Question 1

The economic concept of scarcity refers to the fact that:

Accepted Answer

A)  the United States will always have a battle to fight hunger.
B)  resources are often wasted and shortages are often the result.
C)  income must be redistributed through taxation in order to address income disparity.
D)  limited resources require economies to make choices among production alternatives.E) None of the above
F) A) and B)

Question 2

The use of resources in the most productive way possible to produce the goods and services that have the greatest total economic value to society is called:

Accepted Answer

A)  allocation optimization.
B)  efficiency.
C)  sustainability.
D)  economic quantity.E) B) and C)
F) A) and C) B

Question 3

You are shopping at the local mall with an $80 gift certificate.Only three items catch your attention.The items include a Justin Bieber sheet set,a remote control helicopter,and an "Amazing Ab Belt." You would be willing to give up $60 for the sheets,$70 for the belt,and $80 for the helicopter.Knowing this,you decide to purchase the helicopter.The opportunity cost of the helicopter was:

Accepted Answer

A)  $130,the combined value of the alternatives forgone.
B)  $80,the amount of the gift certificate spent.
C)  $70,the value of the ab belt.
D)  $60,the value of the sheets.E) A) and B)
F) A) and C) C

Question 4

Which is not a characteristic of a good economic model?

Accepted Answer

A)  Focuses on important details
B)  Predicts cause and effect
C)  Builds vague assumptions
D)  Describes the world accuratelyE) A) and C)
F) A) and D) C

Question 5

After purchasing a coffee cup from your local gas station for $5.00,you can always refill your cup for $0.50.The marginal cost of your 10th cup of coffee purchased at the gas station is:

Accepted Answer

A)  $0.50.
B)  $5.00.
C)  $10.00.
D)  $5.50.E) B) and D)
F) C) and D)

Question 6

Applying for a loan in five-group persons is called:

Accepted Answer

A)  family and friends lending.
B)  party of five lending.
C)  group responsibility.
D)  pooling.E) A) and C)
F) None of the above

Question 7

Economies that adopt more open trade policies have historically enjoyed faster economic growth rates as a result.This is an example of what kind of statement?

Accepted Answer

A)  Marginal
B)  Normative
C)  Positive
D)  BiasedE) None of the above
F) A) and B)

Question 8

A statement that "a hair stylist should not have to obtain a cosmetology license" is an example of what kind of statement?

Accepted Answer

A)  Uninformed
B)  Biased
C)  Positive
D)  NormativeE) A) and B)
F) A) and C)

Question 9

Your school offers seniors one "free" college course.Is this course also free to society?

Accepted Answer

A)  Yes,because the seniors live in society.
B)  Yes,because the school has satisfied the assumption of making a rational choice.
C)  No,because if one senior takes the last seat in the class,it means a paying student will not have the opportunity to take it.
D)  No,because some students will not take a free class seriously and will ultimately become less productive workers.E) C) and D)
F) A) and C)

Question 10

Which of the following is an assumption that economists make about people?

Accepted Answer

A)  Most people possess entrepreneurial talent.
B)  People are very good at assessing the costs of decisions accurately.
C)  Individuals and firms will act to provide the things they want.
D)  Individuals usually fail to optimize the use of their resources because they think on the margin.E) None of the above
F) A) and B)

Question 11

Which type of statement is most likely to include the word "should"?

Accepted Answer

A)  Positive statement
B)  Normative statement
C)  Fair statement
D)  Factual statementE) A) and C)
F) B) and D)

Question 12

The two broad fields that make up the subject of economics are:

Accepted Answer

A)  microeconomics and macroeconomics.
B)  personal investments and business investments.
C)  fiscal policy and monetary policy.
D)  imports and exports.E) A) and B)
F) A) and C)

Question 13

Which of the following is a positive incentive?

Accepted Answer

A)  deciding not to play golf due to rain
B)  making a donation to the red cross
C)  hiring 10 new workers as you decide to expand your operations
D)  offering a reward to anyone that can find you missing petE) A) and C)
F) A) and B)

Question 14

A car dealer advertises free satellite radio for one year with the purchase of a new car.This is an example of:

Accepted Answer

A)  bait and switch.
B)  marginal sales.
C)  an incentive.
D)  voluntary exchange.E) All of the above
F) B) and C)

Question 15

Trade-offs are:

Accepted Answer

A)  associated with every decision.
B)  do not exist if we receive something for free.
C)  always result in market-failure.
D)  can be avoided through economic planning.E) A) and D)
F) B) and C)

Question 16

People choose to do something:

Accepted Answer

A)  when they believe the benefits outweigh the costs of the decision.
B)  when they believe the costs outweigh the benefits of the decision.
C)  when they believe equilibrium will be reached.
D)  when they believe it won't harm anyone and will better themselves.E) A) and B)
F) A) and C)

Question 17

Households are vital to the circular flow model in what two ways?

Accepted Answer

A)  They supply factors of production and purchase goods and services.
B)  They export goods and services and import goods and services.
C)  They vote for political officers and pay taxes.
D)  They facilitate exchange between consumers and firms.E) A) and C)
F) B) and D)

Question 18

An economic model:

Accepted Answer

A)  exactly explains what happens in the real economy.
B)  cuts away unnecessary details to clearly demonstrate the principles at work.
C)  approximates all facets of what happens in the real economy.
D)  does not make clear assumptions.E) A) and B)
F) C) and D)

Question 19

A college student decides to spend the afternoon watching three movies rented from Red Box.The cost of each movie is $1.The student was willing to pay $4 to rent each of the first two movies and $2 to rent the third movie.What was the marginal benefit received by the student when renting the 2nd movie?

Accepted Answer

A)  $1
B)  $8
C)  $4
D)  $2E) None of the above
F) B) and C)

Question 20

When making a decision,it is easier to identify and evaluate which of the following?

Accepted Answer

A)  Costs associated with the decision.
B)  Benefits associated with the decision.
C)  Costs and benefits are equally easy to identify and evaluate.
D)  Neither of these is often easy to identify and evaluate.E) A) and B)
F) B) and C)

Exam 1: Economics and Life

The economic concept of scarcity refers to the fact that:

Correct Answer
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The use of resources in the most productive way possible to produce the goods and services that have the greatest total economic value to society is called:

Correct Answer
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B

Correct Answer
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C

Which is not a characteristic of a good economic model?

Correct Answer
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C

After purchasing a coffee cup from your local gas station for $5.00,you can always refill your cup for $0.50.The marginal cost of your 10^th cup of coffee purchased at the gas station is:

Correct Answer
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Applying for a loan in five-group persons is called:

Correct Answer
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Economies that adopt more open trade policies have historically enjoyed faster economic growth rates as a result.This is an example of what kind of statement?

Correct Answer
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A statement that "a hair stylist should not have to obtain a cosmetology license" is an example of what kind of statement?

Correct Answer
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Your school offers seniors one "free" college course.Is this course also free to society?

Correct Answer
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Which of the following is an assumption that economists make about people?

Correct Answer
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Which type of statement is most likely to include the word "should"?

Correct Answer
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The two broad fields that make up the subject of economics are:

Correct Answer
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Which of the following is a positive incentive?

Correct Answer
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A car dealer advertises free satellite radio for one year with the purchase of a new car.This is an example of:

Correct Answer
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Trade-offs are:

Correct Answer
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People choose to do something:

Correct Answer
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Households are vital to the circular flow model in what two ways?

Correct Answer
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An economic model:

Correct Answer
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Correct Answer
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When making a decision,it is easier to identify and evaluate which of the following?

Correct Answer
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Exam 1: Economics and Life

The economic concept of scarcity refers to the fact that:

Correct AnswerverifiedShow Answer

The use of resources in the most productive way possible to produce the goods and services that have the greatest total economic value to society is called:

Correct AnswerverifiedB

Correct AnswerverifiedC

Which is not a characteristic of a good economic model?

Correct AnswerverifiedC

After purchasing a coffee cup from your local gas station for $5.00,you can always refill your cup for $0.50.The marginal cost of your 10th cup of coffee purchased at the gas station is:

Correct AnswerverifiedShow Answer

Applying for a loan in five-group persons is called:

Correct AnswerverifiedShow Answer

Economies that adopt more open trade policies have historically enjoyed faster economic growth rates as a result.This is an example of what kind of statement?

Correct AnswerverifiedShow Answer

A statement that "a hair stylist should not have to obtain a cosmetology license" is an example of what kind of statement?

Correct AnswerverifiedShow Answer

Your school offers seniors one "free" college course.Is this course also free to society?

Correct AnswerverifiedShow Answer

Which of the following is an assumption that economists make about people?

Correct AnswerverifiedShow Answer

Which type of statement is most likely to include the word "should"?

Correct AnswerverifiedShow Answer

The two broad fields that make up the subject of economics are:

Correct AnswerverifiedShow Answer

Which of the following is a positive incentive?

Correct AnswerverifiedShow Answer

A car dealer advertises free satellite radio for one year with the purchase of a new car.This is an example of:

Correct AnswerverifiedShow Answer

Trade-offs are:

Correct AnswerverifiedShow Answer

People choose to do something:

Correct AnswerverifiedShow Answer

Households are vital to the circular flow model in what two ways?

Correct AnswerverifiedShow Answer

An economic model:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When making a decision,it is easier to identify and evaluate which of the following?

Correct AnswerverifiedShow Answer

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B

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C

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C

After purchasing a coffee cup from your local gas station for $5.00,you can always refill your cup for $0.50.The marginal cost of your 10^th cup of coffee purchased at the gas station is:

Correct Answer
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