Question 1

Which of the following would a permanent increase in the growth rate of the money supply change permanently?

Accepted Answer

A)   inflation
B)   unemployment
C)   both inflation and unemployment
D)   neither inflation nor unemploymentE) A) and B)
F) None of the above

Question 2

A marginal change is a small incremental adjustment to an existing plan of action.

Accepted Answer

A) True 
 B)False

Question 3

In the context of decisionmaking, the word "marginal" is most closely associated with the word

Accepted Answer

A)   "unimportant."
B)   "slow."
C)   "edge."
D)   "irrational."E) All of the above
F) A) and C)

Question 4

Communist countries worked on the premise that government officials were in the best position to allocate the economy's scarce resources.

Accepted Answer

A) True 
 B)False

Question 5

A species of snakes became extinct due to pollution in a river where the snakes once lived. 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) A) and B)

Question 6

You have driven 800 miles on a vacation and then you notice that you are only 15 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

Accepted Answer

A)   both the cost of driving the first 800 miles and the next 15 miles.
B)   the cost of driving the first 800 miles, but not the cost of driving the next 15 miles.
C)   the cost of driving the next 15 miles, but not the cost of driving the first 800 miles.
D)   neither the cost of driving the first 800 miles nor the cost of driving the next 15 miles.E) A) and C)
F) C) and D)

Question 7

Rational people make decisions at the margin by

Accepted Answer

A)   following marginal traditions.
B)   behaving in a random fashion.
C)   thinking in black-and-white terms.
D)   comparing marginal costs and marginal benefits.E) C) and D)
F) A) and C)

Question 8

The word "economy" comes from the Greek word oikonomos, which means

Accepted Answer

A)   "environment."
B)   "production."
C)   "one who manages a household."
D)   "one who makes decisions."E) All of the above
F) A) and C)

Question 9

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight. The marginal cost per room per night

Accepted Answer

A)   is $40.
B)   is $80.
C)   is $120.
D)   cannot be determined from the information given.E) A) and B)
F) B) and D)

Question 10

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is a decision that economists study?

Accepted Answer

A)   how much people work
B)   what people buy
C)   how much money people save
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 12

Incomes of U.S. households in the 1970s and 1980s

Accepted Answer

A)   grew rapidly, due to the widespread success of labor unions in pushing up wages during those decades.
B)   grew rapidly, due to several increases in the minimum wage during those decades.
C)   grew rapidly, due to government policies that discouraged the importation of foreign products during those decades.
D)   grew slowly, due to slow growth of the output of goods and services per hour of U.S. workers' time during those decades.E) All of the above
F) A) and B)

Question 13

Congressman Dearmark justified spending $3 million on a new entertainment complex in his district because it will create 450 new jobs for his residents. As a student of economics, you know that

Accepted Answer

A)   this is a case of the "broken window fallacy."
B)   this is a great use of taxpayer dollars.
C)   this policy diverts money from spending somewhere else in the economy.
D)   Both a and c are correct.E) A) and C)
F) A) and D)

Question 14

In a centrally-planned economy, economic activity is guided by .

Accepted Answer

The answer of In a centrally-planned economy, economic activity is...

Question 15

In the 1990s, inflation in the United States was

Accepted Answer

A)   very close to zero.
B)   about 3 percent per year.
C)   about 6 percent per year.
D)   commonly referred to as "public enemy number one."E) A) and D)
F) C) and D)

Question 16

To promote good economic outcomes, policymakers should strive to enact policies that

Accepted Answer

A)   enhance productivity.
B)   enhance individuals' market power.
C)   result in a rapidly-growing quantity of money.
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 17

If the government were to intervene and set a wage for unskilled labor above the market wage, then we would expect, relative to the market outcome,

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) None of the above
F) B) and C)

Question 18

What are the two basic types of economies?

Accepted Answer

Centrally ...

Question 19

College-age athletes who drop out of college to play professional sports

Accepted Answer

A)   are not rational decision makers.
B)   are well aware that their opportunity cost of attending college is very high.
C)   are concerned more about present circumstances than their future.
D)   underestimate the value of a college education.E) A) and D)
F) B) and C)

Exam 1: Ten Principles of Economics

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

Correct Answer
verified

Incomes of U.S. households in the 1970s and 1980s

Correct Answer
verified

A marginal change is a small incremental adjustment to an existing plan of action.

Correct Answer
verified

College-age athletes who drop out of college to play professional sports

Correct Answer
verified

Communist countries worked on the premise that government officials were in the best position to allocate the economy's scarce resources.

Correct Answer
verified

In a centrally-planned economy, economic activity is guided by .

Correct Answer
verified

Which of the following would a permanent increase in the growth rate of the money supply change permanently?

Correct Answer
verified

In the 1990s, inflation in the United States was

Correct Answer
verified

A species of snakes became extinct due to pollution in a river where the snakes once lived. This is an example of

Correct Answer
verified

Which of the following is a decision that economists study?

Correct Answer
verified

The word "economy" comes from the Greek word oikonomos, which means

Correct Answer
verified

In the context of decisionmaking, the word "marginal" is most closely associated with the word

Correct Answer
verified

What are the two basic types of economies?

Correct Answer
verified
Centrally ...
View Answer

Congressman Dearmark justified spending $3 million on a new entertainment complex in his district because it will create 450 new jobs for his residents. As a student of economics, you know that

Correct Answer
verified

You have driven 800 miles on a vacation and then you notice that you are only 15 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

Correct Answer
verified

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight. The marginal cost per room per night

Correct Answer
verified

Rational people make decisions at the margin by

Correct Answer
verified

To promote good economic outcomes, policymakers should strive to enact policies that

Correct Answer
verified

If the government were to intervene and set a wage for unskilled labor above the market wage, then we would expect, relative to the market outcome,

Correct Answer
verified

Exam 1: Ten Principles of Economics

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

Correct AnswerverifiedShow Answer

Incomes of U.S. households in the 1970s and 1980s

Correct AnswerverifiedShow Answer

A marginal change is a small incremental adjustment to an existing plan of action.

Correct AnswerverifiedShow Answer

College-age athletes who drop out of college to play professional sports

Correct AnswerverifiedShow Answer

Communist countries worked on the premise that government officials were in the best position to allocate the economy's scarce resources.

Correct AnswerverifiedShow Answer

In a centrally-planned economy, economic activity is guided by .

Correct AnswerverifiedShow Answer

Which of the following would a permanent increase in the growth rate of the money supply change permanently?

Correct AnswerverifiedShow Answer

In the 1990s, inflation in the United States was

Correct AnswerverifiedShow Answer

A species of snakes became extinct due to pollution in a river where the snakes once lived. This is an example of

Correct AnswerverifiedShow Answer

Which of the following is a decision that economists study?

Correct AnswerverifiedShow Answer

The word "economy" comes from the Greek word oikonomos, which means

Correct AnswerverifiedShow Answer

In the context of decisionmaking, the word "marginal" is most closely associated with the word

Correct AnswerverifiedShow Answer

What are the two basic types of economies?

Correct AnswerverifiedCentrally ...View AnswerShow Answer

Congressman Dearmark justified spending $3 million on a new entertainment complex in his district because it will create 450 new jobs for his residents. As a student of economics, you know that

Correct AnswerverifiedShow Answer

You have driven 800 miles on a vacation and then you notice that you are only 15 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

Correct AnswerverifiedShow Answer

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight. The marginal cost per room per night

Correct AnswerverifiedShow Answer

Rational people make decisions at the margin by

Correct AnswerverifiedShow Answer

To promote good economic outcomes, policymakers should strive to enact policies that

Correct AnswerverifiedShow Answer

If the government were to intervene and set a wage for unskilled labor above the market wage, then we would expect, relative to the market outcome,

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Centrally ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified