Question 1

The phrase "no such thing as a free lunch" means

Accepted Answer

A)   people must face tradeoffs.
B)   rational people think at the margin.
C)   people respond to incentives.
D)   trade can make everyone better off.E) None of the above
F) A) and C)

Question 2

The willingness of citizens to pay for vaccinations does not include the benefit society receives from having vaccinated citizens who cannot transmit an illness to others. This extra benefit society gets from vaccinating its citizens is known as

Accepted Answer

A)   productivity.
B)   an externality.
C)   market power.
D)   property rights.E) A) and B)
F) A) and C)

Question 3

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

Question 4

What does the "invisible hand" refers to?

Accepted Answer

How the decisions of...

Question 5

You are considering staying in college another semester so that you can complete a major in economics. In deciding whether or not to stay you should

Accepted Answer

A)   compare the total cost of your education to the total benefits of your education.
B)   compare the total cost of your education to the benefits of staying one more semester.
C)   compare the cost of staying one more semester to the benefits of staying one more semester.
D)   compare the total benefits of your education to the cost of staying one more semester.E) All of the above
F) C) and D)

Question 6

When Ukraine trades with Italy,

Accepted Answer

A)   both countries are likely made better off.
B)   only Italy benefits since Ukraine can produce all goods at a higher level of quality than Italy.
C)   only Ukraine benefits since Italy's low wages guarantee that Italian firms will be profitable regardless of trade.
D)   neither country will benefit since Ukraine is more efficient than Italy in the production of all goods.E) A) and C)
F) B) and C)

Question 7

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

Question 8

When a single person (or small group)  has the ability to influence market prices, there is

Accepted Answer

A)   competition.
B)   market power.
C)   an externality.
D)   a lack of property rights.E) All of the above
F) None of the above

Question 9

Irregular fluctuations in economic activity are known as the

Accepted Answer

A)   business cycle.
B)   broken window fallacy.
C)   tradeoff between inflation and unemployment.
D)   ten principles of economics.E) A) and B)
F) None of the above

Question 10

The classic tradeoff between "guns and butter" states that when a society spends more on national defense, it has less to spend on consumer goods to raise the standard of living.

Accepted Answer

A) True 
 B)False

Question 11

A rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit.

Accepted Answer

A) True 
 B)False

Question 12

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

Question 13

With the understanding that people respond to incentives, outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

Accepted Answer

The concept of working longer per year w...

Question 14

DeShawn has spent $600 purchasing and repairing an old fishing boat, which he expects to sell for $900 once the repairs are complete. DeShawn discovers that, in addition to the $600 he has already spent, he needs to make an additional repair, which will cost another $400, in order to make the boat worth $900 to potential buyers. He can sell the boat as it is now for $400. What should he do?

Accepted Answer

A)   He should sell the boat as it is now for $400.
B)   He should keep the boat since it would not be rational to spend $1,000 on repairs and then sell the boat for $900.
C)   He should complete the repairs and sell the boat for $900.
D)   It does not matter which action he takes; the outcome is the same either way.E) A) and D)
F) All of the above

Question 15

Efficiency means everyone in the economy should receive an equal share of the goods and services produced.

Accepted Answer

A) True 
 B)False

Question 16

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 B)
F) B) and D)

Question 17

Resources are

Accepted Answer

A)   scarce for households but plentiful for economies.
B)   plentiful for households but scarce for economies.
C)   scarce for households and scarce for economies.
D)   plentiful for households and plentiful for economies.E) None of the above
F) All of the above

Question 18

You go to the movieplex where movies ordinarily cost $9. You are intending to see a movie for which you have a $3 off coupon good for only that movie at that time. However, when you get there you see a friend who asks if you would rather see a new release. Both movies start and end at the same time. If you decide to see the new release with your friend, what is your opportunity cost?

Accepted Answer

A)   the amount you value the first movie + $3
B)   the amount you value the first movie + $9
C)   $3
D)   $9E) C) and D)
F) All of the above

Question 19

Economics is the study of ______.

Accepted Answer

how societ...

Question 20

Invisible hand is a term used by the economist in his 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

Accepted Answer

The answer of Invisible hand is a term used by...

Exam 1: Ten Principles of Economics

With the understanding that people respond to incentives, outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

Correct Answer
verified
The concept of working longer per year w...
View Answer

Efficiency means everyone in the economy should receive an equal share of the goods and services produced.

Correct Answer
verified

A rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit.

Correct Answer
verified

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

Correct Answer
verified

The classic tradeoff between "guns and butter" states that when a society spends more on national defense, it has less to spend on consumer goods to raise the standard of living.

Correct Answer
verified

The tradeoff between inflation and unemployment

Correct Answer
verified

You are considering staying in college another semester so that you can complete a major in economics. In deciding whether or not to stay you should

Correct Answer
verified

When Ukraine trades with Italy,

Correct Answer
verified

When a single person (or small group) has the ability to influence market prices, there is

Correct Answer
verified

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

Correct Answer
verified

The phrase "no such thing as a free lunch" means

Correct Answer
verified

Resources are

Correct Answer
verified

Irregular fluctuations in economic activity are known as the

Correct Answer
verified

Economics is the study of ______.

Correct Answer
verified
how societ...
View Answer

Correct Answer
verified

The willingness of citizens to pay for vaccinations does not include the benefit society receives from having vaccinated citizens who cannot transmit an illness to others. This extra benefit society gets from vaccinating its citizens is known as

Correct Answer
verified

Invisible hand is a term used by the economist in his 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

Correct Answer
verified

What does the "invisible hand" refers to?

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

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

Exam 1: Ten Principles of Economics

With the understanding that people respond to incentives, outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

Correct AnswerverifiedThe concept of working longer per year w...View AnswerShow Answer

Efficiency means everyone in the economy should receive an equal share of the goods and services produced.

Correct AnswerverifiedShow Answer

A rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The classic tradeoff between "guns and butter" states that when a society spends more on national defense, it has less to spend on consumer goods to raise the standard of living.

Correct AnswerverifiedShow Answer

The tradeoff between inflation and unemployment

Correct AnswerverifiedShow Answer

You are considering staying in college another semester so that you can complete a major in economics. In deciding whether or not to stay you should

Correct AnswerverifiedShow Answer

When Ukraine trades with Italy,

Correct AnswerverifiedShow Answer

When a single person (or small group) has the ability to influence market prices, there is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The phrase "no such thing as a free lunch" means

Correct AnswerverifiedShow Answer

Resources are

Correct AnswerverifiedShow Answer

Irregular fluctuations in economic activity are known as the

Correct AnswerverifiedShow Answer

Economics is the study of ______.

Correct Answerverifiedhow societ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The willingness of citizens to pay for vaccinations does not include the benefit society receives from having vaccinated citizens who cannot transmit an illness to others. This extra benefit society gets from vaccinating its citizens is known as

Correct AnswerverifiedShow Answer

Invisible hand is a term used by the economist in his 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

Correct AnswerverifiedShow Answer

What does the "invisible hand" refers to?

Correct AnswerverifiedHow the decisions of...View AnswerShow Answer

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

Correct Answer
verified
The concept of working longer per year w...
View Answer

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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Correct Answer
verified

Correct Answer
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Correct Answer
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how societ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified