Question 1

The presence of scarcity means that no choices come without

Accepted Answer

A)   shortages.
B)   trade-offs.
C)   regret.
D)   incentives.
E)   consumption.

Question 2

The U.S. federal government offers homeowners a tax deduction for their home loan interest payments. This reduction in taxes may have encouraged too many people to own homes. If the tax deduction caused people who otherwise would have rented to own, the tax deduction serves as a(n)  _______incentive.

Accepted Answer

A)   direct
B)   indirect
C)   neutral
D)   complementary
E)   unintended

Question 3

People often clean cabinet doors, but do not regularly clean inside the cabinet. The insides of cabinets aren't visible and require the removal of contents in order to clean. This is an example of _______ thinking.

Accepted Answer

A)   conscientious
B)   deferential
C)   dismal
D)   incentive
E)   marginal

Question 4

Some public transit systems use an "honor system" whereby patrons have to show that they have paid their fare only when asked for it by an enforcement officer. With what population would such a system be successful?

Accepted Answer

A)   a population that is willing to take risks and whose people believe that they will not be caught if they don't pay their fare
B)   a population that places a high opportunity cost on taking time to purchase a ticket
C)   a population whose people are willing to take risks, believe that they will not be caught if they don't pay their fare, and treat fines for not paying a fare as a nuisance
D)   a population that is unwilling to take risks and whose people believe there is a high chance that they will be caught if they don't pay their fare
E)   a population whose people are unwilling to take risks, believe there is a high chance that they will not be caught if they don't pay their fare, and place a low value on doing the right thing

Question 5

Distinguish between a direct incentive and an indirect incentive.

Accepted Answer

A direct incentive is almost always reco...

Question 6

Which of the following is a macroeconomic question?

Accepted Answer

A)   How many textbooks should be published by a publisher?
B)   How much should English majors earn after college?
C)   How do members of a household decide whether to clean their own houses or hire someone else to do it?
D)   What is the rate of unemployment?
E)   What is the price of a new 40-inch television?

Question 7

Many stores are open 24 hours a day. When store managers make the decision to stay open 24 hours, it must be the case that

Accepted Answer

A)   the marginal benefit of staying open all day and the marginal cost to remaining open all day are at least equal.
B)   the marginal benefit of staying open all day must always be greater than the marginal cost to remaining open all day.
C)   the marginal cost of staying open all day must always be greater than the marginal benefit to remaining open all day.
D)   the calculation of marginal benefits or marginal costs of remaining open all day plays no role.
E)   the marginal benefit of remaining open all day is zero.

Question 8

Decisions by individuals and firms are the domain of

Accepted Answer

A)   microeconomics.
B)   macroeconomics.
C)   consumption economics.
D)   median economics.
E)   choice economics.

Question 9

When Noah's parent tells him not to study economics because it is a pointless discipline, why is he or she INCORRECT?

Accepted Answer

A)   The government continues to play a role in our daily lives.
B)   People have the freedom to do whatever they want, and economists have nothing to add to their decision-making process.
C)   Economics is a tool used to understand what happens in a world where there are not enough resources to produce all the goods and services that are wanted and needed.
D)   Economics has nothing to offer in terms of understanding the stock market.
E)   Economics has nothing to offer in terms of understanding government programs like Social Security.

Question 10

It can be said that voluntary trade will not occur unless all parties involved believe that they will be better off after trading than they were before. Considering that the supply of goods and services does not change in trade and only changes hands, how is it possible that each party improves? Shouldn't one party benefit at the expense of another?

Accepted Answer

Not at all. Each party in a trade transa...

Question 11

What is NOT a possible opportunity cost of attending a four-year college following high school graduation?

Accepted Answer

A)   the experience of traveling throughout Europe and staying in hostels
B)   the income earned at a full-time job
C)   the cost of tuition at a four-year college
D)   job training learned at a vocational school
E)   the cost savings from attending a community college

Question 12

_______involves individuals trading goods they already have or providing services in exchange for something they want.

Accepted Answer

A)   Circular flow model
B)   Circular flow model with money
C)   Optimization
D)   Barter
E)   Cash exchange

Question 13

If school teachers are offered more pay to teach year-round school instead of nine-month school, then will they respond to the incentive?

Accepted Answer

A longer work year for a teacher would l...

Question 14

Which of the following is NOT a type of incentive?

Accepted Answer

A)   positive
B)   negative
C)   complementary
D)   indirect
E)   direct

Question 15

Which is NOT one of the five foundations of economics?

Accepted Answer

A)   innovation
B)   incentives
C)   trade-offs
D)   opportunity cost
E)   marginal thinking

Question 16

What is the opportunity cost of taking an exam?

Accepted Answer

A)   all of the things that someone could have done by not studying
B)   each of the questions that someone misses on the exam
C)   the highest valued alternative that someone gave up to prepare for and attend the exam
D)   the money someone spent purchasing the textbook and the other materials with which he or she studies
E)   the money someone spent on tuition

Question 17

Low prices for water in the developed world may lead individuals to believe it is NOT a_______ resource.

Accepted Answer

A)   desired
B)   scarce
C)   plentiful
D)   controlled
E)   economic

Question 18

Economic growth in developed countries has been altered by the increased popularity of the Internet. How has the Internet, in terms of both negative and positive incentives, promoted but also discouraged economic growth?

