Question 1

The invisible hand ensures that economic prosperity is distributed equally.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following rates of growth in the money supply is likely to lead to the highest level of inflation 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) C) and D)
F) All of the above

Question 3

The goal of President Obama's stimulus package and increased government spending following the deep economic downturn in 2008 and 2009 was to reduce inflation.

Accepted Answer

A) True 
 B)False

Question 4

The English word that comes from the Greek word for "one who manages a household" is

Accepted Answer

A)  market.
B)  consumer.
C)  producer.
D)  economy.E) B) and D)
F) B) and C)

Question 5

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) All of the above
F) A) and D)

Question 6

Maureen's college raises the cost of room and board per semester. This increase raises Maureen's opportunity cost of attending college

Accepted Answer

A)  even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost reduces Maureen's incentive to attend college.
B)  even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost increases Maureen's incentive to attend college.
C)  only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost reduces Maureen's incentive to attend college.
D)  only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost increases Maureen's incentive to attend college.E) A) and B)
F) B) and D)

Question 7

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. A customer is willing to pay $60 for the 601st heart rate monitor. Should the company produce and sell it? Explain.

Accepted Answer

No, because the marg...

Question 8

A construction company has built 30 houses so far this year at a total cost to the company of $7.5 million. If the company builds a 31st house, its total cost will increase to $7.76 million. Which of the following statements is correct?

Accepted Answer

A)  For the first 30 houses, the average cost per house was $250,000.
B)  The marginal cost of the 31st house, if it is built, will be $260,000.
C)  If the company can experience a marginal benefit of $275,000 by building the 31st house, then the company should build it.
D)  All of the above are correct.E) A) and D)
F) A) and C)

Question 9

Barb's aunt gave her $100 for her birthday with the condition that Barb buy herself something. In deciding how to spend the money, Barb narrows her options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally she decides on Option B. The opportunity cost of this decision is

Accepted Answer

A)  the value to Barb of the option she would have chosen had Option B not been available.
B)  the value to Barb of Options A, C and D combined.
C)  the average of the values to Barb of Options A, C, and D.
D)  $100.E) A) and B)
F) None of the above

Question 10

Scenario 1-5
Suppose that you have a choice between going to the movies with a friend for three hours or working at your job. If you go to the movies, you will spend $12 on a ticket and $6 on popcorn. If you choose to work, you will earn $10 an hour.
-Refer to Scenario 1-5. What is your opportunity cost of working?

Accepted Answer

The enjoyment you wo...

Question 11

Incomes of U.S. households in the 1970s and 1980s

Accepted Answer

A)  grew rapidly, due to the widespread success of labor unions in pushing up wages during those decades.
B)  grew rapidly, due to several increases in the minimum wage during those decades.
C)  grew rapidly, due to government policies that discouraged the importation of foreign products during those decades.
D)  grew slowly, due to slow growth of the output of goods and services per hour of U.S. workers' time during those decades.E) A) and B)
F) A) and D)

Question 12

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

Accepted Answer

A)  enhance equality.
B)  reduce efficiency.
C)  reduce the reward for working hard.
D)  All of the above are correct.E) All of the above
F) A) and B)

Question 13

Consider Larry's decision to go to college. If he goes to college, he will spend a total of $120,000 on tuition, $30,000 on room and board, and $3,500 on books over four years. If he does not go to college, he will earn $30,000 annually working in a store and spend $7,000 on room and board each year. Larry's cost of going to college is

Accepted Answer

A)  $123,500.
B)  $153,500.
C)  $190,500
D)  $245,500E) A) and C)
F) B) and D)

Question 14

Consider Mandy's decision to go to college. If she goes to college, she will spend $20,000 on tuition, $10,000 on room and board, and $2,000 on books. If she does not go to college, she will earn $18,000 working in a store and spend $8,000 on room and board. Mandy's cost of going to college is

Accepted Answer

A)  $32,000.
B)  $42,000.
C)  $50,000.
D)  $58,000.E) B) and C)
F) A) and D)

Question 15

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

Accepted Answer

A)  trade can make everyone better off.
B)  people face trade-offs.
C)  rational people think at the margin.
D)  people respond to incentives.E) None of the above
F) All of the above

Question 16

What does the "invisible hand" refers to?

Accepted Answer

How the decisions of...

Question 17

Scarcity means that there is less of a good or resource available than people wish to have.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following would a permanent increase in the growth rate of the money supply change permanently?

Accepted Answer

A)  inflation
B)  unemployment
C)  both inflation and unemployment
D)  neither inflation nor unemploymentE) All of the above
F) C) and D)

Question 19

Suppose a typical worker in India can produce 32 units of product in an eight-hour day, while a typical worker in Bangladesh can produce 30 units of product in a 10-hour day. We can conclude that

Accepted Answer

A)  worker productivity in Bangladesh is higher than in India.
B)  the standard of living will likely be higher in India than in Bangladesh.
C)  productivity is 4 units per hour for the worker in Bangladesh and 3 units per hour for the worker in India.
D)  there will be no difference between the standard of living in India and Bangladesh.E) C) and D)
F) None of the above

Question 20

Olivia was accepted by Northwestern and by another university. She is trying to decide where to go. Which of the following should influence her decision?

