Question 1

What are the two short-run effects of increasing the quantity of nation's money?

Accepted Answer

Higher inf...

Question 2

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

Question 3

Scenario 1-2
Suppose that you have a choice between going to the movies with a friend for two hours or working at your job. If you go to the movies, you will spend $7 on a ticket and $5 on popcorn. If you choose to work, you will earn $10 an hour.
-Refer to Scenario 1-2. What is your opportunity cost of going to the movies?

Accepted Answer

The answer of Scenario 1-2
Suppose that you have a choice...

Question 4

One way that governments can improve market outcomes is to ensure that individuals are able to own and exercise control over their scarce resources.

Accepted Answer

A) True 
 B)False

Question 5

Trade

Accepted Answer

A)  allows specialization, which increases costs.
B)  allows specialization, which reduces costs.
C)  reduces specialization, which increases costs.
D)  reduces specialization, which reduces costs.E) B) and C)
F) C) and D)

Question 6

The invisible hand ensures that economic prosperity is distributed equally.

Accepted Answer

A) True 
 B)False

Question 7

Large or persistent inflation is almost always caused by

Accepted Answer

A)  excessive government spending.
B)  excessive growth in the quantity of money.
C)  foreign competition.
D)  higher-than-normal levels of productivity.E) B) and C)
F) A) and B)

Question 8

Which of the following do economists not generally regard as a legitimate reason for the government to intervene in a market?

Accepted Answer

A)  To promote efficiency
B)  To promote equality
C)  To enforce property rights
D)  To protect an industry from foreign competitionE) B) and C)
F) A) and D)

Question 9

What does the term "marginal change" mean?

Accepted Answer

A small incremental ...

Question 10

Rami Home Builders, Inc., has built 24 houses so far this year at a total cost to the company of $4.2 million. If the company builds a 25th house, its total cost will increase to $4.375 million. Which of the following statements is correct?

Accepted Answer

A)  For the first 24 houses, the average cost per house was $170,000.
B)  The marginal cost of the 25th house, if it is built, will equal $175,000.
C)  If the company can sell the 25th house for at least $167,000, then it should build it.
D)  The company should never build the 25th house because this increases its total cost.E) B) and C)
F) A) and D)

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Rational people make decisions "at the margin" by comparing ______.

Accepted Answer

marginal costs and marginal benefits

Question 13

The "invisible hand" refers to

Accepted Answer

A)  how central planners made economic decisions.
B)  how the decisions of households and firms lead to desirable market outcomes.
C)  the control that large firms have over the economy.
D)  government regulations without which the economy would be less efficient.E) A) and C)
F) None of the above

Question 14

What do prices reflect in a market economy?

Accepted Answer

The value of a good ...

Question 15

If an externality is present in a market, economic efficiency may be enhanced by

Accepted Answer

A)  government intervention.
B)  a decrease in foreign competition.
C)  fewer market participants.
D)  weaker property rights.E) A) and D)
F) All of the above

Question 16

Explain the concept of externality and give an example.

Accepted Answer

The impact of one person's actions on the well-being of a bystander; pollution

Question 17

Nevaeh decides to spend four hours playing video games rather than attending her classes. Her opportunity cost of playing video games is

Accepted Answer

A)  the value of the knowledge she would have received had she attended her classes.
B)  the $40 she could have earned if she had worked at her job for those four hours.
C)  the value of her time playing video games minus the value of attending classes.
D)  nothing, since she valued playing video games more than attending classes.E) A) and C)
F) B) and C) A

Question 18

Suppose the cost of flying a 350-seat plane for an airline is $350,000 and there are 10 empty seats on a flight. The marginal cost of flying a passenger is

Accepted Answer

A)  $350.
B)  $3,500.
C)  $350,000.
D)  This cannot be determined from the information given.E) B) and C)
F) C) and D)

Question 19

Which of the following industries has a marginal cost that is close to zero?

Accepted Answer

A)  Automobile
B)  Aircraft
C)  Software
D)  FurnitureE) A) and B)
F) A) and C)

Question 20

The famous observation that households and firms interacting in markets act as if they are guided by an "invisible hand" that leads them to desirable market outcomes comes from whose 1776 book?

Accepted Answer

A)  David Ricardo
B)  Thorstein Veblen
C)  John Maynard Keynes
D)  Adam SmithE) B) and C)
F) A) and D)

Exam 1: Ten Principles of Economics

What are the two short-run effects of increasing the quantity of nation's money?

Correct Answer
verified
Higher inf...
View Answer

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

Correct Answer
verified

Correct Answer
verified

One way that governments can improve market outcomes is to ensure that individuals are able to own and exercise control over their scarce resources.

Correct Answer
verified

Trade

Correct Answer
verified

The invisible hand ensures that economic prosperity is distributed equally.

Correct Answer
verified

Large or persistent inflation is almost always caused by

Correct Answer
verified

Which of the following do economists not generally regard as a legitimate reason for the government to intervene in a market?

Correct Answer
verified

What does the term "marginal change" mean?

Correct Answer
verified
A small incremental ...
View Answer

Rami Home Builders, Inc., has built 24 houses so far this year at a total cost to the company of $4.2 million. If the company builds a 25th house, its total cost will increase to $4.375 million. Which of the following statements is correct?

Correct Answer
verified

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

Correct Answer
verified

Rational people make decisions "at the margin" by comparing ______.

Correct Answer
verified
marginal costs and marginal benefits

The "invisible hand" refers to

Correct Answer
verified

What do prices reflect in a market economy?

Correct Answer
verified
The value of a good ...
View Answer

If an externality is present in a market, economic efficiency may be enhanced by

Correct Answer
verified

Explain the concept of externality and give an example.

Correct Answer
verified
The impact of one person's actions on the well-being of a bystander; pollution

Nevaeh decides to spend four hours playing video games rather than attending her classes. Her opportunity cost of playing video games is

Correct Answer
verified
A

Suppose the cost of flying a 350-seat plane for an airline is $350,000 and there are 10 empty seats on a flight. The marginal cost of flying a passenger is

Correct Answer
verified

Which of the following industries has a marginal cost that is close to zero?

Correct Answer
verified

The famous observation that households and firms interacting in markets act as if they are guided by an "invisible hand" that leads them to desirable market outcomes comes from whose 1776 book?

Correct Answer
verified

Exam 1: Ten Principles of Economics

What are the two short-run effects of increasing the quantity of nation's money?

Correct AnswerverifiedHigher inf...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One way that governments can improve market outcomes is to ensure that individuals are able to own and exercise control over their scarce resources.

Correct AnswerverifiedShow Answer

Trade

Correct AnswerverifiedShow Answer

The invisible hand ensures that economic prosperity is distributed equally.

Correct AnswerverifiedShow Answer

Large or persistent inflation is almost always caused by

Correct AnswerverifiedShow Answer

Which of the following do economists not generally regard as a legitimate reason for the government to intervene in a market?

Correct AnswerverifiedShow Answer

What does the term "marginal change" mean?

Correct AnswerverifiedA small incremental ...View AnswerShow Answer

Rami Home Builders, Inc., has built 24 houses so far this year at a total cost to the company of $4.2 million. If the company builds a 25th house, its total cost will increase to $4.375 million. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Rational people make decisions "at the margin" by comparing ______.

Correct Answerverifiedmarginal costs and marginal benefits

The "invisible hand" refers to

Correct AnswerverifiedShow Answer

What do prices reflect in a market economy?

Correct AnswerverifiedThe value of a good ...View AnswerShow Answer

If an externality is present in a market, economic efficiency may be enhanced by

Correct AnswerverifiedShow Answer

Explain the concept of externality and give an example.

Correct AnswerverifiedThe impact of one person's actions on the well-being of a bystander; pollution

Nevaeh decides to spend four hours playing video games rather than attending her classes. Her opportunity cost of playing video games is

Correct AnswerverifiedA

Suppose the cost of flying a 350-seat plane for an airline is $350,000 and there are 10 empty seats on a flight. The marginal cost of flying a passenger is

Correct AnswerverifiedShow Answer

Which of the following industries has a marginal cost that is close to zero?

Correct AnswerverifiedShow Answer

The famous observation that households and firms interacting in markets act as if they are guided by an "invisible hand" that leads them to desirable market outcomes comes from whose 1776 book?

Correct AnswerverifiedShow Answer

Correct Answer
verified
Higher inf...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A small incremental ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
marginal costs and marginal benefits

Correct Answer
verified

Correct Answer
verified
The value of a good ...
View Answer

Correct Answer
verified

Correct Answer
verified
The impact of one person's actions on the well-being of a bystander; pollution

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified