Question 1

What does the "invisible hand" refers to?

Accepted Answer

How the decisions of...

Question 2

Debbie quits her job, which pays $30,000 a year, to finish her college degree. Her annual college expenses are $10,000 for tuition, $2,000 for books, and $700 for food. What is her opportunity cost of attending college for the year?

Accepted Answer

The answer of Debbie quits her job, which pays $30,000...

Question 3

Economics is the study of how society allocates its unlimited resources.

Accepted Answer

A) True 
 B)False

Question 4

Scenario 1-3
It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators.
-Refer to Scenario 1-3. What is the company's marginal cost?

Accepted Answer

The answer of Scenario 1-3
It costs a company $35,000 to...

Question 5

Ashley eats two bananas during a particular day. The marginal benefit she enjoys from eating the second banana

Accepted Answer

A)   can be thought of as the total benefit Ashley enjoys by eating two bananas minus the total benefit she would have enjoyed by eating just the first banana.
B)   determines Ashley's marginal cost of the first and second bananas.
C)   does not depend on how many bananas Ashley has already eaten.
D)   cannot be determined unless we know how much she paid for the bananas.E) None of the above
F) B) and C)

Question 6

Over the past century, the average income in the United States has risen about

Accepted Answer

A)   twofold.
B)   fivefold.
C)   eightfold.
D)   tenfold.E) None of the above
F) All of the above

Question 7

In the short run, an increase in the money supply is likely to lead to inflation and unemployment.

Accepted Answer

The answer of In the short run, an increase in...

Question 8

If Faith attends college, it will take her four years, during which time she will earn no income. She will pay $50,000 for tuition, $12,000 for room and board, and $5,000 for books. If she spends the four years working rather than attending college, she will pay $18,000 for room and board, pay no intuition, and buy no books. Based on this information, Faith's economic cost of attending college would be $67,000 if, over the four years, she could earn

Accepted Answer

A)   $12,000 instead of attending college.
B)   $14,000 instead of attending college.
C)   $16,000 instead of attending college.
D)   $18,000 instead of attending college.E) None of the above
F) B) and D)

Question 9

Thousands of people develop lung cancer from second-hand exposure to cigarette smoke. This is an example of

Accepted Answer

A)   a market failure caused by an externality.
B)   a market failure caused by market power.
C)   a market failure caused by equality.
D)   There is no market failure in this case.E) B) and C)
F) C) and D)

Question 10

In the short run, which of the following rates of growth in the money supply is likely to lead to the highest level of unemployment in the economy?

Accepted Answer

A)   1 percent per year
B)   2 percent per year
C)   3 percent per year
D)   4 percent per yearE) C) and D)
F) None of the above

Question 11

Scenario 1-3
It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators.
-Refer to Scenario 1-3. What is the minimum price the company will charge for the 701th calculator?

Accepted Answer

The answer of Scenario 1-3
It costs a company $35,000 to...

Question 12

The opportunity cost of going to college is

Accepted Answer

A)   the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses.
B)   the value of the best opportunity a student gives up to attend college.
C)   zero for students who are fortunate enough to have all of their college expenses paid by someone else.
D)   zero, since a college education will allow a student to earn a larger income after graduation.E) B) and C)
F) A) and C)

Question 13

Scenario 1-6
It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors.
-Refer to Scenario 1-6. What is the company's average cost?

Accepted Answer

The answer of Scenario 1-6
It costs a company $30,000 to...

Question 14

When you calculate your true costs of going to college, what portion of your room-and-board expenses should be included?

Accepted Answer

A)   Your full room-and-board expenses should always be included.
B)   None of your room-and-board expenses should ever be included.
C)   You should include only the amount by which your room-and-board expenses exceed the income you earn while attending college.
D)   You should include only the amount by which your room-and-board expenses exceed the expenses for rent and food if you were not in college.E) C) and D)
F) All of the above

Question 15

President Gerald Ford referred to inflation as

Accepted Answer

A)   a blight on our nation's economy.
B)   a necessary evil to combat high unemployment.
C)   public enemy number one.
D)   a fly in the ointment.E) B) and C)
F) A) and B)

Question 16

A rational decisionmaker takes an action if and only if

Accepted Answer

A)   the marginal benefit of the action exceeds the marginal cost of the action.
B)   the marginal cost of the action exceeds the marginal benefit of the action.
C)   the marginal cost of the action is zero.
D)   the opportunity cost of the action is zero.E) A) and B)
F) None of the above

Question 17

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

Question 18

Prices direct economic activity in a market economy by

Accepted Answer

A)   influencing the actions of buyers and sellers.
B)   reducing scarcity of the goods and services produced.
C)   eliminating the need for government intervention.
D)   allocating goods and services in the most equitable way.E) B) and D)
F) B) and C)

Question 19

Market power refers to the

Accepted Answer

A)   power of a single person or small group to influence market prices.
B)   ability of a person or small group to successfully market new products.
C)   power of the government to regulate a market.
D)   importance of a certain market in relation to the overall economy.E) A) and B)
F) B) and C)

Question 20

Senator Jackson argues that replacing the federal income tax with a national sales tax would increase the level of output. Senator Feldman objects that this policy would benefit the rich at the expense of the poor.