Accepted Answer

The Internet has certainly done a great ...

Question 19

An activity's marginal benefit is_______ at the optimal quantity.

Accepted Answer

A)   zero
B)   greater than zero
C)   less than zero
D)   equal to the marginal cost
E)   greater than the marginal cost

Question 20

The opportunity cost to free trade is

Accepted Answer

A)   economic growth.
B)   government involvement.
C)   domestic jobs.
D)   lower prices.
E)   greater efficiency.

Exam 1: Five Foundations of Economics

What is NOT a possible opportunity cost of attending a four-year college following high school graduation?

Correct Answer
verified

If school teachers are offered more pay to teach year-round school instead of nine-month school, then will they respond to the incentive?

Correct Answer
verified
A longer work year for a teacher would l...
View Answer

Which of the following is a macroeconomic question?

Correct Answer
verified

The presence of scarcity means that no choices come without

Correct Answer
verified

An activity's marginal benefit is_______ at the optimal quantity.

Correct Answer
verified

When Noah's parent tells him not to study economics because it is a pointless discipline, why is he or she INCORRECT?

Correct Answer
verified

Economic growth in developed countries has been altered by the increased popularity of the Internet. How has the Internet, in terms of both negative and positive incentives, promoted but also discouraged economic growth?

Correct Answer
verified
The Internet has certainly done a great ...
View Answer

Many stores are open 24 hours a day. When store managers make the decision to stay open 24 hours, it must be the case that

Correct Answer
verified

Low prices for water in the developed world may lead individuals to believe it is NOT a_______ resource.

Correct Answer
verified

The opportunity cost to free trade is

Correct Answer
verified

The U.S. federal government offers homeowners a tax deduction for their home loan interest payments. This reduction in taxes may have encouraged too many people to own homes. If the tax deduction caused people who otherwise would have rented to own, the tax deduction serves as a(n) _______incentive.

Correct Answer
verified

Which of the following is NOT a type of incentive?

Correct Answer
verified

Decisions by individuals and firms are the domain of

Correct Answer
verified

Some public transit systems use an "honor system" whereby patrons have to show that they have paid their fare only when asked for it by an enforcement officer. With what population would such a system be successful?

Correct Answer
verified

Correct Answer
verified
Not at all. Each party in a trade transa...
View Answer

Which is NOT one of the five foundations of economics?

Correct Answer
verified

People often clean cabinet doors, but do not regularly clean inside the cabinet. The insides of cabinets aren't visible and require the removal of contents in order to clean. This is an example of _______ thinking.

Correct Answer
verified

What is the opportunity cost of taking an exam?

Correct Answer
verified

Distinguish between a direct incentive and an indirect incentive.

Correct Answer
verified
A direct incentive is almost always reco...
View Answer

_______involves individuals trading goods they already have or providing services in exchange for something they want.

Correct Answer
verified

Exam 1: Five Foundations of Economics

What is NOT a possible opportunity cost of attending a four-year college following high school graduation?

Correct AnswerverifiedShow Answer

If school teachers are offered more pay to teach year-round school instead of nine-month school, then will they respond to the incentive?

Correct AnswerverifiedA longer work year for a teacher would l...View AnswerShow Answer

Which of the following is a macroeconomic question?

Correct AnswerverifiedShow Answer

The presence of scarcity means that no choices come without

Correct AnswerverifiedShow Answer

An activity's marginal benefit is_______ at the optimal quantity.

Correct AnswerverifiedShow Answer

When Noah's parent tells him not to study economics because it is a pointless discipline, why is he or she INCORRECT?

Correct AnswerverifiedShow Answer

Economic growth in developed countries has been altered by the increased popularity of the Internet. How has the Internet, in terms of both negative and positive incentives, promoted but also discouraged economic growth?

Correct AnswerverifiedThe Internet has certainly done a great ...View AnswerShow Answer

Many stores are open 24 hours a day. When store managers make the decision to stay open 24 hours, it must be the case that

Correct AnswerverifiedShow Answer

Low prices for water in the developed world may lead individuals to believe it is NOT a_______ resource.

Correct AnswerverifiedShow Answer

The opportunity cost to free trade is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is NOT a type of incentive?

Correct AnswerverifiedShow Answer

Decisions by individuals and firms are the domain of

Correct AnswerverifiedShow Answer

Some public transit systems use an "honor system" whereby patrons have to show that they have paid their fare only when asked for it by an enforcement officer. With what population would such a system be successful?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNot at all. Each party in a trade transa...View AnswerShow Answer

Which is NOT one of the five foundations of economics?

Correct AnswerverifiedShow Answer

People often clean cabinet doors, but do not regularly clean inside the cabinet. The insides of cabinets aren't visible and require the removal of contents in order to clean. This is an example of _______ thinking.

Correct AnswerverifiedShow Answer

What is the opportunity cost of taking an exam?

Correct AnswerverifiedShow Answer

Distinguish between a direct incentive and an indirect incentive.

Correct AnswerverifiedA direct incentive is almost always reco...View AnswerShow Answer

_______involves individuals trading goods they already have or providing services in exchange for something they want.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
A longer work year for a teacher would l...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The Internet has certainly done a great ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Not at all. Each party in a trade transa...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A direct incentive is almost always reco...
View Answer

Correct Answer
verified