Question 1

Dee is an accomplished actress and a homeowner who pays a landscaper to maintain her lawn rather than do it herself. Dee has determined that she can earn more in the hour it would take her to work on her lawn than she must pay her landscaper. This scenario is an example of which principle of economics?

Accepted Answer

A)  Trade can make everyone better off.
B)  Markets are usually a good way to organize economic activity.
C)  Governments can sometimes improve market outcomes.
D)  Prices rise when the government prints too much money.E) B) and D)
F) B) and C)

Question 2

Coal is considered to be a non-renewable energy source. Which of the following statements is correct?

Accepted Answer

A)  Coal is an unlimited resource.
B)  Coal is a scarce resource.
C)  Coal is a non-scarce resource.
D)  Coal is not a resource.E) C) and D)
F) None of the above

Question 3

To promote good economic outcomes, policymakers should strive to enact policies that

Accepted Answer

A)  enhance productivity.
B)  enhance individuals' market power.
C)  result in a rapidly-growing quantity of money.
D)  All of the above are correct.E) C) and D)
F) B) and C)

Question 4

When society gets the most it can from its scarce resources, then the outcome is called

Accepted Answer

A)  equitable.
B)  efficient.
C)  normal.
D)  efficacious.E) None of the above
F) All of the above

Question 5

The mainstream view among economists is that

Accepted Answer

A)  society faces a tradeoff between unemployment and inflation, but only in the short run.
B)  society faces a tradeoff between unemployment and inflation, but only in the long run.
C)  society faces a tradeoff between unemployment and inflation, both in the short run and in the long run.
D)  no tradeoff exists between unemployment and inflation, either in the short run or in the long run.E) B) and C)
F) All of the above

Question 6

In a particular country in 1998, the average worker needed to work 25 hours to produce 40 units of output. In that same country in 2008, the average worker needed to work 40 hours to produce 68 units of output. In that country, the productivity of the average worker

Accepted Answer

A)  decreased by 1.7 percent between 1998 and 2008.
B)  remained unchanged between 1998 and 2008.
C)  increased by 4.75 percent between 1998 and 2008.
D)  increased by 6.25 percent between 1998 and 2008.E) B) and C)
F) A) and D)

Question 7

The fact that different countries experience different standards of living is largely explained by differences in those countries'

Accepted Answer

A)  populations.
B)  productivity levels.
C)  locations.
D)  None of the above is correct. Economists are puzzled by differences in standards of living around the world.E) None of the above
F) A) and B)

Question 8

Suppose that a country that has a high average wage level agrees to trade with a country that has a low average wage level. Which country can benefit?

Accepted Answer

A)  only the one with a low level of output per person.
B)  only the one with a high level of output per person.
C)  both
D)  neitherE) None of the above
F) B) and C)

Question 9

The opportunity cost of an item is

Accepted Answer

A)  the number of hours needed to earn money to buy the item.
B)  what you give up to get that item.
C)  usually less than the dollar value of the item.
D)  the dollar value of the item.E) All of the above
F) A) and B)

Question 10

What do prices reflect in a market economy?

Accepted Answer

The value of a good ...

Question 11

Government policies can change the costs and benefits that people face. Those policies have the potential to

Accepted Answer

A)  alter people's behavior.
B)  alter people's decisions at the margin.
C)  produce results that policymakers did not intend.
D)  All of the above are correct.E) A) and B)
F) A) and D)

Question 12

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

Question 13

Which of the following statements does not apply to a market economy?

Accepted Answer

A)  Firms decide whom to hire and what to produce.
B)  The "invisible hand" usually maximizes the income of society as a whole.
C)  Households decide which firms to work for and what to buy with their incomes.
D)  Government policies are the primary forces that guide the decisions of firms and households.E) None of the above
F) A) and B)

Question 14

A certain state legislature is considering an increase in the state gasoline tax. Representative Campbell argues that an increase in the gasoline tax would harm low-income drivers disproportionately. Representative Richards responds by saying that low-income drivers own smaller cars that use less gasoline, and that low-income drivers therefore would not be harmed disproportionately.

Accepted Answer

A)  Representative Campbell's argument is based primarily on efficiency, while Representative Richards' argument is based primarily on equality.
B)  Representative Campbell's argument is based primarily on equality, while Representative Richards' argument is based primarily on efficiency.
C)  Both representatives' arguments are based primarily on efficiency.
D)  Both representatives' arguments are based primarily on equality.E) C) and D)
F) B) and C)

Question 15

Which of the following words and phrases best captures the notion of equality?

