Question 1

Which of these activities will most likely impose an external cost?

Accepted Answer

A)   An athlete works out at a gym.
B)   A secretary smokes a cigarette in a crowded break room.
C)   A young mother pushes her baby in a stroller.
D)   A construction worker eats a hotdog during his lunch break.E) B) and C)
F) None of the above

Question 2

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 the...

Question 3

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 4

When calculating the cost of college,which of the following should you probably include?

Accepted Answer

A)   The cost of your meal plan for the cafeteria.
B)   The cost of books required for college classes
C)   The income you earn at your part-time job.
D)   The cost of living in the dormitory.E) B) and C)
F) All of the above

Question 5

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

Question 6

The principle that "trade can make everyone better off" applies to interactions and trade between

Accepted Answer

A)   families.
B)   states within the United States.
C)   nations.
D)   All of the above are correct.E) A) and D)
F) All of the above

Question 7

Which of the following principles is not one of the four principles of individual decisionmaking?

Accepted Answer

A)   People face tradeoffs.
B)   Trade can make everyone better off.
C)   People respond to incentives.
D)   Rational people think at the margin.E) B) and C)
F) C) and D)

Question 8

One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new,fuel-efficient aircraft.

Accepted Answer

A) True 
 B)False

Question 9

In the early 1920s,

Accepted Answer

A)   Germany experienced a very high rate of inflation.
B)   the quantity of German money was declining rapidly.
C)   the value of German money remained almost constant.
D)   All of the above are correct.E) B) and C)
F) None of the above

Question 10

According to a recent study of Chilean bus drivers,drivers who are paid by the number of passengers they transport have higher productivity than drivers who are paid by the hour.If Chilean bus drivers are paid by the number of passengers they transport and Colombian bus drivers are paid by the hour,we can conclude that

Accepted Answer

A)   Chilean bus drivers likely have a higher standard of living than Colombian bus drivers.
B)   Colombian bus drivers likely have a higher standard of living than Chilean bus drivers.
C)   Chilean and Colombian bus drivers likely have the same standard of living.
D)   Chilean and Colombian bus drivers likely have a higher standard of living than US bus drivers.E) A) and B)
F) None of the above

Question 11

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 12

Which is the most accurate statement about trade?

Accepted Answer

A)   Trade can make every nation better off.
B)   Trade makes some nations better off and others worse off.
C)   Trading for a good can make a nation better off only if the nation cannot produce that good itself.
D)   Trade helps rich nations and hurts poor nations.E) C) and D)
F) A) and D)

Question 13

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 14

The tradeoff between inflation and unemployment

Accepted Answer

A)   implies that policies designed to reduce unemployment also reduce inflation.
B)   was eliminated by improved economic policies in the 1900s.
C)   is a long-run tradeoff,persisting for decades,according to most economists.
D)   None of the above are correct.E) B) and D)
F) All of the above

Question 15

In communism,central planners decide which of the following?

Accepted Answer

A)   what goods and services will be produced
B)   how much will be produced
C)   who produced and consumed the goods and services
D)   All of the above are correct.E) A) and B)
F) C) and D)

Question 16

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 C)
F) None of the above

Question 17

Which of the following products would be considered scarce?

Accepted Answer

A)   automobiles
B)   baseballs autographed by Babe Ruth
C)   pickles
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 18

Choosing not to attend a concert so that you can study for your exam is an example of a tradeoff.

Accepted Answer

A) True 
 B)False

Question 19

According to a recent study of Chilean bus drivers,drivers who are paid by the number of passengers they transport have higher productivity than drivers who are paid by the hour.This result is an example of which principle of economics?

Accepted Answer

A)   People face tradeoffs.
B)   The cost of something is what you give up to get it.
C)   Rational people think at the margin.
D)   People respond to incentives.E) All of the above
F) B) and C)

Question 20

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

Exam 1: Ten Principles of Economics

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 Answer
verified

One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new,fuel-efficient aircraft.

Correct Answer
verified

In the 1990s,inflation in the United States was

Correct Answer
verified

Economists use the word equality to describe a situation in which

Correct Answer
verified

For markets to work well,there must be

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Choosing not to attend a concert so that you can study for your exam is an example of a tradeoff.

Correct Answer
verified

According to a recent study of Chilean bus drivers,drivers who are paid by the number of passengers they transport have higher productivity than drivers who are paid by the hour.This result is an example of which principle of economics?

Correct Answer
verified

In communism,central planners decide which of the following?

Correct Answer
verified

Which of the following products would be considered scarce?

Correct Answer
verified

The tradeoff between inflation and unemployment

Correct Answer
verified

The principle that "trade can make everyone better off" applies to interactions and trade between

Correct Answer
verified

Correct Answer
verified

Which of the following principles is not one of the four principles of individual decisionmaking?

Correct Answer
verified

In the early 1920s,

Correct Answer
verified

When calculating the cost of college,which of the following should you probably include?

Correct Answer
verified

Which of these activities will most likely impose an external cost?

Correct Answer
verified

Which is the most accurate statement about trade?

Correct Answer
verified

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

Correct Answer
verified

Exam 1: Ten Principles of Economics

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

One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new,fuel-efficient aircraft.

Correct AnswerverifiedShow Answer

In the 1990s,inflation in the United States was

Correct AnswerverifiedShow Answer

Economists use the word equality to describe a situation in which

Correct AnswerverifiedShow Answer

For markets to work well,there must be

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Choosing not to attend a concert so that you can study for your exam is an example of a tradeoff.

Correct AnswerverifiedShow Answer

According to a recent study of Chilean bus drivers,drivers who are paid by the number of passengers they transport have higher productivity than drivers who are paid by the hour.This result is an example of which principle of economics?

Correct AnswerverifiedShow Answer

In communism,central planners decide which of the following?

Correct AnswerverifiedShow Answer

Which of the following products would be considered scarce?

Correct AnswerverifiedShow Answer

The tradeoff between inflation and unemployment

Correct AnswerverifiedShow Answer

The principle that "trade can make everyone better off" applies to interactions and trade between

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following principles is not one of the four principles of individual decisionmaking?

Correct AnswerverifiedShow Answer

In the early 1920s,

Correct AnswerverifiedShow Answer

When calculating the cost of college,which of the following should you probably include?

Correct AnswerverifiedShow Answer

Which of these activities will most likely impose an external cost?

Correct AnswerverifiedShow Answer

Which is the most accurate statement about trade?

Correct AnswerverifiedShow Answer

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

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

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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