Accepted Answer

A)   Both senators' arguments are primarily about equality.
B)   Both senators' arguments are primarily about efficiency.
C)   Senator Jackson's argument is primarily about equality, while Senator Feldman's argument is primarily about efficiency.
D)   Senator Jackson's argument is primarily about efficiency, while Senator Feldman's argument is primarily about equality.E) A) and C)
F) None of the above

Exam 1: Ten Principles of Economics

Prices direct economic activity in a market economy by

Correct Answer
verified

Ashley eats two bananas during a particular day. The marginal benefit she enjoys from eating the second banana

Correct Answer
verified

Market power refers to the

Correct Answer
verified

Scenario 1-3 It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators. -Refer to Scenario 1-3. What is the company's marginal cost?

Correct Answer
verified

Over the past century, the average income in the United States has risen about

Correct Answer
verified

When you calculate your true costs of going to college, what portion of your room-and-board expenses should be included?

Correct Answer
verified

In the short run, an increase in the money supply is likely to lead to inflation and unemployment.

Correct Answer
verified

Economics is the study of how society allocates its unlimited resources.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

President Gerald Ford referred to inflation as

Correct Answer
verified

Senator Jackson argues that replacing the federal income tax with a national sales tax would increase the level of output. Senator Feldman objects that this policy would benefit the rich at the expense of the poor.

Correct Answer
verified

What does the "invisible hand" refers to?

Correct Answer
verified
How the decisions of...
View Answer

Debbie quits her job, which pays $30,000 a year, to finish her college degree. Her annual college expenses are $10,000 for tuition, $2,000 for books, and $700 for food. What is her opportunity cost of attending college for the year?

Correct Answer
verified

A rational decisionmaker takes an action if and only if

Correct Answer
verified

Scenario 1-6 It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors. -Refer to Scenario 1-6. What is the company's average cost?

Correct Answer
verified

The opportunity cost of going to college is

Correct Answer
verified

In the short run, which of the following rates of growth in the money supply is likely to lead to the highest level of unemployment in the economy?

Correct Answer
verified

Thousands of people develop lung cancer from second-hand exposure to cigarette smoke. This is an example of

Correct Answer
verified

Exam 1: Ten Principles of Economics

Prices direct economic activity in a market economy by

Correct AnswerverifiedShow Answer

Ashley eats two bananas during a particular day. The marginal benefit she enjoys from eating the second banana

Correct AnswerverifiedShow Answer

Market power refers to the

Correct AnswerverifiedShow Answer

Scenario 1-3 It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators. -Refer to Scenario 1-3. What is the company's marginal cost?

Correct AnswerverifiedShow Answer

Over the past century, the average income in the United States has risen about

Correct AnswerverifiedShow Answer

When you calculate your true costs of going to college, what portion of your room-and-board expenses should be included?

Correct AnswerverifiedShow Answer

In the short run, an increase in the money supply is likely to lead to inflation and unemployment.

Correct AnswerverifiedShow Answer

Economics is the study of how society allocates its unlimited resources.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

President Gerald Ford referred to inflation as

Correct AnswerverifiedShow Answer

Senator Jackson argues that replacing the federal income tax with a national sales tax would increase the level of output. Senator Feldman objects that this policy would benefit the rich at the expense of the poor.

Correct AnswerverifiedShow Answer

What does the "invisible hand" refers to?

Correct AnswerverifiedHow the decisions of...View AnswerShow Answer

Debbie quits her job, which pays $30,000 a year, to finish her college degree. Her annual college expenses are $10,000 for tuition, $2,000 for books, and $700 for food. What is her opportunity cost of attending college for the year?

Correct AnswerverifiedShow Answer

A rational decisionmaker takes an action if and only if

Correct AnswerverifiedShow Answer

Scenario 1-6 It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors. -Refer to Scenario 1-6. What is the company's average cost?

Correct AnswerverifiedShow Answer

The opportunity cost of going to college is

Correct AnswerverifiedShow Answer

In the short run, which of the following rates of growth in the money supply is likely to lead to the highest level of unemployment in the economy?

Correct AnswerverifiedShow Answer

Thousands of people develop lung cancer from second-hand exposure to cigarette smoke. This is an example of

Correct AnswerverifiedShow Answer

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How the decisions of...
View Answer

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