Question 1

Suppose a typical worker in India can produce 32 units of product in an eight-hour day, while a typical worker in Bangladesh can produce 30 units of product in a 10-hour day. We can conclude that

Accepted Answer

A)   worker productivity in Bangladesh is higher than in India.
B)   the standard of living will likely be higher in India than in Bangladesh.
C)   productivity is 4 units per hour for the worker in Bangladesh and 3 units per hour for the worker in India.
D)   there will be no difference between the standard of living in India and Bangladesh.E) C) and D)
F) A) and C)

Question 2

What does the "invisible hand" refers to?

Accepted Answer

How the decisions of...

Question 3

In an economy in which decisions are guided by prices and individual self-interest, there is

Accepted Answer

A)   the potential to achieve efficiency in production.
B)   a strong need for government intervention in the market.
C)   less efficiency than would be observed in a centrally-planned economy.
D)   more need for a strong legal system to control individual greed than would be needed in a centrally-planned economy.E) A) and B)
F) All of the above

Question 4

Economics is the study of ______.

Accepted Answer

how societ...

Question 5

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

Question 6

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 7

The government enforces property rights by

Accepted Answer

A)   requiring property owners to pay property taxes.
B)   providing police and courts.
C)   forcing people to own property.
D)   providing public parks and recreation facilities.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)   equality is improved, but efficiency is not.
C)   both efficiency and equality are improved.
D)   neither efficiency nor equality are improved.E) A) and B)
F) A) and C)

Question 9

In the early 1980s, U.S. economic policy was directed toward reducing inflation. What would you have expected to observe during this short period of time?

Accepted Answer

A)   Inflation fell and unemployment fell.
B)   Inflation and unemployment were both unaffected.
C)   Inflation fell and unemployment increased.
D)   Inflation fell and unemployment was unchanged.E) C) and D)
F) A) and C)

Question 10

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 going to the movies?

Accepted Answer

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

Question 11

The collapse of communism in the Soviet Union and Eastern Europe took place mainly in the

Accepted Answer

A)   1960s.
B)   1970s.
C)   1980s.
D)   1990s.E) C) and D)
F) A) and D)

Question 12

The fact that people are willing to pay much more for a diamond, which is not needed for survival, than they are willing to pay for a cup of water, which is needed for survival, is an example of irrational behavior.

Accepted Answer

A) True 
 B)False

Question 13

A rational decisionmaker takes an action if and only if

Accepted Answer

A)   the marginal benefit of the action exceeds the marginal cost of the action.
B)   the marginal cost of the action exceeds the marginal benefit of the action.
C)   the marginal cost of the action is zero.
D)   the opportunity cost of the action is zero.E) None of the above
F) All of the above

Question 14

Suppose the cost of flying a 100-seat plane for an airline is $50,000 and there are 10 empty seats on a flight. The marginal cost of flying a passenger is

Accepted Answer

A)   $50.
B)   $500.
C)   $50,000.
D)   This cannot be determined from the information given.E) All of the above
F) A) and C)

Question 15

Which of the following statements best represents the principle represented by the adage, "There is no such thing as a free lunch"?

Accepted Answer

A)   Michelle can attend the concert only if she takes her sister with her.
B)   Michael is hungry and homeless.
C)   Andrea must repair the tire on her bike before she can ride it to class.
D)   Dani must decide between going to Florida or Brazil for spring break.E) None of the above
F) B) and D)

Question 16

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Accepted Answer

A) True 
 B)False

Question 17

The invisible hand's ability to coordinate the decisions of the firms and households in the economy can be hindered by

Accepted Answer

A)   government actions that distort prices.
B)   increased competition in markets.
C)   enforcement of property rights.
D)   too much attention paid to efficiency.E) B) and C)
F) All of the above

Question 18

When the government implements programs such as progressive income tax rates, which of the following is likely to occur?

Accepted Answer

A)   equality is increased and efficiency is increased.
B)   equality is increased and efficiency is decreased.
C)   equality is decreased and efficiency is increased.
D)   equality is decreased and efficiency is decreased.E) None of the above
F) A) and B)

Question 19

Suppose the state of Wyoming passes a law that increases the tax on cigarettes. As a result, smokers who live in Wyoming start purchasing their cigarettes in surrounding states. Which of the following principles does this best illustrate?

Accepted Answer

A)   People respond to incentives.
B)   Rational people think at the margin.
C)   Trade can make everyone better off.
D)   Markets are usually a good way to organize economic activity.E) None of the above
F) A) and D)

Question 20

What is the main difference between a centrally planned economy and a market economy?

Accepted Answer

In a market economy, decisions...

Exam 1: Ten Principles of Economics

The fact that people are willing to pay much more for a diamond, which is not needed for survival, than they are willing to pay for a cup of water, which is needed for survival, is an example of irrational behavior.

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

Suppose the state of Wyoming passes a law that increases the tax on cigarettes. As a result, smokers who live in Wyoming start purchasing their cigarettes in surrounding states. Which of the following principles does this best illustrate?

Correct Answer
verified

When the government implements programs such as progressive income tax rates, which of the following is likely to occur?

Correct Answer
verified

What does the "invisible hand" refers to?

Correct Answer
verified
How the decisions of...
View Answer

In the early 1980s, U.S. economic policy was directed toward reducing inflation. What would you have expected to observe during this short period of time?

Correct Answer
verified

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

Correct Answer
verified

The government enforces property rights by

Correct Answer
verified

A rational decisionmaker takes an action if and only if

Correct Answer
verified

Suppose a typical worker in India can produce 32 units of product in an eight-hour day, while a typical worker in Bangladesh can produce 30 units of product in a 10-hour day. We can conclude that

Correct Answer
verified

Which of the following statements best represents the principle represented by the adage, "There is no such thing as a free lunch"?

Correct Answer
verified

Correct Answer
verified

Economics is the study of ______.

Correct Answer
verified
how societ...
View Answer

The collapse of communism in the Soviet Union and Eastern Europe took place mainly in the

Correct Answer
verified

Suppose the cost of flying a 100-seat plane for an airline is $50,000 and there are 10 empty seats on a flight. The marginal cost of flying a passenger is

Correct Answer
verified

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Correct Answer
verified

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

Correct Answer
verified

The invisible hand's ability to coordinate the decisions of the firms and households in the economy can be hindered by

Correct Answer
verified

In an economy in which decisions are guided by prices and individual self-interest, there is

Correct Answer
verified

What is the main difference between a centrally planned economy and a market economy?

Correct Answer
verified
In a market economy, decisions...
View Answer

Exam 1: Ten Principles of Economics

The fact that people are willing to pay much more for a diamond, which is not needed for survival, than they are willing to pay for a cup of water, which is needed for survival, is an example of irrational behavior.

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

Suppose the state of Wyoming passes a law that increases the tax on cigarettes. As a result, smokers who live in Wyoming start purchasing their cigarettes in surrounding states. Which of the following principles does this best illustrate?

Correct AnswerverifiedShow Answer

When the government implements programs such as progressive income tax rates, which of the following is likely to occur?

Correct AnswerverifiedShow Answer

What does the "invisible hand" refers to?

Correct AnswerverifiedHow the decisions of...View AnswerShow Answer

In the early 1980s, U.S. economic policy was directed toward reducing inflation. What would you have expected to observe during this short period of time?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The government enforces property rights by

Correct AnswerverifiedShow Answer

A rational decisionmaker takes an action if and only if

Correct AnswerverifiedShow Answer

Suppose a typical worker in India can produce 32 units of product in an eight-hour day, while a typical worker in Bangladesh can produce 30 units of product in a 10-hour day. We can conclude that

Correct AnswerverifiedShow Answer

Which of the following statements best represents the principle represented by the adage, "There is no such thing as a free lunch"?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economics is the study of ______.

Correct Answerverifiedhow societ...View AnswerShow Answer

The collapse of communism in the Soviet Union and Eastern Europe took place mainly in the

Correct AnswerverifiedShow Answer

Suppose the cost of flying a 100-seat plane for an airline is $50,000 and there are 10 empty seats on a flight. The marginal cost of flying a passenger is

Correct AnswerverifiedShow Answer

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The invisible hand's ability to coordinate the decisions of the firms and households in the economy can be hindered by

Correct AnswerverifiedShow Answer

In an economy in which decisions are guided by prices and individual self-interest, there is

Correct AnswerverifiedShow Answer

What is the main difference between a centrally planned economy and a market economy?

Correct AnswerverifiedIn a market economy, decisions...View AnswerShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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How the decisions of...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
how societ...
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In a market economy, decisions...
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