Question 1

One example of physical capital is the amount of savings that you have.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an example of an efficiency-equity trade-off faced by economic agents?

Accepted Answer

A)  According to an article by in the American Journal of Public Health by Edward Kaplan and Michael Merson of Yale University School of Medicine, the federal government's current method of allocating HIV-prevention resources is not cost-effective. Instead of allocating resources to states in proportion to reported AIDS cases, resources should flow first to those activities that prevent more infections per dollar and then to less and less effective combinations of programs and populations until funds are exhausted, even if it means that some populations would be left without any prevention services. 
B)  Concerned about the falling birth rate, the French government has pledged more money for families with three children, in an effort to encourage working women to have more babies. 
C)  Some U.S. colleges are actively recruiting foreign students for their technology-based programs. 
D)  All New York City art museums are considering adopting a free-admission policy for local residents one weekend per month. 
A)  According to an article by in the American Journal of Public Health by Edward Kaplan and Michael Merson of Yale University School of Medicine, the federal government's current method of allocating HIV-prevention resources is not cost-effective. Instead of allocating resources to states in proportion to reported AIDS cases, resources should flow first to those activities that prevent more infections per dollar and then to less and less effective combinations of programs and populations until funds are exhausted, even if it means that some populations would be left without any prevention services. 
B)  Concerned about the falling birth rate, the French government has pledged more money for families with three children, in an effort to encourage working women to have more babies. 
C)  Some U.S. colleges are actively recruiting foreign students for their technology-based programs. 
D)  All New York City art museums are considering adopting a free-admission policy for local residents one weekend per month.

Question 3

The town of Harmonia gives away all 500 tickets to its annual Founder's Day Free Concert-in-the-Park to local residents.Each year,more than 500 people wish to attend the concert,so some of the residents who receive the free tickets sell them for as much as $75 each.Is a transaction where someone pays a resident $75 for a "free ticket" economically efficient?

Accepted Answer

A)  No, people should never be allowed to sell items they received for free. 
B)  Yes, it was a voluntary exchange that benefited both parties. 
C)  No, the buyer paid too much for the ticket. 
D)  Yes, it is efficient only from the perspective of the seller and not from the perspective of the buyer. 
A)  No, people should never be allowed to sell items they received for free. 
B)  Yes, it was a voluntary exchange that benefited both parties. 
C)  No, the buyer paid too much for the ticket. 
D)  Yes, it is efficient only from the perspective of the seller and not from the perspective of the buyer.

Question 4

How are the fundamental economic decisions determined in North Korea?

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 North Korea is a centrally planned economy. 
D)  The United Nations decides because North Korea 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 North Korea is a centrally planned economy. 
D)  The United Nations decides because North Korea is a developing economy.

Question 5

Which of the following statements about positive economic analysis is false?

Accepted Answer

A)  Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. 
B)  There is much more disagreement among economists over normative economic analysis than over positive economic analysis. 
C)  There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D)  Unlike normative economic analysis, positive economic analysis can be tested. 
A)  Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. 
B)  There is much more disagreement among economists over normative economic analysis than over positive economic analysis. 
C)  There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D)  Unlike normative economic analysis, positive economic analysis can be tested.

Question 6

Which of the following is motivated by an equity concern?

Accepted Answer

A)  Some states have transferred funds to food bank programs in order to increase benefits to lower-income families. 
B)  Following the implementation of subsidies for energy conservation, household demand for rooftop solar panels increased quite significantly in California. 
C)  The United Network for Organ Sharing advocates a system of rationing scarce kidneys that would favor young patients over old in an effort to wring more life out of donated organs. 
D)  The United States offers patent protection to pharmaceutical manufacturers to prevent others from duplicating their products. 
A)  Some states have transferred funds to food bank programs in order to increase benefits to lower-income families. 
B)  Following the implementation of subsidies for energy conservation, household demand for rooftop solar panels increased quite significantly in California. 
C)  The United Network for Organ Sharing advocates a system of rationing scarce kidneys that would favor young patients over old in an effort to wring more life out of donated organs. 
D)  The United States offers patent protection to pharmaceutical manufacturers to prevent others from duplicating their products.

Question 7

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

Question 8

Scenario 1-1
Suppose a cell phone manufacturer currently sells 20,000 cell phones per week and makes a profit of $5,000 per week. A manager at the plant observes, "Although the last 3,000 cell phones we produced and sold increased our revenue by $6,000 and our costs by $6,700, 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 cell phones."
-Refer to Scenario 1-1.Using marginal analysis terminology,what is another economic term for the incremental revenue received from the sale of the last 3,000 cell phones?

