Question 1

The "invisible hand" works to promote general well-being in the economy primarily through

Accepted Answer

A)  government intervention.
B)  the political process.
C)  people's pursuit of self-interest.
D)  altruism.E) All of the above
F) C) and D)

Question 2

The term ______ refers to the size of the economic pie, and the term ______ refers to how the pie is divided.

Accepted Answer

efficiency...

Question 3

The irregular and largely unpredictable fluctuations in economic activity are called

Accepted Answer

A)  market failure.
B)  business cycle.
C)  inflation.
D)  unemployment.E) B) and D)
F) None of the above

Question 4

The study of how society manages its scarce resources is most closely associated with which field of study?

Accepted Answer

A)  environmental studies
B)  economics
C)  management
D)  accountingE) A) and D)
F) None of the above

Question 5

Rational people make decisions "at the margin" by comparing

Accepted Answer

A)  average costs and benefits.
B)  total costs and benefits.
C)  additional costs and benefits.
D)  opportunity costs and benefits.E) All of the above
F) B) and C)

Question 6

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

Accepted Answer

A) True 
 B)False

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

Question 8

Give an example of a trade-off faced by society.

Accepted Answer

Efficiency and equality; a cle...

Question 9

Tracy quits her job, which pays $25,000 a year, to finish her college degree. Her annual college expenses are $12,000 for tuition and fees and $1,000 for books. What is her opportunity cost of attending college for the year?

Accepted Answer

The answer of Tracy quits her job, which pays $25,000...

Question 10

Which of the following products would be considered scarce?

Accepted Answer

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

Question 11

Which of the following rates of growth in the money supply is likely to lead to the lowest level of inflation in the economy?

Accepted Answer

A)  1 percent per year
B)  3 percent per year
C)  5 percent per year
D)  7 percent per yearE) A) and D)
F) A) and C)

Question 12

Something that induces a person to act is called

Accepted Answer

A)  a trade-off.
B)  a policy.
C)  an incentive.
D)  an opportunity cost.E) B) and C)
F) A) and B)

Question 13

Economics is the study of how society manages its

Accepted Answer

A)  limited wants and unlimited resources.
B)  unlimited wants and unlimited resources.
C)  limited wants and limited resources.
D)  unlimited wants and limited resources.E) A) and C)
F) All of the above

Question 14

The invisible hand ensures that economic prosperity is distributed equally.

Accepted Answer

A) True 
 B)False

Question 15

Market economies are distinguished from other types of economies largely on the basis of

Accepted Answer

A)  the political affiliations of government officials.
B)  the process by which government officials are elected or appointed.
C)  the ways in which scarce resources are allocated.
D)  the number of retail outlets available to consumers.E) A) and B)
F) A) and C)

Question 16

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by

Accepted Answer

A)  unstable economic conditions in Eastern Europe.
B)  increased competition from abroad.
C)  a decline in the rate of increase in U.S. productivity.
D)  a strong U.S. dollar abroad, hurting U.S. exports.E) B) and D)
F) A) and D)

Question 17

When the government attempts to improve equality in an economy the result is often

Accepted Answer

A)  an increase in overall output in the economy.
B)  additional government revenue since overall income will increase.
C)  a reduction in equality.
D)  a reduction in efficiency.E) All of the above
F) A) and B)

Question 18

Evidence indicates that seat belt laws have led to

Accepted Answer

A)  fewer pedestrian deaths.
B)  fewer automobile accidents.
C)  fewer deaths per automobile accident.
D)  All of the above are correct.E) All of the above
F) None of the above

Question 19

Approximately what percentage of the world's economies experience scarcity?

Accepted Answer

A)  10%
B)  40%
C)  85%
D)  100%E) None of the above
F) All of the above

Question 20

Economists study how people make decisions.

Accepted Answer

A) True 
 B)False

Exam 1: Ten Principles of Economics

Which of the following products would be considered scarce?

Correct AnswerverifiedShow Answer

The "invisible hand" works to promote general well-being in the economy primarily through

Correct AnswerverifiedShow Answer

Evidence indicates that seat belt laws have led to

Correct AnswerverifiedShow Answer

Economists study how people make decisions.

Correct AnswerverifiedShow Answer

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by

Correct AnswerverifiedShow Answer

Tracy quits her job, which pays $25,000 a year, to finish her college degree. Her annual college expenses are $12,000 for tuition and fees and $1,000 for books. What is her opportunity cost of attending college for the year?

Correct AnswerverifiedShow Answer

Market economies are distinguished from other types of economies largely on the basis of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Something that induces a person to act is called

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following rates of growth in the money supply is likely to lead to the lowest level of inflation in the economy?

Correct AnswerverifiedShow Answer

Economics is the study of how society manages its

Correct AnswerverifiedShow Answer

The irregular and largely unpredictable fluctuations in economic activity are called

Correct AnswerverifiedShow Answer

The term ______ refers to the size of the economic pie, and the term ______ refers to how the pie is divided.

Correct Answerverifiedefficiency...View AnswerShow Answer

Approximately what percentage of the world's economies experience scarcity?

Correct AnswerverifiedShow Answer

When the government attempts to improve equality in an economy the result is often

Correct AnswerverifiedShow Answer

The study of how society manages its scarce resources is most closely associated with which field of study?

Correct AnswerverifiedShow Answer

The invisible hand ensures that economic prosperity is distributed equally.

Correct AnswerverifiedShow Answer

Give an example of a trade-off faced by society.

Correct AnswerverifiedEfficiency and equality; a cle...View AnswerShow Answer

Rational people make decisions "at the margin" by comparing

Correct AnswerverifiedShow Answer

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The term refers to the size of the economic pie, and the term refers to how the pie is divided.

Correct Answer
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efficiency...
View Answer

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Efficiency and equality; a cle...
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Correct Answer
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