Question 1

The opportunity cost of an item is

Accepted Answer

A)   the number of hours needed to earn money to buy the item.
B)   what you give up to get that item.
C)   usually less than the dollar value of the item.
D)   the dollar value of the item.E) A) and D)
F) B) and D)

Question 2

Mitch has $100 to spend and wants to buy either a new amplifier for his guitar or a new mp3 player to listen to music while working out.Both the amplifier and the mp3 player cost $100,so he can only buy one.This illustrates the basic concept that

Accepted Answer

A)   trade can make everyone better off.
B)   people face trade-offs
C)   rational people think at the margin.
D)   people respond to incentives.E) A) and D)
F) A) and C)

Question 3

When society requires that firms reduce pollution,there is

Accepted Answer

A)   a tradeoff because of reduced incomes to the firms' owners and workers.
B)   a tradeoff only if some firms are forced to close.
C)   no tradeoff,since the cost of reducing pollution falls only on the firms affected by the requirements.
D)   no tradeoff,since everyone benefits from reduced pollution.E) C) and D)
F) All of the above

Question 4

Which of the following is not an example of a group responding to an incentive?

Accepted Answer

A)   Students attend class because of an attendance policy that reduces their grade for absences.
B)   Consumers buy more of a product when it is on sale at a reduced price.
C)   Universities offer fewer online classes when they generate more revenue than traditional classes.
D)   Employees work harder to earn higher commissions.E) All of the above
F) B) and D)

Question 5

Equality refers to how the pie is divided,and efficiency refers to the size of the economic pie.

Accepted Answer

A) True 
 B)False

Question 6

In response to the deep economic downturn in the US in 2008 and 2009,the US

Accepted Answer

A)   reduced taxes.
B)   increased government spending.
C)   increased the supply of money.
D)   All of the above are correct.E) B) and C)
F) A) and B)

Question 7

Approximately what percentage of the world's economies experience scarcity?

Accepted Answer

A)   10%
B)   40%
C)   85%
D)   100%E) C) and D)
F) B) and D)

Question 8

In the short run,which of the following is not correct?

Accepted Answer

A)   Increasing the money supply increases the demand for goods and services.
B)   Increasing the money supply encourages firms to hire more workers.
C)   Lowering the money supply leads to a higher level of unemployment.
D)   Policies that encourage higher employment will also induce a lower rate of inflation.E) B) and D)
F) B) and C)

Question 9

With the understanding that people respond to incentives,outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

Accepted Answer

The concept of working longer per year w...

Question 10

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

Question 11

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 B)
F) C) and D)

Question 12

If the wage for unskilled labor were fixed above the current wage,then we would expect

Accepted Answer

A)   an increase in the number of unskilled jobs available.
B)   a decrease in the number of unskilled jobs available.
C)   a decrease in the number of workers wanting unskilled jobs.
D)   None of the above is correct.E) B) and D)
F) A) and B)

Question 13

In a particular country in 2000,the average worker needed to work 40 hours to produce 55 units of output.In that same country in 2008,the average worker needed to work 30 hours to produce 45 units of output.In that country,the productivity of the average worker

Accepted Answer

A)   decreased by about 6 percent between 2000 and 2008.
B)   remained unchanged between 2000 and 2008.
C)   increased by about 9 percent between 2000 and 2008.
D)   increased by about 18 percent between 2000 and 2008.E) B) and C)
F) A) and D)

Question 14

What are the two reasons for the government to intervene in a market?

Accepted Answer

To promote...

Question 15

In 2008,the average American earned about $47,000 while the average Nigerian earned about $1,400.Which of the following statements is likely?

Accepted Answer

A)   The average American purchases more televisions than the average Nigerian.
B)   The average American has better nutrition and healthcare than the average Nigerian.
C)   The average American has a longer life expectancy than the average Nigerian.
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 16

Which of the following is not an example of the opportunity cost of going to school?

Accepted Answer

A)   The money a student could have earned by working if he had not gone to college.
B)   The nap a student could have enjoyed if he had not attended class.
C)   The party a student could have enjoyed if he had not stayed in to study for his exam.
D)   The money a student spends on rent for his apartment while attending school.E) C) and D)
F) B) and C)

Question 17

Because resources are scarce,a society cannot give all individuals the standard of living to which each aspires.

Accepted Answer

A) True 
 B)False

Question 18

One of the 20th century's worst episodes of inflation occurred in

Accepted Answer

A)   the United States in the 1960s.
B)   Italy in the 1950s.
C)   Russia in the 1930s.
D)   Germany in the 1920s.E) B) and D)
F) A) and B)

Question 19

One effect of the government-imposed seat belt law in the U.S.has been

Accepted Answer

A)   a dramatic decrease in the number of pedestrian deaths.
B)   safer driving.
C)   an increase in the number of accidents.
D)   a dramatic decrease in the number of driver deaths.E) B) and D)
F) A) and B)

Question 20

An example of a firm with market power is a

Accepted Answer

A)   delicatessen in New York.
B)   cable TV provider in St.Louis.
C)   clothing store in Los Angeles.
D)   family farm in Illinois.E) A) and C)
F) A) and B)

Exam 1: Ten Principles of Economics

Which of the following is not an example of the opportunity cost of going to school?

Correct AnswerverifiedShow Answer

If the wage for unskilled labor were fixed above the current wage,then we would expect

Correct AnswerverifiedShow Answer

One of the 20th century's worst episodes of inflation occurred in

Correct AnswerverifiedShow Answer

One effect of the government-imposed seat belt law in the U.S.has been

Correct AnswerverifiedShow Answer

Mitch has $100 to spend and wants to buy either a new amplifier for his guitar or a new mp3 player to listen to music while working out.Both the amplifier and the mp3 player cost $100,so he can only buy one.This illustrates the basic concept that

Correct AnswerverifiedShow Answer

In 2008,the average American earned about $47,000 while the average Nigerian earned about $1,400.Which of the following statements is likely?

Correct AnswerverifiedShow Answer

In response to the deep economic downturn in the US in 2008 and 2009,the US

Correct AnswerverifiedShow Answer

Approximately what percentage of the world's economies experience scarcity?

Correct AnswerverifiedShow Answer

What are the two reasons for the government to intervene in a market?

Correct AnswerverifiedTo promote...View AnswerShow Answer

In the short run,which of the following is not correct?

Correct AnswerverifiedShow Answer

Which of the following is not an example of a group responding to an incentive?

Correct AnswerverifiedShow Answer

The opportunity cost of an item is

Correct AnswerverifiedShow Answer

Because resources are scarce,a society cannot give all individuals the standard of living to which each aspires.

Correct AnswerverifiedShow Answer

In a particular country in 2000,the average worker needed to work 40 hours to produce 55 units of output.In that same country in 2008,the average worker needed to work 30 hours to produce 45 units of output.In that country,the productivity of the average worker

Correct AnswerverifiedShow Answer

Equality refers to how the pie is divided,and efficiency refers to the size of the economic pie.

Correct AnswerverifiedShow Answer

With the understanding that people respond to incentives,outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

Correct AnswerverifiedThe concept of working longer per year w...View AnswerShow Answer

When society requires that firms reduce pollution,there is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An example of a firm with market power is a

Correct AnswerverifiedShow Answer

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To promote...
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The concept of working longer per year w...
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Correct Answer
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