Question 1

Market failure is the ability of a single person to have a substantial influence on market prices.

Accepted Answer

A) True 
 B)False

Question 2

Efficiency means everyone in the economy should receive an equal share of the goods and services produced.

Accepted Answer

A) True 
 B)False

Question 3

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by

Accepted Answer

A)   unstable economic conditions in Eastern Europe.
B)   increased competition from abroad.
C)   a decline in the rate of increase in U.S. productivity.
D)   a strong U.S. dollar abroad, hurting U.S. exports.E) A) and B)
F) None of the above

Question 4

It once took 90 percent of our population to grow our food. It now takes only 3 percent of the population to grow our food. Which of the following statements is true?

Accepted Answer

A)   This loss of jobs has been detrimental to our economy.
B)   The government should provide subsidies to encourage more people to become farmers.
C)   This reduction in the number of farmers explains the increase in the price of food.
D)   This is progress because freed-up labor is used to produce other goods.E) C) and D)
F) A) and B)

Question 5

Benefits from trade would not include

Accepted Answer

A)   the ability of people and nations to specialize.
B)   a greater variety of goods and services becoming available.
C)   less competition.
D)   lower prices.E) B) and C)
F) All of the above

Question 6

Olivia was accepted by Northwestern and by another university. She is trying to decide where to go. Which of the following should influence her decision?

Accepted Answer

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

Question 7

Productivity is defined as the quantity of goods and services produced from each unit of labor input.

Accepted Answer

A) True 
 B)False

Question 8

Inflation is the primary determinant of a country's living standards.

Accepted Answer

A) True 
 B)False

Question 9

A barber currently cuts hair for 50 clients per week and earns a profit. He is considering expanding his operation in order to serve more clients. Should he expand?

Accepted Answer

A)   Yes, because cutting hair is profitable.
B)   No, because he may not be able to sell more services.
C)   It depends on the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients.
D)   It depends on the average cost of serving more clients and the average revenue he will earn from serving more clients.E) None of the above
F) All of the above

Question 10

For most students, the largest single cost of a college education is

Accepted Answer

A)   the wages given up to attend school.
B)   tuition, fees, and books.
C)   room and board.
D)   transportation, parking, and entertainment.E) B) and D)
F) B) and C)

Question 11

If an externality is present in a market, economic efficiency may be enhanced by

Accepted Answer

A)   government intervention.
B)   a decrease in foreign competition.
C)   fewer market participants.
D)   weaker property rights.E) A) and D)
F) All of the above

Question 12

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) A) and C)
F) B) and D)

Question 13

Barb's aunt gave her $100 for her birthday with the condition that Barb buy herself something. In deciding how to spend the money, Barb narrows her options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally she decides on Option B. The opportunity cost of this decision is

Accepted Answer

A)   the value to Barb of the option she would have chosen had Option B not been available.
B)   the value to Barb of Options A, C and D combined.
C)   the average of the values to Barb of Options A, C, and D.
D)   $100.E) All of the above
F) A) and C)

Question 14

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

Accepted Answer

A)   should be counted in full, regardless of the costs of eating and sleeping elsewhere.
B)   should be counted only to the extent that they are more expensive at college than elsewhere.
C)   usually exceed the opportunity cost of going to college.
D)   plus the cost of tuition, equals the opportunity cost of going to college.E) A) and B)
F) All of the above

Question 15

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 16

Which of the following statements best characterizes a basic difference between market economies and centrally- planned economies?

Accepted Answer

A)   Society relies more upon prices to allocate resources when the economy is centrally-planned than when it is market-based.
B)   The self-interest of households is reflected more fully in the outcome of a centrally-planned economy than in the outcome of a market economy.
C)   Government plays a larger role in the economic affairs of a market economy than in the economic affairs of a centrally-planned economy.
D)   None of the above are correct.E) None of the above
F) C) and D)

Question 17

Economists use the term to refer to an increase in the overall level of prices in the economy.

Accepted Answer

The answer of Economists use the term to refer to...

Question 18

It costs a company $35,000 to produce 500 graphing calculators. The company's cost will be $35,080 if it produces an additional graphing calculator. If the company produces 501 graphing calculators then

Accepted Answer

A)   its average cost is greater than its marginal cost.
B)   its average cost and its marginal cost are equal.
C)   its average cost is less than its marginal cost.
D)   This cannot be determined from the information given.E) A) and B)
F) All of the above

Exam 1: Ten Principles of Economics

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

Correct Answer
verified

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by

Correct Answer
verified

Economists use the term to refer to an increase in the overall level of prices in the economy.

Correct Answer
verified

Productivity is defined as the quantity of goods and services produced from each unit of labor input.

Correct Answer
verified

Efficiency means everyone in the economy should receive an equal share of the goods and services produced.

Correct Answer
verified

Olivia was accepted by Northwestern and by another university. She is trying to decide where to go. Which of the following should influence her decision?

Correct Answer
verified

It costs a company $35,000 to produce 500 graphing calculators. The company's cost will be $35,080 if it produces an additional graphing calculator. If the company produces 501 graphing calculators then

Correct Answer
verified

It once took 90 percent of our population to grow our food. It now takes only 3 percent of the population to grow our food. Which of the following statements is true?

Correct Answer
verified

Market failure is the ability of a single person to have a substantial influence on market prices.

Correct Answer
verified

Benefits from trade would not include

Correct Answer
verified

Correct Answer
verified

Which of the following statements best characterizes a basic difference between market economies and centrally- planned economies?

Correct Answer
verified

Resources are

Correct Answer
verified

For most students, the largest single cost of a college education is

Correct Answer
verified

If an externality is present in a market, economic efficiency may be enhanced by

Correct Answer
verified

A barber currently cuts hair for 50 clients per week and earns a profit. He is considering expanding his operation in order to serve more clients. Should he expand?

Correct Answer
verified

Inflation is the primary determinant of a country's living standards.

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

Exam 1: Ten Principles of Economics

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

Correct AnswerverifiedShow Answer

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by

Correct AnswerverifiedShow Answer

Economists use the term to refer to an increase in the overall level of prices in the economy.

Correct AnswerverifiedShow Answer

Productivity is defined as the quantity of goods and services produced from each unit of labor input.

Correct AnswerverifiedShow Answer

Efficiency means everyone in the economy should receive an equal share of the goods and services produced.

Correct AnswerverifiedShow Answer

Olivia was accepted by Northwestern and by another university. She is trying to decide where to go. Which of the following should influence her decision?

Correct AnswerverifiedShow Answer

It costs a company $35,000 to produce 500 graphing calculators. The company's cost will be $35,080 if it produces an additional graphing calculator. If the company produces 501 graphing calculators then

Correct AnswerverifiedShow Answer

It once took 90 percent of our population to grow our food. It now takes only 3 percent of the population to grow our food. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Market failure is the ability of a single person to have a substantial influence on market prices.

Correct AnswerverifiedShow Answer

Benefits from trade would not include

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements best characterizes a basic difference between market economies and centrally- planned economies?

Correct AnswerverifiedShow Answer

Resources are

Correct AnswerverifiedShow Answer

For most students, the largest single cost of a college education is

Correct AnswerverifiedShow Answer

If an externality is present in a market, economic efficiency may be enhanced by

Correct AnswerverifiedShow Answer

A barber currently cuts hair for 50 clients per week and earns a profit. He is considering expanding his operation in order to serve more clients. Should he expand?

Correct AnswerverifiedShow Answer

Inflation is the primary determinant of a country's living standards.

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

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