Question 1

In considering how to allocate its scarce resources among its various members, a household considers

Accepted Answer

A)   each member's abilities.
B)   each member's efforts.
C)   each member's desires.
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 2

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

Accepted Answer

A)   efficiency is improved, but equality is not.
B)   equality is improved, but efficiency is not.
C)   both efficiency and equality are improved.
D)   neither efficiency nor equality are improved.E) All of the above
F) C) and D)

Question 3

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

Question 4

When the government prevents prices from adjusting naturally to supply and demand,

Accepted Answer

A)   it equates the amount buyers want to buy with the amount sellers want to sell.
B)   it adversely affects the allocation of resources.
C)   it improves equality and efficiency.
D)   it improves efficiency but reduces equality.E) A) and B)
F) A) and C)

Question 5

People are likely to respond to a policy change

Accepted Answer

A)   only if they think the policy is a good one.
B)   only if the policy change changes the costs of their behavior.
C)   only if the policy change changes the benefits of their behavior.
D)   if the policy changes either the costs or benefits of their behavior.E) B) and C)
F) A) and C)

Question 6

A rational decisionmaker

Accepted Answer

A)   ignores marginal changes and focuses instead on "the big picture."
B)   ignores the likely effects of government policies when he or she makes choices.
C)   takes an action only if the marginal benefit of that action exceeds the marginal cost of that action.
D)   takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions.E) A) and D)
F) B) and C)

Question 7

When the government attempts to improve equality in an economy the result is often

Accepted Answer

A)   an increase in overall output in the economy.
B)   additional government revenue since overall income will increase.
C)   a reduction in equality.
D)   a reduction in efficiency.E) All of the above
F) A) and B)

Question 8

After much consideration, you have chosen Ireland over Spain for your Study Abroad program next year. However, the deadline for your final decision is still months away and you may reverse this decision. Which of the following events would prompt you to reverse this decision?

Accepted Answer

A)   The marginal benefit of going to Spain increases.
B)   The marginal cost of going to Spain increases.
C)   The marginal benefit of going to Ireland increases.
D)   The marginal cost of going to Ireland decreases.E) All of the above
F) C) and D)

Question 9

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

Question 10

Economics deals primarily with the concept of

Accepted Answer

A)   scarcity.
B)   money.
C)   poverty.
D)   banking.E) A) and B)
F) A) and C)

Question 11

The study of how society manages its scarce resources is most closely associated with which field of study?

Accepted Answer

A)   environmental studies
B)   economics
C)   management
D)   accountingE) C) and D)
F) B) and C)

Question 12

The increase in living standards of American workers over the past century is primarily due to

Accepted Answer

A)   the success of labor unions.
B)   minimum-wage laws.
C)   improvements in productivity.
D)   None of the above are correct.E) A) and B)
F) A) and C)

Question 13

In a particular country in 1998, the average worker needed to work 40 hours to produce 100 units of output. In that same country in 2008, the average worker needed to work 36 hours to produce 72 units of output. In that country, the productivity of the average worker

Accepted Answer

A)   decreased between 1998 and 2008, so we would expect the standard of living to have decreased accordingly.
B)   increased between 1998 and 2008, so we would expect the standard of living to have increased accordingly.
C)   decreased between 1998 and 2008, so we would expect inflation to have decreased accordingly.
D)   increased between 1998 and 2008, so we would expect inflation to have increased accordingly.E) A) and B)
F) B) and C)

Question 14

Trade with any nation can be mutually beneficial.

Accepted Answer

A) True 
 B)False

Question 15

In the United States, the overall level of prices more than doubled during the

Accepted Answer

A)   1950s.
B)   1960s.
C)   1970s.
D)   1980s.E) A) and B)
F) B) and D)

Question 16

Explain how government policies that redistribute income from the rich to the poor might reduce efficiency.

Accepted Answer

They reduce the reward for wor...

Question 17

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.
-Refer to Scenario 1-2. What is your opportunity cost of going to the movies?

Accepted Answer

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

Question 18

Trade between countries tends to

Accepted Answer

A)   reduce both competition and specialization.
B)   reduce competition and increase specialization.
C)   increase competition and reduce specialization.
D)   increase both competition and specialization.E) A) and C)
F) A) and D)

Question 19

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 20

Suppose the Federal Reserve announces that it will be making a change to a key interest rate to increase the money supply. This is likely because

Accepted Answer

A)   the Federal Reserve is worried about inflation.
B)   the Federal Reserve is worried about unemployment.
C)   the Federal Reserve is hoping to reduce the demand for goods and services.
D)   the Federal Reserve is worried that the economy is growing too quickly.E) A) and C)
F) A) and B)

Exam 1: Ten Principles of Economics

In the United States, the overall level of prices more than doubled during the

Correct Answer
verified

The study of how society manages its scarce resources is most closely associated with which field of study?

Correct Answer
verified

People are likely to respond to a policy change

Correct Answer
verified

Correct Answer
verified

Economics deals primarily with the concept of

Correct Answer
verified

When the government attempts to improve equality in an economy the result is often

Correct Answer
verified

The increase in living standards of American workers over the past century is primarily due to

Correct Answer
verified

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

Correct Answer
verified

When the government prevents prices from adjusting naturally to supply and demand,

Correct Answer
verified

In the United States, incomes have historically grown

Correct Answer
verified

Trade with any nation can be mutually beneficial.

Correct Answer
verified

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

Correct Answer
verified

A rational decisionmaker

Correct Answer
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Explain how government policies that redistribute income from the rich to the poor might reduce efficiency.

Correct Answer
verified
They reduce the reward for wor...
View Answer

In a particular country in 1998, the average worker needed to work 40 hours to produce 100 units of output. In that same country in 2008, the average worker needed to work 36 hours to produce 72 units of output. In that country, the productivity of the average worker

Correct Answer
verified

Suppose the Federal Reserve announces that it will be making a change to a key interest rate to increase the money supply. This is likely because

Correct Answer
verified

Which of the following can lead to market failure?

Correct Answer
verified

After much consideration, you have chosen Ireland over Spain for your Study Abroad program next year. However, the deadline for your final decision is still months away and you may reverse this decision. Which of the following events would prompt you to reverse this decision?

Correct Answer
verified

In considering how to allocate its scarce resources among its various members, a household considers

Correct Answer
verified

Trade between countries tends to

Correct Answer
verified

Exam 1: Ten Principles of Economics

In the United States, the overall level of prices more than doubled during the

Correct AnswerverifiedShow Answer

The study of how society manages its scarce resources is most closely associated with which field of study?

Correct AnswerverifiedShow Answer

People are likely to respond to a policy change

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economics deals primarily with the concept of

Correct AnswerverifiedShow Answer

When the government attempts to improve equality in an economy the result is often

Correct AnswerverifiedShow Answer

The increase in living standards of American workers over the past century is primarily due to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When the government prevents prices from adjusting naturally to supply and demand,

Correct AnswerverifiedShow Answer

In the United States, incomes have historically grown

Correct AnswerverifiedShow Answer

Trade with any nation can be mutually beneficial.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A rational decisionmaker

Correct AnswerverifiedShow Answer

Explain how government policies that redistribute income from the rich to the poor might reduce efficiency.

Correct AnswerverifiedThey reduce the reward for wor...View AnswerShow Answer

In a particular country in 1998, the average worker needed to work 40 hours to produce 100 units of output. In that same country in 2008, the average worker needed to work 36 hours to produce 72 units of output. In that country, the productivity of the average worker

Correct AnswerverifiedShow Answer

Suppose the Federal Reserve announces that it will be making a change to a key interest rate to increase the money supply. This is likely because

Correct AnswerverifiedShow Answer

Which of the following can lead to market failure?

Correct AnswerverifiedShow Answer

After much consideration, you have chosen Ireland over Spain for your Study Abroad program next year. However, the deadline for your final decision is still months away and you may reverse this decision. Which of the following events would prompt you to reverse this decision?

Correct AnswerverifiedShow Answer

In considering how to allocate its scarce resources among its various members, a household considers

Correct AnswerverifiedShow Answer

Trade between countries tends to

Correct AnswerverifiedShow Answer

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They reduce the reward for wor...
View Answer

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