Question 1

What is the most important factor that explains differences in living standards across countries?

Accepted Answer

A)  the quantity of money
B)  the level of unemployment
C)  productivity
D)  equalityE) A) and D)
F) A) and C)

Question 2

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

Question 3

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

Question 4

With careful planning, we can usually get something that we like without having to give up something else that we like.

Accepted Answer

A) True 
 B)False

Question 5

Suppose your management professor has been offered a corporate job with a 30 percent pay increase. He has decided to take the job. For him, the marginal

Accepted Answer

A)  cost of leaving was greater than the marginal benefit.
B)  benefit of leaving was greater than the marginal cost.
C)  benefit of teaching was greater than the marginal cost.
D)  All of the above are correct.E) None of the above
F) B) and D)

Question 6

Consider Paul's decision to go to college. If he goes to college, he will spend $90,000 on tuition, $15,000 on room and board, and $7,000 on books. If he does not go to college, he will earn $22,000 working at a construction job and he will spend $11,000 on room and board. Paul's cost of going to college is

Accepted Answer

A)  $96,000.
B)  $110,000.
C)  $114,000.
D)  $123,000.E) A) and B)
F) A) and C)

Question 7

In considering how to allocate its scarce resources among its various members, a household considers

Accepted Answer

A)  each member's abilities.
B)  each member's efforts.
C)  each member's desires.
D)  All of the above are correct.E) A) and D)
F) A) and C)

Question 8

What is another word for "marginal"?

Accepted Answer

incrementa...

Question 9

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

Accepted Answer

A) True 
 B)False

Question 10

In a particular country in 1998, the average worker needed to work 40 hours to produce 100 units of output. In that same country in 2008, the average worker needed to work 36 hours to produce 72 units of output. In that country, the productivity of the average worker

Accepted Answer

A)  decreased between 1998 and 2008, so we would expect the standard of living to have decreased accordingly.
B)  increased between 1998 and 2008, so we would expect the standard of living to have increased accordingly.
C)  decreased between 1998 and 2008, so we would expect inflation to have decreased accordingly.
D)  increased between 1998 and 2008, so we would expect inflation to have increased accordingly.E) A) and B)
F) A) and C)

Question 11

Which of the following is an important cause of inflation in an economy?

Accepted Answer

A)  increases in productivity in the economy
B)  the influence of positive externalities on the economy
C)  lack of property rights in the economy
D)  growth in the quantity of money in the economyE) B) and D)
F) A) and D)

Question 12

Economists use the word equality to describe a situation in which

Accepted Answer

A)  each member of society has the same income.
B)  each member of society has access to abundant quantities of goods and services, regardless of his or her income.
C)  society is getting the maximum benefits from its scarce resources.
D)  society's resources are used efficiently.E) C) and D)
F) A) and B)

Question 13

The fact that people are willing to pay much more for a diamond, which is not needed for survival, than they are willing to pay for a cup of water, which is needed for survival, is an example of irrational behavior.

Accepted Answer

A) True 
 B)False

Question 14

The "invisible hand" influences market behavior through trade.​

Accepted Answer

A) True 
 B)False

Question 15

The tradeoff between inflation and unemployment

Accepted Answer

A)  implies that policies designed to reduce unemployment also reduce inflation.
B)  was eliminated by improved economic policies in the 1900s.
C)  is a long-run tradeoff, persisting for decades, according to most economists.
D)  None of the above are correct.E) A) and B)
F) A) and C)

Question 16

A direct or positive relationship exists between a country's

Accepted Answer

A)  productivity and its standard of living.
B)  amount of government spending and its productivity.
C)  total population and its average citizen's income.
D)  rate of population growth and the extent of its trade with other countries.E) All of the above
F) B) and C)

Question 17

Which of the following statements best represents the principle represented by the adage, "There is no such thing as a free lunch"?

Accepted Answer

A)  Michelle can attend the concert only if she takes her sister with her.
B)  Michael is hungry and homeless.
C)  Andrea must repair the tire on her bike before she can ride it to class.
D)  Dani must decide between going to Florida or Brazil for spring break.E) A) and D)
F) B) and C)

Question 18

In 2011, the average American earned about $48,000 while the average Nigerian earned about $1,200. Which of the following statements is likely?

