Question 1

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 2

Efficiency means that

Accepted Answer

A)   society is conserving resources in order to save them for the future.
B)   society's goods and services are distributed equally among society's members.
C)   society's goods and services are distributed fairly,though not necessarily equally,among society's members.
D)   society is getting the maximum benefits from its scarce resources.E) A) and B)
F) A) and C)

Question 3

One tradeoff society faces is between efficiency and equality.Define each term.If the U.S.government redistributes income from the rich to the poor,explain how this action affects equality as well as efficiency in the economy.

Accepted Answer

Efficiency is the property of society ge...

Question 4

Guns and butter are used to represent the classic societal tradeoff between spending on

Accepted Answer

A)   durable and nondurable goods.
B)   imports and exports.
C)   national defense and consumer goods.
D)   law enforcement and agriculture.E) B) and D)
F) None of the above

Question 5

In considering how to allocate its scarce resources among its various members,a household considers

Accepted Answer

A)   each member's abilities.
B)   each member's efforts.
C)   each member's desires.
D)   all of the aboveE) None of the above
F) A) and B)

Question 6

The marginal benefit Colin gets from eating a fourth slice of pizza is

Accepted Answer

A)   the total benefit Colin gets from eating four slices of pizza minus the total benefit Colin gets from eating three slices of pizza.
B)   the same as the total benefit of eating four slices of pizza.
C)   less than the marginal cost of eating the fourth slice of pizza since he chose to eat the fourth slice.
D)   the total benefit Colin gets from eating five slices of pizza minus the total benefit Colin gets from eating four slices of pizza.E) A) and D)
F) A) and C)

Question 7

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

Question 8

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

Accepted Answer

A) True 
 B)False

Question 9

Large or persistent inflation is almost always caused by

Accepted Answer

A)   excessive government spending.
B)   excessive growth in the quantity of money.
C)   foreign competition.
D)   higher-than-normal levels of productivity.E) A) and B)
F) A) and D)

Question 10

Public policies

Accepted Answer

A)   may be able to improve either economic efficiency or equality.
B)   may be able to improve economic efficiency but cannot improve equality.
C)   may be able to improve equality but cannot improve economic efficiency.
D)   cannot improve either equality or economic efficiency.E) C) and D)
F) B) and C)

Question 11

The business cycle is measured by the

Accepted Answer

A)   production of goods and services.
B)   number of people employed.
C)   the interest rate.
D)   Both a and b are correct.E) B) and D)
F) All of the above

Question 12

Economists use the word equality to describe a situation in which

Accepted Answer

A)   each member of society has the same income.
B)   each member of society has access to abundant quantities of goods and services,regardless of his or her income.
C)   society is getting the maximum benefits from its scarce resources.
D)   society's resources are used efficiently.E) A) and D)
F) C) and D)

Question 13

If the average cost of transporting a passenger on the train from Chicago to St.Louis is $75,it would be irrational for the railroad to allow any passenger to ride for less than $75.

Accepted Answer

A) True 
 B)False

Question 14

In a particular country in 1998,the average worker needed to work 40 hours to produce 100 units of output.In that same country in 2008,the average worker needed to work 36 hours to produce 72 units of output.In that country,the productivity of the average worker

Accepted Answer

A)   decreased between 1998 and 2008,so we would expect the standard of living to have decreased accordingly.
B)   increased between 1998 and 2008,so we would expect the standard of living to have increased accordingly.
C)   decreased between 1998 and 2008,so we would expect inflation to have decreased accordingly.
D)   increased between 1998 and 2008,so we would expect inflation to have increased accordingly.E) B) and D)
F) None of the above

Question 15

To improve living standards,policymakers should

Accepted Answer

A)   impose restrictions on foreign competition.
B)   formulate policies designed to increase productivity.
C)   impose tougher immigration policies.
D)   provide tax breaks for the middle class.E) B) and D)
F) B) and C)

Question 16

In the United States,the overall level of prices more than doubled during the

Accepted Answer

A)   1950s.
B)   1960s.
C)   1970s.
D)   1980s.E) B) and C)
F) All of the above

Question 17

After much consideration,you have chosen Cancun over Ft.Lauderdale as your Spring Break destination this year.However,Spring Break is still months away,and you may reverse this decision.Which of the following events would prompt you to reverse this decision?

Accepted Answer

A)   The marginal benefit of going to Cancun increases.
B)   The marginal cost of going to Cancun decreases.
C)   The marginal benefit of going to Ft.Lauderdale decreases.
D)   The marginal cost of going to Ft.Lauderdale decreases.E) All of the above
F) A) and C)

Question 18

In the early 1980s,U.S.economic policy was directed toward reducing inflation.What would you have expected to observe during this short period of time?

Accepted Answer

A)   Inflation fell and unemployment fell.
B)   Inflation and unemployment were both unaffected.
C)   Inflation fell and unemployment increased.
D)   Inflation fell and unemployment was unchanged.E) A) and B)
F) B) and C)

Question 19

For markets to work well,there must be

Accepted Answer

A)   market power.
B)   a central planner.
C)   property rights.
D)   abundant,not scarce,resources.E) C) and D)
F) A) and D)

Question 20

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

Exam 1: Ten Principles of Economics

The business cycle is measured by the

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In a particular country in 1998,the average worker needed to work 40 hours to produce 100 units of output.In that same country in 2008,the average worker needed to work 36 hours to produce 72 units of output.In that country,the productivity of the average worker

Correct AnswerverifiedShow Answer

After much consideration,you have chosen Cancun over Ft.Lauderdale as your Spring Break destination this year.However,Spring Break is still months away,and you may reverse this decision.Which of the following events would prompt you to reverse this decision?

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Efficiency means that

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Large or persistent inflation is almost always caused by

Correct AnswerverifiedShow Answer

Economists use the word equality to describe a situation in which

Correct AnswerverifiedShow Answer

Guns and butter are used to represent the classic societal tradeoff between spending on

Correct AnswerverifiedShow Answer

One tradeoff society faces is between efficiency and equality.Define each term.If the U.S.government redistributes income from the rich to the poor,explain how this action affects equality as well as efficiency in the economy.

Correct AnswerverifiedEfficiency is the property of society ge...View AnswerShow Answer

Public policies

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

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

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In the United States,the overall level of prices more than doubled during the

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The marginal benefit Colin gets from eating a fourth slice of pizza is

Correct AnswerverifiedShow Answer

To improve living standards,policymakers should

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An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

Correct AnswerverifiedShow Answer

For markets to work well,there must be

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In considering how to allocate its scarce resources among its various members,a household considers

Correct AnswerverifiedShow Answer

In the early 1980s,U.S.economic policy was directed toward reducing inflation.What would you have expected to observe during this short period of time?

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

If the average cost of transporting a passenger on the train from Chicago to St.Louis is $75,it would be irrational for the railroad to allow any passenger to ride for less than $75.

Correct AnswerverifiedShow Answer

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Efficiency is the property of society ge...
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