Question 1

What is meant by the statement that "optimal decisions are made at the margin"?

Accepted Answer

In economics,the word "marginal" means "

Question 2

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following correctly describes the relationship between economic efficiency and economic equity?

Accepted Answer

A) They are both automatically achieved in a free market economy. 
B) They always call for opposite outcomes. 
C) There is no conflict between the two goals. 
D) There is often a trade-off between the two. 
A) They are both automatically achieved in a free market economy. 
B) They always call for opposite outcomes. 
C) There is no conflict between the two goals. 
D) There is often a trade-off between the two.

Question 4

Political candidates often hold fund raisers by charging "per plate" for dinner.Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate.Is this transaction economically efficient?

Accepted Answer

A) No,political candidates should never be allowed to overcharge for a fund raising dinner. 
B) Yes,it was a voluntary exchange that benefited both parties. 
C) No,Wendy paid too much for four dinners. 
D) Yes,it is efficient only from the perspective of the candidate but not from the perspective of Wendy. 
A) No,political candidates should never be allowed to overcharge for a fund raising dinner. 
B) Yes,it was a voluntary exchange that benefited both parties. 
C) No,Wendy paid too much for four dinners. 
D) Yes,it is efficient only from the perspective of the candidate but not from the perspective of Wendy.

Question 5

In economics,the term ________ means "additional" or "extra."

Accepted Answer

A) allocative 
B) marginal 
C) equity 
D) optimal 
A) allocative 
B) marginal 
C) equity 
D) optimal

Question 6

Which of the following is motivated by an efficiency concern?

Accepted Answer

A) In December 2006,the Bush administration restarted a short-term housing assistance program for victims of Hurricane Katrina. 
B) Each year,the University of Notre Dame conducts a lottery to parcel out the 30,000 seats available to contributors,former athletes and parents in the 80,000-seat stadium. 
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 federal government's housing choice voucher program assists very low-income families,the elderly,and the disabled to afford decent,safe,and sanitary housing in the private market. 
A) In December 2006,the Bush administration restarted a short-term housing assistance program for victims of Hurricane Katrina. 
B) Each year,the University of Notre Dame conducts a lottery to parcel out the 30,000 seats available to contributors,former athletes and parents in the 80,000-seat stadium. 
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 federal government's housing choice voucher program assists very low-income families,the elderly,and the disabled to afford decent,safe,and sanitary housing in the private market.

Question 7

Markets promote

Accepted Answer

A) equity and competition. 
B) voluntary exchange and equality. 
C) equity and equality. 
D) competition and voluntary exchange. 
A) equity and competition. 
B) voluntary exchange and equality. 
C) equity and equality. 
D) competition and voluntary exchange.

Question 8

Which of the following statements is true about competition in a market?

Accepted Answer

A) Competition forces firms to outsource the production of their labor-intensive products. 
B) Competition forces firms to undercut their selling price,thus benefiting consumers who will be able to purchase products at the lowest price possible. 
C) Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production. 
D) Competition forces firms to add only low profit margins to their costs of production. 
A) Competition forces firms to outsource the production of their labor-intensive products. 
B) Competition forces firms to undercut their selling price,thus benefiting consumers who will be able to purchase products at the lowest price possible. 
C) Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production. 
D) Competition forces firms to add only low profit margins to their costs of production.

Question 9

What are some of the reasons given for the the decline in the number of physicians choosing to enter private practices?

Accepted Answer

The reasons include lower insu

Question 10

Define productive efficiency.Does productive efficiency imply allocative efficiency? Explain.

Accepted Answer

Productive efficiency is an efficiency c

Question 11

The decisions Apple makes in determining production levels for its iPhone is an example of a microeconomics topic.

Accepted Answer

A) True 
 B)False

Question 12

Soo Jin shares a one-bedroom apartment with her classmate.Her share of the rent is $700 per month.She is considering moving to a studio apartment which she will not have to share with anyone.The studio apartment rents for $950 per month.Recently,you ran into Soo Jin on campus and she tells you that she has moved into the studio apartment.Soo Jin is as rational as any other person.As an economics major,you rightly conclude that

Accepted Answer

A) Soo Jin did not have a choice;her roommate was a slob. 
B) Soo Jin figures that the additional benefit of having her own place (as opposed to sharing)is at least $250. 
C) Soo Jin figures that the benefit of having her own place (as opposed to sharing)is at least $950. 
D) the cost of having one's own space outweighs the benefits. 
A) Soo Jin did not have a choice;her roommate was a slob. 
B) Soo Jin figures that the additional benefit of having her own place (as opposed to sharing)is at least $250. 
C) Soo Jin figures that the benefit of having her own place (as opposed to sharing)is at least $950. 
D) the cost of having one's own space outweighs the benefits.

Question 13

Which of the following is a result of a market economy?

Accepted Answer

A) environmental protection 
B) an equal income distribution 
C) agreement on equity 
D) voluntary exchange 
A) environmental protection 
B) an equal income distribution 
C) agreement on equity 
D) voluntary exchange

Question 14

Which of the following questions or statements regarding medical school is normative?

Accepted Answer

A) How do changes in expected future incomes affect the decisions of medical students about which specialty to choose? 
B) Medical students who enter specialized fields make a larger contribution to society than do student who enter primary care. 
C) What role does tuition play in a student's decision about whether to attend medical school? 
D) Have tuition increases had a large effect or a small effect on the number of applications to medical school? 
A) How do changes in expected future incomes affect the decisions of medical students about which specialty to choose? 
B) Medical students who enter specialized fields make a larger contribution to society than do student who enter primary care. 
C) What role does tuition play in a student's decision about whether to attend medical school? 
D) Have tuition increases had a large effect or a small effect on the number of applications to medical school?

Question 15

When voluntary exchange takes place,both parties gain from the exchange.

Accepted Answer

A) True 
 B)False

Question 16

Explain the economic assumption that "people are rational."

Accepted Answer

"People are rational" means that economi

Question 17

Automobile manufacturers produce a range of automobiles such as sports utility vehicles,luxury sedans,pickup trucks and compact cars.What fundamental economic question are they addressing by making this range of products?

Accepted Answer

A) How to produce goods that consumers want? 
B) Why produce a variety of automobiles? 
C) What to produce? 
D) Who to produce automobiles for? 
A) How to produce goods that consumers want? 
B) Why produce a variety of automobiles? 
C) What to produce? 
D) Who to produce automobiles for?

Question 18

At a recent faculty meeting,Lorraine Waverly,president of Skywalker College,announced that enrollment is up by 12 percent over the previous semester.If enrollment the previous semester was 3,250 students,what is the student enrollment this semester?

Accepted Answer

A) 390 
B) 2,860 
C) 3,640 
D) 4,030 
A) 390 
B) 2,860 
C) 3,640 
D) 4,030

Question 19

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

Accepted Answer

A) True 
 B)False

Question 20

What is opportunity cost?

Accepted Answer

Opportunity cost refers to the highest-v

What is meant by the statement that "optimal decisions are made at the margin"?

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

Which of the following correctly describes the relationship between economic efficiency and economic equity?

Political candidates often hold fund raisers by charging "per plate" for dinner.Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate.Is this transaction economically efficient?

In economics,the term ________ means "additional" or "extra."

Which of the following is motivated by an efficiency concern?

Markets promote

Which of the following statements is true about competition in a market?

What are some of the reasons given for the the decline in the number of physicians choosing to enter private practices?

Define productive efficiency.Does productive efficiency imply allocative efficiency? Explain.

The decisions Apple makes in determining production levels for its iPhone is an example of a microeconomics topic.

Which of the following is a result of a market economy?

Which of the following questions or statements regarding medical school is normative?

When voluntary exchange takes place,both parties gain from the exchange.

Explain the economic assumption that "people are rational."

Automobile manufacturers produce a range of automobiles such as sports utility vehicles,luxury sedans,pickup trucks and compact cars.What fundamental economic question are they addressing by making this range of products?

At a recent faculty meeting,Lorraine Waverly,president of Skywalker College,announced that enrollment is up by 12 percent over the previous semester.If enrollment the previous semester was 3,250 students,what is the student enrollment this semester?

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

What is opportunity cost?

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

What is meant by the statement that "optimal decisions are made at the margin"?

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

Which of the following correctly describes the relationship between economic efficiency and economic equity?

Political candidates often hold fund raisers by charging "per plate" for dinner.Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate.Is this transaction economically efficient?

In economics,the term ________ means "additional" or "extra."

Which of the following is motivated by an efficiency concern?

Markets promote

Which of the following statements is true about competition in a market?

What are some of the reasons given for the the decline in the number of physicians choosing to enter private practices?

Define productive efficiency.Does productive efficiency imply allocative efficiency? Explain.

The decisions Apple makes in determining production levels for its iPhone is an example of a microeconomics topic.

Which of the following is a result of a market economy?

Which of the following questions or statements regarding medical school is normative?

When voluntary exchange takes place,both parties gain from the exchange.

Explain the economic assumption that "people are rational."

Automobile manufacturers produce a range of automobiles such as sports utility vehicles,luxury sedans,pickup trucks and compact cars.What fundamental economic question are they addressing by making this range of products?

At a recent faculty meeting,Lorraine Waverly,president of Skywalker College,announced that enrollment is up by 12 percent over the previous semester.If enrollment the previous semester was 3,250 students,what is the student enrollment this semester?

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

What is opportunity cost?

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