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Exam 1: Ten Principles of Economics

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Question 71

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In the short run, which of the following is not correct?

A) Increasing the money supply increases the demand for goods and services.
B) Increasing the money supply encourages firms to hire more workers.
C) Lowering the money supply leads to a higher level of unemployment.
D) Policies that encourage higher employment will also induce a lower rate of inflation.

E) None of the above
F) B) and C)

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Question 72

Multiple Choice

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Efficiency means that

A) society is conserving resources in order to save them for the future.
B) society's goods and services are distributed equally among society's members.
C) society's goods and services are distributed fairly, though not necessarily equally, among society's members.
D) society is getting the most it can from its scarce resources.

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

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Question 73

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Scenario 1-6 It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors. -Refer to Scenario 1-6. What is the company's marginal cost?

Economics is the study of how society manages its

A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. However, redistributing income from rich to poor reduces the reward for working hard. Therefore, society faces a tradeoff between

In the short-run, society faces a tradeoff between inflation and unemployment.

During the 1990s, the United Kingdom experienced low levels of inflation while Turkey experienced high levels of inflation. A likely explanation of these facts is that

The cost of an action is measured in terms of foregone opportunities.

What are the two possible causes of market failure?

What are the two basic types of economies?

Inflation measures the increase in the quantity of goods and services produced from each hour of a worker's time.

Economists study how people make decisions.

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

Laws that enforce chemical hazard control are examples of government intervention that is intended to reduce

The primary determinant of a country's standard of living is

Suppose your finance professor has been offered a corporate job with a 25 percent pay increase. He has decided to take the job. For him, the marginal

What is the main difference between a centrally planned economy and a market economy?

You go to the movieplex where movies ordinarily cost $8.00. You are intending to see a movie for which you have a $2.50-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?

The goal of President Obama's stimulus package and increased government spending following the deep economic downturn in 2008 and 2009 was to reduce inflation.

Economics is the study of ______ .