Question 1

In the former Soviet Union,producers were paid for meeting output targets,not for selling products.Under those circumstances,what were the economic incentives for producers?

Accepted Answer

A)   to produce good quality products so that society would benefit from the resources used
B)   to conserve on costs,so as to maintain efficiency in the economy
C)   to produce enough to meet the output target,without regard for quality or cost
D)   to produce those products that society desires mostE) A) and C)
F) B) and C)

Question 2

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) All of the above
F) C) and D)

Question 3

Scenario 1-2
Suppose that you have a choice between going to the movies with a friend for two hours or working at your job.If you go to the movies,you will spend $7 on a ticket and $5 on popcorn.If you choose to work,you will earn $10 an hour.
-Refer to Scenario 1-2.What is your opportunity cost of going to the movies?

Accepted Answer

The answer of Scenario 1-2
Suppose that you have a choice...

Question 4

George has spent $600 purchasing and repairing an old fishing boat,which he expects to sell for $900 once the repairs are complete.George discovers that,in addition to the $600 he has already spent,he needs to make an additional repair,which will cost another $400,in order to make the boat worth $900 to potential buyers.He can sell the boat as it is now for $400.What should he do?

Accepted Answer

A)   He should sell the boat as it is now for $400.
B)   He should keep the boat since it would not be rational to spend $1,000 on repairs and then sell the boat for $900.
C)   He should complete the repairs and sell the boat for $900.
D)   It does not matter which action he takes;the outcome is the same either way.E) A) and C)
F) A) and B)

Question 5

Which of the following is an example of an externality?

Accepted Answer

A)   A paper mill dumps waste into the river.
B)   A neighbor's loud music disrupts sleep.
C)   A drunk driver causes an accident that injures another person.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

When the "invisible hand" guides economic activity,prices of products reflect

Accepted Answer

A)   only the values that society places on those products.
B)   only the costs to society of producing those products.
C)   both the values that society places on those products and the costs to society of producing those products.
D)   none of the above;when the "invisible hand" guides economic activity,prices of products are set by the government in a manner that is thought to be "fair."E) A) and B)
F) B) and C)

Question 8

Explain the concept of externality and give an example.

Accepted Answer

The impact of one pe...

Question 9

Rick buys a 1966 Mustang for $3,000,planning to restore and sell the car.He goes on to spend $9,000 restoring the car.At this point he can sell the car for $10,000.As an alternative,he can spend an additional $3,000 replacing the engine.With a new engine the car would sell for $13,000.Rick should

Accepted Answer

A)   complete the repairs and sell the car for $13,000.
B)   sell the car now for $10,000.
C)   never try such an expensive project again.
D)   be indifferent between (i) selling the car now and (ii) replacing the engine and then selling it.E) B) and C)
F) A) and C)

Question 10

Trade can make everyone better off except in the case where one person is better at doing everything.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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 B)
F) A) and C)

Question 13

Which of the following is a principle concerning how people interact?

Accepted Answer

A)   Markets are usually a good way to organize economic activity.
B)   Rational people think at the margin.
C)   People respond to incentives.
D)   All of the above are correct.E) A) and C)
F) None of the above

Question 14

England can benefit from trade

Accepted Answer

A)   only with nations that can produce goods England cannot produce.
B)   only with less developed nations.
C)   only with nations outside of Europe.
D)   with any nation.E) All of the above
F) None of the above

Question 15

The relatively low inflation experienced in the United States in the 1990s is attributable to

Accepted Answer

A)   slow growth of U.S.productivity during the 1990s.
B)   slow growth of the quantity of money in the U.S.in the 1990s.
C)   low levels of government spending in the U.S.in the 1980s and 1990s.
D)   the eight-year presidency of William Jefferson Clinton during the 1990s.E) A) and C)
F) None of the above

Question 16

For which of the following problems can well-designed public policy enhance economic efficiency?

Accepted Answer

A)   both externalities and market power
B)   externalities,but not market power
C)   market power,but not externalities
D)   neither externalities nor market powerE) All of the above
F) B) and C)

Question 17

If the price of a dozen eggs were fixed above the current price,then we would expect

Accepted Answer

A)   an increase in the number of eggs people want to buy and an increase in the number of eggs farmers want to sell.
B)   an increase in the number of eggs people want to buy and a decrease in the number of eggs farmers want to sell.
C)   a decrease in the number of eggs people want to buy and an increase in the number of eggs farmers want to sell.
D)   a decrease in the number of eggs people want to buy and a decrease in the number of eggs farmers want to sell.E) B) and C)
F) A) and B)

Question 18

Market failure refers to a situation in which the market does not allocate resources efficiently.

Accepted Answer

A) True 
 B)False

Question 19

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

Question 20

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 D)
F) A) and D)

Exam 1: Ten Principles of Economics

Resources are

Correct Answer
verified

The relatively low inflation experienced in the United States in the 1990s is attributable to

Correct Answer
verified

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

Correct Answer
verified

Which of the following is a principle concerning how people interact?

Correct Answer
verified

The principle that "people face tradeoffs" applies to

Correct Answer
verified

England can benefit from trade

Correct Answer
verified

Trade can make everyone better off except in the case where one person is better at doing everything.

Correct Answer
verified

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

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

When the "invisible hand" guides economic activity,prices of products reflect

Correct Answer
verified

Correct Answer
verified

Explain the concept of externality and give an example.

Correct Answer
verified
The impact of one pe...
View Answer

Market failure refers to a situation in which the market does not allocate resources efficiently.

Correct Answer
verified

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

Correct Answer
verified

In the former Soviet Union,producers were paid for meeting output targets,not for selling products.Under those circumstances,what were the economic incentives for producers?

Correct Answer
verified

Which of the following is an example of an externality?

Correct Answer
verified

If the price of a dozen eggs were fixed above the current price,then we would expect

Correct Answer
verified

For which of the following problems can well-designed public policy enhance economic efficiency?

Correct Answer
verified

Correct Answer
verified

Rick buys a 1966 Mustang for $3,000,planning to restore and sell the car.He goes on to spend $9,000 restoring the car.At this point he can sell the car for $10,000.As an alternative,he can spend an additional $3,000 replacing the engine.With a new engine the car would sell for $13,000.Rick should

Correct Answer
verified

Exam 1: Ten Principles of Economics

Resources are

Correct AnswerverifiedShow Answer

The relatively low inflation experienced in the United States in the 1990s is attributable to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is a principle concerning how people interact?

Correct AnswerverifiedShow Answer

The principle that "people face tradeoffs" applies to

Correct AnswerverifiedShow Answer

England can benefit from trade

Correct AnswerverifiedShow Answer

Trade can make everyone better off except in the case where one person is better at doing everything.

Correct AnswerverifiedShow Answer

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

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

When the "invisible hand" guides economic activity,prices of products reflect

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Explain the concept of externality and give an example.

Correct AnswerverifiedThe impact of one pe...View AnswerShow Answer

Market failure refers to a situation in which the market does not allocate resources efficiently.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the former Soviet Union,producers were paid for meeting output targets,not for selling products.Under those circumstances,what were the economic incentives for producers?

Correct AnswerverifiedShow Answer

Which of the following is an example of an externality?

Correct AnswerverifiedShow Answer

If the price of a dozen eggs were fixed above the current price,then we would expect

Correct AnswerverifiedShow Answer

For which of the following problems can well-designed public policy enhance economic efficiency?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Rick buys a 1966 Mustang for $3,000,planning to restore and sell the car.He goes on to spend $9,000 restoring the car.At this point he can sell the car for $10,000.As an alternative,he can spend an additional $3,000 replacing the engine.With a new engine the car would sell for $13,000.Rick should

Correct AnswerverifiedShow Answer

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The impact of one pe...
View Answer

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