Question 1

One trade off society faces is between efficiency and equality. Define each term. If the UK government redistributes income from the rich to the poor, explain how this action affects equality as well as efficiency in the economy.

Accepted Answer

Efficiency is the property of society ge...

Question 2

Inflation reduces:

Accepted Answer

A)   The price level.
B)   Employment.
C)   The money supply.
D)   The value of money.E) None of the above
F) All of the above

Question 3

Foreign trade:

Accepted Answer

A)   Increases the scarcity of resources.
B)   Makes a country more equitable.
C)   Allows a country to have a greater variety of products at a lower cost than if it tried to produce everything at home.
D)   Allows a country to avoid trade-offs.E) None of the above
F) All of the above

Question 4

Anneka is better at cleaning and Jurgen is better at cooking. It will take fewer hours to eat and clean if Jurgen specializes in cooking and Anneka specializes in cleaning than if they share the household duties evenly.

Accepted Answer

A) True 
 B)False  True

Question 5

High and persistent inflation is caused by excessive growth in the quantity of money in the economy.

Accepted Answer

A) True 
 B)False

Question 6

Both the production of goods and services and the unemployment rate are used to measure:

Accepted Answer

A)   The business cycle.
B)   Productivity.
C)   The interest rate.
D)   Inflation.E) A) and B)
F) B) and D)

Question 7

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort. This law is likely to:

Accepted Answer

A)   Increase efficiency and increase equality.
B)   Increase efficiency but decrease equality.
C)   Decrease efficiency but increase equality.
D)   Decrease efficiency and decrease equality.E) A) and B)
F) All of the above

Question 8

Which of the following is not part of the opportunity cost of going on holiday? The money you:

Accepted Answer

A)   Spent on a theatre show
B)   Could have made if you had stayed at home and worked
C)   Spent on airline tickets
D)   Spent on another opportunityE) A) and D)
F) A) and C) D

Question 9

Productivity can be increased by

Accepted Answer

A)   Improving the education of workers.
B)   Raising union wages.
C)   Raising minimum wages.
D)   Restricting trade with foreign countries.E) None of the above
F) A) and C)

Question 10

Productivity is defined as the:

Accepted Answer

A)   Amount of goods and services produced from each unit of labour input.
B)   Number of workers required producing a given amount of goods and services.
C)   Amount of labour that can be saved by replacing workers with machines.
D)   Actual amount of effort workers put into an hour of working time.E) All of the above
F) A) and D)

Question 11

With the understanding that people respond to incentives, outline the possible outcome for teachers if school holidays are reduced.

Accepted Answer

The concept of working longer per year w...

Question 12

Rational people act only when the marginal benefit of the action exceeds the marginal cost.

Accepted Answer

A) True 
 B)False

Question 13

An increase in the price of beef provides information which:

Accepted Answer

A)   Provides no information because prices in a market system are managed by planning boards.
B)   Tell consumers to buy less pork.
C)   Tell producers to produce more beef.
D)   Tell consumers to buy more beef.E) B) and C)
F) A) and B)

Question 14

Suppose that Rebecca throws her cola bottle out of her car window and it smashes on the road. Jim drives over the broken glass and gets a flat tyre. Rebecca's cola consumption has resulted in:

Accepted Answer

A)   The production of a public good.
B)   An externality.
C)   Monopoly power for Rebecca.
D)   Greater efficiency in consumption.E) A) and B)
F) A) and C)

Question 15

How does the study of economics depend upon the phenomenon of scarcity?

Accepted Answer

Because economics is the study of how so...

Question 16

A nation's standard of living can be increased by:

Accepted Answer

A)   Improvements in technology and international trade.
B)   Improvements in technology but not international trade.
C)   International trade but not improvements in technology.
D)   Neither international trade nor improvements in technology.E) B) and C)
F) A) and D)

Question 17

Government can improve market outcomes by:

Accepted Answer

A)   Directing labour to priority areas.
B)   Printing money.
C)   Using well designed policies to reduce firms' market power.
D)   Taxing everyone equally.E) B) and D)
F) All of the above

Question 18

Define opportunity cost. What is the opportunity cost to you of attending college? What was your opportunity cost of coming to class today?

Accepted Answer

Whatever must be given up to obtain some item it its opportunity cost. Basically, this would be a person's second choice. The opportunity cost of a person attending college is the value of the best alternative use of that person's time, as well as the additional costs the person incurs by making the choice to attend college. For most students this would be the income the student gives up by not working plus the cost of tuition and books, and any other costs they incur by attending college that they would not incur if they chose not to attend college. A student's opportunity cost of coming to class was the value of the best opportunity the student gave up. (For most students, that seems to be sleep.)

Question 19

There are three questions that any economy has to face: What goods and services should be produced? How should these goods and services be produced? ___________________?

Accepted Answer

A)   How many goods and services should be produced?
B)   When should the goods and services be produced?
C)   Why should the goods and services be produced?
D)   Who should get the goods and services that have been produced?E) A) and D)
F) B) and D)

Question 20

Which of the following activities is most likely to produce an externality? A student:

Accepted Answer

A)   Eats a hamburger in the student union.
B)   Reads a novel for pleasure.
C)   Sits at home and watches T.V.
D)   Has a party in her room in the student hall of residence.E) C) and D)
F) B) and C)

Exam 1: What Is Economics

One trade off society faces is between efficiency and equality. Define each term. If the UK government redistributes income from the rich to the poor, explain how this action affects equality as well as efficiency in the economy.

Correct Answer
verified
Efficiency is the property of society ge...
View Answer

Inflation reduces:

Correct Answer
verified

Foreign trade:

Correct Answer
verified

Anneka is better at cleaning and Jurgen is better at cooking. It will take fewer hours to eat and clean if Jurgen specializes in cooking and Anneka specializes in cleaning than if they share the household duties evenly.

Correct Answer
verified
True

High and persistent inflation is caused by excessive growth in the quantity of money in the economy.

Correct Answer
verified

Both the production of goods and services and the unemployment rate are used to measure:

Correct Answer
verified

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort. This law is likely to:

Correct Answer
verified

Which of the following is not part of the opportunity cost of going on holiday? The money you:

Correct Answer
verified
D

Productivity can be increased by

Correct Answer
verified

Productivity is defined as the:

Correct Answer
verified

With the understanding that people respond to incentives, outline the possible outcome for teachers if school holidays are reduced.

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

Rational people act only when the marginal benefit of the action exceeds the marginal cost.

Correct Answer
verified

An increase in the price of beef provides information which:

Correct Answer
verified

Suppose that Rebecca throws her cola bottle out of her car window and it smashes on the road. Jim drives over the broken glass and gets a flat tyre. Rebecca's cola consumption has resulted in:

Correct Answer
verified

How does the study of economics depend upon the phenomenon of scarcity?

Correct Answer
verified
Because economics is the study of how so...
View Answer

A nation's standard of living can be increased by:

Correct Answer
verified

Government can improve market outcomes by:

Correct Answer
verified

Define opportunity cost. What is the opportunity cost to you of attending college? What was your opportunity cost of coming to class today?

There are three questions that any economy has to face: What goods and services should be produced? How should these goods and services be produced? ___________________?

Correct Answer
verified

Which of the following activities is most likely to produce an externality? A student:

Correct Answer
verified

Exam 1: What Is Economics

One trade off society faces is between efficiency and equality. Define each term. If the UK government redistributes income from the rich to the poor, explain how this action affects equality as well as efficiency in the economy.

Correct AnswerverifiedEfficiency is the property of society ge...View AnswerShow Answer

Inflation reduces:

Correct AnswerverifiedShow Answer

Foreign trade:

Correct AnswerverifiedShow Answer

Anneka is better at cleaning and Jurgen is better at cooking. It will take fewer hours to eat and clean if Jurgen specializes in cooking and Anneka specializes in cleaning than if they share the household duties evenly.

Correct AnswerverifiedTrue

High and persistent inflation is caused by excessive growth in the quantity of money in the economy.

Correct AnswerverifiedShow Answer

Both the production of goods and services and the unemployment rate are used to measure:

Correct AnswerverifiedShow Answer

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort. This law is likely to:

Correct AnswerverifiedShow Answer

Which of the following is not part of the opportunity cost of going on holiday? The money you:

Correct AnswerverifiedD

Productivity can be increased by

Correct AnswerverifiedShow Answer

Productivity is defined as the:

Correct AnswerverifiedShow Answer

With the understanding that people respond to incentives, outline the possible outcome for teachers if school holidays are reduced.

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

Rational people act only when the marginal benefit of the action exceeds the marginal cost.

Correct AnswerverifiedShow Answer

An increase in the price of beef provides information which:

Correct AnswerverifiedShow Answer

Suppose that Rebecca throws her cola bottle out of her car window and it smashes on the road. Jim drives over the broken glass and gets a flat tyre. Rebecca's cola consumption has resulted in:

Correct AnswerverifiedShow Answer

How does the study of economics depend upon the phenomenon of scarcity?

Correct AnswerverifiedBecause economics is the study of how so...View AnswerShow Answer

A nation's standard of living can be increased by:

Correct AnswerverifiedShow Answer

Government can improve market outcomes by:

Correct AnswerverifiedShow Answer

Define opportunity cost. What is the opportunity cost to you of attending college? What was your opportunity cost of coming to class today?

There are three questions that any economy has to face: What goods and services should be produced? How should these goods and services be produced? ___________________?

Correct AnswerverifiedShow Answer

Which of the following activities is most likely to produce an externality? A student:

Correct AnswerverifiedShow Answer

Correct Answer
verified
Efficiency is the property of society ge...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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True

Correct Answer
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Correct Answer
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D

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

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Because economics is the study of how so...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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