Question 1

In a particular country in 2000, the average worker needed to work 40 hours to produce 55 units of output. In that same country in 2008, the average worker needed to work 30 hours to produce 45 units of output. In that country, the productivity of the average worker

Accepted Answer

A)   decreased by about 6 percent between 2000 and 2008.
B)   remained unchanged between 2000 and 2008.
C)   increased by about 9 percent between 2000 and 2008.
D)   increased by about 18 percent between 2000 and 2008.E) A) and B)
F) None of the above

Question 2

The U.S. president who referred to inflation as "public enemy number one" was

Accepted Answer

A)   Richard Nixon.
B)   Gerald Ford.
C)   Jimmy Carter.
D)   Ronald Reagan.E) All of the above
F) C) and D)

Question 3

Prices direct economic activity in a market economy by

Accepted Answer

A)   influencing the actions of buyers and sellers.
B)   reducing scarcity of the goods and services produced.
C)   eliminating the need for government intervention.
D)   allocating goods and services in the most equitable way.E) A) and B)
F) All of the above

Question 4

Water pollution from pulp and paper mills harms plants, animals, and humans. 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) A) and D)

Question 5

Economics is the study of how society manages its

Accepted Answer

A)   limited wants and unlimited resources.
B)   unlimited wants and unlimited resources.
C)   limited wants and limited resources.
D)   unlimited wants and limited resources.E) A) and D)
F) A) and C)

Question 6

Define opportunity cost. What is the opportunity cost to you of attending college? What was your opportunity cost of coming to class today?

Accepted Answer

Whatever must be given up to obtain some...

Question 7

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

Question 8

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

Accepted Answer

A) True 
 B)False

Question 9

Katie is planning to sell her house, and she is considering making two upgrades to the house before listing it for sale. Replacing the carpeting will cost her $2,500 and replacing the roof will cost her $9,000. Katie expects the new carpeting to increase the value of her house by $3,000 and the new roof to increase the value of her house by $7,000.

Accepted Answer

A)   She should make both improvements to her house.
B)   She should replace the carpeting but not replace the roof.
C)   She should replace the roof but not replace the carpeting.
D)   She should not make either improvement to her house.E) A) and D)
F) C) and D)

Question 10

If Switzerland chooses to engage in trade, it

Accepted Answer

A)   will only benefit if it trades with countries that produce goods Switzerland cannot produce.
B)   cannot benefit if it trades with less developed countries.
C)   should first attempt to produce the good itself.
D)   can benefit by trading with any other country.E) B) and D)
F) All of the above

Question 11

You have driven 800 miles on a vacation and then you notice that you are only 15 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

Accepted Answer

A)   both the cost of driving the first 800 miles and the next 15 miles.
B)   the cost of driving the first 800 miles, but not the cost of driving the next 15 miles.
C)   the cost of driving the next 15 miles, but not the cost of driving the first 800 miles.
D)   neither the cost of driving the first 800 miles nor the cost of driving the next 15 miles.E) A) and B)
F) A) and C)

Question 12

Which of the following statements about trade is false?

Accepted Answer

A)   Trade increases competition.
B)   With trade, one country wins and one country loses.
C)   Bulgaria can benefit, potentially, from trade with any other country.
D)   Trade allows people to buy a greater variety of goods and services at lower cost.E) C) and D)
F) All of the above

Question 13

The principle that "people face tradeoffs" applies to

Accepted Answer

A)   individuals.
B)   families.
C)   societies.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 14

Which of the following is a decision that economists study?

Accepted Answer

A)   how much people work
B)   what people buy
C)   how much money people save
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 15

What are the two reasons for the government to intervene in a market?

Accepted Answer

To promote...

Question 16

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

Question 17

When calculating the cost of college, which of the following should you probably include?

Accepted Answer

A)   The cost of your meal plan for the cafeteria.
B)   The cost of books required for college classes
C)   The income you earn at your part-time job.
D)   The cost of living in the dormitory.E) None of the above
F) A) and B)

Question 18

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) All of the above
F) None of the above

Question 19

The term used to describe a situation in which markets do not allocate resources efficiently is

Accepted Answer

A)   economic meltdown.
B)   market failure.
C)   equilibrium.
D)   the effect of the invisible hand.E) None of the above
F) B) and C)

Question 20

Efficiency means everyone in the economy should receive an equal share of the goods and services produced.

Accepted Answer

A) True 
 B)False

Exam 1: Ten Principles of Economics

Which of the following is a decision that economists study?

Correct Answer
verified

The principle that "people face tradeoffs" applies to

Correct Answer
verified

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

Correct Answer
verified

The term used to describe a situation in which markets do not allocate resources efficiently is

Correct Answer
verified

If Switzerland chooses to engage in trade, it

Correct Answer
verified

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

Correct Answer
verified

When calculating the cost of college, which of the following should you probably include?

Correct Answer
verified

You have driven 800 miles on a vacation and then you notice that you are only 15 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

Correct Answer
verified

Economics is the study of how society manages its

Correct Answer
verified

Define opportunity cost. What is the opportunity cost to you of attending college? What was your opportunity cost of coming to class today?

Correct Answer
verified
Whatever must be given up to obtain some...
View Answer

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

Efficiency means everyone in the economy should receive an equal share of the goods and services produced.

Correct Answer
verified

Prices direct economic activity in a market economy by

Correct Answer
verified

What are the two reasons for the government to intervene in a market?

Correct Answer
verified
To promote...
View Answer

Water pollution from pulp and paper mills harms plants, animals, and humans. This is an example of

Correct Answer
verified

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

Correct Answer
verified

Which of the following statements about trade is false?

Correct Answer
verified

The U.S. president who referred to inflation as "public enemy number one" was

Correct Answer
verified

In a particular country in 2000, the average worker needed to work 40 hours to produce 55 units of output. In that same country in 2008, the average worker needed to work 30 hours to produce 45 units of output. In that country, the productivity of the average worker

Correct Answer
verified

Exam 1: Ten Principles of Economics

Which of the following is a decision that economists study?

Correct AnswerverifiedShow Answer

The principle that "people face tradeoffs" applies to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The term used to describe a situation in which markets do not allocate resources efficiently is

Correct AnswerverifiedShow Answer

If Switzerland chooses to engage in trade, it

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When calculating the cost of college, which of the following should you probably include?

Correct AnswerverifiedShow Answer

You have driven 800 miles on a vacation and then you notice that you are only 15 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

Correct AnswerverifiedShow Answer

Economics is the study of how society manages its

Correct AnswerverifiedShow Answer

Define opportunity cost. What is the opportunity cost to you of attending college? What was your opportunity cost of coming to class today?

Correct AnswerverifiedWhatever must be given up to obtain some...View AnswerShow Answer

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

Efficiency means everyone in the economy should receive an equal share of the goods and services produced.

Correct AnswerverifiedShow Answer

Prices direct economic activity in a market economy by

Correct AnswerverifiedShow Answer

What are the two reasons for the government to intervene in a market?

Correct AnswerverifiedTo promote...View AnswerShow Answer

Water pollution from pulp and paper mills harms plants, animals, and humans. This is an example of

Correct AnswerverifiedShow Answer

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

Correct AnswerverifiedShow Answer

Which of the following statements about trade is false?

Correct AnswerverifiedShow Answer

The U.S. president who referred to inflation as "public enemy number one" was

Correct AnswerverifiedShow Answer

In a particular country in 2000, the average worker needed to work 40 hours to produce 55 units of output. In that same country in 2008, the average worker needed to work 30 hours to produce 45 units of output. In that country, the productivity of the average worker

Correct AnswerverifiedShow 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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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified
Whatever must be given up to obtain some...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
To promote...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified