Question 1

Scenario 1-2
Suppose that you have a choice between going to the movies with a friend for two hours or working at your job. If you go to the movies, you will spend $7 on a ticket and $5 on popcorn. If you choose to work, you will earn $10 an hour.
-Zack quits his job at a consulting firm, which pays $40,000 a year, to enroll in a two-year graduate program. His annual school expenses are $30,000 for tuition, $2,000 for books, and $600 for food. What is his opportunity cost of attending the two-year graduate program?

Accepted Answer

The answer of Scenario 1-2
Suppose that you have a choice...

Question 2

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

Accepted Answer

A)   should be counted in full, regardless of the costs of eating and sleeping elsewhere.
B)   should be counted only to the extent that they are more expensive at college than elsewhere.
C)   usually exceed the opportunity cost of going to college.
D)   plus the cost of tuition, equals the opportunity cost of going to college.E) C) and D)
F) B) and C)

Question 3

Suppose that a country that has a high level of output per person agrees to trade with a country that has a low level of output per person. Which country can benefit?

Accepted Answer

A)   only the one with a low level of output per person.
B)   only the one with a high level of output per person.
C)   both
D)   neitherE) B) and C)
F) None of the above

Question 4

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

Accepted Answer

A)   enhance equality.
B)   enhance efficiency.
C)   increase the reward for working hard.
D)   All of the above are correct.E) C) and D)
F) None of the above

Question 5

In the United States, incomes have historically grown

Accepted Answer

A)   about 0.5 percent per year.
B)   about 2 percent per year.
C)   about 4 percent per year.
D)   about 6 percent per year.E) None of the above
F) A) and D)

Question 6

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

Accepted Answer

A)   trade can make everyone better off.
B)   people face trade-offs.
C)   rational people think at the margin.
D)   people respond to incentives.E) C) and D)
F) B) and C)

Question 7

Which of the following is the most correct statement about the relationship between inflation and unemployment?

Accepted Answer

A)   In the short run, falling inflation is associated with falling unemployment.
B)   In the short run, falling inflation is associated with rising unemployment.
C)   In the long run, falling inflation is associated with falling unemployment.
D)   In the long run, falling inflation is associated with rising unemployment.E) A) and B)
F) A) and C)

Question 8

When the government redistributes income from the wealthy to the poor,

Accepted Answer

A)   efficiency is improved, but equality is not.
B)   both wealthy people and poor people benefit directly.
C)   people work less and produce fewer goods and services.
D)   the government collects more revenue in total.E) B) and C)
F) A) and B)

Question 9

Scenario 1-3
It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators.
-Refer to Scenario 1-3. What is the minimum price the company will charge for the 701th calculator?

Accepted Answer

The answer of Scenario 1-3
It costs a company $35,000 to...

Question 10

A rationale for government involvement in a market economy is

Accepted Answer

A)   markets sometimes fail to produce a fair distribution of economic well-being.
B)   markets sometimes fail to produce an efficient allocation of resources.
C)   property rights have to be enforced.
D)   All of the above are correct.E) All of the above
F) B) 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) A) and B)
F) B) and C)

Question 12

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Accepted Answer

A) True 
 B)False

Question 13

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 B)

Question 14

Suppose the cost of operating a 100 room hotel for a night is $10,000 and there are 5 empty rooms for tonight. If the marginal cost of operating one room for one night is $30 and a customer is willing to pay $60 for the night, the hotel manager should

Accepted Answer

A)   rent the room because the marginal benefit exceeds the marginal cost.
B)   rent the room because the marginal benefit exceeds the average cost.
C)   not rent the room because the marginal benefit is less than the marginal cost.
D)   not rent the room because the marginal benefit is less than the average cost.E) A) and C)
F) B) and C)

Question 15

One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new, fuel-efficient aircraft.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is true?

Accepted Answer

A)   Efficiency refers to the size of the economic pie; equality refers to how the pie is divided.
B)   Government policies usually improve upon both equality and efficiency.
C)   As long as the economic pie continually gets larger, no one will have to go hungry.
D)   Efficiency and equality can both be achieved if the economic pie is cut into equal pieces.E) B) and C)
F) B) and D)

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

Question 18

In response to the deep economic downturn in the US in 2008 and 2009, the US

Accepted Answer

A)   reduced taxes.
B)   increased government spending.
C)   increased the supply of money.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 19

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) None of the above

Question 20

To improve living standards, policymakers should

Accepted Answer

A)   impose restrictions on foreign competition.
B)   formulate policies designed to increase productivity.
C)   impose tougher immigration policies.
D)   provide tax breaks for the middle class.E) B) and D)
F) B) and C)

Exam 1: Ten Principles of Economics

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

A rationale for government involvement in a market economy is

Correct Answer
verified

To improve living standards, policymakers should

Correct Answer
verified

When the government redistributes income from the wealthy to the poor,

Correct Answer
verified

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

Correct Answer
verified

One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new, fuel-efficient aircraft.

Correct Answer
verified

Which of the following is the most correct statement about the relationship between inflation and unemployment?

Correct Answer
verified

Which of the following is true?

Correct Answer
verified

Which of the following is a decision that economists study?

Correct Answer
verified

Suppose that a country that has a high level of output per person agrees to trade with a country that has a low level of output per person. Which country can benefit?

Correct Answer
verified

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

Correct Answer
verified

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Correct Answer
verified

Suppose the cost of operating a 100 room hotel for a night is $10,000 and there are 5 empty rooms for tonight. If the marginal cost of operating one room for one night is $30 and a customer is willing to pay $60 for the night, the hotel manager should

Correct Answer
verified

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

Correct Answer
verified

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

Correct Answer
verified

In response to the deep economic downturn in the US in 2008 and 2009, the US

Correct Answer
verified

In the United States, incomes have historically grown

Correct Answer
verified

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

Correct Answer
verified

Correct Answer
verified

Exam 1: Ten Principles of Economics

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

A rationale for government involvement in a market economy is

Correct AnswerverifiedShow Answer

To improve living standards, policymakers should

Correct AnswerverifiedShow Answer

When the government redistributes income from the wealthy to the poor,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new, fuel-efficient aircraft.

Correct AnswerverifiedShow Answer

Which of the following is the most correct statement about the relationship between inflation and unemployment?

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

Which of the following is a decision that economists study?

Correct AnswerverifiedShow Answer

Suppose that a country that has a high level of output per person agrees to trade with a country that has a low level of output per person. Which country can benefit?

Correct AnswerverifiedShow Answer

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

Correct AnswerverifiedShow Answer

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Correct AnswerverifiedShow Answer

Suppose the cost of operating a 100 room hotel for a night is $10,000 and there are 5 empty rooms for tonight. If the marginal cost of operating one room for one night is $30 and a customer is willing to pay $60 for the night, the hotel manager should

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

Correct AnswerverifiedShow Answer

In response to the deep economic downturn in the US in 2008 and 2009, the US

Correct AnswerverifiedShow Answer

In the United States, incomes have historically grown

Correct AnswerverifiedShow Answer

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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