Question 1

Communist countries worked on the premise that government officials were in the best position to allocate the economy's scarce resources.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not an example of scarcity?

Accepted Answer

A)   Only some people can afford to buy a Ferrari.
B)   Every individual in society cannot attain the highest standard of living to which he or she might aspire.
C)   Doug has an unlimited supply of apples in his orchard.
D)   Each member of a household cannot get everything he or she wants.E) B) and C)
F) B) and D)

Question 3

High-school athletes who skip college to become professional athletes

Accepted Answer

A)   obviously do not understand the value of a college education.
B)   usually do so because they cannot get into college.
C)   understand that the opportunity cost of attending college is very high.
D)   are not making a rational decision since the marginal benefits of college outweigh the marginal costs of college for high-school athletes.E) A) and B)
F) A) and C)

Question 4

If wages for accountants rose,then accountants' leisure time would have a lower opportunity cost.

Accepted Answer

A) True 
 B)False

Question 5

The self-interest of the participants in an economy is guided into promoting general economic self-interest by

Accepted Answer

A)   the invisible hand.
B)   market power.
C)   government intervention.
D)   oikonomos.E) A) and B)
F) None of the above

Question 6

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 7

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 8

Olivia was accepted to Notre Dame and another college.She is trying to decide where to go.Which of the following should she include in making her decision?

Accepted Answer

A)   how much she spent applying to Notre Dame, and the difference between living expenses at Notre Dame and the other college
B)   how much she spent applying to Notre Dame, but not the difference between living expenses at Notre Dame and the other college
C)   the difference between living expenses at Notre Dame and her second choice, but not how much she spent applying to Notre Dame
D)   neither how much she spent applying to Notre Dame nor the difference between living expenses at Notre Dame and her second choiceE) None of the above
F) C) and D)

Question 9

The basic principles of economics suggest that

Accepted Answer

A)   markets are seldom, if ever, a good way to organize economic activity.
B)   government should become involved in markets when trade between countries is involved.
C)   government should become involved in markets when those markets fail to produce efficient or fair outcomes.
D)   All of the above are correct.E) B) and C)
F) C) and D)

Question 10

Rational people make decisions at the margin by

Accepted Answer

A)   following marginal traditions.
B)   behaving in a random fashion.
C)   thinking in black-and-white terms.
D)   comparing marginal costs and marginal benefits.E) A) and B)
F) A) and C)

Question 11

To improve living standards,policymakers should

Accepted Answer

A)   impose restrictions on foreign competition.
B)   formulate policies designed to increase productivity.
C)   impose tougher immigration policies.
D)   provide tax breaks for the middle class.E) All of the above
F) C) and D)

Question 12

When calculating the cost of college,which of the following should you probably include?

Accepted Answer

A)   The cost of your meal plan for the cafeteria.
B)   The cost of books required for college classes
C)   The income you earn at your part-time job.
D)   The cost of living in the dormitory.E) B) and C)
F) A) and C)

Question 13

The primary determinant of a country's standard of living is

Accepted Answer

A)   the country's ability to prevail over foreign competition.
B)   the country's ability to produce goods and services.
C)   the total supply of money in the economy.
D)   the average age of the country's labor force.E) None of the above
F) A) and B)

Question 14

Resources are

Accepted Answer

A)   scarce for households but plentiful for economies.
B)   plentiful for households but scarce for economies.
C)   scarce for households and scarce for economies.
D)   plentiful for households and plentiful for economies.E) B) and C)
F) None of the above

Question 15

If the United States decides to trade with Mexico,we know that

Accepted Answer

A)   Mexico will benefit, but trade with a less developed country could not benefit the United States.
B)   it will not benefit Mexico because workers in the United States are more productive.
C)   Mexico and the United States can both benefit.
D)   it will not benefit either country because their cultural differences are too vast.E) B) and D)
F) B) and C)

Question 16

The broken window fallacy states that when a window breaks and someone spends money to repair it,they have created new economic activity that would not have otherwise taken place.

Accepted Answer

A) True 
 B)False

Question 17

What is the most important factor that explains differences in living standards across countries?

Accepted Answer

A)   the quantity of money
B)   the level of unemployment
C)   productivity
D)   equalityE) B) and D)
F) B) and C)

Question 18

Trade between the United States and India

Accepted Answer

A)   benefits both the United States and India.
B)   is a losing proposition for the United States because India has cheaper labor.
C)   is a losing proposition for India because capital is much more abundant in the U.S. than in India.
D)   is a losing proposition for India because U.S. workers are more productive.E) A) and B)
F) None of the above

Question 19

If the average cost of transporting a passenger on the train from Chicago to St.Louis is $75,it would be irrational for the railroad to allow any passenger to ride for less than $75.

Accepted Answer

A) True 
 B)False

Question 20

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 D)
F) None of the above

Exam 1: Ten Principles of Economics.

The basic principles of economics suggest that

Correct AnswerverifiedShow Answer

What is the most important factor that explains differences in living standards across countries?

Correct AnswerverifiedShow Answer

The broken window fallacy states that when a window breaks and someone spends money to repair it,they have created new economic activity that would not have otherwise taken place.

Correct AnswerverifiedShow Answer

To improve living standards,policymakers should

Correct AnswerverifiedShow Answer

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

The self-interest of the participants in an economy is guided into promoting general economic self-interest by

Correct AnswerverifiedShow Answer

If the United States decides to trade with Mexico,we know that

Correct AnswerverifiedShow Answer

High-school athletes who skip college to become professional athletes

Correct AnswerverifiedShow Answer

Rational people make decisions at the margin by

Correct AnswerverifiedShow Answer

If wages for accountants rose,then accountants' leisure time would have a lower opportunity cost.

Correct AnswerverifiedShow Answer

If the average cost of transporting a passenger on the train from Chicago to St.Louis is $75,it would be irrational for the railroad to allow any passenger to ride for less than $75.

Correct AnswerverifiedShow Answer

Communist countries worked on the premise that government officials were in the best position to allocate the economy's scarce resources.

Correct AnswerverifiedShow Answer

When calculating the cost of college,which of the following should you probably include?

Correct AnswerverifiedShow Answer

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

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

Which of the following is not an example of scarcity?

Correct AnswerverifiedShow Answer

Olivia was accepted to Notre Dame and another college.She is trying to decide where to go.Which of the following should she include in making her decision?

Correct AnswerverifiedShow Answer

Trade between the United States and India

Correct AnswerverifiedShow Answer

Resources are

Correct AnswerverifiedShow Answer

The primary determinant of a country's standard of living is

Correct AnswerverifiedShow 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

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