Question 1

The cost incurred from the production of an additional unit of a product

Accepted Answer

A) is a marginal cost to the firm. 
B) is called a loss. 
C) is called opportunity cost. 
D) must be zero for a firm to be efficient. 
A) is a marginal cost to the firm. 
B) is called a loss. 
C) is called opportunity cost. 
D) must be zero for a firm to be efficient.

Question 2

Which of the following is not 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) The growing demand for corn by ethanol producers has led to a surge in the price of tortillas,a staple in the Mexican diet.To quell public outcry over rising tortilla prices,the Mexican government released government corn stocks at prices well below the market,and pressured states to impose price ceilings on tortillas. 
D) Some U.S.colleges cut back on merit scholarships since these programs siphon money from need-based programs,thus harming lower-income students with greater financial need. 
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) The growing demand for corn by ethanol producers has led to a surge in the price of tortillas,a staple in the Mexican diet.To quell public outcry over rising tortilla prices,the Mexican government released government corn stocks at prices well below the market,and pressured states to impose price ceilings on tortillas. 
D) Some U.S.colleges cut back on merit scholarships since these programs siphon money from need-based programs,thus harming lower-income students with greater financial need.

Question 3

Physical capital refers to stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 4

Lionel's Lawn Care is a company that maintains residential yards.Lionel's cost for his standard package of mowing,edging,and trimming is $15,and he charges $25 for this service.For a total price of $40,Lionel will also trim shrubs,a service that adds an additional $10 to the total cost of the standard package.What is Lionel's marginal benefit if he sells the standard package?

Accepted Answer

A) $10 
B) $15 
C) $25 
D) $40 
A) $10 
B) $15 
C) $25 
D) $40

Question 5

The term "market" in economics refers to

Accepted Answer

A) a place where money changes hands. 
B) a legal institution where exchange can take place. 
C) a group of buyers and sellers of a product and the arrangement by which they come together to trade. 
D) an organization which sells goods and services. 
A) a place where money changes hands. 
B) a legal institution where exchange can take place. 
C) a group of buyers and sellers of a product and the arrangement by which they come together to trade. 
D) an organization which sells goods and services.

Question 6

Which of the following is an example of an economic trade-off that a firm has to make?

Accepted Answer

A) whether it is cheaper to produce with more machines or with more workers 
B) deciding why consumers want its products 
C) whether or not consumers will buy its products 
D) deciding what profit margin it desires for its products 
A) whether it is cheaper to produce with more machines or with more workers 
B) deciding why consumers want its products 
C) whether or not consumers will buy its products 
D) deciding what profit margin it desires for its products

Question 7

Which of the following statements is true?

Accepted Answer

A) An inverse relationship has a positive slope value. 
B) A direct relationship has a negative slope value. 
C) A curved line has slope values that change at every point. 
D) A straight line has a slope of one. 
A) An inverse relationship has a positive slope value. 
B) A direct relationship has a negative slope value. 
C) A curved line has slope values that change at every point. 
D) A straight line has a slope of one.

Question 8

Human capital refers to

Accepted Answer

A) the money people have. 
B) the machines workers have to work with. 
C) the accumulated skills and training workers have. 
D) the wealth people have. 
A) the money people have. 
B) the machines workers have to work with. 
C) the accumulated skills and training workers have. 
D) the wealth people have.

Question 9

Which of the following best describes an assumption economists make about human behavior?

Accepted Answer

A) They assume that individuals act rationally all the time in all circumstances. 
B) They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time. 
C) They assume that people take into account the question of fairness in all decisions they make. 
D) They assume that individuals act randomly. 
A) They assume that individuals act rationally all the time in all circumstances. 
B) They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time. 
C) They assume that people take into account the question of fairness in all decisions they make. 
D) They assume that individuals act randomly.

Question 10

Policies based on normative economic ideas tend to increase economic efficiency and improve equity.

Accepted Answer

A) True 
 B)False

Question 11

The Farm Factory,a booth at the local Farmer's Market,sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon.What is the opportunity cost of buying a dozen eggs?