Accepted Answer

A)  The average American purchases more televisions than the average Nigerian.
B)  The average American has better nutrition and healthcare than the average Nigerian.
C)  The average American has a longer life expectancy than the average Nigerian.
D)  All of the above are correct.E) C) and D)
F) A) and B)

Question 19

The cost of an action is measured in terms of foregone opportunities.

Accepted Answer

A) True 
 B)False

Question 20

Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

Accepted Answer

A)  only Sam is made better off by trade.
B)  only Annie is made better off by trade.
C)  both Sam and Annie are made better off by trade.
D)  neither Sam nor Annie are made better off by trade.E) B) and C)
F) C) and D)

Exam 1: Ten Principles of Economics

Economists use the word equality to describe a situation in which

Correct Answer
verified

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

Correct Answer
verified

In considering how to allocate its scarce resources among its various members, a household considers

Correct Answer
verified

Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

Correct Answer
verified

What is another word for "marginal"?

Correct Answer
verified
incrementa...
View Answer

Suppose your management professor has been offered a corporate job with a 30 percent pay increase. He has decided to take the job. For him, the marginal

Correct Answer
verified

In 2011, the average American earned about $48,000 while the average Nigerian earned about $1,200. Which of the following statements is likely?

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

The fact that people are willing to pay much more for a diamond, which is not needed for survival, than they are willing to pay for a cup of water, which is needed for survival, is an example of irrational behavior.

Correct Answer
verified

The "invisible hand" influences market behavior through trade.

Correct Answer
verified

With careful planning, we can usually get something that we like without having to give up something else that we like.

Correct Answer
verified

A direct or positive relationship exists between a country's

Correct Answer
verified

The cost of an action is measured in terms of foregone opportunities.

Correct Answer
verified

The tradeoff between inflation and unemployment

Correct Answer
verified

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

Correct Answer
verified

Which of the following statements best represents the principle represented by the adage, "There is no such thing as a free lunch"?

Correct Answer
verified

What is the most important factor that explains differences in living standards across countries?

Correct Answer
verified

Which of the following is an important cause of inflation in an economy?

Correct Answer
verified

In a particular country in 1998, the average worker needed to work 40 hours to produce 100 units of output. In that same country in 2008, the average worker needed to work 36 hours to produce 72 units of output. In that country, the productivity of the average worker

Correct Answer
verified

Exam 1: Ten Principles of Economics

Economists use the word equality to describe a situation in which

Correct AnswerverifiedShow Answer

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

Correct AnswerverifiedShow Answer

In considering how to allocate its scarce resources among its various members, a household considers

Correct AnswerverifiedShow Answer

Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

Correct AnswerverifiedShow Answer

What is another word for "marginal"?

Correct Answerverifiedincrementa...View AnswerShow Answer

Suppose your management professor has been offered a corporate job with a 30 percent pay increase. He has decided to take the job. For him, the marginal

Correct AnswerverifiedShow Answer

In 2011, the average American earned about $48,000 while the average Nigerian earned about $1,200. Which of the following statements is likely?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The fact that people are willing to pay much more for a diamond, which is not needed for survival, than they are willing to pay for a cup of water, which is needed for survival, is an example of irrational behavior.

Correct AnswerverifiedShow Answer

The "invisible hand" influences market behavior through trade.​

Correct AnswerverifiedShow Answer

With careful planning, we can usually get something that we like without having to give up something else that we like.

Correct AnswerverifiedShow Answer

A direct or positive relationship exists between a country's

Correct AnswerverifiedShow Answer

The cost of an action is measured in terms of foregone opportunities.

Correct AnswerverifiedShow Answer

The tradeoff between inflation and unemployment

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements best represents the principle represented by the adage, "There is no such thing as a free lunch"?

Correct AnswerverifiedShow Answer

What is the most important factor that explains differences in living standards across countries?

Correct AnswerverifiedShow Answer

Which of the following is an important cause of inflation in an economy?

Correct AnswerverifiedShow Answer

In a particular country in 1998, the average worker needed to work 40 hours to produce 100 units of output. In that same country in 2008, the average worker needed to work 36 hours to produce 72 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
verified

Correct Answer
verified
incrementa...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The "invisible hand" influences market behavior through trade.

Correct Answer
verified

Correct Answer
verified

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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