Question 1

The government enforces property rights by

Accepted Answer

A)   requiring property owners to pay property taxes.
B)   providing police and courts.
C)   forcing people to own property.
D)   providing public parks and recreation facilities.E) A) and B)
F) A) and C)

Question 2

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) A) and B)

Question 3

For a very long time Treeland 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) All of the above
F) A) and D)

Question 4

For most students,the largest single cost of a college education is

Accepted Answer

A)   the wages given up to attend school.
B)   tuition,fees,and books.
C)   room and board.
D)   transportation,parking,and entertainment.E) B) and C)
F) A) and B)

Question 5

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

Question 6

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 C)
F) B) and D)

Question 7

The short-run tradeoff between inflation and unemployment implies that,in the short run,

Accepted Answer

A)   a decrease in the growth rate of the quantity of money will be accompanied by an increase in the unemployment rate.
B)   an increase in the growth rate of the quantity of money will be accompanied by an increase in the unemployment rate.
C)   policymakers are able to reduce the inflation rate and,at the same time,reduce the unemployment rate.
D)   policymakers can influence the inflation rate,but not the unemployment rate.E) C) and D)
F) B) and C)

Question 8

If the United States decides to trade with Mexico,we know that

Accepted Answer

A)   Mexico will benefit,but trade with a less developed country could not benefit the United States.
B)   it will not benefit Mexico because workers in the United States are more productive.
C)   Mexico and the United States can both benefit.
D)   it will not benefit either country because their cultural differences are too vast.E) C) and D)
F) None of the above

Question 9

Kevin is the CEO of a large firm and a homeowner who pays a landscaper to maintain his lawn rather than do it himself.Kevin has determined that he can earn more in the hour it would take him to work on his lawn than he must pay his 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 prinst too much money.E) All of the above
F) C) and D)

Question 10

The average cost per seat on the 75-passenger Get-There-Safe Bus company's trip from Milwaukee to Minneapolis,on which no refreshments are served,is $37.In advance of a particular trip,three seats remain unsold.The bus company could increase its profit only if it

Accepted Answer

A)   charged any ticket price above $0 for the three remaining seats.
B)   charged at least $18.50 for each of the three remaining seats.
C)   charged at least $37 for each of the three remaining seats.
D)   paid three people to occupy the three remaining seats.E) A) and D)
F) A) and B)

Question 11

You have driven 500 miles on a vacation and then you notice that you are only 25 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 500 and the next 25 miles.
B)   the cost of driving the first 500 miles,but not the cost of driving the next 25.
C)   the cost of driving the next 25 miles,but not the cost of driving the first 500.
D)   neither the cost of driving the first 500 miles nor the cost of driving the next 25 miles.E) B) and D)
F) A) and C)

Question 12

In less than two years in the early 1920s,the cost of a German newspaper rose from 0.30 marks to 70,000,000 marks.This is a spectacular example of

Accepted Answer

A)   market power caused by a change in the country's standard of living.
B)   market power caused by a single firm controlling the newspaper production.
C)   inflation caused by increased productivity in the economy.
D)   inflation caused by an increase in the quantity of money in the economy.E) B) and C)
F) A) and B)

Question 13

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 D)
F) B) and C)

Question 14

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

Question 15

Germany could have avoided the high inflation that it experienced in the 1920s by

Accepted Answer

A)   not directing so many of its resources toward preparation for World War II.
B)   not increasing taxes so much on the German middle class.
C)   not allowing the quantity of money to increase so rapidly.
D)   using government policies to stimulate the economy more so than what was done.E) C) and D)
F) A) and D)

Question 16

In a market economy,

Accepted Answer

A)   households decide which firms to work for and what to buy with their incomes.
B)   firms decide whom to hire and what to make.
C)   a central planner makes decisions about production and consumption.
D)   Both a and b are correct.E) A) and B)
F) None of the above

Question 17

Which of the following statements exemplifies a principle of individual decisionmaking?

Accepted Answer

A)   Trade can make everyone better off.
B)   Governments can sometimes improve market outcomes.
C)   The cost of something is what you give up to get it.
D)   All of the above are correct.E) All of the above
F) C) and D)

Question 18

Evidence indicates that seat belt laws have led to

Accepted Answer

A)   fewer pedestrian deaths.
B)   fewer automobile accidents.
C)   fewer deaths per automobile accident.
D)   All of the above are correct.E) A) and D)
F) A) and B)

Question 19

The historical rise in living standards of American workers is primarily a result of

Accepted Answer

A)   the influence of labor unions in America.
B)   tariff protection imposed by the American government.
C)   the enactment of minimum-wage laws in America.
D)   the rise in American productivity.E) A) and B)
F) A) and C)

Question 20

You have eaten two bowls of ice cream at Sundae School Ice Cream store.You consider eating a third.As a rational consumer you should make your choice by comparing

Accepted Answer

A)   the benefits from eating all three bowls of ice cream to how much three bowls of ice cream costs.
B)   the benefits from eating all three bowls of ice cream to how much one more bowl of ice cream costs.
C)   the benefits from eating one more bowl of ice cream to how much three bowls of ice cream costs.
D)   the benefits from eating one more bowl of ice cream to how much one more bowl of ice cream costs.E) A) and B)
F) C) and D)

Exam 1: Ten Principles of Economics

Evidence indicates that seat belt laws have led to

Correct Answer
verified

The average cost per seat on the 75-passenger Get-There-Safe Bus company's trip from Milwaukee to Minneapolis,on which no refreshments are served,is $37.In advance of a particular trip,three seats remain unsold.The bus company could increase its profit only if it

Correct Answer
verified

Which of the following can lead to market failure?

Correct Answer
verified

If the United States decides to trade with Mexico,we know that

Correct Answer
verified

Correct Answer
verified

Germany could have avoided the high inflation that it experienced in the 1920s by

Correct Answer
verified

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

The historical rise in living standards of American workers is primarily a result of

Correct Answer
verified

The government enforces property rights by

Correct Answer
verified

Which of the following is a decision that economists study?

Correct Answer
verified

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

Correct Answer
verified

The short-run tradeoff between inflation and unemployment implies that,in the short run,

Correct Answer
verified

You have driven 500 miles on a vacation and then you notice that you are only 25 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

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

Correct Answer
verified

In a market economy,

Correct Answer
verified

For most students,the largest single cost of a college education is

Correct Answer
verified

Economics is the study of

Correct Answer
verified

In less than two years in the early 1920s,the cost of a German newspaper rose from 0.30 marks to 70,000,000 marks.This is a spectacular example of

Correct Answer
verified

Which of the following statements exemplifies a principle of individual decisionmaking?

Correct Answer
verified

You have eaten two bowls of ice cream at Sundae School Ice Cream store.You consider eating a third.As a rational consumer you should make your choice by comparing

Correct Answer
verified

Exam 1: Ten Principles of Economics

Evidence indicates that seat belt laws have led to

Correct AnswerverifiedShow Answer

The average cost per seat on the 75-passenger Get-There-Safe Bus company's trip from Milwaukee to Minneapolis,on which no refreshments are served,is $37.In advance of a particular trip,three seats remain unsold.The bus company could increase its profit only if it

Correct AnswerverifiedShow Answer

Which of the following can lead to market failure?

Correct AnswerverifiedShow Answer

If the United States decides to trade with Mexico,we know that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Germany could have avoided the high inflation that it experienced in the 1920s by

Correct AnswerverifiedShow 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

The historical rise in living standards of American workers is primarily a result of

Correct AnswerverifiedShow Answer

The government enforces property rights by

Correct AnswerverifiedShow Answer

Which of the following is a decision that economists study?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The short-run tradeoff between inflation and unemployment implies that,in the short run,

Correct AnswerverifiedShow Answer

You have driven 500 miles on a vacation and then you notice that you are only 25 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

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

Correct AnswerverifiedShow Answer

In a market economy,

Correct AnswerverifiedShow Answer

For most students,the largest single cost of a college education is

Correct AnswerverifiedShow Answer

Economics is the study of

Correct AnswerverifiedShow Answer

In less than two years in the early 1920s,the cost of a German newspaper rose from 0.30 marks to 70,000,000 marks.This is a spectacular example of

Correct AnswerverifiedShow Answer

Which of the following statements exemplifies a principle of individual decisionmaking?

Correct AnswerverifiedShow Answer

You have eaten two bowls of ice cream at Sundae School Ice Cream store.You consider eating a third.As a rational consumer you should make your choice by comparing

Correct AnswerverifiedShow Answer

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