Question 1

Max and Maddy charge people to park on their lawn while attending a nearby craft fair. At the current price of $10, seven people park on their lawn. If they raise the price to $15, they know that only five people will want to park on their lawn. Whether they have seven or five cars parked on their lawn does not affect their costs. From this information it follows that

Accepted Answer

A)   they should leave the price at $10.
B)   it does not matter if they charge $10 or $15.
C)   they would do better charging $15 than $10.
D)   they should raise the price even more.E) A) and B)
F) A) and C)

Question 2

Ashley eats two bananas during a particular day. The marginal benefit she enjoys from eating the second banana

Accepted Answer

A)   can be thought of as the total benefit Ashley enjoys by eating two bananas minus the total benefit she would have enjoyed by eating just the first banana.
B)   determines Ashley's marginal cost of the first and second bananas.
C)   does not depend on how many bananas Ashley has already eaten.
D)   cannot be determined unless we know how much she paid for the bananas.E) A) and B)
F) None of the above

Question 3

Explain the concept of externality and give an example.

Accepted Answer

The impact of one pe...

Question 4

Coal is considered to be a non-renewable energy source. Which of the following statements is correct?

Accepted Answer

A)   Coal is an unlimited resource.
B)   Coal is a scarce resource.
C)   Coal is a non-productive resource.
D)   Coal is not a resource.E) A) and B)
F) B) and C)

Question 5

The combination of President Obama's strategies and the Federal Reserve's reaction to the deep economic downturn in the US in 2008 and 2009

Accepted Answer

A)   intended to reduce unemployment.
B)   may lead to excessive inflation over time.
C)   resulted in higher taxes and an increased supply of money.
D)   Both a and b are correct.E) None of the above
F) A) and D)

Question 6

Variations in the standard of living across countries are due almost entirely to differences in each nation's total output of goods and services.

Accepted Answer

A) True 
 B)False

Question 7

Consider Frank's decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in a store and spend $7,200 on room and board. Frank's cost of going to college is

Accepted Answer

A)   $33,800.
B)   $42,600.
C)   $49,800.
D)   $57,000.E) A) and C)
F) None of the above

Question 8

Scenario 1-1
You have the afternoon free. You have a choice between going to the movies with a friend or studying economics for three hours. If you go to the movies, you will spend $8.00 on a ticket and $4.50 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 10 points.
-Refer to Scenario 1-1. What is your opportunity cost of studying economics?

Accepted Answer

The enjoyment you wo...

Question 9

A marginal change is a

Accepted Answer

A)   change that involves little, if anything, that is important.
B)   large, significant adjustment.
C)   change for the worse, and so it is usually a short-term change.
D)   small, incremental adjustment.E) All of the above
F) C) and D)

Question 10

One effect of the government-imposed seat belt law in the U.S. has been

Accepted Answer

A)   a dramatic decrease in the number of pedestrian deaths.
B)   safer driving.
C)   an increase in the number of accidents.
D)   a dramatic decrease in the number of driver deaths.E) A) and B)
F) A) and C)

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements about markets is most accurate?

Accepted Answer

A)   Markets are usually a good way to organize economic activity.
B)   Markets are usually inferior to central planning as a way to organize economic activity.
C)   Markets fail and are therefore not an acceptable way to organize economic activity.
D)   Markets are a good way to organize economic activity in developed nations, but not in less developed nations.E) All of the above
F) B) and D)

Question 13

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

Accepted Answer

A)   trade can make everyone better off.
B)   people face trade-offs.
C)   rational people think at the margin.
D)   people respond to incentives.E) A) and D)
F) B) and C)

Question 14

Senator Jackson argues that replacing the federal income tax with a national sales tax would increase the level of output. Senator Feldman objects that this policy would benefit the rich at the expense of the poor.

Accepted Answer

A)   Both senators' arguments are primarily about equality.
B)   Both senators' arguments are primarily about efficiency.
C)   Senator Jackson's argument is primarily about equality, while Senator Feldman's argument is primarily about efficiency.
D)   Senator Jackson's argument is primarily about efficiency, while Senator Feldman's argument is primarily about equality.E) All of the above
F) A) and C)

Question 15

What does the "invisible hand" refers to?

Accepted Answer

How the decisions of...

Question 16

The fact that different countries experience different standards of living is largely explained by differences in those countries'

Accepted Answer

A)   populations.
B)   productivity levels.
C)   locations.
D)   None of the above is correct. Economists are puzzled by differences in standards of living around the world.E) A) and B)
F) A) and C)

Question 17

Ramona decides to spend two hours taking a nap rather than attending her classes. Her opportunity cost of napping is

Accepted Answer

A)   the value of the knowledge she would have received had she attended class.
B)   the $24 she could have earned if she had worked at her job for those two hours.
C)   the value of her nap minus the value of attending class.
D)   nothing, since she valued sleep more than attendance at class.E) None of the above
F) All of the above

Question 18

The term refers to a small incremental adjustment to an existing plan of action.

