Question 1

The phenomenon of scarcity stems from the fact that

Accepted Answer

A)   most economies' production methods are not very good.
B)   in most economies, wealthy people consume disproportionate quantities of goods and services.
C)   governments restrict production of too many goods and services.
D)   resources are limited.E) C) and D)
F) None of the above

Question 2

Government policies resulting in reduced efficiency include i)  the welfare system
Ii)  unemployment insurance
Iii)  progressive income tax

Accepted Answer

A)   i)  only
B)   ii)  only
C)   i)  and ii)  only
D)   i) , ii) , and iii) E) B) and C)
F) All of the above

Question 3

Suppose the cost of flying a 100-seat plane for an airline is $50,000 and there are 10 empty seats on a flight. The average cost per seat is

Accepted Answer

A)   $50.
B)   $500.
C)   $50,000.
D)   This cannot be determined from the information given.E) All of the above
F) B) and D)

Question 4

What does the term "marginal change" mean?

Accepted Answer

A small incremental ...

Question 5

Tuition is the single-largest cost of attending college for most students.

Accepted Answer

A) True 
 B)False

Question 6

The historical rise in living standards of American workers is primarily a result of

Accepted Answer

A)   the influence of labor unions in America.
B)   tariff protection imposed by the American government.
C)   the enactment of minimum-wage laws in America.
D)   the rise in American productivity.E) A) and B)
F) A) and C)

Question 7

Give an example of government intervention that is intended to improve equality.

Accepted Answer

The income...

Question 8

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) None of the above
F) C) and D)

Question 9

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) A) and B)
F) C) and D)

Question 10

Zack quits his job at a consulting firm, which pays $40,000 a year, to enroll in a two-year graduate program. His annual school expenses are $30,000 for tuition, $2,000 for books, and $600 for food. What is his opportunity cost of attending the two-year graduate program?

Accepted Answer

The answer of Zack quits his job at a consulting...

Question 11

A worker in Vietnam can earn $6 per day making cotton cloth on a hand loom. A worker in the United States can earn $85 per day making cotton cloth with a mechanical loom. What is the likely explanation for the difference in wages?

Accepted Answer

A)   U.S. textile workers belong to a union, whereas Vietnamese textile workers do not belong to a union.
B)   There is little demand for cotton cloth in Vietnam and great demand in the U.S.
C)   Labor is more productive making cotton cloth with a mechanical loom than with a hand loom.
D)   Vietnam has a low-wage policy to make its textile industry more competitive in world markets.E) All of the above
F) B) and D)

Question 12

Which of the following is correct concerning opportunity cost?

Accepted Answer

A)   Except to the extent that you pay more for them, opportunity costs should not include the cost of things you would have purchased anyway.
B)   To compute opportunity costs, you should subtract benefits from costs.
C)   Opportunity costs and the idea of trade-offs are not closely related.
D)   Rational people should compare various options without considering opportunity costs.E) All of the above
F) A) and D)

Question 13

What is the main difference between a centrally planned economy and a market economy?

Accepted Answer

In a market economy, decisions...

Question 14

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 15

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Accepted Answer

A) True 
 B)False

Question 16

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) None of the above
F) A) and B)

Question 17

To improve living standards, policymakers should

Accepted Answer

A)   impose restrictions on foreign competition.
B)   formulate policies designed to increase productivity.
C)   impose tougher immigration policies.
D)   provide tax breaks for the middle class.E) A) and B)
F) A) and D)

Question 18

Which of the following can lead to market failure?

Accepted Answer

A)   externalities and market power
B)   externalities but not market power
C)   market power but not externalities
D)   neither externalities nor market powerE) None of the above
F) B) and C)

Question 19

Irregular fluctuations in economic activity are known as the

Accepted Answer

A)   business cycle.
B)   broken window fallacy.
C)   tradeoff between inflation and unemployment.
D)   ten principles of economics.E) A) and B)
F) A) and C)

Question 20

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) A) and B)
F) A) and C)

Exam 1: Ten Principles of Economics

What does the term "marginal change" mean?

Correct Answer
verified
A small incremental ...
View Answer

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

Correct Answer
verified

The phenomenon of scarcity stems from the fact that

Correct Answer
verified

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Correct Answer
verified

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

Correct Answer
verified

Irregular fluctuations in economic activity are known as the

Correct Answer
verified

Which of the following is correct concerning opportunity cost?

Correct Answer
verified

Which of the following can lead to market failure?

Correct Answer
verified

A worker in Vietnam can earn $6 per day making cotton cloth on a hand loom. A worker in the United States can earn $85 per day making cotton cloth with a mechanical loom. What is the likely explanation for the difference in wages?

Correct Answer
verified

Suppose the cost of flying a 100-seat plane for an airline is $50,000 and there are 10 empty seats on a flight. The average cost per seat is

Correct Answer
verified

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

Tuition is the single-largest cost of attending college for most students.

Correct Answer
verified

Give an example of government intervention that is intended to improve equality.

Correct Answer
verified
The income...
View Answer

The historical rise in living standards of American workers is primarily a result of

Correct Answer
verified

Government policies resulting in reduced efficiency include i) the welfare system Ii) unemployment insurance Iii) progressive income tax

Correct Answer
verified

To improve living standards, policymakers should

Correct Answer
verified

What is the main difference between a centrally planned economy and a market economy?

Correct Answer
verified
In a market economy, decisions...
View 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 Answer
verified

Zack quits his job at a consulting firm, which pays $40,000 a year, to enroll in a two-year graduate program. His annual school expenses are $30,000 for tuition, $2,000 for books, and $600 for food. What is his opportunity cost of attending the two-year graduate program?

Correct Answer
verified

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

Exam 1: Ten Principles of Economics

What does the term "marginal change" mean?

Correct AnswerverifiedA small incremental ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

The phenomenon of scarcity stems from the fact that

Correct AnswerverifiedShow Answer

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Irregular fluctuations in economic activity are known as the

Correct AnswerverifiedShow Answer

Which of the following is correct concerning opportunity cost?

Correct AnswerverifiedShow Answer

Which of the following can lead to market failure?

Correct AnswerverifiedShow Answer

A worker in Vietnam can earn $6 per day making cotton cloth on a hand loom. A worker in the United States can earn $85 per day making cotton cloth with a mechanical loom. What is the likely explanation for the difference in wages?

Correct AnswerverifiedShow Answer

Suppose the cost of flying a 100-seat plane for an airline is $50,000 and there are 10 empty seats on a flight. The average cost per seat is

Correct AnswerverifiedShow 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

Tuition is the single-largest cost of attending college for most students.

Correct AnswerverifiedShow Answer

Give an example of government intervention that is intended to improve equality.

Correct AnswerverifiedThe income...View AnswerShow Answer

The historical rise in living standards of American workers is primarily a result of

Correct AnswerverifiedShow Answer

Government policies resulting in reduced efficiency include i) the welfare system Ii) unemployment insurance Iii) progressive income tax

Correct AnswerverifiedShow Answer

To improve living standards, policymakers should

Correct AnswerverifiedShow Answer

What is the main difference between a centrally planned economy and a market economy?

Correct AnswerverifiedIn a market economy, decisions...View AnswerShow 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

Zack quits his job at a consulting firm, which pays $40,000 a year, to enroll in a two-year graduate program. His annual school expenses are $30,000 for tuition, $2,000 for books, and $600 for food. What is his opportunity cost of attending the two-year graduate program?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe enjoyment you wo...View AnswerShow Answer

Correct Answer
verified
A small incremental ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The income...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In a market economy, decisions...
View Answer

Correct Answer
verified

Correct Answer
verified

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