Question 1

Which of the following words and phrases best captures the notion of equity?

Accepted Answer

A)  minimum waste
B)  maximum benefit
C)  sameness
D)  fairness

Question 2

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.

Question 3

During the early 1920s in Germany,prices

Accepted Answer

A)  doubled annually.
B)  doubled monthly.
C)  tripled monthly.
D)  tripled annually.

Question 4

Resources are

Accepted Answer

A)  scarce for households but plentiful for economies.
B)  plentiful for households but scarce for economies.
C)  scarce for households and scarce for economies.
D)  plentiful for households and plentiful for economies.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The overriding reason as to why households and societies face many decisions is that

Accepted Answer

A)  resources are scarce.
B)  goods and services are not scarce.
C)  incomes fluctuate with business cycles.
D)  people, by nature, tend to disagree.

Question 7

In the United States,the overall level of prices more than doubled during the

Accepted Answer

A)  1950s.
B)  1960s.
C)  1970s.
D)  1980s.

Question 8

In a market economy,economic activity is guided by

Accepted Answer

A)  the government.
B)  corporations.
C)  central planners.
D)  self-interest and prices.

Question 9

With careful planning,we can usually get something that we like without having to give up something else that we like.

Accepted Answer

A) True 
 B)False

Question 10

Trade with any nation can be mutually beneficial.

Accepted Answer

A) True 
 B)False

Question 11

Prior to the collapse of communism,communist countries worked on the premise that economic well-being could be best attained by

Accepted Answer

A)  a market economy.
B)  a strong reliance on prices and individuals' self-interests.
C)  a system of large, government-operated, privately-owned firms.
D)  the actions of government central planners.

Question 12

When a society cannot produce all the goods and services people wish to have,it is said that the economy is experiencing

Accepted Answer

A)  scarcity.
B)  shortages.
C)  inefficiencies.
D)  inequities.

Question 13

One effect of the government-imposed seat belt law in the U.S.has been

Accepted Answer

A)  a dramatic decrease in the number of pedestrian deaths.
B)  safer driving.
C)  an increase in the number of accidents.
D)  a dramatic decrease in the number of driver deaths.

Question 14

The average cost per seat on the 50-passenger Floating-On-Air Bus company's trip from Kansas City to St.Louis,on which no refreshments are served,is $45.In advance of a particular trip,three seats remain unsold.The bus company could increase its profit only if it

Accepted Answer

A)  charged any ticket price above $0 for the three remaining seats.
B)  charged at least $15 for each of the three remaining seats.
C)  charged at least $45 for each of the three remaining seats.
D)  paid three people to occupy the three remaining seats.

Question 15

Russell spends an hour studying instead of playing tennis.The opportunity cost to him of studying is

Accepted Answer

A)  the improvement in his grades from studying for the hour.
B)  the improvement in his grades from studying minus the enjoyment of playing tennis.
C)  the enjoyment and exercise he would have received had he played tennis.
D)  zero.Since Russell chose to study rather than to play tennis, the value of studying must have been greater than the value of playing tennis.

Question 16

A tradeoff exists between a clean environment and a higher level of income in that

Accepted Answer

A)  studies show that individuals with higher levels of income actually pollute less than low-income individuals.
B)  efforts to reduce pollution typically are not completely successful.
C)  laws that reduce pollution raise costs of production and reduce incomes.
D)  by employing individuals to clean up pollution, employment and income both rise.

Question 17

Policies to enhance living standards should be designed to ensure that workers

Accepted Answer

A)  have access to the best available methods of producing goods and services.
B)  have the appropriate equipment to produce goods and services.
C)  receive good educations.
D)  All of the above are correct.

Question 18

The income of a typical worker in a country is most closely linked to which of the following?

Accepted Answer

A)  population
B)  productivity
C)  market power
D)  government policies

Question 19

In 2000 the average American had an income of about

Accepted Answer

A)  $28,400.
B)  $34,100.
C)  $39,800.
D)  $44,500.

Question 20

Senator Smart,who understands economic principles,is trying to convince workers in her district that trade with other countries is beneficial.Senator Smart should argue that trade can be beneficial

Accepted Answer

A)  only if it allows us to obtain things that we couldn't make for ourselves.
B)  because it allows specialization, which increases total output.
C)  to us if we can gain and the others involved in the trade lose.
D)  in only a limited number of circumstances because others are typically self-interested.

Exam 1: Ten Principles of Economics

The income of a typical worker in a country is most closely linked to which of the following?

Correct AnswerverifiedShow Answer

During the early 1920s in Germany,prices

Correct AnswerverifiedShow Answer

One effect of the government-imposed seat belt law in the U.S.has been

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In a market economy,economic activity is guided by

Correct AnswerverifiedShow Answer

With careful planning,we can usually get something that we like without having to give up something else that we like.

Correct AnswerverifiedShow Answer

The average cost per seat on the 50-passenger Floating-On-Air Bus company's trip from Kansas City to St.Louis,on which no refreshments are served,is $45.In advance of a particular trip,three seats remain unsold.The bus company could increase its profit only if it

Correct AnswerverifiedShow Answer

Trade with any nation can be mutually beneficial.

Correct AnswerverifiedShow Answer

A tradeoff exists between a clean environment and a higher level of income in that

Correct AnswerverifiedShow Answer

When a society cannot produce all the goods and services people wish to have,it is said that the economy is experiencing

Correct AnswerverifiedShow Answer

Which of the following words and phrases best captures the notion of equity?

Correct AnswerverifiedShow Answer

Russell spends an hour studying instead of playing tennis.The opportunity cost to him of studying is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the United States,the overall level of prices more than doubled during the

Correct AnswerverifiedShow Answer

In 2000 the average American had an income of about

Correct AnswerverifiedShow Answer

Senator Smart,who understands economic principles,is trying to convince workers in her district that trade with other countries is beneficial.Senator Smart should argue that trade can be beneficial

Correct AnswerverifiedShow Answer

Policies to enhance living standards should be designed to ensure that workers

Correct AnswerverifiedShow Answer

Resources are

Correct AnswerverifiedShow Answer

The overriding reason as to why households and societies face many decisions is that

Correct AnswerverifiedShow Answer

Prior to the collapse of communism,communist countries worked on the premise that economic well-being could be best attained by

Correct AnswerverifiedShow Answer

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