Question 1

Which is an example of a "bad" incentive?

Accepted Answer

A)  charging drivers a gasoline tax to fund green energy projects 
B)  offering factories tax credits for reducing pollution 
C)  rewarding students for studying and earning high grades 
D)  raising homeowners' property taxes on home improvements 
A)  charging drivers a gasoline tax to fund green energy projects 
B)  offering factories tax credits for reducing pollution 
C)  rewarding students for studying and earning high grades 
D)  raising homeowners' property taxes on home improvements

Question 2

Which of the following is NOT a macroeconomic issue?

Accepted Answer

A)  whether the Federal Reserve will raise interest rate this week 
B)  whether the unemployment rate will exceed 6% this month 
C)  whether the country's price level has increased last quarter 
D)  whether the production of automobiles decreased last year 
A)  whether the Federal Reserve will raise interest rate this week 
B)  whether the unemployment rate will exceed 6% this month 
C)  whether the country's price level has increased last quarter 
D)  whether the production of automobiles decreased last year

Question 3

Microeconomics focuses on decision making by individuals,businesses,industries,and government.

Accepted Answer

A) True 
 B)False

Question 4

Positive questions are questions about how things ought to be.

Accepted Answer

A) True 
 B)False

Question 5

All of the following are considered key principles of economics,EXCEPT:

Accepted Answer

A)  scarcity exists for everyone. 
B)  people face economic incentives on a regular basis. 
C)  irrational behavior requires thinking at the margin. 
D)  information is important to producers and consumers. 
A)  scarcity exists for everyone. 
B)  people face economic incentives on a regular basis. 
C)  irrational behavior requires thinking at the margin. 
D)  information is important to producers and consumers.

Question 6

If a store sells candy bars for $0.89 for one bar,and $1.50 for two.The marginal cost of the second candy bar is $0.75.

Accepted Answer

A) True 
 B)False

Question 7

Stylized models boil down issues and facts to their basic relevant elements.

Accepted Answer

A) True 
 B)False

Question 8

The _____ the opportunity cost of an activity,the ____ a person will do that activity.

Accepted Answer

A)  higher;more 
B)  higher;less 
C)  lower,less 
D)  It doesn't matter.Price alone will determine the action. 
A)  higher;more 
B)  higher;less 
C)  lower,less 
D)  It doesn't matter.Price alone will determine the action.

Question 9

If you were not studying economics,you could be doing one of the following: sleeping in (which you value at $5),playing cards with your friends (which you value at $10),or working (you would have earned an extra $8).The opportunity cost of studying economics is therefore:

Accepted Answer

A)  $23. 
B)  $10. 
C)  $8. 
D)  $5. 
A)  $23. 
B)  $10. 
C)  $8. 
D)  $5.

Question 10

One of the key ingredients in making rational choices is access to:

Accepted Answer

A)  sufficient funds. 
B)  information. 
C)  foreign markets. 
D)  a university psychology department. 
A)  sufficient funds. 
B)  information. 
C)  foreign markets. 
D)  a university psychology department.

Question 11

A situation in which output is produced at the lowest possible cost is called allocative efficiency.

Accepted Answer

A) True 
 B)False

Question 12

Scarcity is not a problem faced by Bill Gates.

Accepted Answer

A) True 
 B)False

Question 13

_____ is how well resources are used and allocated.

Accepted Answer

A)  Equity 
B)  Efficiency 
C)  Choice 
D)  Scarcity 
A)  Equity 
B)  Efficiency 
C)  Choice 
D)  Scarcity

Question 14

If society produces a pie at the lowest possible cost and then distributes the pie evenly among its population,then:

Accepted Answer

A)  production and allocative efficiency are achieved. 
B)  only production efficiency is achieved. 
C)  neither production efficiency nor allocative efficiency is achieved. 
D)  only allocative efficiency is achieved. 
A)  production and allocative efficiency are achieved. 
B)  only production efficiency is achieved. 
C)  neither production efficiency nor allocative efficiency is achieved. 
D)  only allocative efficiency is achieved.

Question 15

The situation in which markets fail to provide efficiently is called:

Accepted Answer

A)  market failure. 
B)  uneconomic efficiency. 
C)  market collapse. 
D)  government failure. 
A)  market failure. 
B)  uneconomic efficiency. 
C)  market collapse. 
D)  government failure.

Question 16

When economists use the word additional,they generally mean:

Accepted Answer

A)  rational. 
B)  economics. 
C)  marginal. 
D)  opportunity cost. 
A)  rational. 
B)  economics. 
C)  marginal. 
D)  opportunity cost.

Question 17

An increase in the price of gold is always associated with the outbreak of wars.Increasing gold prices cause wars.This would be an example of what logical fallacy?

