Question 1

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 2

Which of the following products would be considered scarce?

Accepted Answer

A)   bread
B)   baseballs autographed by Babe Ruth
C)   motorcycles
D)   All of the above are correct.E) None of the above
F) All of the above

Question 3

Explain how trade with other countries is beneficial.

Accepted Answer

Trade allows countri...

Question 4

A species of snakes became extinct due to pollution in a river where the snakes once lived. This is an example of

Accepted Answer

A)   a market failure caused by an externality.
B)   a market failure caused by market power.
C)   a market failure caused by equality.
D)   There is no market failure in this case.E) B) and C)
F) C) and D)

Question 5

Trade makes costs

Accepted Answer

A)   higher and reduces the variety of goods and services available.
B)   higher but raises the variety of goods and services available.
C)   lower but reduces the variety of goods and services available.
D)   lower and raises the variety of goods and services available.E) A) and B)
F) None of the above

Question 6

Resources are

Accepted Answer

A)   scarce for households but plentiful for economies.
B)   plentiful for households but scarce for economies.
C)   scarce for households and scarce for economies.
D)   plentiful for households and plentiful for economies.E) A) and B)
F) A) and C)

Question 7

Economics is the study of

Accepted Answer

A)   production methods.
B)   how society manages its scarce resources.
C)   how households decide who performs which tasks.
D)   the interaction of business and government.E) None of the above
F) B) and D)

Question 8

When calculating the cost of college, which of the following should you probably not include?

Accepted Answer

A)   The cost of tuition
B)   The cost of books required for college classes
C)   The income you would have earned had you not gone to college
D)   The cost of rent for your off-campus apartment.E) B) and C)
F) All of the above

Question 9

When Ukraine trades with Italy,

Accepted Answer

A)   both countries are likely made better off.
B)   only Italy benefits since Ukraine can produce all goods at a higher level of quality than Italy.
C)   only Ukraine benefits since Italy's low wages guarantee that Italian firms will be profitable regardless of trade.
D)   neither country will benefit since Ukraine is more efficient than Italy in the production of all goods.E) A) and D)
F) All of the above

Question 10

The opportunity cost of going to college is

Accepted Answer

A)   the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses.
B)   the value of the best opportunity a student gives up to attend college.
C)   zero for students who are fortunate enough to have all of their college expenses paid by someone else.
D)   zero, since a college education will allow a student to earn a larger income after graduation.E) None of the above
F) B) and D)

Question 11

If the average cost of transporting a passenger on the train from Chicago to St. Louis is $75, it would be irrational for the railroad to allow any passenger to ride for less than $75.

Accepted Answer

A) True 
 B)False

Question 12

Rational people make decisions "at the margin" by comparing .

Accepted Answer

marginal c...

Question 13

During the early 1920s in Germany, prices

Accepted Answer

A)   doubled annually.
B)   doubled monthly.
C)   tripled monthly.
D)   tripled annually.E) None of the above
F) A) and D)

Question 14

In a market economy, economic activity is guided by

Accepted Answer

A)   the government.
B)   corporations.
C)   central planners.
D)   self-interest and prices.E) A) and B)
F) A) and C)

Question 15

Productivity is defined as the

Accepted Answer

A)   amount of goods and services produced from each unit of labor input.
B)   number of workers required to produce a given amount of goods and services.
C)   amount of labor that can be saved by replacing workers with machines.
D)   actual amount of effort workers put into an hour of working time.E) C) and D)
F) B) and D)

Question 16

The ability of an individual to own and exercise control over scarce resources is called

Accepted Answer

A)   market failure.
B)   property rights.
C)   externality.
D)   market power.E) A) and B)
F) A) and C)

Question 17

Ralph Nader's book Unsafe at Any Speed caused Congress to require

Accepted Answer

A)   safety glass in all new cars.
B)   seat belts in all new cars.
C)   air bags in all new cars.
D)   stricter drunk driving laws in all states.E) A) and B)
F) A) and C)

Question 18

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

Question 19

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

Exam 1: Ten Principles of Economics

Rational people make decisions "at the margin" by comparing .

Correct Answer
verified
marginal c...
View Answer

When Ukraine trades with Italy,

Correct Answer
verified

A species of snakes became extinct due to pollution in a river where the snakes once lived. This is an example of

Correct Answer
verified

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

Correct Answer
verified

The opportunity cost of going to college is

Correct Answer
verified

During the early 1920s in Germany, prices

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

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

If the average cost of transporting a passenger on the train from Chicago to St. Louis is $75, it would be irrational for the railroad to allow any passenger to ride for less than $75.

Correct Answer
verified

Productivity is defined as the

Correct Answer
verified

Which of the following products would be considered scarce?

Correct Answer
verified

Explain how trade with other countries is beneficial.

Correct Answer
verified
Trade allows countri...
View Answer

In a market economy, economic activity is guided by

Correct Answer
verified

Resources are

Correct Answer
verified

Trade makes costs

Correct Answer
verified

When calculating the cost of college, which of the following should you probably not include?

Correct Answer
verified

Economics is the study of

Correct Answer
verified

The ability of an individual to own and exercise control over scarce resources is called

Correct Answer
verified

Ralph Nader's book Unsafe at Any Speed caused Congress to require

Correct Answer
verified

Exam 1: Ten Principles of Economics

Rational people make decisions "at the margin" by comparing .

Correct Answerverifiedmarginal c...View AnswerShow Answer

When Ukraine trades with Italy,

Correct AnswerverifiedShow Answer

A species of snakes became extinct due to pollution in a river where the snakes once lived. This is an example of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The opportunity cost of going to college is

Correct AnswerverifiedShow Answer

During the early 1920s in Germany, prices

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

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

If the average cost of transporting a passenger on the train from Chicago to St. Louis is $75, it would be irrational for the railroad to allow any passenger to ride for less than $75.

Correct AnswerverifiedShow Answer

Productivity is defined as the

Correct AnswerverifiedShow Answer

Which of the following products would be considered scarce?

Correct AnswerverifiedShow Answer

Explain how trade with other countries is beneficial.

Correct AnswerverifiedTrade allows countri...View AnswerShow Answer

In a market economy, economic activity is guided by

Correct AnswerverifiedShow Answer

Resources are

Correct AnswerverifiedShow Answer

Trade makes costs

Correct AnswerverifiedShow Answer

When calculating the cost of college, which of the following should you probably not include?

Correct AnswerverifiedShow Answer

Economics is the study of

Correct AnswerverifiedShow Answer

The ability of an individual to own and exercise control over scarce resources is called

Correct AnswerverifiedShow Answer

Ralph Nader's book Unsafe at Any Speed caused Congress to require

Correct AnswerverifiedShow Answer

Correct Answer
verified
marginal c...
View Answer

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

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Trade allows countri...
View Answer

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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Correct Answer
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Correct Answer
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