Question 1

The opportunity cost of something is:

Accepted Answer

A)  greater during periods of rising prices. 
B)  equal to the money cost. 
C)  less during periods of falling prices. 
D)  what is given up to acquire it. 
A)  greater during periods of rising prices. 
B)  equal to the money cost. 
C)  less during periods of falling prices. 
D)  what is given up to acquire it.

Question 2

If every individual were required to be self-sufficient:

Accepted Answer

A)  living standards would fall. 
B)  living standards for some individuals would fall, but for others they would rise. 
C)  living standards would rise. 
D)  it's impossible to say how living standards would change. 
A)  living standards would fall. 
B)  living standards for some individuals would fall, but for others they would rise. 
C)  living standards would rise. 
D)  it's impossible to say how living standards would change.

Question 3

When the San Francisco city manager faces a complaint that the city council chamber podium is not accessible to individuals with disabilities, he responds that the $1 million improvement will not happen because "that money could be spent building 70 curb ramps." This statement best represents this economic concept:

Accepted Answer

A)  Resources are scarce. 
B)  The real cost of something is what you must give up to get it. 
C)  "How much" is a decision at the margin. 
D)  When markets don't achieve efficiency, government intervention can improve society's welfare. 
A)  Resources are scarce. 
B)  The real cost of something is what you must give up to get it. 
C)  "How much" is a decision at the margin. 
D)  When markets don't achieve efficiency, government intervention can improve society's welfare.

Question 4

When we are forced to make choices, we are facing the concept of:

Accepted Answer

A)  human capital. 
B)  inflation. 
C)  scarcity. 
D)  market failure. 
A)  human capital. 
B)  inflation. 
C)  scarcity. 
D)  market failure.

Question 5

When markets don't achieve efficiency:

Accepted Answer

A)  they must achieve equity. 
B)  government must be participating in the market. 
C)  government may intervene to improve society's welfare. 
D)  they should be closed. 
A)  they must achieve equity. 
B)  government must be participating in the market. 
C)  government may intervene to improve society's welfare. 
D)  they should be closed.

Question 6

When individuals act in their own self-interest:

Accepted Answer

A)  efficiency is always achieved. 
B)  equity is always achieved. 
C)  society may be worse off in some cases. 
D)  all opportunities have been taken to make some people better off without making other people worse off. 
A)  efficiency is always achieved. 
B)  equity is always achieved. 
C)  society may be worse off in some cases. 
D)  all opportunities have been taken to make some people better off without making other people worse off.

Question 7

Which of the following demonstrates how people respond to incentives to make themselves better off?

Accepted Answer

A)  More students major in economics when they hear that salaries for economists are rising. 
B)  Students are assigned dorm rooms through a lottery system. 
C)  Students are encouraged to donate blood because it is the right thing to do. 
D)  Students and faculty are encouraged to wear college apparel to support the college athletic teams. 
A)  More students major in economics when they hear that salaries for economists are rising. 
B)  Students are assigned dorm rooms through a lottery system. 
C)  Students are encouraged to donate blood because it is the right thing to do. 
D)  Students and faculty are encouraged to wear college apparel to support the college athletic teams.

Question 8

Nara has gone to three movies this week. She has some extra money, so she decides to go to another. This statement best represents this economic concept:

Accepted Answer

A)  Resources are scarce. 
B)  The real cost of something is what you must give up to get it. 
C)  "How much" is a decision at the margin. 
D)  There are gains from trade. 
A)  Resources are scarce. 
B)  The real cost of something is what you must give up to get it. 
C)  "How much" is a decision at the margin. 
D)  There are gains from trade.

Question 9

You and your roommate are taking the same economics class. When it comes to doing homework assignments, your roommate draws beautifully precise graphs, while you are an extremely fast typist. Therefore, you and your roommate work on the assignments together. Which of the 12 principles is at work here?

Accepted Answer

There are gains from trade. Wh

Question 10

The incentives built into the market economy ensure that resources are put to good use and that opportunities to make people better off are not wasted. This means that:

Accepted Answer

A)  people usually are not selfish enough to exploit opportunities to make themselves better off. 
B)  markets move toward equilibrium. 
C)  resources should be used as efficiently as possible to achieve society's goals. 
D)  markets usually lead to efficiency. 
A)  people usually are not selfish enough to exploit opportunities to make themselves better off. 
B)  markets move toward equilibrium. 
C)  resources should be used as efficiently as possible to achieve society's goals. 
D)  markets usually lead to efficiency.

Question 11

The most efficient way to dispose of industrial waste is to dump it in a nearby river or parcel of land. Why is this illegal?

Accepted Answer

Because while it may be quite efficient,

Question 12

A new fast-food restaurant offered a free meal (valued at $5) a week for a year to its first 100 customers. Ramona camped out for 48 hours before the opening to be one of the first 100 customers. The cost of the free meal a week for a year for Ramona was:

Accepted Answer

A)  zero. 
B)  $260. 
C)  whatever else she would have done with the 48 hours. 
D)  The cost is impossible to determine. 
A)  zero. 
B)  $260. 
C)  whatever else she would have done with the 48 hours. 
D)  The cost is impossible to determine.

Question 13

How people choose among the alternatives available to them is:

Accepted Answer

A)  not part of the study of economics. 
B)  impossible to describe. 
C)  the study of microeconomics. 
D)  not important in the study of microeconomics. 
A)  not part of the study of economics. 
B)  impossible to describe. 
C)  the study of microeconomics. 
D)  not important in the study of microeconomics.

Exam 1: First Principles

The opportunity cost of something is:

If every individual were required to be self-sufficient:

When we are forced to make choices, we are facing the concept of:

When markets don't achieve efficiency:

When individuals act in their own self-interest:

Which of the following demonstrates how people respond to incentives to make themselves better off?

Nara has gone to three movies this week. She has some extra money, so she decides to go to another. This statement best represents this economic concept:

The incentives built into the market economy ensure that resources are put to good use and that opportunities to make people better off are not wasted. This means that:

The most efficient way to dispose of industrial waste is to dump it in a nearby river or parcel of land. Why is this illegal?

A new fast-food restaurant offered a free meal (valued at $5) a week for a year to its first 100 customers. Ramona camped out for 48 hours before the opening to be one of the first 100 customers. The cost of the free meal a week for a year for Ramona was:

How people choose among the alternatives available to them is:

Economic Models- Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas- Meddling With Markets

Elasticity

Taxes

The Rational Consumer

International Trade

Decision Making by Individuals and Firms

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Macroeconomics- the Big Picture

Gdp and the Consumer Price Index

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Macroeconomics- Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

Toward a Fuller Understanding

Consumer Preferences and Consumer Choice

Indifference Curve Analysis of Labor Supply

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