Accepted Answer

A)  gross earnings 
B)  marginal revenue 
C)  sales revenue 
D)  gross profit 
A)  gross earnings 
B)  marginal revenue 
C)  sales revenue 
D)  gross profit

Question 9

Which of the following statements about the economic decisions consumers,firms,and the government have to make is false?

Accepted Answer

A)  Governments face the problem of scarcity in making economic decisions. 
B)  Only individuals face scarcity; firms and the government do not. 
C)  Both firms and individuals face scarcity. 
D)  Each faces the problem of scarcity which necessitates trade-offs in making economic decisions. 
A)  Governments face the problem of scarcity in making economic decisions. 
B)  Only individuals face scarcity; firms and the government do not. 
C)  Both firms and individuals face scarcity. 
D)  Each faces the problem of scarcity which necessitates trade-offs in making economic decisions.

Question 10

Marginal benefit refers to the additional benefit that your activity provides to you.

Accepted Answer

A) True 
 B)False

Question 11

If the price of milk was $2.50 a gallon and it is now $3.25 a gallon,what is the percentage change in price?

Accepted Answer

A)  13 percent 
B)  30 percent 
C)  75 percent 
D)  77 percent 
A)  13 percent 
B)  30 percent 
C)  75 percent 
D)  77 percent

Question 12

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 13

If a graph has a line that shows the amount of outsourcing in the last ten years,it is known as

Accepted Answer

A)  a pie chart. 
B)  a time-series graph. 
C)  a demand curve for outsourcing. 
D)  a supply curve of outsourcing. 
A)  a pie chart. 
B)  a time-series graph. 
C)  a demand curve for outsourcing. 
D)  a supply curve of outsourcing.

Question 14

What is a mixed economy?

Accepted Answer

A mixed economy is an economy in which m

Question 15

Who receives the most of what is produced in a market economy?

Accepted Answer

A)  lawmakers and other politically favored groups 
B)  those who are willing and able to buy them 
C)  everyone receives an equal amount 
D)  people who earn the highest incomes 
A)  lawmakers and other politically favored groups 
B)  those who are willing and able to buy them 
C)  everyone receives an equal amount 
D)  people who earn the highest incomes

Question 16

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Accepted Answer

A)  collective 
B)  cooperative 
C)  market 
D)  trade-off 
A)  collective 
B)  cooperative 
C)  market 
D)  trade-off

Question 17

Figure 1-3  
-Refer to Figure 1-3.Calculate the area of the trapezoid X.

Accepted Answer

A)  $270 
B)  $720 
C)  $810 
D)  $2,520 
A)  $270 
B)  $720 
C)  $810 
D)  $2,520

Question 18

The branch of economics which studies the behavior of entire economies is called

Accepted Answer

A)  public economics. 
B)  microeconomics. 
C)  macroeconomics. 
D)  normative economics. 
A)  public economics. 
B)  microeconomics. 
C)  macroeconomics. 
D)  normative economics.

Question 19

Jewelry 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 20

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

One example of physical capital is the amount of savings that you have.

Which of the following is an example of an efficiency-equity trade-off faced by economic agents?

How are the fundamental economic decisions determined in North Korea?

Which of the following statements about positive economic analysis is false?

Which of the following is motivated by an equity concern?

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 about the economic decisions consumers,firms,and the government have to make is false?

Marginal benefit refers to the additional benefit that your activity provides to you.

If the price of milk was $2.50 a gallon and it is now $3.25 a gallon,what is the percentage change in price?

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

If a graph has a line that shows the amount of outsourcing in the last ten years,it is known as

What is a mixed economy?

Who receives the most of what is produced in a market economy?

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Figure 1-3 -Refer to Figure 1-3.Calculate the area of the trapezoid X.

The branch of economics which studies the behavior of entire economies is called

Jewelry 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?

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

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

One example of physical capital is the amount of savings that you have.

Which of the following is an example of an efficiency-equity trade-off faced by economic agents?

How are the fundamental economic decisions determined in North Korea?

Which of the following statements about positive economic analysis is false?

Which of the following is motivated by an equity concern?

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 about the economic decisions consumers,firms,and the government have to make is false?

Marginal benefit refers to the additional benefit that your activity provides to you.

If the price of milk was $2.50 a gallon and it is now $3.25 a gallon,what is the percentage change in price?

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

If a graph has a line that shows the amount of outsourcing in the last ten years,it is known as

What is a mixed economy?

Who receives the most of what is produced in a market economy?

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Figure 1-3 -Refer to Figure 1-3.Calculate the area of the trapezoid X.

The branch of economics which studies the behavior of entire economies is called

Jewelry 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?

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

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

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