Accepted Answer

A)  minimum waste
B)  maximum benefit
C)  sameness
D)  efficiencyE) A) and B)
F) A) and D)

Question 16

In a particular country in 2008, the average worker had to work 40 hours to produce 100 units of output. In that same country in 2018, the average worker needed to work 35 hours to produce 94.5 units of output. In that country, the productivity of the average worker

Accepted Answer

A)  increased by 2 percent between 2008 and 2018.
B)  increased by 8 percent between 2008 and 2018.
C)  remained unchanged between 2008 and 2018.
D)  decreased by 2 percent between 2008 and 2018.E) B) and C)
F) None of the above

Question 17

Suppose after graduating from college you get a job working at a bank earning $30,000 per year. After two years of working at the bank earning the same salary, you have an opportunity to enroll in a one-year graduate program that would require you to quit your job at the bank. Which of the following should not be included in a calculation of your opportunity cost?

Accepted Answer

A)  the cost of tuition and books to attend the graduate program
B)  the $30,000 salary that you could have earned if you retained your job at the bank
C)  the $45,000 salary that you will be able to earn after having completed your graduate program
D)  the value of insurance coverage and other employee benefits you would have received if you retained your job at the bankE) All of the above
F) B) and C)

Question 18

The primary determinant of a country's standard of living is

Accepted Answer

A)  the country's ability to prevail over foreign competition.
B)  the country's ability to produce goods and services.
C)  the total supply of money in the economy.
D)  the average age of the country's labor force.E) C) and D)
F) A) and D)

Question 19

If an electric power plant does not bear the entire cost of the pollution it emits, it will

Accepted Answer

A)  not emit any pollution so as to avoid the entire cost of the pollution.
B)  emit lower levels of pollution.
C)  emit an acceptable level of pollution.
D)  emit too much pollution.E) A) and B)
F) A) and C)

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 1: Ten Principles of Economics

Correct Answer
verified

The primary determinant of a country's standard of living is

Correct Answer
verified

In a particular country in 2008, the average worker had to work 40 hours to produce 100 units of output. In that same country in 2018, the average worker needed to work 35 hours to produce 94.5 units of output. In that country, the productivity of the average worker

Correct Answer
verified

Which of the following words and phrases best captures the notion of equality?

Correct Answer
verified

Government policies can change the costs and benefits that people face. Those policies have the potential to

Correct Answer
verified

To promote good economic outcomes, policymakers should strive to enact policies that

Correct Answer
verified

The fact that different countries experience different standards of living is largely explained by differences in those countries'

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

When society gets the most it can from its scarce resources, then the outcome is called

Correct Answer
verified

The opportunity cost of an item is

Correct Answer
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Which of the following statements does not apply to a market economy?

Correct Answer
verified

The mainstream view among economists is that

Correct Answer
verified

What do prices reflect in a market economy?

Correct Answer
verified
The value of a good ...
View Answer

If an electric power plant does not bear the entire cost of the pollution it emits, it will

Correct Answer
verified

Suppose that a country that has a high average wage level agrees to trade with a country that has a low average wage level. Which country can benefit?

Correct Answer
verified

In a particular country in 1998, the average worker needed to work 25 hours to produce 40 units of output. In that same country in 2008, the average worker needed to work 40 hours to produce 68 units of output. In that country, the productivity of the average worker

Correct Answer
verified

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

Correct Answer
verified

Coal is considered to be a non-renewable energy source. Which of the following statements is correct?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Exam 1: Ten Principles of Economics

Correct AnswerverifiedShow Answer

The primary determinant of a country's standard of living is

Correct AnswerverifiedShow Answer

In a particular country in 2008, the average worker had to work 40 hours to produce 100 units of output. In that same country in 2018, the average worker needed to work 35 hours to produce 94.5 units of output. In that country, the productivity of the average worker

Correct AnswerverifiedShow Answer

Which of the following words and phrases best captures the notion of equality?

Correct AnswerverifiedShow Answer

Government policies can change the costs and benefits that people face. Those policies have the potential to

Correct AnswerverifiedShow Answer

To promote good economic outcomes, policymakers should strive to enact policies that

Correct AnswerverifiedShow Answer

The fact that different countries experience different standards of living is largely explained by differences in those countries'

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

When society gets the most it can from its scarce resources, then the outcome is called

Correct AnswerverifiedShow Answer

The opportunity cost of an item is

Correct AnswerverifiedShow Answer

Which of the following statements does not apply to a market economy?

Correct AnswerverifiedShow Answer

The mainstream view among economists is that

Correct AnswerverifiedShow Answer

What do prices reflect in a market economy?

Correct AnswerverifiedThe value of a good ...View AnswerShow Answer

If an electric power plant does not bear the entire cost of the pollution it emits, it will

Correct AnswerverifiedShow Answer

Suppose that a country that has a high average wage level agrees to trade with a country that has a low average wage level. Which country can benefit?

Correct AnswerverifiedShow Answer

In a particular country in 1998, the average worker needed to work 25 hours to produce 40 units of output. In that same country in 2008, the average worker needed to work 40 hours to produce 68 units of output. In that country, the productivity of the average worker

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Coal is considered to be a non-renewable energy source. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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The value of a good ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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