Question 1

Trade with any nation can be mutually beneficial.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following examples does not illustrate the principle represented by the adage,"There is no such thing as a free lunch"?

Accepted Answer

A)   Joe needs to pay his rent and his electric bill.
B)   Pete must choose between buying a new flat screen television and buying his textbooks for this semester.
C)   Kevin must decide between studying for his economics exam and working at his part-time job.
D)   Lisa can spend her money on a new sweater or a pair of jeans.E) A) and D)
F) A) and C)

Question 3

Government policies that improve equality usually increase efficiency at the same time.

Accepted Answer

A) True 
 B)False

Question 4

Betty's Bakery bakes fresh bread every morning.Any bread not sold by the end of the day is thrown away.A loaf of bread costs Betty $2.00 to produce,and she prices loaves of bread at $3.50 per loaf.Suppose near the end of one day Betty still has 12 loaves of bread on hand.Which of the following is correct?

Accepted Answer

A)   Betty should only sell the remaining bread for $3.50 per loaf since that is the regular price.
B)   Betty should only sell the remaining bread for $2.00 per loaf or more since that is what the bread costs to make.
C)   Betty should be willing to sell the remaining bread for any price above $0 per loaf since she will have to throw it away if she does not sell it for something.
D)   Betty should just throw the bread away and change the price of her bread starting tomorrow to make sure she sells all of her bread each day.E) A) and C)
F) C) and D)

Question 5

If the price of visiting a doctor were fixed below the current price,then we would expect

Accepted Answer

A)   an increase in the number of visits people want to make and an increase in the number of visits health care providers want to provide.
B)   an increase in the number of visits people want to make and a decrease in the number of visits health care providers want to provide.
C)   a decrease in the number of visits people want to make and an increase in the number of visits health care providers want to provide.
D)   a decrease in the number of visits people want to make and a decrease in the number of visits health care providers want to provide.E) All of the above
F) None of the above

Question 6

In less than two years in the early 1920s,the cost of a German newspaper rose from 0.30 marks to 70,000,000 marks.This is a spectacular example of

Accepted Answer

A)   market power caused by a change in the country's standard of living.
B)   market power caused by a single firm controlling the newspaper production.
C)   inflation caused by increased productivity in the economy.
D)   inflation caused by an increase in the quantity of money in the economy.E) None of the above
F) B) and D)

Question 7

Economics is the study of how evenly goods and services are distributed within society.

Accepted Answer

A) True 
 B)False

Question 8

Oil is considered to be a non-renewable energy source.Oil

Accepted Answer

A)   is an unlimited resource.
B)   is a scarce resource.
C)   is not a productive resource.
D)   has no opportunity cost.E) B) and C)
F) A) and D)

Question 9

Sophia is planning her activities for a hot summer day.She would like to go to the local swimming pool and see the latest blockbuster movie,but because she can only get tickets to the movie for the same time that the pool is open she can only choose one activity.This illustrates the basic principle that

Accepted Answer

A)   people respond to incentives.
B)   rational people think at the margin.
C)   people face tradeoffs.
D)   improvements in efficiency sometimes come at the expense of equality.E) None of the above
F) B) and D)

Question 10

You have driven 500 miles on a vacation and then you notice that you are only 25 miles from an attraction you hadn't known about,but would really like to see.In computing the opportunity cost of visiting this attraction you had not planned to visit,you should include

Accepted Answer

A)   both the cost of driving the first 500 and the next 25 miles.
B)   the cost of driving the first 500 miles,but not the cost of driving the next 25.
C)   the cost of driving the next 25 miles,but not the cost of driving the first 500.
D)   neither the cost of driving the first 500 miles nor the cost of driving the next 25 miles.E) B) and C)
F) All of the above

Question 11

The self-interest of the participants in an economy is guided into promoting general economic self-interest by

Accepted Answer

A)   the invisible hand.
B)   market power.
C)   government intervention.
D)   oikonomos.E) B) and C)
F) None of the above

Question 12

It costs a company $35,000 to produce 500 graphing calculators.The company's cost will be $35,050 if it produces an additional graphing calculator.If the company produces 500 graphing calculators then

Accepted Answer

A)   its average cost is greater than its marginal cost.
B)   its average cost and its marginal cost are equal.
C)   its average cost is less than its marginal cost.
D)   This cannot be determined from the information given.E) B) and C)
F) A) and D)

Question 13

In the short run,which of the following rates of growth in the money supply is likely to lead to the highest level of unemployment in the economy?

Accepted Answer

A)   1 percent per year
B)   2 percent per year
C)   3 percent per year
D)   4 percent per yearE) A) and D)
F) None of the above

Question 14

Making rational decisions "at the margin" means that people

Accepted Answer

A)   make those decisions that do not impose a marginal cost.
B)   evaluate how easily a decision can be reversed if problems arise.
C)   compare the marginal costs and marginal benefits of each decision.
D)   always calculate the dollar costs for each decision.E) None of the above
F) B) and D)

Question 15

Causes of market failure include

Accepted Answer

A)   externalities and market power.
B)   market power and incorrect forecasts of consumer demand.
C)   externalities and foreign competition.
D)   incorrect forecasts of consumer demand and foreign competition.E) A) and B)
F) A) and C)

Question 16

Bridget drinks three sodas during a particular day.The marginal benefit she enjoys from drinking the third soda

Accepted Answer

A)   can be thought of as the total benefit Bridget enjoys by drinking three sodas minus the total benefit she would have enjoyed by drinking just two sodas.
B)   determines Bridget's willingness to pay for the third soda.
C)   is likely different from the marginal benefit provided to Bridget by the second soda.
D)   All of the above are correct.E) A) and B)
F) B) and D)

Question 17

The average cost per seat on the 75-passenger Get-There-Safe Bus company's trip from Milwaukee to Minneapolis,on which no refreshments are served,is $37.In advance of a particular trip,three seats remain unsold.The bus company could increase its profit only if it

Accepted Answer

A)   charged any ticket price above $0 for the three remaining seats.
B)   charged at least $18.50 for each of the three remaining seats.
C)   charged at least $37 for each of the three remaining seats.
D)   paid three people to occupy the three remaining seats.E) A) and D)
F) None of the above

Question 18

Large or persistent inflation is almost always caused by

Accepted Answer

A)   excessive government spending.
B)   excessive growth in the quantity of money.
C)   foreign competition.
D)   higher-than-normal levels of productivity.E) A) and B)
F) B) and C)

Question 19

Economists use the term ______ to refer to fluctuations in economic activity,such as employment and production.

Accepted Answer

The answer of Economists use the term ______ to refer...

Question 20

The marginal benefit Colin gets from eating a fourth slice of pizza is

Accepted Answer

A)   the total benefit Colin gets from eating four slices of pizza minus the total benefit Colin gets from eating three slices of pizza.
B)   the same as the total benefit of eating four slices of pizza.
C)   less than the marginal cost of eating the fourth slice of pizza since he chose to eat the fourth slice.
D)   the total benefit Colin gets from eating five slices of pizza minus the total benefit Colin gets from eating four slices of pizza.E) B) and D)
F) B) and C)

Exam 1: Ten Principles of Economics

The average cost per seat on the 75-passenger Get-There-Safe Bus company's trip from Milwaukee to Minneapolis,on which no refreshments are served,is $37.In advance of a particular trip,three seats remain unsold.The bus company could increase its profit only if it

Correct Answer
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Large or persistent inflation is almost always caused by

Correct Answer
verified

Economics is the study of how evenly goods and services are distributed within society.

Correct Answer
verified

In less than two years in the early 1920s,the cost of a German newspaper rose from 0.30 marks to 70,000,000 marks.This is a spectacular example of

Correct Answer
verified

Correct Answer
verified

Trade with any nation can be mutually beneficial.

Correct Answer
verified

The self-interest of the participants in an economy is guided into promoting general economic self-interest by

Correct Answer
verified

Causes of market failure include

Correct Answer
verified

You have driven 500 miles on a vacation and then you notice that you are only 25 miles from an attraction you hadn't known about,but would really like to see.In computing the opportunity cost of visiting this attraction you had not planned to visit,you should include

Correct Answer
verified

If the price of visiting a doctor were fixed below the current price,then we would expect

Correct Answer
verified

It costs a company $35,000 to produce 500 graphing calculators.The company's cost will be $35,050 if it produces an additional graphing calculator.If the company produces 500 graphing calculators then

Correct Answer
verified

Oil is considered to be a non-renewable energy source.Oil

Correct Answer
verified

Making rational decisions "at the margin" means that people

Correct Answer
verified

The marginal benefit Colin gets from eating a fourth slice of pizza is

Correct Answer
verified

Which of the following examples does not illustrate the principle represented by the adage,"There is no such thing as a free lunch"?

Correct Answer
verified

Economists use the term ______ to refer to fluctuations in economic activity,such as employment and production.

Correct Answer
verified

Correct Answer
verified

In the short run,which of the following rates of growth in the money supply is likely to lead to the highest level of unemployment in the economy?

Correct Answer
verified

Bridget drinks three sodas during a particular day.The marginal benefit she enjoys from drinking the third soda

Correct Answer
verified

Government policies that improve equality usually increase efficiency at the same time.

Correct Answer
verified

Exam 1: Ten Principles of Economics

The average cost per seat on the 75-passenger Get-There-Safe Bus company's trip from Milwaukee to Minneapolis,on which no refreshments are served,is $37.In advance of a particular trip,three seats remain unsold.The bus company could increase its profit only if it

Correct AnswerverifiedShow Answer

Large or persistent inflation is almost always caused by

Correct AnswerverifiedShow Answer

Economics is the study of how evenly goods and services are distributed within society.

Correct AnswerverifiedShow Answer

In less than two years in the early 1920s,the cost of a German newspaper rose from 0.30 marks to 70,000,000 marks.This is a spectacular example of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Trade with any nation can be mutually beneficial.

Correct AnswerverifiedShow Answer

The self-interest of the participants in an economy is guided into promoting general economic self-interest by

Correct AnswerverifiedShow Answer

Causes of market failure include

Correct AnswerverifiedShow Answer

You have driven 500 miles on a vacation and then you notice that you are only 25 miles from an attraction you hadn't known about,but would really like to see.In computing the opportunity cost of visiting this attraction you had not planned to visit,you should include

Correct AnswerverifiedShow Answer

If the price of visiting a doctor were fixed below the current price,then we would expect

Correct AnswerverifiedShow Answer

It costs a company $35,000 to produce 500 graphing calculators.The company's cost will be $35,050 if it produces an additional graphing calculator.If the company produces 500 graphing calculators then

Correct AnswerverifiedShow Answer

Oil is considered to be a non-renewable energy source.Oil

Correct AnswerverifiedShow Answer

Making rational decisions "at the margin" means that people

Correct AnswerverifiedShow Answer

The marginal benefit Colin gets from eating a fourth slice of pizza is

Correct AnswerverifiedShow Answer

Which of the following examples does not illustrate the principle represented by the adage,"There is no such thing as a free lunch"?

Correct AnswerverifiedShow Answer

Economists use the term ______ to refer to fluctuations in economic activity,such as employment and production.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the short run,which of the following rates of growth in the money supply is likely to lead to the highest level of unemployment in the economy?

Correct AnswerverifiedShow Answer

Bridget drinks three sodas during a particular day.The marginal benefit she enjoys from drinking the third soda

Correct AnswerverifiedShow Answer

Government policies that improve equality usually increase efficiency at the same time.

Correct AnswerverifiedShow Answer

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