Accepted Answer

A)  ceteris paribus 
B)  correlation is causation 
C)  laissez-faire 
D)  nonlinearity 
A)  ceteris paribus 
B)  correlation is causation 
C)  laissez-faire 
D)  nonlinearity

Question 18

Suppose an economist discovers that the relationship between grades and hours of tutoring is Grade = 60 + 5(Hours).Based on the equation,which statement is TRUE?

Accepted Answer

A)  Tutoring is not worthwhile because each hour raises grade by only 5 points. 
B)  If no tutoring is done then the grade will be zero. 
C)  The expected grade with 5 hours of tutoring is 85. 
D)  The relationship between tutoring and grades is weak. 
A)  Tutoring is not worthwhile because each hour raises grade by only 5 points. 
B)  If no tutoring is done then the grade will be zero. 
C)  The expected grade with 5 hours of tutoring is 85. 
D)  The relationship between tutoring and grades is weak.

Question 19

Explain why incentives are important,and give examples of incentives that a business might provide to its customers to increase product sales on weekdays.

Accepted Answer

Incentives cause people to change their

Question 20

Tax policy is partly based on the notion that:

Accepted Answer

A)  high taxes are preferable to low taxes. 
B)  government must always run a budget surplus. 
C)  markets never work efficiently. 
D)  people respond to financial incentives. 
A)  high taxes are preferable to low taxes. 
B)  government must always run a budget surplus. 
C)  markets never work efficiently. 
D)  people respond to financial incentives.

Which is an example of a "bad" incentive?

Which of the following is NOT a macroeconomic issue?

Microeconomics focuses on decision making by individuals,businesses,industries,and government.

Positive questions are questions about how things ought to be.

All of the following are considered key principles of economics,EXCEPT:

If a store sells candy bars for $0.89 for one bar,and $1.50 for two.The marginal cost of the second candy bar is $0.75.

Stylized models boil down issues and facts to their basic relevant elements.

The _ the opportunity cost of an activity,the a person will do that activity.

If you were not studying economics,you could be doing one of the following: sleeping in (which you value at $5),playing cards with your friends (which you value at $10),or working (you would have earned an extra $8).The opportunity cost of studying economics is therefore:

One of the key ingredients in making rational choices is access to:

A situation in which output is produced at the lowest possible cost is called allocative efficiency.

Scarcity is not a problem faced by Bill Gates.

_____ is how well resources are used and allocated.

If society produces a pie at the lowest possible cost and then distributes the pie evenly among its population,then:

The situation in which markets fail to provide efficiently is called:

When economists use the word additional,they generally mean:

An increase in the price of gold is always associated with the outbreak of wars.Increasing gold prices cause wars.This would be an example of what logical fallacy?

Suppose an economist discovers that the relationship between grades and hours of tutoring is Grade = 60 + 5(Hours).Based on the equation,which statement is TRUE?

Explain why incentives are important,and give examples of incentives that a business might provide to its customers to increase product sales on weekdays.

Tax policy is partly based on the notion that:

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Expenditures

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomic

Filters

Exam 1: Exploring Economics

Which is an example of a "bad" incentive?

Which of the following is NOT a macroeconomic issue?

Microeconomics focuses on decision making by individuals,businesses,industries,and government.

Positive questions are questions about how things ought to be.

All of the following are considered key principles of economics,EXCEPT:

If a store sells candy bars for $0.89 for one bar,and $1.50 for two.The marginal cost of the second candy bar is $0.75.

Stylized models boil down issues and facts to their basic relevant elements.

The _____ the opportunity cost of an activity,the ____ a person will do that activity.

If you were not studying economics,you could be doing one of the following: sleeping in (which you value at $5),playing cards with your friends (which you value at $10),or working (you would have earned an extra $8).The opportunity cost of studying economics is therefore:

One of the key ingredients in making rational choices is access to:

A situation in which output is produced at the lowest possible cost is called allocative efficiency.

Scarcity is not a problem faced by Bill Gates.

_____ is how well resources are used and allocated.

If society produces a pie at the lowest possible cost and then distributes the pie evenly among its population,then:

The situation in which markets fail to provide efficiently is called:

When economists use the word additional,they generally mean:

An increase in the price of gold is always associated with the outbreak of wars.Increasing gold prices cause wars.This would be an example of what logical fallacy?

Suppose an economist discovers that the relationship between grades and hours of tutoring is Grade = 60 + 5(Hours).Based on the equation,which statement is TRUE?

Explain why incentives are important,and give examples of incentives that a business might provide to its customers to increase product sales on weekdays.

Tax policy is partly based on the notion that:

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Expenditures

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomic

Filters

The _ the opportunity cost of an activity,the a person will do that activity.