Question 1

Variations in the standard of living across countries is due almost entirely to differences in each nation's total output of goods and services.

Accepted Answer

A) True 
 B)False

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) None of the above
F) All of the above

Question 3

The phrase "no such thing as a free lunch" means

Accepted Answer

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

Question 4

With the understanding that people respond to incentives,outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

Accepted Answer

The concept of working longer per year w...

Question 5

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

Question 6

In the long run the primary effect of increasing the quantity of money is higher prices.

Accepted Answer

A) True 
 B)False

Question 7

If the wage for unskilled labor were fixed above the current wage,then we would expect

Accepted Answer

A)   an increase in the number of unskilled jobs available.
B)   a decrease in the number of unskilled jobs available.
C)   a decrease in the number of workers wanting unskilled jobs.
D)   None of the above is correct.E) A) and D)
F) A) and C)

Question 8

If an externality is present in a market,economic efficiency may be enhanced by

Accepted Answer

A)   government intervention.
B)   a decrease in foreign competition.
C)   fewer market participants.
D)   weaker property rights.E) None of the above
F) B) and D)

Question 9

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) C) and D)
F) All of the above

Question 10

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

Accepted Answer

To lower inflation,the government may ch...

Question 11

Market failure refers to a situation in which the market does not allocate resources efficiently.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a principle concerning how people interact?

Accepted Answer

A)   Markets are usually a good way to organize economic activity.
B)   Rational people think at the margin.
C)   People respond to incentives.
D)   All of the above are correct.E) B) and C)
F) None of the above

Question 13

The fact that different countries experience different standards of living is largely explained by differences in those countries'

Accepted Answer

A)   populations.
B)   productivity levels.
C)   locations.
D)   None of the above is correct.Economists are puzzled by differences in standards of living around the world.E) B) and C)
F) A) and D)

Question 14

The combination of President Obama's strategies and the Federal Reserve's reaction to the deep economic downturn in the US in 2008 and 2009

Accepted Answer

A)   intended to reduce unemployment.
B)   may lead to excessive inflation over time.
C)   resulted in higher taxes and an increased supply of money.
D)   Both a and b are correct.E) C) and D)
F) B) and C)

Question 15

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 B)

Question 16

Senator Green argues that replacing the income tax with a national sales tax would increase the level of output.Senator Brown objects that this policy would benefit the rich at the expense of the poor.

Accepted Answer

A)   Both Senators' arguments are primarily about equality.
B)   Both Senators' arguments are primarily about efficiency.
C)   Senator Green's argument is primarily about equality,while Senator Brown's argument is primarily about efficiency.
D)   Senator Green's argument is primarily about efficiency,while Senator Brown's argument is primarily about equality.E) B) and D)
F) B) and C)

Question 17

Market power and externalities are two possible causes of market failure.

Accepted Answer

A) True 
 B)False

Question 18

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 well-being 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) All of the above
F) A) and B)

Question 19

Which of these activities will most likely result in an external benefit?

Accepted Answer

A)   Jake purchases a dilapidated house and cleans up the yard and exterior of the house.
B)   John purchases an iPhone and downloads new apps.
C)   Jack purchases a new SUV and drives it to work every day.
D)   Joe purchases a suit and wears it on his interviews.E) All of the above
F) A) and B)

Question 20

Suppose after graduating from college you get a job working at a bank earning $30,000 per year.After two years of working at the bank earning the same salary,you have an opportunity to enroll in a one-year graduate program that would require you to quit your job at the bank.Which of the following should not be included in a calculation of your opportunity cost?

Accepted Answer

A)   the cost of tuition and books to attend the graduate program
B)   the $30,000 salary that you could have earned if you retained your job at the bank
C)   the $45,000 salary that you will be able to earn after having completed your graduate program
D)   the value of insurance coverage and other employee benefits you would have received if you retained your job at the bankE) A) and B)
F) All of the above

Exam 1: Ten Principles of Economics

Senator Green argues that replacing the income tax with a national sales tax would increase the level of output.Senator Brown objects that this policy would benefit the rich at the expense of the poor.

Correct Answer
verified

The phrase "no such thing as a free lunch" means

Correct Answer
verified

Which of these activities will most likely result in an external benefit?

Correct Answer
verified

In the United States,incomes have historically grown

Correct Answer
verified

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

Correct Answer
verified
To lower inflation,the government may ch...
View Answer

If an externality is present in a market,economic efficiency may be enhanced by

Correct Answer
verified

If the wage for unskilled labor were fixed above the current wage,then we would expect

Correct Answer
verified

In the long run the primary effect of increasing the quantity of money is higher prices.

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

Market failure refers to a situation in which the market does not allocate resources efficiently.

Correct Answer
verified

The fact that different countries experience different standards of living is largely explained by differences in those countries'

Correct Answer
verified

Which of the following is a principle concerning how people interact?

Correct Answer
verified

The combination of President Obama's strategies and the Federal Reserve's reaction to the deep economic downturn in the US in 2008 and 2009

Correct Answer
verified

Variations in the standard of living across countries is due almost entirely to differences in each nation's total output of goods and services.

Correct Answer
verified

Market power and externalities are two possible causes of market failure.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

With the understanding that people respond to incentives,outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

Correct Answer
verified
The concept of working longer per year w...
View Answer

Correct Answer
verified

Exam 1: Ten Principles of Economics

Senator Green argues that replacing the income tax with a national sales tax would increase the level of output.Senator Brown objects that this policy would benefit the rich at the expense of the poor.

Correct AnswerverifiedShow Answer

The phrase "no such thing as a free lunch" means

Correct AnswerverifiedShow Answer

Which of these activities will most likely result in an external benefit?

Correct AnswerverifiedShow Answer

In the United States,incomes have historically grown

Correct AnswerverifiedShow Answer

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

Correct AnswerverifiedTo lower inflation,the government may ch...View AnswerShow Answer

If an externality is present in a market,economic efficiency may be enhanced by

Correct AnswerverifiedShow Answer

If the wage for unskilled labor were fixed above the current wage,then we would expect

Correct AnswerverifiedShow Answer

In the long run the primary effect of increasing the quantity of money is higher prices.

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

Market failure refers to a situation in which the market does not allocate resources efficiently.

Correct AnswerverifiedShow Answer

The fact that different countries experience different standards of living is largely explained by differences in those countries'

Correct AnswerverifiedShow Answer

Which of the following is a principle concerning how people interact?

Correct AnswerverifiedShow Answer

The combination of President Obama's strategies and the Federal Reserve's reaction to the deep economic downturn in the US in 2008 and 2009

Correct AnswerverifiedShow Answer

Variations in the standard of living across countries is due almost entirely to differences in each nation's total output of goods and services.

Correct AnswerverifiedShow Answer

Market power and externalities are two possible causes of market failure.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

With the understanding that people respond to incentives,outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

Correct AnswerverifiedThe concept of working longer per year w...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
To lower inflation,the government may ch...
View Answer

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
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The concept of working longer per year w...
View Answer

Correct Answer
verified