Question 1

Choosing not to attend a concert so that you can study for your exam is an example of a tradeoff.

Accepted Answer

A) True 
 B)False

Question 2

An increase in the overall level of prices in an economy is referred to as

Accepted Answer

A)   the income effect.
B)   inflation.
C)   deflation.
D)   the substitution effect.E) A) and B)
F) A) and C)

Question 3

Air pollution from burning fossil fuels causes damages to crops and public health. 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) All of the above
F) A) and C)

Question 4

Efficiency means that

Accepted Answer

A)   society is conserving resources in order to save them for the future.
B)   society's goods and services are distributed equally among society's members.
C)   society's goods and services are distributed fairly, though not necessarily equally, among society's members.
D)   society is getting the maximum benefits from its scarce resources.E) B) and D)
F) B) and C)

Question 5

Government policies that improve equality usually increase efficiency at the same time.

Accepted Answer

A) True 
 B)False

Question 6

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

Question 7

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) None of the above
F) A) and B)

Question 8

Use the following Scenario to answer the question scenario 1-6 :
It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors.
-Refer to Scenario 1-6. What is the company's average cost?

Accepted Answer

The answer of Use the following Scenario to answer the...

Question 9

Efficiency

Accepted Answer

A)   and equality both refer to how much a society can produce with its resources.
B)   and equality both refer to how fairly the benefits from using resources are distributed between members of a society.
C)   refers to how much a society can produce with its resources. Equality refers to how evenly the benefits from using resources are distributed among members of society.
D)   refers to how evenly the benefits from using resources are distributed between members of society. Equality refers to how much a society can produce with its resourcesE) All of the above
F) A) and B)

Question 10

Equality refers to how the pie is divided, and efficiency refers to the size of the economic pie.

Accepted Answer

A) True 
 B)False

Question 11

Most economists believe that an increase in the quantity of money results in

Accepted Answer

A)   an increase in the demand for goods and services.
B)   lower unemployment in the short run.
C)   higher inflation in the long run.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 12

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

Question 13

Use the following Scenario to answer the question scenario 1-5 :  
Suppose that you have a choice between going to the movies with a friend for three hours or working at your job. If you go to the movies, you will spend $12 on a ticket and $6 on popcorn. If you choose to work, you will earn $10 an hour.
-Refer to Scenario 1-5. What is your opportunity cost of working?

Accepted Answer

The enjoyment you wo...

Question 14

Max and Maddy charge people to park on their lawn while attending a nearby craft fair. At the current price of $10, seven people park on their lawn. If they raise the price to $15, they know that only five people will want to park on their lawn. Whether they have seven or five cars parked on their lawn does not affect their costs. From this information it follows that

Accepted Answer

A)   they should leave the price at $10.
B)   it does not matter if they charge $10 or $15.
C)   they would do better charging $15 than $10.
D)   they should raise the price even more.E) B) and C)
F) A) and C)

Question 15

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) None of the above
F) A) and D)

Question 16

Suppose the government taxes the wealthy at a higher rate than it taxes the poor and then develops programs to redistribute the tax revenue from the wealthy to the poor. This redistribution of wealth

Accepted Answer

A)   is more efficient and more equal for society.
B)   is more efficient but less equal for society.
C)   is more equal but less efficient for society.
D)   is less equal and less efficient for society.E) B) and D)
F) B) and C)

Question 17

While pollution regulations yield the benefit of a cleaner environment and the improved health that comes with it, the regulations come at the cost of reducing the incomes of the regulated firms' owners, workers, and customers. This statement illustrates the principle that

Accepted Answer

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

Question 18

One reason we need government, even in a market economy, is that

Accepted Answer

A)   there is insufficient market power in the absence of government.
B)   property rights are too strong in the absence of government.
C)   the invisible hand is not perfect.
D)   Both a and b are correct.E) A) and D)
F) B) and D)

Question 19

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) B) and D)
F) None of the above

Question 20

To say that government intervenes in the economy to promote equality is to say that government is aiming to

Accepted Answer

A)   create a more fair distribution of income.
B)   change the ingredients that are used to "bake" the economic pie.
C)   enlarge the economic pie.
D)   All of the above are correct.E) None of the above
F) B) and D)

Exam 1: Ten Principles of Economics

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

Correct Answer
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Correct Answer
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Choosing not to attend a concert so that you can study for your exam is an example of a tradeoff.

Correct Answer
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Correct Answer
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The enjoyment you wo...
View Answer

Air pollution from burning fossil fuels causes damages to crops and public health. This is an example of

Correct Answer
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Government policies that improve equality usually increase efficiency at the same time.

Correct Answer
verified

Efficiency means that

Correct Answer
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Correct Answer
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Efficiency

Correct Answer
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An increase in the overall level of prices in an economy is referred to as

Correct Answer
verified

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

Correct Answer
verified

To say that government intervenes in the economy to promote equality is to say that government is aiming to

Correct Answer
verified

Suppose the government taxes the wealthy at a higher rate than it taxes the poor and then develops programs to redistribute the tax revenue from the wealthy to the poor. This redistribution of wealth

Correct Answer
verified

While pollution regulations yield the benefit of a cleaner environment and the improved health that comes with it, the regulations come at the cost of reducing the incomes of the regulated firms' owners, workers, and customers. This statement illustrates the principle that

Correct Answer
verified

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

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

Correct Answer
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Equality refers to how the pie is divided, and efficiency refers to the size of the economic pie.

Correct Answer
verified

Which of the following statements about trade is false?

Correct Answer
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One reason we need government, even in a market economy, is that

Correct Answer
verified

Most economists believe that an increase in the quantity of money results in

Correct Answer
verified

Exam 1: Ten Principles of Economics

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Choosing not to attend a concert so that you can study for your exam is an example of a tradeoff.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe enjoyment you wo...View AnswerShow Answer

Air pollution from burning fossil fuels causes damages to crops and public health. This is an example of

Correct AnswerverifiedShow Answer

Government policies that improve equality usually increase efficiency at the same time.

Correct AnswerverifiedShow Answer

Efficiency means that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Efficiency

Correct AnswerverifiedShow Answer

An increase in the overall level of prices in an economy is referred to as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

To say that government intervenes in the economy to promote equality is to say that government is aiming to

Correct AnswerverifiedShow Answer

Suppose the government taxes the wealthy at a higher rate than it taxes the poor and then develops programs to redistribute the tax revenue from the wealthy to the poor. This redistribution of wealth

Correct AnswerverifiedShow Answer

While pollution regulations yield the benefit of a cleaner environment and the improved health that comes with it, the regulations come at the cost of reducing the incomes of the regulated firms' owners, workers, and customers. This statement illustrates the principle that

Correct AnswerverifiedShow 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

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

Correct AnswerverifiedShow Answer

Equality refers to how the pie is divided, and efficiency refers to the size of the economic pie.

Correct AnswerverifiedShow Answer

Which of the following statements about trade is false?

Correct AnswerverifiedShow Answer

One reason we need government, even in a market economy, is that

Correct AnswerverifiedShow Answer

Most economists believe that an increase in the quantity of money results in

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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The enjoyment you wo...
View Answer

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Correct Answer
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