Question 1

You are considering staying in college another semester so that you can complete a major in finance. In deciding whether or not to stay you should

Accepted Answer

A)  compare the total cost of your education to the total benefits of your education.
B)  compare the total cost of your education to the benefits of staying one more semester.
C)  compare the cost of staying one more semester to the benefits of staying one more semester.
D)  compare the total benefits of your education to the cost of staying one more semester.

Question 2

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. A customer is willing to pay $60 for the 601st heart rate monitor. Should the company produce and sell it? Explain.

Accepted Answer

No, because the marg...

Question 3

With the understanding that people respond to incentives, outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

Accepted Answer

The concept of working longer per year w...

Question 4

If the government were to intervene and set a wage for unskilled labor above the market wage, then we would expect, relative to the market outcome,

Accepted Answer

A)  an increase in the number of unskilled jobs available.
B)  a decrease in the number of unskilled jobs available.
C)  a decrease in the number of workers wanting unskilled jobs.
D)  an increase in the number of businesses using unskilled workers.

Question 5

You have driven 850 miles on a vacation and then you notice that you are only 50 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

Accepted Answer

A)  both the cost of driving the first 850 miles and the next 50 miles.
B)  the cost of driving the first 850 miles, but not the cost of driving the next 50 miles.
C)  the cost of driving the next 50 miles, but not the cost of driving the first 850 miles.
D)  neither the cost of driving the first 850 miles nor the cost of driving the next 50 miles.

Question 6

Scenario 1-1
You have the afternoon free. You have a choice between going to the movies with a friend or studying economics for three hours. If you go to the movies, you will spend $8.00 on a ticket and $4.50 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 10 points.
-Refer to Scenario 1-1. What is your opportunity cost of going to the movies?

Accepted Answer

$12.50 and...

Question 7

Which of the following statements exemplifies a principle of individual decision making?

Accepted Answer

A)  Trade can make everyone better off.
B)  Governments can sometimes improve market outcomes.
C)  The cost of something is what you give up to get it.
D)  Prices rise when the government prints too much money.

Question 8

When society gets the most it can from its scarce resources, then the outcome is called

Accepted Answer

A)  equitable.
B)  efficient.
C)  normal.
D)  marginal.

Question 9

Scenario 1-3
It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators.
-Refer to Scenario 1-3. A customer is willing to pay $60 for the 701th calculator. Should the company produce and sell it? Explain.

Accepted Answer

No, because the marg...

Question 10

Using income tax revenue to fund the welfare system illustrates the conflict between efficiency and equality.

Accepted Answer

A) True 
 B)False

Question 11

Economics is the study of how evenly goods and services are distributed within society.

Accepted Answer

A) True 
 B)False

Question 12

Suppose the state of Rhode Island passes a law that increases the tax on beer. As a result, beer consumers who live in Rhode Island start purchasing their beer in surrounding states. Which of the following principles does this best illustrate?

Accepted Answer

A)  People respond to incentives.
B)  Rational people think at the margin.
C)  Trade can make everyone better off.
D)  Markets are usually a good way to organize economic activity.

Question 13

The marginal benefit Joseph gets from purchasing a fourth pair of shoes is

Accepted Answer

A)  the same as the total benefit he gets from purchasing four pairs of shoes.
B)  more than the marginal cost of purchasing the fourth pair of shoes.
C)  the total benefit he gets from purchasing four pairs of shoes minus the total benefit he gets from purchasing three pairs of shoes.
D)  the total benefit he gets from purchasing five pairs of shoes minus the total benefit he gets from purchasing four pairs of shoes.

Question 14

Explain the concept of market failure.

Accepted Answer

Market failure is a situation ...

Question 15

Which of the following is true?

Accepted Answer

A)  Efficiency refers to the size of the economic pie; equality refers to how the pie is divided.
B)  Government policies usually improve upon both equality and efficiency.
C)  As long as the economic pie continually gets larger, no one will have to go hungry.
D)  Efficiency and equality can both be achieved if the economic pie is cut into equal pieces.

Question 16

Economists use the term ______ to refer to an increase in the overall level of prices in the economy.

Accepted Answer

The answer of Economists use the term ______ to refer...

Question 17

Which of the following claims is consistent with the views of mainstream economists?

Accepted Answer

A)  If we increase the rate of inflation from 4 percent to 6 percent, then the rate of unemployment will temporarily fall.
B)  If we increase the rate of inflation from 4 percent to 6 percent, then the rate of unemployment will temporarily rise.
C)  If we increase the rate of inflation from 4 percent to 6 percent, then the rate of unemployment will permanently fall.
D)  If we increase the rate of inflation from 4 percent to 6 percent, then the rate of unemployment will permanently rise.

Question 18

Inflation increases the value of money.

Accepted Answer

A) True 
 B)False

Question 19

Scenario 1-4 You have the afternoon free. You have a choice between going to the movies with a friend or studying economics for three hours. If you go to the movies, you will spend $12.00 on a ticket and $4.75 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 15 points.
-Refer to Scenario 1-4. What is your opportunity cost of going to the movies?

Accepted Answer

$16.75 and...

Question 20

Suppose one county in Missouri decides it wants to reduce alcohol consumption, so the county passes a law that raises the price of a bottle of beer by $1. As a result, people drive to other counties to drink alcohol, which results in an increase in drunk driving. This illustrates the principle that people respond to incentives.

Accepted Answer

A) True 
 B)False

Exam 1: Ten Principles of Economics

When society gets the most it can from its scarce resources, then the outcome is called

Correct Answer
verified

Correct Answer
verified

You are considering staying in college another semester so that you can complete a major in finance. In deciding whether or not to stay you should

Correct Answer
verified

Using income tax revenue to fund the welfare system illustrates the conflict between efficiency and equality.

Correct Answer
verified

Which of the following claims is consistent with the views of mainstream economists?

Correct Answer
verified

You have driven 850 miles on a vacation and then you notice that you are only 50 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

Correct Answer
verified

Economics is the study of how evenly goods and services are distributed within society.

Correct Answer
verified

Explain the concept of market failure.

Correct Answer
verified
Market failure is a situation ...
View Answer

Economists use the term ______ to refer to an increase in the overall level of prices in the economy.

Correct Answer
verified

Correct Answer
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No, because the marg...
View Answer

Correct Answer
verified
$12.50 and...
View Answer

With the understanding that people respond to incentives, outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

Correct Answer
verified
The concept of working longer per year w...
View Answer

Suppose the state of Rhode Island passes a law that increases the tax on beer. As a result, beer consumers who live in Rhode Island start purchasing their beer in surrounding states. Which of the following principles does this best illustrate?

Correct Answer
verified

Correct Answer
verified
$16.75 and...
View Answer

The marginal benefit Joseph gets from purchasing a fourth pair of shoes is

Correct Answer
verified

If the government were to intervene and set a wage for unskilled labor above the market wage, then we would expect, relative to the market outcome,

Correct Answer
verified

Which of the following statements exemplifies a principle of individual decision making?

Correct Answer
verified

Correct Answer
verified
No, because the marg...
View Answer

Which of the following is true?

Correct Answer
verified

Inflation increases the value of money.

Correct Answer
verified

Exam 1: Ten Principles of Economics

When society gets the most it can from its scarce resources, then the outcome is called

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

You are considering staying in college another semester so that you can complete a major in finance. In deciding whether or not to stay you should

Correct AnswerverifiedShow Answer

Using income tax revenue to fund the welfare system illustrates the conflict between efficiency and equality.

Correct AnswerverifiedShow Answer

Which of the following claims is consistent with the views of mainstream economists?

Correct AnswerverifiedShow Answer

You have driven 850 miles on a vacation and then you notice that you are only 50 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

Correct AnswerverifiedShow Answer

Economics is the study of how evenly goods and services are distributed within society.

Correct AnswerverifiedShow Answer

Explain the concept of market failure.

Correct AnswerverifiedMarket failure is a situation ...View AnswerShow Answer

Economists use the term ______ to refer to an increase in the overall level of prices in the economy.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNo, because the marg...View AnswerShow Answer

Correct Answerverified$12.50 and...View AnswerShow Answer

With the understanding that people respond to incentives, outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

Correct AnswerverifiedThe concept of working longer per year w...View AnswerShow Answer

Suppose the state of Rhode Island passes a law that increases the tax on beer. As a result, beer consumers who live in Rhode Island start purchasing their beer in surrounding states. Which of the following principles does this best illustrate?

Correct AnswerverifiedShow Answer

Correct Answerverified$16.75 and...View AnswerShow Answer

The marginal benefit Joseph gets from purchasing a fourth pair of shoes is

Correct AnswerverifiedShow Answer

If the government were to intervene and set a wage for unskilled labor above the market wage, then we would expect, relative to the market outcome,

Correct AnswerverifiedShow Answer

Which of the following statements exemplifies a principle of individual decision making?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNo, because the marg...View AnswerShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

Inflation increases the value of money.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Market failure is a situation ...
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Correct Answer
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Correct Answer
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No, because the marg...
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Correct Answer
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$12.50 and...
View Answer

Correct Answer
verified
The concept of working longer per year w...
View Answer

Correct Answer
verified

Correct Answer
verified
$16.75 and...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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No, because the marg...
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Correct Answer
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Correct Answer
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