Question 1

For markets to work well, there must be

Accepted Answer

A)  market power.
B)  a central planner.
C)  property rights.
D)  abundant, not scarce, resources.E) A) and B)
F) A) and C)

Question 2

What is the most important factor that explains differences in living standards among countries?

Accepted Answer

A)  labor unions
B)  minimum wage laws
C)  productivity
D)  efficiencyE) A) and B)
F) A) and C)

Question 3

The amount of goods and services produced from each unit of labor input is called

Accepted Answer

A)  opportunity cost.
B)  productivity.
C)  externality.
D)  marginal benefit.E) B) and C)
F) None of the above

Question 4

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort. This law is likely to

Accepted Answer

A)  increase efficiency and increase equality.
B)  increase efficiency but decrease equality.
C)  decrease efficiency but increase equality.
D)  decrease efficiency and decrease equality.E) B) and C)
F) B) and D)

Question 5

Scenario 1-3
It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators.
-Refer to Scenario 1-3. What is the company's average cost?

Accepted Answer

The answer of Scenario 1-3
It costs a company $35,000 to...

Question 6

The study of how society manages its scarce resources is most closely associated with which field of study?

Accepted Answer

A)  environmental studies
B)  economics
C)  management
D)  accountingE) None of the above
F) A) and D)

Question 7

Which of these activities will most likely impose an external cost?

Accepted Answer

A)  Betty plants flowers in her garden.
B)  Bonnie gets a flu vaccine.
C)  Bridget drives her car after having too much alcohol to drink.
D)  Becky buys a new flat screen television.E) A) and D)
F) All of the above

Question 8

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)  Melissa needs to pay her rent and her electric bill.
B)  Kevin must choose between buying a new flat screen television and buying his textbooks for this semester.
C)  Robert must decide between studying for his psychology exam and working at his part-time job.
D)  Lisa can spend her money on a new smart phone or on a weekend trip.E) C) and D)
F) A) and C)

Question 9

When the "invisible hand" guides economic activity, prices of products reflect

Accepted Answer

A)  only the values that society places on those products.
B)  only the costs to society of producing those products.
C)  both the values that society places on those products and the costs to society of producing those products.
D)  none of the above; when the "invisible hand" guides economic activity, prices of products are set by the government in a manner that is thought to be "fair."E) B) and C)
F) A) and B)

Question 10

Acme Home Builders, Inc., has built 24 houses so far this year at a total cost to the company of $4.80 million. If the company builds a 25th house, its total cost will increase to $5.05 million. Which of the following statements is correct?

Accepted Answer

A)  For the first 24 houses, the average cost per house was $205,000.
B)  The marginal cost of the 25th house, if it is built, will equal $250,000.
C)  If the company can sell the 25th house for at least $202,000, then it should build it.
D)  All of the above are correct.E) All of the above
F) B) and C)

Question 11

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

Accepted Answer

To lower inflation, the government may c...

Question 12

The increase in living standards of American workers over the past century is primarily due to

Accepted Answer

A)  the success of labor unions.
B)  minimum-wage laws.
C)  improvements in productivity.
D)  None of the above are correct.E) A) and C)
F) All of the above

Question 13

Which of the following is not an example of the opportunity cost of going to school?

Accepted Answer

A)  The money a student could have earned by working if he had not gone to college.
B)  The nap a student could have enjoyed if he had not attended class.
C)  The party a student could have enjoyed if he had not stayed in to study for his exam.
D)  The money a student spends on rent for his apartment while attending school.E) B) and C)
F) A) and D)

Question 14

Scenario 1-2
Suppose that you have a choice between going to the movies with a friend for two hours or working at your job. If you go to the movies, you will spend $7 on a ticket and $5 on popcorn. If you choose to work, you will earn $10 an hour.
-Refer to Scenario 1-2. What is your opportunity cost of going to the movies?

Accepted Answer

The answer of Scenario 1-2
Suppose that you have a choice...

Question 15

Scenario 1-6
It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors.
-Refer to Scenario 1-6. What is the company's average cost?

Accepted Answer

The answer of Scenario 1-6
It costs a company $30,000 to...

Question 16

A rational decisionmaker takes an action if and only if

Accepted Answer

A)  the marginal benefit of the action exceeds the marginal cost of the action.
B)  the marginal cost of the action exceeds the marginal benefit of the action.
C)  the marginal cost of the action is zero.
D)  the opportunity cost of the action is zero.E) None of the above
F) All of the above

Question 17

Trade with any nation can be mutually beneficial.

Accepted Answer

A) True 
 B)False

Question 18

Fundamentally, economics deals with

Accepted Answer

A)  scarcity.
B)  money.
C)  poverty.
D)  banking.E) None of the above
F) B) and C)

Question 19

Which of the following is the primary cause of inflation?

Accepted Answer

A)  an increase in the quantity of money
B)  an increase in government spending
C)  an increase in unemployment
D)  an increase in productivityE) A) and B)
F) B) and D)

Question 20

Which of the following is a principle concerning how people interact?

Accepted Answer

A)  Markets are usually a good way to organize economic activity.
B)  Rational people think at the margin.
C)  People respond to incentives.
D)  All of the above are correct.E) All of the above
F) B) and D)

Exam 1: Ten Principles of Economics

For markets to work well, there must be

Correct Answer
verified

The amount of goods and services produced from each unit of labor input is called

Correct Answer
verified

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

Correct Answer
verified
To lower inflation, the government may c...
View Answer

Acme Home Builders, Inc., has built 24 houses so far this year at a total cost to the company of $4.80 million. If the company builds a 25^th house, its total cost will increase to $5.05 million. Which of the following statements is correct?

Correct Answer
verified

What is the most important factor that explains differences in living standards among countries?

Correct Answer
verified

Scenario 1-6 It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors. -Refer to Scenario 1-6. What is the company's average cost?

Correct Answer
verified

Scenario 1-3 It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators. -Refer to Scenario 1-3. What is the company's average cost?

Correct Answer
verified

Which of these activities will most likely impose an external cost?

Correct Answer
verified

Trade with any nation can be mutually beneficial.

Correct Answer
verified

Correct Answer
verified

A rational decisionmaker takes an action if and only if

Correct Answer
verified

The increase in living standards of American workers over the past century is primarily due to

Correct Answer
verified

Which of the following is a principle concerning how people interact?

Correct Answer
verified

Which of the following is not an example of the opportunity cost of going to school?

Correct Answer
verified

Which of the following is the primary cause of inflation?

Correct Answer
verified

Fundamentally, economics deals with

Correct Answer
verified

The study of how society manages its scarce resources is most closely associated with which field of study?

Correct Answer
verified

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort. This law is likely to

Correct Answer
verified

When the "invisible hand" guides economic activity, prices of products reflect

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

Exam 1: Ten Principles of Economics

For markets to work well, there must be

Correct AnswerverifiedShow Answer

The amount of goods and services produced from each unit of labor input is called

Correct AnswerverifiedShow Answer

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

Correct AnswerverifiedTo lower inflation, the government may c...View AnswerShow Answer

Acme Home Builders, Inc., has built 24 houses so far this year at a total cost to the company of $4.80 million. If the company builds a 25th house, its total cost will increase to $5.05 million. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

What is the most important factor that explains differences in living standards among countries?

Correct AnswerverifiedShow Answer

Scenario 1-6 It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors. -Refer to Scenario 1-6. What is the company's average cost?

Correct AnswerverifiedShow Answer

Scenario 1-3 It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators. -Refer to Scenario 1-3. What is the company's average cost?

Correct AnswerverifiedShow Answer

Which of these activities will most likely impose an external cost?

Correct AnswerverifiedShow Answer

Trade with any nation can be mutually beneficial.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A rational decisionmaker takes an action if and only if

Correct AnswerverifiedShow Answer

The increase in living standards of American workers over the past century is primarily due to

Correct AnswerverifiedShow Answer

Which of the following is a principle concerning how people interact?

Correct AnswerverifiedShow Answer

Which of the following is not an example of the opportunity cost of going to school?

Correct AnswerverifiedShow Answer

Which of the following is the primary cause of inflation?

Correct AnswerverifiedShow Answer

Fundamentally, economics deals with

Correct AnswerverifiedShow Answer

The study of how society manages its scarce resources is most closely associated with which field of study?

Correct AnswerverifiedShow Answer

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort. This law is likely to

Correct AnswerverifiedShow Answer

When the "invisible hand" guides economic activity, prices of products reflect

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
To lower inflation, the government may c...
View Answer

Acme Home Builders, Inc., has built 24 houses so far this year at a total cost to the company of $4.80 million. If the company builds a 25^th house, its total cost will increase to $5.05 million. Which of the following statements is correct?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified