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

Which of the following statements best represents the principle represented by the adage, "There ain't no such thing as a free lunch"?

Accepted Answer

A)  Bo can go swimming only if he takes his brother with him.
B)  Jada is starving and homeless.
C)  Alivia must put gas in her truck before she can drive it to school.
D)  Benjamin must decide between going to Florida or Brazil for summer vacation.E) A) and D)
F) B) and C)

Question 3

The "invisible hand" influences market behavior through trade.​

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)  A college student buys a deck of cards to play solitaire in her dorm room.
B)  An elderly woman plants a flower garden on the vacant lot next to her house.
C)  An executive purchases a book to read on a business trip.
D)  A ten-year-old uses his allowance to buy new Nike shoes.E) None of the above
F) A) and D)

Question 5

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

Question 6

To say people respond to incentives means that people may alter their decisions when the costs and benefits of an action change.

Accepted Answer

A) True 
 B)False

Question 7

Bo buys and sells real estate. Two weeks ago, he paid $400,000 for a house on Cypress Street, intending to spend $50,000 on repairs and then sell the house for $500,000. Last week, the city government announced a plan to build a new landfill on Cypress Street just down the street from the house Bo purchased. As a result of the city's announced plan, Bo is weighing two alternatives: He can go ahead with the $50,000 in repairs and then sell the house for $390,000, or he can forgo the repairs and sell the house as it is for $350,000. He should

Accepted Answer

A)  keep the house and live in it.
B)  go ahead with the $50,000 in repairs and sell the house for $390,000.
C)  forgo the repairs and sell the house as it is for $350,000.
D)  move the house from Cypress Street to a more desirable location, regardless of the cost of doing so.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) None of the above
F) A) and B)

Question 9

Explain how trade with other countries is beneficial.

Accepted Answer

Trade allows countri...

Question 10

Invisible hand is a term used by the economist ______ to describe how the decisions of households and firms lead to desirable market outcomes.

Accepted Answer

The answer of Invisible hand is a term used by...

Question 11

The term market failure refers to

Accepted Answer

A)  a situation in which the market on its own fails to allocate resources efficiently.
B)  an unsuccessful advertising campaign which reduces demand for a product.
C)  a situation in which competition among firms becomes ruthless.
D)  a firm that is forced out of business because of losses.E) None of the above
F) A) and D)

Question 12

Market failure occurs when no individual has the ability to substantially influence market prices.

Accepted Answer

A) True 
 B)False

Question 13

Trade can make everyone better off except in the case where one person is better at doing everything.

Accepted Answer

A) True 
 B)False

Question 14

Melinda quits her job at a bank, which pays $30,000 a year, to enroll in a two-year graduate program. Her annual school expenses are $22,000 for tuition and fees and $2,000 for books. What is her opportunity cost of attending the two-year graduate program?

Accepted Answer

The answer of Melinda quits her job at a bank,...

Question 15

Both the production of goods and services and the unemployment rate are used to measure

Accepted Answer

A)  the business cycle.
B)  productivity.
C)  the interest rate.
D)  inflation.E) B) and C)
F) All of the above

Question 16

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 resources.E) All of the above
F) C) and D)

Question 17

Market power refers to the

Accepted Answer

A)  power of a single person or small group to influence market prices.
B)  ability of a person or small group to successfully market new products.
C)  power of the government to regulate a market.
D)  importance of a certain market in relation to the overall economy.E) A) and D)
F) All of the above

Question 18

How does the study of economics depend upon the phenomenon of scarcity?

Accepted Answer

Because economics is the study of how so...

Question 19

A rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit.

Accepted Answer

A) True 
 B)False

Question 20

The adage, "There ain't no such thing as a free lunch," means

Accepted Answer

A)  even people on welfare have to pay for food.
B)  the cost of living is always increasing.
C)  people face tradeoffs.
D)  all costs are included in the price of a product.E) B) and D)
F) B) and C)

Exam 1: Ten Principles of Economics

A rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit.

Correct Answer
verified

Both the production of goods and services and the unemployment rate are used to measure

Correct Answer
verified

Market failure occurs when no individual has the ability to substantially influence market prices.

Correct Answer
verified

How does the study of economics depend upon the phenomenon of scarcity?

Correct Answer
verified
Because economics is the study of how so...
View Answer

Market power refers to the

Correct Answer
verified

Melinda quits her job at a bank, which pays $30,000 a year, to enroll in a two-year graduate program. Her annual school expenses are $22,000 for tuition and fees and $2,000 for books. What is her opportunity cost of attending the two-year graduate program?

Correct Answer
verified

To say people respond to incentives means that people may alter their decisions when the costs and benefits of an action change.

Correct Answer
verified

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

Correct Answer
verified

The term market failure refers to

Correct Answer
verified

Efficiency

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

The "invisible hand" influences market behavior through trade.

Correct Answer
verified

Invisible hand is a term used by the economist ______ to describe how the decisions of households and firms lead to desirable market outcomes.

Correct Answer
verified

Which of the following statements best represents the principle represented by the adage, "There ain't no such thing as a free lunch"?

Correct Answer
verified

The adage, "There ain't no such thing as a free lunch," means

Correct Answer
verified

Explain how trade with other countries is beneficial.

Correct Answer
verified
Trade allows countri...
View Answer

Trade can make everyone better off except in the case where one person is better at doing everything.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Exam 1: Ten Principles of Economics

A rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit.

Correct AnswerverifiedShow Answer

Both the production of goods and services and the unemployment rate are used to measure

Correct AnswerverifiedShow Answer

Market failure occurs when no individual has the ability to substantially influence market prices.

Correct AnswerverifiedShow Answer

How does the study of economics depend upon the phenomenon of scarcity?

Correct AnswerverifiedBecause economics is the study of how so...View AnswerShow Answer

Market power refers to the

Correct AnswerverifiedShow Answer

Melinda quits her job at a bank, which pays $30,000 a year, to enroll in a two-year graduate program. Her annual school expenses are $22,000 for tuition and fees and $2,000 for books. What is her opportunity cost of attending the two-year graduate program?

Correct AnswerverifiedShow Answer

To say people respond to incentives means that people may alter their decisions when the costs and benefits of an action change.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The term market failure refers to

Correct AnswerverifiedShow Answer

Efficiency

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 AnswerverifiedShow Answer

The "invisible hand" influences market behavior through trade.​

Correct AnswerverifiedShow Answer

Invisible hand is a term used by the economist ______ to describe how the decisions of households and firms lead to desirable market outcomes.

Correct AnswerverifiedShow Answer

Which of the following statements best represents the principle represented by the adage, "There ain't no such thing as a free lunch"?

Correct AnswerverifiedShow Answer

The adage, "There ain't no such thing as a free lunch," means

Correct AnswerverifiedShow Answer

Explain how trade with other countries is beneficial.

Correct AnswerverifiedTrade allows countri...View AnswerShow Answer

Trade can make everyone better off except in the case where one person is better at doing everything.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Because economics is the study of how so...
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

The "invisible hand" influences market behavior through trade.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Trade allows countri...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified