A centrally planned economy is

Question 7

The three fundamental questions that any economy must address are

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?

Question 8

In the market for factors of production,firms earn income by selling factors of production to households.

Accepted Answer

A) True 
 B)False

Question 9

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.What is Lydia's marginal cost if she decides to stay open for two hours instead of one hour?

Accepted Answer

A)  $10 
B)  $20 
C)  $25 
D)  $40 
A)  $10 
B)  $20 
C)  $25 
D)  $40

Question 10

All centrally planned economies

Accepted Answer

A)  have been political dictatorships. 
B)  started out as market economies. 
C)  began as mixed economies. 
D)  have become mixed economies. 
A)  have been political dictatorships. 
B)  started out as market economies. 
C)  began as mixed economies. 
D)  have become mixed economies.

Question 11

Pookie's Pinball Palace restores old Pinball machines.Pookie has just spent $300 purchasing and cleaning a 1960s-era machine which he expects to sell for $2,000 once he is finished with the restoration.After having spent $300,Pookie discovers that he will need to rewire the entire machine at a cost of $1,100 in order to finish the restoration.Alternatively,he can sell the machine "as is" now for $1,000.What is the marginal cost of completing the task?

Accepted Answer

A)  $300 
B)  $800 
C)  $1,100 
D)  $1,400 
A)  $300 
B)  $800 
C)  $1,100 
D)  $1,400

Question 12

All economic questions arise from the fact that resources are unlimited.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a microeconomics question?

Accepted Answer

A)  Why do economies experience periods of high inflation? 
B)  Will Federal Reserve intervention lower the inflation rate? 
C)  Why has growth in the economy increased since the end of the recession? 
D)  Will the merger of American Airlines and US Airways increase or decrease airfares? 
A)  Why do economies experience periods of high inflation? 
B)  Will Federal Reserve intervention lower the inflation rate? 
C)  Why has growth in the economy increased since the end of the recession? 
D)  Will the merger of American Airlines and US Airways increase or decrease airfares?

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

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

Making "how much" decisions involve

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 must the additional cost of keeping the office open this additional hour per week be to make staying open for the extra hour economically rational?

What is a centrally planned economy?

The three fundamental questions that any economy must address are

In the market for factors of production,firms earn income by selling factors of production to households.

All centrally planned economies

All economic questions arise from the fact that resources are unlimited.

Which of the following is a microeconomics question?

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

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

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

Making "how much" decisions involve

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 must the additional cost of keeping the office open this additional hour per week be to make staying open for the extra hour economically rational?

What is a centrally planned economy?

The three fundamental questions that any economy must address are

In the market for factors of production,firms earn income by selling factors of production to households.

All centrally planned economies

All economic questions arise from the fact that resources are unlimited.

Which of the following is a microeconomics question?

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