Question 1

The ability of an individual to own and exercise control over scarce resources is called

Accepted Answer

A)   market failure.
B)   property rights.
C)   externality.
D)   market power.E) All of the above
F) A) and D)

Question 2

What you give up to obtain an item is called your

Accepted Answer

A)   opportunity cost.
B)   explicit cost.
C)   monetary cost.
D)   direct cost.E) A) and C)
F) A) and D)

Question 3

The income of a typical worker in a country is most closely linked to which of the following?

Accepted Answer

A)   population
B)   productivity
C)   market power
D)   government policiesE) B) and D)
F) None of the above

Question 4

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 5

Inflation is defined as

Accepted Answer

A)   a period of rising productivity in the economy.
B)   a period of rising income in the economy.
C)   an increase in the overall level of output in the economy.
D)   an increase in the overall level of prices in the economy.E) B) and D)
F) C) and D)

Question 6

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

Question 7

In which of the following decades was there both high inflation and rapid money supply growth in the US?

Accepted Answer

A)   the 1970's and the 1990's
B)   the 1970's but not the 1990's
C)   the 1990's but not the 1970's
D)   neither the 1970's nor the 1990'sE) None of the above
F) B) and D)

Question 8

One way that governments can improve market outcomes is to ensure that individuals are able to own and exercise control over their scarce resources.

Accepted Answer

A) True 
 B)False

Question 9

Efficiency

Accepted Answer

A)   and equality both refer to how much a society can produce with its resources.
B)   and equality both refer to how fairly the benefits from using resources are distributed between members of a society.
C)   refers to how much a society can produce with its resources. Equality refers to how evenly the benefits from using resources are distributed among members of society.
D)   refers to how evenly the benefits from using resources are distributed between members of society. Equality refers to how much a society can produce with its resourcesE) A) and B)
F) A) and C)

Question 10

Suppose one county in Missouri decides it wants to reduce alcohol consumption, so the county passes a law that raises the price of a bottle of beer by $1. As a result, people drive to other counties to drink alcohol, which results in an increase in drunk driving. This illustrates the principle that people respond to incentives.

Accepted Answer

A) True 
 B)False

Question 11

In a market economy, economic activity is guided by

Accepted Answer

A)   the government.
B)   central planners.
C)   large businesses.
D)   prices and self-interest.E) A) and B)
F) A) and C)

Question 12

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 marginal cost?

Accepted Answer

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

Question 13

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 D)
F) B) and C)

Question 14

Give an example of government intervention that is intended to improve equality.

Accepted Answer

The income...

Question 15

Inflation measures the increase in the quantity of goods and services produced from each hour of a worker's time.

Accepted Answer

A) True 
 B)False

Question 16

Melody decides to spend three hours working overtime rather than going to the park with her friends. She earns $20 per hour for overtime work. Her opportunity cost of working is

Accepted Answer

A)   the $60 she earns working.
B)   the $60 minus the enjoyment she would have received from going to the park.
C)   the enjoyment she would have received had she gone to the park.
D)   nothing, since she would have received less than $60 worth of enjoyment from going to the park.E) A) and B)
F) A) and C)

Question 17

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 18

The government can potentially improve market outcomes if market inequalities or market failure exists.

Accepted Answer

A) True 
 B)False

Question 19

In the short-run, society faces a tradeoff between inflation and unemployment.

Accepted Answer

A) True 
 B)False

Question 20

For a number of years country A had inflation of 3% but for the last five years has had inflation of 6%. Country B had inflation of 4% for many years, but very recently inflation unexpectedly rose to 9%. Other things the same, in which of the countries would the higher inflation rate be more likely to reduce unemployment?

Accepted Answer

A)   both country A and country B
B)   neither country A nor country B
C)   country A but not country B
D)   country B but not country AE) A) and B)
F) A) and C)

Exam 1: Ten Principles of Economics

The ability of an individual to own and exercise control over scarce resources is called

Correct Answer
verified

In which of the following decades was there both high inflation and rapid money supply growth in the US?

Correct Answer
verified

In the short-run, society faces a tradeoff between inflation and unemployment.

Correct Answer
verified

Efficiency

Correct Answer
verified

What you give up to obtain an item is called your

Correct Answer
verified

The income of a typical worker in a country is most closely linked to which of the following?

Correct Answer
verified

Inflation is defined as

Correct Answer
verified

The government can potentially improve market outcomes if market inequalities or market failure exists.

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

Which of the following is an example of an externality?

Correct Answer
verified

Give an example of government intervention that is intended to improve equality.

Correct Answer
verified
The income...
View Answer

One way that governments can improve market outcomes is to ensure that individuals are able to own and exercise control over their scarce resources.

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 marginal cost?

Correct Answer
verified

Correct Answer
verified

In a market economy, economic activity is guided by

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Melody decides to spend three hours working overtime rather than going to the park with her friends. She earns $20 per hour for overtime work. Her opportunity cost of working is

Correct Answer
verified

Inflation measures the increase in the quantity of goods and services produced from each hour of a worker's time.

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

The ability of an individual to own and exercise control over scarce resources is called

Correct AnswerverifiedShow Answer

In which of the following decades was there both high inflation and rapid money supply growth in the US?

Correct AnswerverifiedShow Answer

In the short-run, society faces a tradeoff between inflation and unemployment.

Correct AnswerverifiedShow Answer

Efficiency

Correct AnswerverifiedShow Answer

What you give up to obtain an item is called your

Correct AnswerverifiedShow Answer

The income of a typical worker in a country is most closely linked to which of the following?

Correct AnswerverifiedShow Answer

Inflation is defined as

Correct AnswerverifiedShow Answer

The government can potentially improve market outcomes if market inequalities or market failure exists.

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

Which of the following is an example of an externality?

Correct AnswerverifiedShow Answer

Give an example of government intervention that is intended to improve equality.

Correct AnswerverifiedThe income...View AnswerShow Answer

One way that governments can improve market outcomes is to ensure that individuals are able to own and exercise control over their scarce resources.

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 marginal cost?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In a market economy, economic activity is guided by

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Melody decides to spend three hours working overtime rather than going to the park with her friends. She earns $20 per hour for overtime work. Her opportunity cost of working is

Correct AnswerverifiedShow Answer

Inflation measures the increase in the quantity of goods and services produced from each hour of a worker's time.

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

Correct Answer
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The income...
View Answer

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