Question 1

The principle that "people face tradeoffs" applies to

Accepted Answer

A)   individuals.
B)   families.
C)   societies.
D)   All of the above are correct.E) A) and C)
F) A) and B)

Question 2

Economics is the study of how evenly goods and services are distributed within society.

Accepted Answer

A) True 
 B)False

Question 3

For a number of years country A had inflation of 3% but for the last five years has had inflation of 6%.Country B had inflation of 4% for many years,but very recently inflation unexpectedly rose to 9%.Other things the same,in which of the countries would the higher inflation rate be more likely to reduce unemployment?

Accepted Answer

A)   both country A and country B
B)   neither country A nor country B
C)   country A but not country B
D)   country B but not country AE) B) and D)
F) A) and D)

Question 4

The term "invisible hand" was coined by

Accepted Answer

A)   Adam Smith.
B)   David Ricardo.
C)   Karl Marx.
D)   Benjamin Franklin.E) None of the above
F) B) and D)

Question 5

Katie is planning to sell her house,and she is considering making two upgrades to the house before listing it for sale.Replacing the carpeting will cost her $2,500 and replacing the roof will cost her $9,000.Katie expects the new carpeting to increase the value of her house by $3,000 and the new roof to increase the value of her house by $7,000.

Accepted Answer

A)   She should make both improvements to her house.
B)   She should replace the carpeting but not replace the roof.
C)   She should replace the roof but not replace the carpeting.
D)   She should not make either improvement to her house.E) A) and B)
F) None of the above

Question 6

Which of the following firms is most likely to have market power?

Accepted Answer

A)   a grocery store in a metropolitan area
B)   a gas station in a suburb
C)   a pub in a college town
D)   the only hotel in a rural areaE) A) and D)
F) All of the above

Question 7

Suppose that in Ireland total annual output is worth $600 million and people work 30 million hours.In Canada total annual output is worth $800 million and people work 50 million hours.Productivity is higher

Accepted Answer

A)   in Ireland. Most variation in the standard of living across countries is due to differences in productivity.
B)   in Ireland. Differences in productivity explain very little of the variation in the standard of living across countries.
C)   in Canada. Most variation in the standard of living across countries is due to differences in productivity.
D)   in Canada. Differences in productivity explain very little of the variation in the standard of living across countries.E) B) and D)
F) A) and B)

Question 8

Your professor loves her work,teaching economics.She has been offered other positions in the corporate world that would increase her income by 25 percent,but she has decided to continue working as a professor.Her decision would not change unless the marginal

Accepted Answer

A)   cost of teaching increased.
B)   benefit of teaching increased.
C)   cost of a corporate job increased.
D)   benefit of a corporate job decreased.E) A) and B)
F) A) and C)

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

An individual deciding how to allocate her limited time is dealing with both scarcity and trade-offs.

Accepted Answer

A) True 
 B)False

Question 11

Slow growth in US incomes during the 1970s and 1980s was primarily due to

Accepted Answer

A)   slow productivity growth in the US.
B)   increased competition from Japan.
C)   increased competition from European countries.
D)   a rapid decrease in the quantity of money in the economy.E) A) and B)
F) None of the above

Question 12

Kyle is planning to take a roadtrip.After he makes his plans,he has to make some unexpected auto repairs.Also,he sees the price of gas has gone up.Which of these two events should Kyle consider in deciding if it is still worthwhile to go on the trip?

Accepted Answer

A)   the unexpected repairs and the increase in the price of gas
B)   the unexpected increase for repairs, but not the increase in the price of gas
C)   the increase in the price of gas, but not the unexpected repairs
D)   neither the unexpected increase in the price of gas nor the unexpected repairsE) All of the above
F) A) and C)

Question 13

Which of the following is an example of something economists study?

Accepted Answer

A)   Kate chooses to work overtime to earn extra income for her family.
B)   Ryan sells his economics textbook from last semester to his roommate for half the price of a new textbook.
C)   The unemployment rate in the United States is at its highest level in over fifty years.
D)   All of the above are correct.E) A) and D)
F) A) and B)

Question 14

If a paper factory does not bear the entire cost of the pollution it emits,it will

Accepted Answer

A)   not emit any pollution so as to avoid the entire cost of the pollution.
B)   emit lower levels of pollution.
C)   emit an acceptable level of pollution.
D)   emit too much pollution.E) B) and C)
F) A) and B)

Question 15

The invisible hand refers to

Accepted Answer

A)   how central planners made economic decisions.
B)   how the decisions of households and firms lead to desirable market outcomes.
C)   the control that large firms have over the economy.
D)   government regulations without which the economy would be less efficient.E) A) and B)
F) A) and C)

Question 16

When government policies are enacted,

Accepted Answer

A)   equality can usually be enhanced without an efficiency loss, but efficiency can never be enhanced without a reduction in equality.
B)   efficiency can usually be enhanced without a reduction in equality, but equality can never be enhanced without an efficiency loss.
C)   it is always the case that either efficiency and equality are both enhanced, or efficiency and equality are both diminished.
D)   None of the above are correct.E) None of the above
F) B) and D)

Question 17

Adam Smith's book The Wealth of Nations was published in

Accepted Answer

A)   1692.
B)   1776.
C)   1816.
D)   1936.E) A) and B)
F) A) and C)

Question 18

In the United States,incomes historically have grown about 2 percent per year.At this rate,average income doubles every

Accepted Answer

A)   15 years.
B)   25 years.
C)   35 years.
D)   45 years.E) C) and D)
F) All of the above

Question 19

Tuition is the single-largest cost of attending college for most students.

Accepted Answer

A) True 
 B)False

Question 20

A company that formerly produced software went out of business because too many potential customers bought illegally-produced copies of the software instead of buying the product directly from the company.This instance serves as an example of

Accepted Answer

A)   market power.
B)   inefficient trade.
C)   inadequate enforcement of property rights.
D)   the invisible hand at work.E) A) and D)
F) B) and C)

Exam 1: Ten Principles of Economics.

Slow growth in US incomes during the 1970s and 1980s was primarily due to

Correct Answer
verified

Kyle is planning to take a roadtrip.After he makes his plans,he has to make some unexpected auto repairs.Also,he sees the price of gas has gone up.Which of these two events should Kyle consider in deciding if it is still worthwhile to go on the trip?

Correct Answer
verified

An individual deciding how to allocate her limited time is dealing with both scarcity and trade-offs.

Correct Answer
verified

Correct Answer
verified

Which of the following is an example of something economists study?

Correct Answer
verified

The term "invisible hand" was coined by

Correct Answer
verified

Correct Answer
verified

The principle that "people face tradeoffs" applies to

Correct Answer
verified

In the United States,incomes historically have grown about 2 percent per year.At this rate,average income doubles every

Correct Answer
verified

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

Correct Answer
verified

A company that formerly produced software went out of business because too many potential customers bought illegally-produced copies of the software instead of buying the product directly from the company.This instance serves as an example of

Correct Answer
verified

Suppose that in Ireland total annual output is worth $600 million and people work 30 million hours.In Canada total annual output is worth $800 million and people work 50 million hours.Productivity is higher

Correct Answer
verified

When government policies are enacted,

Correct Answer
verified

If a paper factory does not bear the entire cost of the pollution it emits,it will

Correct Answer
verified

Adam Smith's book The Wealth of Nations was published in

Correct Answer
verified

Which of the following firms is most likely to have market power?

Correct Answer
verified

The invisible hand refers to

Correct Answer
verified

Your professor loves her work,teaching economics.She has been offered other positions in the corporate world that would increase her income by 25 percent,but she has decided to continue working as a professor.Her decision would not change unless the marginal

Correct Answer
verified

Economics is the study of how evenly goods and services are distributed within society.

Correct Answer
verified

Tuition is the single-largest cost of attending college for most students.

Correct Answer
verified

Exam 1: Ten Principles of Economics.

Slow growth in US incomes during the 1970s and 1980s was primarily due to

Correct AnswerverifiedShow Answer

Kyle is planning to take a roadtrip.After he makes his plans,he has to make some unexpected auto repairs.Also,he sees the price of gas has gone up.Which of these two events should Kyle consider in deciding if it is still worthwhile to go on the trip?

Correct AnswerverifiedShow Answer

An individual deciding how to allocate her limited time is dealing with both scarcity and trade-offs.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is an example of something economists study?

Correct AnswerverifiedShow Answer

The term "invisible hand" was coined by

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The principle that "people face tradeoffs" applies to

Correct AnswerverifiedShow Answer

In the United States,incomes historically have grown about 2 percent per year.At this rate,average income doubles every

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A company that formerly produced software went out of business because too many potential customers bought illegally-produced copies of the software instead of buying the product directly from the company.This instance serves as an example of

Correct AnswerverifiedShow Answer

Suppose that in Ireland total annual output is worth $600 million and people work 30 million hours.In Canada total annual output is worth $800 million and people work 50 million hours.Productivity is higher

Correct AnswerverifiedShow Answer

When government policies are enacted,

Correct AnswerverifiedShow Answer

If a paper factory does not bear the entire cost of the pollution it emits,it will

Correct AnswerverifiedShow Answer

Adam Smith's book The Wealth of Nations was published in

Correct AnswerverifiedShow Answer

Which of the following firms is most likely to have market power?

Correct AnswerverifiedShow Answer

The invisible hand refers to

Correct AnswerverifiedShow Answer

Your professor loves her work,teaching economics.She has been offered other positions in the corporate world that would increase her income by 25 percent,but she has decided to continue working as a professor.Her decision would not change unless the marginal

Correct AnswerverifiedShow Answer

Economics is the study of how evenly goods and services are distributed within society.

Correct AnswerverifiedShow Answer

Tuition is the single-largest cost of attending college for most students.

Correct AnswerverifiedShow Answer

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