Accepted Answer

A) 1 2/3 gallons of milk 
B) 3/5 of a gallon of milk 
C) $2.50 
D) $1.50 
A) 1 2/3 gallons of milk 
B) 3/5 of a gallon of milk 
C) $2.50 
D) $1.50

Question 12

In the first six months of 2003,branches of Commerce Bank in New York City were robbed 14 times.The New York City Police recommended steps the bank could take to deter robberies,including the installation of plastic barriers called "bandit barriers." The police were surprised the bank did not take their advice.According to a deputy commissioner of police,"Commerce does very little of what we recommend.They've told our detectives they have no interest in ever putting in the barriers." It would seem that Commerce Bank would have a strong incentive to install "bandit barriers" to deter robberies.Why wouldn't they do it?

Accepted Answer

A) The banks would rather delay installation of any theft deterring equipment in anticipation of new,lower-cost innovations in the security devices market. 
B) The banks must have weighed the cost of installing bandit barriers against the benefits and decided that they have "no interest in ever putting in the barriers." 
C) The banks are concerned that "bandit barriers" would send the wrong message to customers - that the bank is unsafe. 
D) The banks probably resent any interference from the police department. 
A) The banks would rather delay installation of any theft deterring equipment in anticipation of new,lower-cost innovations in the security devices market. 
B) The banks must have weighed the cost of installing bandit barriers against the benefits and decided that they have "no interest in ever putting in the barriers." 
C) The banks are concerned that "bandit barriers" would send the wrong message to customers - that the bank is unsafe. 
D) The banks probably resent any interference from the police department.

Question 13

In the United States in 2012,the CDC estimated that the total number of people with diabetes (both diagnosed and undiagnosed cases)was lowest for people in the age range of ________,and the percentage of people with diabetes was lowest for people in the age range of ________.

Accepted Answer

A) 20 - 44;20 - 44 
B) 45 - 64;65 and older 
C) 65 and older;65 and older 
D) 65 and older;20 - 44 
A) 20 - 44;20 - 44 
B) 45 - 64;65 and older 
C) 65 and older;65 and older 
D) 65 and older;20 - 44

Question 14

In 2015,Peelville consumed 30,000 bananas.In 2016,banana consumption rose to 35,000.Calculate the percentage change in banana consumption.

Accepted Answer

A) 11.66% 
B) 14.28% 
C) 16.67% 
D) 22.25% 
A) 11.66% 
B) 14.28% 
C) 16.67% 
D) 22.25%

Question 15

Suppose that to move more people off the wait list for organ donations,surgeons and hospitals are developing a market for organ swapping.This is an example of a macroeconomics topic.

Accepted Answer

A) True 
 B)False

Question 16

If the price of milk was $1.25 a gallon and it is now $2.25 a gallon,what is the percentage change in price?

Accepted Answer

A) 4.4 percent 
B) 8 percent 
C) 44 percent 
D) 80 percent 
A) 4.4 percent 
B) 8 percent 
C) 44 percent 
D) 80 percent

Question 17

All economic questions arise from the fact that resources are scarce.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is motivated by an equity concern?

Accepted Answer

A) Some U.S.colleges have cut back on merit scholarships since these programs siphon money from need-based programs,thus harming lower-income students with greater financial need. 
B) Following the removal of subsidies in urban water use,household demand for water decreased quite significantly in Bogor,Indonesia. 
C) In November 2003,the Federal Communications Commission implemented the "local number portability" rule which gives cell phone customers the option of keeping their number when they switch carriers within the same geographic region. 
D) The United States protects intellectual property rights,allowing inventors to prevent others from using their inventions without payment. 
A) Some U.S.colleges have cut back on merit scholarships since these programs siphon money from need-based programs,thus harming lower-income students with greater financial need. 
B) Following the removal of subsidies in urban water use,household demand for water decreased quite significantly in Bogor,Indonesia. 
C) In November 2003,the Federal Communications Commission implemented the "local number portability" rule which gives cell phone customers the option of keeping their number when they switch carriers within the same geographic region. 
D) The United States protects intellectual property rights,allowing inventors to prevent others from using their inventions without payment.

Question 19

The decision about what goods and services will be produced in a market economy is made by

Accepted Answer

A) lawmakers in the government voting on what will be produced. 
B) workers deciding to produce only what the boss says must be produced. 
C) producers deciding what society wants most. 
D) consumers and firms choosing which goods and services to buy or produce. 
E) consumers dictating to firms what they need most. 
A) lawmakers in the government voting on what will be produced. 
B) workers deciding to produce only what the boss says must be produced. 
C) producers deciding what society wants most. 
D) consumers and firms choosing which goods and services to buy or produce. 
E) consumers dictating to firms what they need most.

Question 20

If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8,the slope of this line is

Accepted Answer

A) negative 8 divided by 4. 
B) seven tenths. 
C) negative one half. 
D) one -and one half. 
A) negative 8 divided by 4. 
B) seven tenths. 
C) negative one half. 
D) one -and one half.

The cost incurred from the production of an additional unit of a product

Which of the following is not an example of an efficiency-equity trade-off faced by economic agents?

Physical capital refers to stocks and bonds.

The term "market" in economics refers to

Which of the following is an example of an economic trade-off that a firm has to make?

Which of the following statements is true?

Human capital refers to

Which of the following best describes an assumption economists make about human behavior?

Policies based on normative economic ideas tend to increase economic efficiency and improve equity.

The Farm Factory,a booth at the local Farmer's Market,sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon.What is the opportunity cost of buying a dozen eggs?

In the United States in 2012,the CDC estimated that the total number of people with diabetes (both diagnosed and undiagnosed cases)was lowest for people in the age range of ,and the percentage of people with diabetes was lowest for people in the age range of .

In 2015,Peelville consumed 30,000 bananas.In 2016,banana consumption rose to 35,000.Calculate the percentage change in banana consumption.

Suppose that to move more people off the wait list for organ donations,surgeons and hospitals are developing a market for organ swapping.This is an example of a macroeconomics topic.

If the price of milk was $1.25 a gallon and it is now $2.25 a gallon,what is the percentage change in price?

All economic questions arise from the fact that resources are scarce.

Which of the following is motivated by an equity concern?

The decision about what goods and services will be produced in a market economy is made by

If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8,the slope of this line is

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 1: Economics: Foundations and Models

The cost incurred from the production of an additional unit of a product

Which of the following is not an example of an efficiency-equity trade-off faced by economic agents?

Physical capital refers to stocks and bonds.

The term "market" in economics refers to

Which of the following is an example of an economic trade-off that a firm has to make?

Which of the following statements is true?

Human capital refers to

Which of the following best describes an assumption economists make about human behavior?

Policies based on normative economic ideas tend to increase economic efficiency and improve equity.

The Farm Factory,a booth at the local Farmer's Market,sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon.What is the opportunity cost of buying a dozen eggs?

In the United States in 2012,the CDC estimated that the total number of people with diabetes (both diagnosed and undiagnosed cases)was lowest for people in the age range of ________,and the percentage of people with diabetes was lowest for people in the age range of ________.

In 2015,Peelville consumed 30,000 bananas.In 2016,banana consumption rose to 35,000.Calculate the percentage change in banana consumption.

Suppose that to move more people off the wait list for organ donations,surgeons and hospitals are developing a market for organ swapping.This is an example of a macroeconomics topic.

If the price of milk was $1.25 a gallon and it is now $2.25 a gallon,what is the percentage change in price?

All economic questions arise from the fact that resources are scarce.

Which of the following is motivated by an equity concern?

The decision about what goods and services will be produced in a market economy is made by

If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8,the slope of this line is

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

In the United States in 2012,the CDC estimated that the total number of people with diabetes (both diagnosed and undiagnosed cases)was lowest for people in the age range of ,and the percentage of people with diabetes was lowest for people in the age range of .