Question 1

Tuition is the single-largest cost of attending college for most students.

Accepted Answer

A) True 
 B)False

Question 2

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

Question 3

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

Question 4

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

Question 5

Which of the following can policy do?

Accepted Answer

A)  alter incentives
B)  alter trade-offs
C)  change opportunity costs
D)  All of the above are correct.E) All of the above
F) C) and D)

Question 6

Which of the following firms is most likely to have market power?

Accepted Answer

A)  a grocery store in a metropolitan area
B)  a gas station in a suburb
C)  a pub in a college town
D)  the only hotel in a rural areaE) C) and D)
F) B) and C)

Question 7

When the government redistributes income from the wealthy to the poor,

Accepted Answer

A)  efficiency is improved, but equality is not.
B)  both wealthy people and poor people benefit directly.
C)  people work less and produce fewer goods and services.
D)  the government collects more revenue in total.E) B) and D)
F) B) and C)

Question 8

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 C)
F) A) and D)

Question 9

Prior to the collapse of communism, communist countries worked on the premise that economic well-being could be best attained by

Accepted Answer

A)  a market economy.
B)  a strong reliance on prices and individuals' self-interests.
C)  a system of large privately-owned firms.
D)  the actions of government central planners.E) None of the above
F) B) and C)

Question 10

In the short run, which of the following rates of growth in the money supply is likely to lead to the lowest level of unemployment in the economy?

Accepted Answer

A)  3 percent per year
B)  5 percent per year
C)  7 percent per year
D)  9 percent per yearE) A) and B)
F) B) and C)

Question 11

Katie is planning to sell her house, and she is considering making two upgrades to the house before listing it for sale. Replacing the carpeting will cost her $2,500 and replacing the roof will cost her $9,000. Katie expects the new carpeting to increase the value of her house by $3,000 and the new roof to increase the value of her house by $7,000.

Accepted Answer

A)  She should make both improvements to her house.
B)  She should replace the carpeting but not replace the roof.
C)  She should replace the roof but not replace the carpeting.
D)  She should not make either improvement to her house.E) A) and D)
F) A) and C)

Question 12

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

Accepted Answer

A)  enhance equality.
B)  reduce efficiency.
C)  reduce the reward for working hard.
D)  All of the above are correct.E) A) and B)
F) None of the above

Question 13

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 D)
F) A) and B)

Question 14

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight. The marginal cost per room per night

Accepted Answer

A)  is $40.
B)  is $80.
C)  is $120.
D)  cannot be determined from the information given.E) B) and D)
F) C) and D)

Question 15

Government policies designed to equalize the distribution of economic well-being include (i) 
The welfare system
(ii) 
Unemployment insurance
(iii) 
Progressive income tax

Accepted Answer

A)  (i)  only
B)  (ii)  only
C)  (i)  and (ii)  only
D)  (i) , (ii) , and (iii) E) B) and D)
F) None of the above

Question 16

Betty's Bakery bakes fresh bread every morning. Any bread not sold by the end of the day is thrown away. A loaf of bread costs Betty $2.00 to produce, and she prices loaves of bread at $3.50 per loaf. Suppose near the end of one day Betty still has 12 loaves of bread on hand. Which of the following is correct?

Accepted Answer

A)  Betty should only sell the remaining bread for $3.50 per loaf since that is the regular price.
B)  Betty should only sell the remaining bread for $2.00 per loaf or more since that is what the bread costs to make.
C)  Betty should be willing to sell the remaining bread for any price above $0 per loaf since she will have to throw it away if she does not sell it for something.
D)  Betty should just throw the bread away and change the price of her bread starting tomorrow to make sure she sells all of her bread each day.E) A) and D)
F) B) and C)

Question 17

Following the implementation of laws requiring automobiles to have seat belts, which of the following occurred?

Accepted Answer

A)  An individual's probability of surviving an auto accident rose.
B)  There was an increase in pedestrian deaths.
C)  There was an increase in automobile accidents.
D)  All of the above are correct.E) None of the above
F) All of the above

Question 18

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 19

Which of the following is an example of something economists study?

Accepted Answer

A)  Kate chooses to work overtime to earn extra income for her family.
B)  Ryan sells his economics textbook from last semester to his roommate for half the price of a new textbook.
C)  The unemployment rate in the United States is at its highest level in over fifty years.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 20

Market failure can be caused by

Accepted Answer

A)  low consumer demand.
B)  equilibrium prices.
C)  externalities and market power.
D)  high prices and foreign competition.E) A) and B)
F) B) and C)

Exam 1: Ten Principles of Economics

Government policies designed to equalize the distribution of economic well-being include (i) The welfare system (ii) Unemployment insurance (iii) Progressive income tax

Correct Answer
verified

In the short run, which of the following rates of growth in the money supply is likely to lead to the lowest level of unemployment in the economy?

Correct Answer
verified

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 Answer
verified

When the government redistributes income from the wealthy to the poor,

Correct Answer
verified

Following the implementation of laws requiring automobiles to have seat belts, which of the following occurred?

Correct Answer
verified

Prior to the collapse of communism, communist countries worked on the premise that economic well-being could be best attained by

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

In the 1990s, inflation in the United States was

Correct Answer
verified

Tuition is the single-largest cost of attending college for most students.

Correct Answer
verified

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight. The marginal cost per room per night

Correct Answer
verified

Which of the following can policy do?

Correct Answer
verified

Correct Answer
verified

Which of the following firms is most likely to have market power?

Correct Answer
verified

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 Answer
verified
Efficiency is the property of society ge...
View Answer

Market failure can be caused by

Correct Answer
verified

The tradeoff between inflation and unemployment

Correct Answer
verified

Which of the following is an example of something economists study?

Correct Answer
verified

Correct Answer
verified

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

Correct Answer
verified

Correct Answer
verified

Exam 1: Ten Principles of Economics

Government policies designed to equalize the distribution of economic well-being include (i) The welfare system (ii) Unemployment insurance (iii) Progressive income tax

Correct AnswerverifiedShow Answer

In the short run, which of the following rates of growth in the money supply is likely to lead to the lowest level of unemployment in the economy?

Correct AnswerverifiedShow Answer

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

When the government redistributes income from the wealthy to the poor,

Correct AnswerverifiedShow Answer

Following the implementation of laws requiring automobiles to have seat belts, which of the following occurred?

Correct AnswerverifiedShow Answer

Prior to the collapse of communism, communist countries worked on the premise that economic well-being could be best attained by

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

In the 1990s, inflation in the United States was

Correct AnswerverifiedShow Answer

Tuition is the single-largest cost of attending college for most students.

Correct AnswerverifiedShow Answer

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight. The marginal cost per room per night

Correct AnswerverifiedShow Answer

Which of the following can policy do?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following firms is most likely to have market power?

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

Market failure can be caused by

Correct AnswerverifiedShow Answer

The tradeoff between inflation and unemployment

Correct AnswerverifiedShow Answer

Which of the following is an example of something economists study?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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Efficiency is the property of society ge...
View Answer

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