Question 1

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

Accepted Answer

The income...

Question 2

Both the production of goods and services and the unemployment rate are used to measure

Accepted Answer

A)   the business cycle.
B)   productivity.
C)   the interest rate.
D)   inflation.E) B) and C)
F) C) and D)

Question 3

Equality means distributing society's resources in the most efficient manner.

Accepted Answer

A) True 
 B)False

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

Question 5

For a very long time the country of Zeeland has had an inflation rate of 9%. Suddenly its inflation rate drops to 3%. The drop in the inflation rate

Accepted Answer

A)   could be due to slower money supply growth. We would expect unemployment to be higher.
B)   could be due to slower money supply growth. We would expect unemployment to be lower.
C)   could be due to higher money supply growth. We would expect unemployment to be higher.
D)   could be due to higher money supply growth. We would expect unemployment to be lower.E) A) and B)
F) None of the above

Question 6

Give an example of government intervention that is intended to reduce an externality.

Accepted Answer

Laws that restrict t...

Question 7

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) All of the above

Question 8

Based on the available evidence, which of the following groups benefits most from mandatory seat belt laws?

Accepted Answer

A)   automakers
B)   pedestrians
C)   drivers
D)   owners of collision-repair shopsE) B) and C)
F) B) and D)

Question 9

A society allocates its scarce resources to various jobs. These scarce resources include

Accepted Answer

A)   land.
B)   people.
C)   machines.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 10

Consider Noah's decision to go to college. If he goes to college, he will spend $80,000 on tuition, $15,000 on room and board, and $4,000 on books. If he does not go to college, he will earn $22,000 working in a store and he will spend $13,000 on room and board. Noah's cost of going to college is

Accepted Answer

A)   $99,000.
B)   $103,000.
C)   $108,000.
D)   $121,000.E) A) and C)
F) A) and D)

Question 11

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by

Accepted Answer

A)   unstable economic conditions in Eastern Europe.
B)   increased competition from abroad.
C)   a decline in the rate of increase in U.S. productivity.
D)   a strong U.S. dollar abroad, hurting U.S. exports.E) All of the above
F) B) and C)

Question 12

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

Accepted Answer

A)   3 percent per year
B)   5 percent per year
C)   7 percent per year
D)   9 percent per yearE) A) and D)
F) A) and C)

Question 13

A rational decision maker takes an action if and only if

Accepted Answer

A)   the average benefit of the action exceeds the average cost.
B)   the average cost of the action exceeds the average benefit.
C)   the marginal benefit of the action exceeds the marginal cost.
D)   the marginal cost of the action exceeds the marginal benefit.E) C) and D)
F) None of the above

Question 14

Economics deals primarily with the concept of

Accepted Answer

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

Question 15

Market economies are distinguished from other types of economies largely on the basis of

Accepted Answer

A)   the political affiliations of government officials.
B)   the process by which government officials are elected or appointed.
C)   the ways in which scarce resources are allocated.
D)   the number of retail outlets available to consumers.E) A) and C)
F) A) and D)

Question 16

College-age athletes who drop out of college to play professional sports

Accepted Answer

A)   are not rational decision makers.
B)   are well aware that their opportunity cost of attending college is very high.
C)   are concerned more about present circumstances than their future.
D)   underestimate the value of a college education.E) A) and D)
F) A) and B)

Question 17

Cole is refinishing an antique china cabinet and has already spent $180 on the restoration. He expects to be able to sell the cabinet for $360. Cole discovers that he needs to do an additional $200 worth of work to make the cabinet worth $360 to potential buyers. He could also sell the cabinet now, without completing the additional work, for $100. What should Cole do?

Accepted Answer

A)   He should sell the cabinet now for $100.
B)   He should keep the cabinet since it wouldn't be rational to spend $380 restoring a cabinet and then sell it for only $360.
C)   He should complete the additional work and sell the cabinet for $360.
D)   It does not matter which action he takes since the outcome will be the same either way.E) B) and D)
F) A) and B)

Question 18

What are the two possible causes of market failure?

Accepted Answer

Externalit...

Question 19

What is another word for "marginal"?

Accepted Answer

incrementa...

Question 20

What do prices reflect in a market economy?

Accepted Answer

The value of a good ...

Exam 1: Ten Principles of Economics

What is another word for "marginal"?

Correct Answer
verified
incrementa...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

Equality means distributing society's resources in the most efficient manner.

Correct Answer
verified

Give an example of government intervention that is intended to reduce an externality.

Correct Answer
verified
Laws that restrict t...
View Answer

A rational decision maker takes an action if and only if

Correct Answer
verified

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

Correct Answer
verified
The income...
View Answer

For a very long time the country of Zeeland has had an inflation rate of 9%. Suddenly its inflation rate drops to 3%. The drop in the inflation rate

Correct Answer
verified

Both the production of goods and services and the unemployment rate are used to measure

Correct Answer
verified

Consider Noah's decision to go to college. If he goes to college, he will spend $80,000 on tuition, $15,000 on room and board, and $4,000 on books. If he does not go to college, he will earn $22,000 working in a store and he will spend $13,000 on room and board. Noah's cost of going to college is

Correct Answer
verified

What are the two possible causes of market failure?

Correct Answer
verified
Externalit...
View Answer

A society allocates its scarce resources to various jobs. These scarce resources include

Correct Answer
verified

Economics deals primarily with the concept of

Correct Answer
verified

Market economies are distinguished from other types of economies largely on the basis of

Correct Answer
verified

College-age athletes who drop out of college to play professional sports

Correct Answer
verified

What do prices reflect in a market economy?

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

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by

Correct Answer
verified

Which of the following can lead to market failure?

Correct Answer
verified

Based on the available evidence, which of the following groups benefits most from mandatory seat belt laws?

Correct Answer
verified

Correct Answer
verified

Exam 1: Ten Principles of Economics

What is another word for "marginal"?

Correct Answerverifiedincrementa...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Equality means distributing society's resources in the most efficient manner.

Correct AnswerverifiedShow Answer

Give an example of government intervention that is intended to reduce an externality.

Correct AnswerverifiedLaws that restrict t...View AnswerShow Answer

A rational decision maker takes an action if and only if

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThe income...View AnswerShow Answer

For a very long time the country of Zeeland has had an inflation rate of 9%. Suddenly its inflation rate drops to 3%. The drop in the inflation rate

Correct AnswerverifiedShow Answer

Both the production of goods and services and the unemployment rate are used to measure

Correct AnswerverifiedShow Answer

Consider Noah's decision to go to college. If he goes to college, he will spend $80,000 on tuition, $15,000 on room and board, and $4,000 on books. If he does not go to college, he will earn $22,000 working in a store and he will spend $13,000 on room and board. Noah's cost of going to college is

Correct AnswerverifiedShow Answer

What are the two possible causes of market failure?

Correct AnswerverifiedExternalit...View AnswerShow Answer

A society allocates its scarce resources to various jobs. These scarce resources include

Correct AnswerverifiedShow Answer

Economics deals primarily with the concept of

Correct AnswerverifiedShow Answer

Market economies are distinguished from other types of economies largely on the basis of

Correct AnswerverifiedShow Answer

College-age athletes who drop out of college to play professional sports

Correct AnswerverifiedShow Answer

What do prices reflect in a market economy?

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

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by

Correct AnswerverifiedShow Answer

Which of the following can lead to market failure?

Correct AnswerverifiedShow Answer

Based on the available evidence, which of the following groups benefits most from mandatory seat belt laws?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified
incrementa...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Laws that restrict t...
View Answer

Correct Answer
verified

Correct Answer
verified
The income...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Externalit...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified