A marginal change is a small incremental adjustment to an existing plan of action.

Select
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The correct answer is 'True'.

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
Feedback
The correct answer is: the cost of driving the next 50 miles, but not the cost of driving the
first 850
miles

is the study of how people allocate scarce resources for production,

distribution, and
consumption, both individually and collectively.
Answer:
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The correct answer is: ECONOMICS

Which of these activities will most likely result in an external benefit?

Feedback
The correct answer is: An elderly woman plants a flower garden on the vacant lot next to
her house

Trade between countries tends to

Feedback
The correct answer is: increase both competition and specialization.

Which of the following involve a trade-off?

Feedback
The correct answer is:
ALL of the given choices

In a market economy, economic activity is guided by

Feedback
The correct answer is: self-interest and prices.

Variations in the standard of living across countries is due almost entirely to differences in
each nation's
total output of goods and services.
Feedback
The correct answer is 'False'.

The property of society getting the most it can from its scarce resources is called
Feedback
The correct answer is: efficiency.
The government can potentially improve market outcomes if market inequalities or
market failure
exists.
Feedback
The correct answer is 'True'.
Economics is the study of how society manages its
Feedback
The correct answer is: unlimited wants and limited resources.
What term refers to the idea that society has limited resources and therefore cannot
produce all the
goods and services people wish to have?
Feedback
The correct answer is: scarcity

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?

Feedback
The correct answer is: People respond to incentives.

Economics is the study of how society allocates its unlimited resources.

Feedback
The correct answer is 'False'.
The opportunity cost of working one hour is the sum of the values you would have
received from all
other activities you could have done in that hour.
Feedback
The correct answer is 'False'.
In the short run, which of the following rates of growth in the money supply is likely to
lead to the
lowest level of unemployment in the economy?
Feedback
The correct answer is: 8 percent per year

The overriding reason why households and societies face many decisions is that
.Feedback
The correct answer is: resources are scarce.

A rational decision maker takes an action if and only if the marginal benefit exceeds the
marginal cost.
Feedback
The correct answer is 'True'.

Prior to the collapse of communism, communist countries worked on the premise that
economic well
being could be best attained by
Feedback
The correct answer is: the actions of government central planners.

Trade
Feedback
The correct answer is: allows specialization, which reduces costs.

Suppose you find P200. If you choose to use the P200 to go to a football
match, your
opportunity cost of going to the game is

Feedback
Your answer is correct.
The correct answer is:
P200 (because you could have used the P200 to buy other things) plus the
value of your
time spent at the game.

Equality refers to how the pie is divided, and efficiency refers to the size of the economic
pie
Feedback
The correct answer is 'True'.

Market failure refers to a situation in which the market does not allocate resources
efficiently.
Feedback
The correct answer is 'True'.

studies the overall economy on both a national and international level.

Its focus can
include a distinct geographical region, a country, a continent, or even the
whole world.
Feedback
The correct answer is: MACROECONOMICS
In the short-run, society faces a tradeoff between inflation and unemployment.
Select one:
True
False
Feedback
The correct answer is 'True'.
Question 26
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Your professor loves her work, teaching math. She has been offered other positions in the
corporate
world that would increase her income by 15 percent, but she has decided to continue
working as a
professor. Her decision would not change unless the marginal
a.
benefit of a corporate job decreased.
b.
cost of teaching increased.
Correct
c.
cost of a corporate job increased.
d.benefit of teaching increased.
Feedback
The correct answer is: cost of teaching increased.
Question 27
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Which of the following do economists not generally regard as a legitimate reason for the
government to
intervene in a market?
a.
To enforce property rights
b.
To promote efficiency
c.
To protect an industry from foreign competition
Correct
d.
To promote equality
Feedback
The correct answer is: To protect an industry from foreign competition
Question 28
Correct
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Savion is restoring a car and has already spent $4,000 on the restoration. He expects to be
able to sell
the car for $5800. Savion discovers that he needs to do an additional $2,400 of work to
make the car
worth $5,800 to potential buyers. He could also sell the car now, without completing the
additional
work, for $3,800. What should he do?
a.
It does not matter which action he takes since the outcome will be the same either way.
b.
He should complete the additional work and sell the car for $5,800.
c.
He should sell the car now for $3,800.
Correct
d.
He should keep the car since it wouldn’t be rational to spend $6,400 restoring a car and then
sell it for
only $5,800.
Feedback
The correct answer is: He should sell the car now for $3,800.
Question 29
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Which of the following statements does not apply to a market economy?
a.
The "invisible hand" usually maximizes the income of society as a whole.
b.
Government policies are the primary forces that guide the decisions of firms and
households.
Correctc.
Households decide which firms to work for and what to buy with their incomes.
d.
Firms decide whom to hire and what to produce.
Feedback
The correct answer is: Government policies are the primary forces that guide the decisions
of firms and
households.
Question 30
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Inflation is the primary determinant of a country's living standards.
Select one:
True
False
Feedback
The correct answer is 'False'.
Question 31
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Question text
Known as the father of economics and classical economic theories.
Answer:
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The correct answer is: ADAM SMITHQuestion 32
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The business cycle refers to fluctuations in economic activity such as employment and
production.
Select one:
True
False
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The correct answer is 'True'.
Question 33
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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.
Select one:
True
False
Feedback
The correct answer is 'False'.
Question 34
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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
a.
benefit of leaving was greater than the marginal cost.
Correct
b.
benefit of teaching was negative.
c.
benefit of teaching was greater than the marginal cost.
d.
cost of leaving was greater than the marginal benefit.
Feedback
The correct answer is: benefit of leaving was greater than the marginal cost.
Question 35
Correct
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Trade-offs are required because wants are unlimited and resources are
a.
efficient.
b.
economical
c.
all of the given choicesd.
unlimited
e.
marginal
f.
scarce
Feedback
Your answer is correct.
The correct answer is:
scarce
Question 36
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Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty
seats on a
flight. If the marginal cost of flying a passenger is $200 and a standby passenger is willing to
pay $300,
the airline should
a.
not sell the ticket because the marginal benefit is less than the average cost.
b.
not sell the ticket because the marginal benefit is less than the marginal cost.
c.
sell the ticket because the marginal benefit exceeds the average cost.
d.
sell the ticket because the marginal benefit exceeds the marginal cost.
CorrectFeedback
The correct answer is: sell the ticket because the marginal benefit exceeds the marginal
cost.
Question 37
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The fact that people are willing to pay much more for a diamond, which is not needed for
survival, than
they are willing to pay for a cup of water, which is needed for survival, is an example of
irrational
behavior.
Select one:
True
False
Feedback
The correct answer is 'False'.
Question 38
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Senator Fujita argues that replacing the federal income tax with a national sales tax would
increase the
level of output. Senator Watson objects that this policy would benefit the rich at the
expense of the
poor.
a.
Both senators' arguments are primarily about efficiency.
b.
Both senators' arguments are primarily about equality.
c.Senator Fujita's argument is primarily about equality, while Senator Watson's argument is
primarily
about efficiency.
d.
Senator Fujita's argument is primarily about efficiency, while Senator Watson's argument is
primarily
about equality.
Correct
Feedback
The correct answer is: Senator Fujita's argument is primarily about efficiency, while Senator
Watson's
argument is primarily about equality.
Question 39
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The opportunity cost of working out for one hour is the value of the next-best activity that
you could
have done in that hour.
Select one:
True
False
Feedback
The correct answer is 'True'.
Question 40
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Suppose that you have received $650 as a birthday gift. You can spend it today or you can
put the
money in a savings account for a year and earn 2 percent interest. The opportunity cost of
spending the
money today, in terms of what you could have after one year, isa.
$652.00.
b.
$663.00.
Correct
c.
$0.
d.
$13.00.
Feedback
The correct answer is: $663.00.
Question 41
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it focuses on how individual consumers and firm make decisions; these
individuals can
be a single person, a household, a business/organization or a government
agency.
Answer:
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The correct answer is: MICROECONOMICS
Question 42
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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,
a.
a decrease in the number of unskilled jobs available.
Correct
b.
a decrease in the number of workers wanting unskilled jobs.
c.
an increase in the number of businesses using unskilled workers.
d.
an increase in the number of unskilled jobs available.
Feedback
The correct answer is: a decrease in the number of unskilled jobs available.
Question 43
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Question text
Fossil fuels are considered to be nonrenewable energy sources. Which of the following
statements is
correct?
a.
Fossil fuels are not resources

Fossil fuels are considered to be nonrenewable energy sources. Which of the following
statements is
correct?
a.
Fossil fuels are not resources.
b.
Fossil fuels are scarce resources.
Correct
c.Fossil fuels are nonscarce resources.
d.
Fossil fuels are unlimited resources.
Feedback
The correct answer is: Fossil fuels are scarce resources.
Question 44
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A hair stylist currently cuts and colors hair for 50 clients per week and earns a profit. He is
considering
expanding his operation in order to serve more clients. Should he expand?
a.
Yes, because cutting hair is profitable.
b.
It depends on the marginal cost of serving more clients and the marginal revenue he will
earn from
serving more clients.
Correct
c.
It depends on the average cost of serving more clients and the average revenue he will earn
from
serving more clients.
d.
No, because he may not be able to sell more services.
Feedback
The correct answer is: It depends on the marginal cost of serving more clients and the
marginal
revenue he will earn from serving more clients.
Question 45
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Suppose that in Peru total annual output is worth $750 million and people work 40 million
hours. In
Oman, total annual output is worth 650 million and people work 20 million hours.
Productivity is higher
a.
in Oman. Most variation in the standard of living across countries is due to differences in
productivity.
Correct
b.
in Oman. Differences in productivity explain very little of the variation in the standard of
living across
countries.
c.
in Peru. Most variation in the standard of living across countries is due to differences in
productivity.
d.
in Peru. Differences in productivity explain very little of the variation in the standard of living
across
countries.
Feedback
The correct answer is: in Oman. Most variation in the standard of living across countries is
due to
differences in productivity.
Question 46
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Tuition is the single-largest cost of attending college for most students.
Select one:
True
FalseFeedback
The correct answer is 'False'.
Question 47
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An individual deciding how to allocate her limited time is dealing with both scarcity and
trade-offs.
Select one:
True
False
Feedback
The correct answer is 'True'.
Question 48
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Equality means distributing society's resources in the most efficient manner.
Select one:
True
False
Feedback
The correct answer is 'False'.
Question 49
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Consider Miray's decision to go to college. If she goes to college, she will spend $24,000 on
tuition,
$12,000 on room and board, and $1,900 on books. If she does not go to college, she will
earn $16,000
working in a store and spend $8,000 on room and board. Miray's cost of going to college is
a.
$61,900.
b.
$45,900.
Correct
c.
$53,900.
d.
$37,900.
Feedback
The correct answer is: $45,900.
Question 50
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Economics is the study of
a.
how society manages its scarce resources.
b.
how society manages its unlimited resources.c.
all of the given choices
d.
how to avoid having to make trade-offs.
e.
how to reduce our wants until we are satisfied
f.
how to fully satisfy our unlimited wants.
Feedback
Your answer is correct.
The correct answer is:
how society manages its scarce resources.
Question 51
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People are willing to pay more for a diamond than for a bottle of water because
a.
the marginal cost of producing an extra diamond far exceeds the marginal cost of producing
an extra
bottle of water.
b.
producers of diamonds have a much greater ability to manipulate diamond prices than
producers of
water have to manipulate water prices.
c.
water prices are held artificially low by governments, since water is necessary for life.
d.
the marginal benefit of an extra diamond far exceeds the marginal benefit of an extra bottle
of water.Correct
Feedback
The correct answer is: the marginal benefit of an extra diamond far exceeds the marginal
benefit of an
extra bottle of water.
Question 52
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Since people respond to incentives, we would expect that, if the average salary
of
accountants increases by 50% while the average salary of teachers increases
by 20%,
then
a.
fewer students will attend university.
b.
fewer students will take degree courses in education and more will take
accounting
courses.
c.
none of these
d.
fewer students will take degree courses in accounting and more will take
education
courses.
e.
all of the choices given
f.
a lot will take up the degree in teaching
Feedback
Your answer is correct.
The correct answer is:fewer students will take degree courses in education and
more will take accounting
courses.
Question 53
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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.
Select one:
True
False
Feedback
The correct answer is 'True'.
Question 54
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The willingness of citizens to pay for vaccinations does not include the benefit society
receives from
having vaccinated citizens who cannot transmit an illness to others. This extra benefit
society gets from
vaccinating its citizens is known as
a.
productivity.
b.
market power.c.
an externality.
Correct
d.
property rights.
Feedback
The correct answer is: an externality.
Question 55
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Inflation increases the value of money.
Select one:
True
False
Feedback
The correct answer is 'False'.

The classic tradeoff between "guns and butter" states that when a society spends more on
national
defense, it has less to spend on consumer goods to raise the standard of living.
Feedback
The correct answer is 'True'.

Question text
Dee is an accomplished actress and a homeowner who pays a landscaper to maintain her
lawn rather
than do it herself. Dee has determined that she can earn more in the hour it would take
her to work on
her lawn than she must pay her landscaper. This scenario is an example of which principle
of
economics?
Feedback
The correct answer is: Trade can make everyone better off.

Alana decides to spend 2 hours working overtime rather than going shopping with her
friends. She earns
$11 per hour for overtime work. Her opportunity cost of working is
Feedback
The correct answer is: the enjoyment she would have received had she gone shopping.

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

Feedback
The correct answer is: compare the cost of staying one more semester to the benefits of
staying one
more semester.

A rational person does not act unless

Feedback
Your answer is correct.
The correct answer is:
the action produces marginal benefits that exceed marginal costs