Question 1

Society faces a trade-off in all of the following situations except

Accepted Answer

A) when deciding who will receive the goods and services produced. 
B) when deciding what goods and services will be produced. 
C) when deciding how goods and services will be produced. 
D) when some previously unemployed workers find jobs. 
A) when deciding who will receive the goods and services produced. 
B) when deciding what goods and services will be produced. 
C) when deciding how goods and services will be produced. 
D) when some previously unemployed workers find jobs.

Question 2

What is a centrally planned economy?

Accepted Answer

A centrally planned economy is

Question 3

How are the fundamental economic questions answered in a market economy?

Accepted Answer

A) The government alone decides the answers. 
B) Individuals,firms,and the government interact in markets to decide the answers to these questions. 
C) Households and firms interact in markets to decide the answers to these questions. 
D) Large corporations alone decide the answers. 
A) The government alone decides the answers. 
B) Individuals,firms,and the government interact in markets to decide the answers to these questions. 
C) Households and firms interact in markets to decide the answers to these questions. 
D) Large corporations alone decide the answers.

Question 4

Which of the following generates productive efficiency?

Accepted Answer

A) competition among sellers 
B) competition among buyers 
C) government inspectors 
D) government production rules and regulations 
A) competition among sellers 
B) competition among buyers 
C) government inspectors 
D) government production rules and regulations

Question 5

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

Accepted Answer

A) Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others. 
B) Failure to do this could lead to an inequitable allocation of goods and services produced. 
C) Failure to do this could lead to drastic shortages of good and services. 
D) Failure to do this could reduces efficiency and leads to an inequitable allocation of output. 
A) Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others. 
B) Failure to do this could lead to an inequitable allocation of goods and services produced. 
C) Failure to do this could lead to drastic shortages of good and services. 
D) Failure to do this could reduces efficiency and leads to an inequitable allocation of output.

Question 6

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics?
a.gasoline prices
b.unemployment
c.inflation
d.health care costs
e.air pollution
f.economic growth

Accepted Answer

b,c,and f are primar

Question 7

Economists assume that rational people do all of the following except

Accepted Answer

A) use all available information as they act to achieve their goals. 
B) undertake activities that benefit others and hurt themselves. 
C) weigh the benefits and costs of all possible alternative actions. 
D) respond to economic incentives. 
A) use all available information as they act to achieve their goals. 
B) undertake activities that benefit others and hurt themselves. 
C) weigh the benefits and costs of all possible alternative actions. 
D) respond to economic incentives.

Question 8

The economic analysis of minimum wage involves both normative and positive analysis.Consider the following consequences of a minimum wage: a.The minimum wage law causes unemployment.
B.A minimum wage law benefits some groups and hurts others.
C.In some cities such as San Francisco and New York,it would be impossible for low-skilled workers to live in the city without minimum wage laws.
D.The gains to winners of a minimum wage law should be valued more highly than the losses to losers because the latter primarily comprises businesses.
Which of the consequences above are positive statements and which are normative statements?

Accepted Answer

A) a,b,and c are positive statements and d is a normative statement. 
B) a and b are positive statements,c and d are normative statement. 
C) Only a is a positive statement,b,c and d are normative statements. 
D) a and c are positive statements,b and d are normative statements. 
A) a,b,and c are positive statements and d is a normative statement. 
B) a and b are positive statements,c and d are normative statement. 
C) Only a is a positive statement,b,c and d are normative statements. 
D) a and c are positive statements,b and d are normative statements.

Question 9

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 10

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 11

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40,and he charges $75 for this service.For a total price of $90,DeShawn will also detail the car's engine,a service that adds an additional $20 to the total cost of the package.Should DeShawn continue to offer the engine detailing service?

Accepted Answer

A) yes,he still makes a profit by selling the engine detailing service with the basic detailing package 
B) yes,but only if he raises the price of the basic detailing package 
C) no,his marginal benefit is less than his marginal cost 
D) More information is needed for DeShawn to make this decision. 
A) yes,he still makes a profit by selling the engine detailing service with the basic detailing package 
B) yes,but only if he raises the price of the basic detailing package 
C) no,his marginal benefit is less than his marginal cost 
D) More information is needed for DeShawn to make this decision.

Question 12

The relationship between consumer spending and disposable personal income is

Accepted Answer

A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) independent. 
A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) independent.

Question 13

Suppose the extra cost for a doctor to keep his office open for one extra hour is $200.Then,the doctor should stay open for the extra hour even if he can generate additional revenue of $200 for that hour.

Accepted Answer

A) True 
 B)False

Question 14

What is equity,and how does it differ from efficiency?

Accepted Answer

Equity refers to the fair distribution o

Question 15

When production reflects consumer preferences,________ occurs.

Accepted Answer

A) allocative efficiency 
B) productive efficiency 
C) equity 
D) efficient central planning 
A) allocative efficiency 
B) productive efficiency 
C) equity 
D) efficient central planning

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

Which of the following is a normative economic statement?

Accepted Answer

A) The price of gasoline is too high. 
B) The current high price of gasoline is the result of strong worldwide demand. 
C) When the price of gasoline rises,the quantity of gasoline purchased falls. 
D) When the price of gasoline rises,transportation costs rise. 
A) The price of gasoline is too high. 
B) The current high price of gasoline is the result of strong worldwide demand. 
C) When the price of gasoline rises,the quantity of gasoline purchased falls. 
D) When the price of gasoline rises,transportation costs rise.

Question 18

"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement.

Accepted Answer

A) True 
 B)False

Question 19

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 20

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

Society faces a trade-off in all of the following situations except

What is a centrally planned economy?

How are the fundamental economic questions answered in a market economy?

Which of the following generates productive efficiency?

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics? a.gasoline prices b.unemployment c.inflation d.health care costs e.air pollution f.economic growth

Economists assume that rational people do all of the following except

Which of the following statements is true about profit?

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

The relationship between consumer spending and disposable personal income is

Suppose the extra cost for a doctor to keep his office open for one extra hour is $200.Then,the doctor should stay open for the extra hour even if he can generate additional revenue of $200 for that hour.

What is equity,and how does it differ from efficiency?

When production reflects consumer preferences,________ occurs.

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.

Which of the following is a normative economic statement?

"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement.

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

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

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

Filters

Exam 1: Economics: Foundations and Models

Society faces a trade-off in all of the following situations except

What is a centrally planned economy?

How are the fundamental economic questions answered in a market economy?

Which of the following generates productive efficiency?

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics? a.gasoline prices b.unemployment c.inflation d.health care costs e.air pollution f.economic growth

Economists assume that rational people do all of the following except

Which of the following statements is true about profit?

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

The relationship between consumer spending and disposable personal income is

Suppose the extra cost for a doctor to keep his office open for one extra hour is $200.Then,the doctor should stay open for the extra hour even if he can generate additional revenue of $200 for that hour.

What is equity,and how does it differ from efficiency?

When production reflects consumer preferences,________ occurs.

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.

Which of the following is a normative economic statement?

"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement.

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

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

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

Filters