Accepted Answer

The answer of The term refers to a small incremental...

Question 19

What are the two basic types of economies?

Accepted Answer

Centrally ...

Question 20

For which of the following individuals would the opportunity cost of going to college be highest?

Accepted Answer

A)   a promising young mathematician who will command a high salary once she earns her college degree
B)   a student with average grades who has never held a job
C)   a famous, highly-paid actor who wants to take time away from show business to finish college and earn a degree
D)   a student who is the best player on his college basketball team, but who lacks the skills necessary to play professional basketballE) B) and D)
F) None of the above

Exam 1: Ten Principles of Economics

Ramona decides to spend two hours taking a nap rather than attending her classes. Her opportunity cost of napping is

Correct Answer
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Correct Answer
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What are the two basic types of economies?

Correct Answer
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Centrally ...
View Answer

Consider Frank's decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in a store and spend $7,200 on room and board. Frank's cost of going to college is

Correct Answer
verified

For which of the following individuals would the opportunity cost of going to college be highest?

Correct Answer
verified

Senator Jackson argues that replacing the federal income tax with a national sales tax would increase the level of output. Senator Feldman objects that this policy would benefit the rich at the expense of the poor.

Correct Answer
verified

The term refers to a small incremental adjustment to an existing plan of action.

Correct Answer
verified

Ashley eats two bananas during a particular day. The marginal benefit she enjoys from eating the second banana

Correct Answer
verified

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

Correct Answer
verified

Explain the concept of externality and give an example.

Correct Answer
verified
The impact of one pe...
View Answer

One effect of the government-imposed seat belt law in the U.S. has been

Correct Answer
verified

A marginal change is a

Correct Answer
verified

What does the "invisible hand" refers to?

Correct Answer
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How the decisions of...
View Answer

Coal is considered to be a non-renewable energy source. Which of the following statements is correct?

Correct Answer
verified

The combination of President Obama's strategies and the Federal Reserve's reaction to the deep economic downturn in the US in 2008 and 2009

Correct Answer
verified

The fact that different countries experience different standards of living is largely explained by differences in those countries'

Correct Answer
verified

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

Correct Answer
verified

Variations in the standard of living across countries are due almost entirely to differences in each nation's total output of goods and services.

Correct Answer
verified

Correct Answer
verified
The enjoyment you wo...
View Answer

Which of the following statements about markets is most accurate?

Correct Answer
verified

Exam 1: Ten Principles of Economics

Ramona decides to spend two hours taking a nap rather than attending her classes. Her opportunity cost of napping is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What are the two basic types of economies?

Correct AnswerverifiedCentrally ...View AnswerShow Answer

Consider Frank's decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in a store and spend $7,200 on room and board. Frank's cost of going to college is

Correct AnswerverifiedShow Answer

For which of the following individuals would the opportunity cost of going to college be highest?

Correct AnswerverifiedShow Answer

Senator Jackson argues that replacing the federal income tax with a national sales tax would increase the level of output. Senator Feldman objects that this policy would benefit the rich at the expense of the poor.

Correct AnswerverifiedShow Answer

The term refers to a small incremental adjustment to an existing plan of action.

Correct AnswerverifiedShow Answer

Ashley eats two bananas during a particular day. The marginal benefit she enjoys from eating the second banana

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Explain the concept of externality and give an example.

Correct AnswerverifiedThe impact of one pe...View AnswerShow Answer

One effect of the government-imposed seat belt law in the U.S. has been

Correct AnswerverifiedShow Answer

A marginal change is a

Correct AnswerverifiedShow Answer

What does the "invisible hand" refers to?

Correct AnswerverifiedHow the decisions of...View AnswerShow Answer

Coal is considered to be a non-renewable energy source. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The combination of President Obama's strategies and the Federal Reserve's reaction to the deep economic downturn in the US in 2008 and 2009

Correct AnswerverifiedShow Answer

The fact that different countries experience different standards of living is largely explained by differences in those countries'

Correct AnswerverifiedShow Answer

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

Correct AnswerverifiedShow Answer

Variations in the standard of living across countries are due almost entirely to differences in each nation's total output of goods and services.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe enjoyment you wo...View AnswerShow Answer

Which of the following statements about markets is most accurate?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
verified

Correct Answer
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Centrally ...
View 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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Correct Answer
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Correct Answer
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The impact of one pe...
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Correct Answer
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Correct Answer
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Correct Answer
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How the decisions of...
View 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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Correct Answer
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The enjoyment you wo...
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Correct Answer
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