Accepted Answer

A)  how much she spent applying to Northwestern, and the difference between living expenses at Northwestern and the other university
B)  how much she spent applying to Northwestern, but not the difference between living expenses at Northwestern and the other university
C)  the difference between living expenses at Northwestern and her second choice, but not how much she spent applying to Northwestern
D)  neither how much she spent applying to Northwestern nor the difference between living expenses at Northwestern and her second choiceE) C) and D)
F) A) and D)

Exam 1: Ten Principles of Economics

Correct Answer
verified
No, because the marg...
View Answer

Maureen's college raises the cost of room and board per semester. This increase raises Maureen's opportunity cost of attending college

Correct Answer
verified

Correct Answer
verified
The enjoyment you wo...
View Answer

The English word that comes from the Greek word for "one who manages a household" is

Correct Answer
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Incomes of U.S. households in the 1970s and 1980s

Correct Answer
verified

Consider Mandy's decision to go to college. If she goes to college, she will spend $20,000 on tuition, $10,000 on room and board, and $2,000 on books. If she does not go to college, she will earn $18,000 working in a store and spend $8,000 on room and board. Mandy's cost of going to college is

Correct Answer
verified

Correct Answer
verified

Which of the following rates of growth in the money supply is likely to lead to the highest level of inflation in the economy?

Correct Answer
verified

What does the "invisible hand" refers to?

Correct Answer
verified
How the decisions of...
View Answer

Olivia was accepted by Northwestern and by another university. She is trying to decide where to go. Which of the following should influence her decision?

Correct Answer
verified

Scarcity means that there is less of a good or resource available than people wish to have.

Correct Answer
verified

A construction company has built 30 houses so far this year at a total cost to the company of $7.5 million. If the company builds a 31^st house, its total cost will increase to $7.76 million. Which of the following statements is correct?

Correct Answer
verified

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

Correct Answer
verified

Correct Answer
verified

The invisible hand ensures that economic prosperity is distributed equally.

Correct Answer
verified

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

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

The goal of President Obama's stimulus package and increased government spending following the deep economic downturn in 2008 and 2009 was to reduce inflation.

Correct Answer
verified

Which of the following would a permanent increase in the growth rate of the money supply change permanently?

Correct Answer
verified

Suppose a typical worker in India can produce 32 units of product in an eight-hour day, while a typical worker in Bangladesh can produce 30 units of product in a 10-hour day. We can conclude that

Correct Answer
verified

Exam 1: Ten Principles of Economics

Correct AnswerverifiedNo, because the marg...View AnswerShow Answer

Maureen's college raises the cost of room and board per semester. This increase raises Maureen's opportunity cost of attending college

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe enjoyment you wo...View AnswerShow Answer

The English word that comes from the Greek word for "one who manages a household" is

Correct AnswerverifiedShow Answer

Incomes of U.S. households in the 1970s and 1980s

Correct AnswerverifiedShow Answer

Consider Mandy's decision to go to college. If she goes to college, she will spend $20,000 on tuition, $10,000 on room and board, and $2,000 on books. If she does not go to college, she will earn $18,000 working in a store and spend $8,000 on room and board. Mandy's cost of going to college is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following rates of growth in the money supply is likely to lead to the highest level of inflation in the economy?

Correct AnswerverifiedShow Answer

What does the "invisible hand" refers to?

Correct AnswerverifiedHow the decisions of...View AnswerShow Answer

Olivia was accepted by Northwestern and by another university. She is trying to decide where to go. Which of the following should influence her decision?

Correct AnswerverifiedShow Answer

Scarcity means that there is less of a good or resource available than people wish to have.

Correct AnswerverifiedShow Answer

A construction company has built 30 houses so far this year at a total cost to the company of $7.5 million. If the company builds a 31st house, its total cost will increase to $7.76 million. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The invisible hand ensures that economic prosperity is distributed equally.

Correct AnswerverifiedShow Answer

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

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

The goal of President Obama's stimulus package and increased government spending following the deep economic downturn in 2008 and 2009 was to reduce inflation.

Correct AnswerverifiedShow Answer

Which of the following would a permanent increase in the growth rate of the money supply change permanently?

Correct AnswerverifiedShow Answer

Suppose a typical worker in India can produce 32 units of product in an eight-hour day, while a typical worker in Bangladesh can produce 30 units of product in a 10-hour day. We can conclude that

Correct AnswerverifiedShow Answer

Correct Answer
verified
No, because the marg...
View Answer

Correct Answer
verified

Correct Answer
verified
The enjoyment you wo...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
How the decisions of...
View Answer

Correct Answer
verified

Correct Answer
verified

A construction company has built 30 houses so far this year at a total cost to the company of $7.5 million. If the company builds a 31^st house, its total cost will increase to $7.76 million. Which of the following statements is correct?

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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