Question 1

In Ventura County,California,strawberry production is limited by the number of acres available for agriculture production.Which economic concept does this statement BEST represent?

Accepted Answer

A)  Scarcity
B)  Marginal Analysis.
C)  Equilibrium.
D)  Opportunity Cost.E) B) and C)
F) A) and D)

Question 2

You can spend $100 on either a new economics textbook or a new tablet computer.If you choose to buy the new economics textbook,the opportunity cost is:

Accepted Answer

A)  $100.
B)  your enjoyment of the new tablet computer.
C)  both the $100 and your enjoyment of the new tablet computer.
D)  impossible to determine.E) A) and B)
F) A) and C)

Question 3

When markets don't achieve efficiency:

Accepted Answer

A)  they must achieve equity.
B)  the government must be participating in the market.
C)  the government may intervene to improve society's welfare.
D)  they should be closed.E) None of the above
F) A) and C)

Question 4

Handicapped-designated parking spaces are an example of the market economy achieving efficiency.

Accepted Answer

A) True 
 B)False

Question 5

Nara has gone to three movies this week.She has some extra money,so she decides to go to another.Which economic principle does this statement BEST represent?

Accepted Answer

A)  Choices are necessary because resources are scarce.
B)  The true cost of something is its opportunity cost.
C)  "How much" is a decision at the margin.
D)  There are gains from trade.E) B) and C)
F) A) and D)

Question 6

Your elderly grandma tells you: "I haven't been taking my beloved walks because I'm concerned about falling and getting hurt.See,there is always a cost to doing something.But if you don't do anything,then there is no cost." Your grandma does not understand the economic concept of:

Accepted Answer

A)  scarcity.
B)  efficiency.
C)  opportunity cost.
D)  marginal analysis.E) A) and B)
F) B) and C)

Question 7

Florida schools offered cash bonuses to students who scored high on the state's standardized exams.The cash bonuses are motivated by which economic principle?

Accepted Answer

A)  Choices are necessary because resources are scarce.
B)  The true cost of something is its opportunity cost.
C)  "How Much" is a decision at the margin.
D)  People usually respond to incentives,exploiting opportunities to make themselves better off.E) B) and C)
F) A) and B)

Question 8

Specialization in production was the starting point for:

Accepted Answer

A)  The Wealth of Nations,by Adam Smith.
B)  The General Theory,by John Maynard Keynes.
C)  Das Kapital,by Karl Marx.
D)  Free to Choose,by Milton Friedman.E) C) and D)
F) B) and D)

Question 9

When we are forced to make choices,we are facing the concept of:

Accepted Answer

A)  human capital.
B)  inflation.
C)  scarcity.
D)  market failure.E) A) and C)
F) A) and D)

Question 10

Gains from trade exist for:

Accepted Answer

A)  individuals only.
B)  states only.
C)  countries only.
D)  individuals,states,and countries.E) A) and B)
F) B) and D)

Question 11

A dozen friends got together to celebrate a birthday.If the birthday cake is cut into 12 pieces of the same size and each of the 12 partygoers gets a slice,this cake distribution is:

Accepted Answer

A)  efficient but not equitable.
B)  equitable but not efficient.
C)  efficient and equitable.
D)  equitable.E) B) and C)
F) None of the above

Question 12

When markets fail:

Accepted Answer

A)  government intervention may help.
B)  the market realizes the maximum possible gains from trade given the available resources.
C)  there may still be an efficient allocation of resources.
D)  no goods and services are produced.E) None of the above
F) A) and B)

Question 13

A resource is anything that:

Accepted Answer

A)  can be used in production.
B)  you pay for.
C)  is in scarce supply.
D)  can be consumed.E) A) and B)
F) A) and C)

Question 14

Economists define an efficient use of resources as a situation in which:

Accepted Answer

A)  one person can be made better off but only by making another person worse off.
B)  all persons can be made better off without making anyone worse off.
C)  all persons receive an equal share of the resources.
D)  all persons are made worse off when one person is made better off.E) C) and D)
F) All of the above

Question 15

In 2003,Congress passed a tax cut.The country did NOT incur any opportunity cost from this decision.

Accepted Answer

A) True 
 B)False

Question 16

If the value of homes in University City increases and,as a result,the people of University City spend more,incomes in University City will:

Accepted Answer

A)  decrease.
B)  increase.
C)  remain the same.
D)  be unaffected.E) A) and B)
F) A) and C)

Question 17

Because people usually exploit opportunities to make themselves better off,to encourage young people to go to college in their home state,state universities can:

Accepted Answer

A)  charge higher tuition to in-state students.
B)  award special scholarships to out-of-state students.
C)  offer high-interest loans to in-state students.
D)  offer lower tuition to in-state students.E) None of the above
F) B) and C)

Question 18

A central and fundamental theme in economics is that:

Accepted Answer

A)  wants are limited.
B)  the United States is a rich country,but we are simply not aware of it.
C)  people have unlimited wants but limited means to satisfy them.
D)  resources are unlimited.E) B) and D)
F) B) and C)

Question 19

For a student who owns his or her own home and doesn't plan to live in the dorm,the cost of going to college is:

Accepted Answer

A)  tuition and the cost of housing.
B)  tuition,the cost of housing,and the cost of books and other school materials.
C)  tuition,the cost of books and other school materials,and forgone income.
D)  forgone income only.E) B) and D)
F) B) and C)

Question 20

Economists use the term equilibrium to describe situation when:

Accepted Answer

A)  individuals are equal.
B)  goods are distributed equitably .
C)  there are equal number of buyers and sellers..
D)  no individual would be better off taking a different action or no individual has an incentive to change his or her behavior.E) B) and D)
F) A) and D)

Exam 1: First Principles

Economists define an efficient use of resources as a situation in which:

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Your elderly grandma tells you: "I haven't been taking my beloved walks because I'm concerned about falling and getting hurt.See,there is always a cost to doing something.But if you don't do anything,then there is no cost." Your grandma does not understand the economic concept of:

Correct AnswerverifiedShow Answer

In Ventura County,California,strawberry production is limited by the number of acres available for agriculture production.Which economic concept does this statement BEST represent?

Correct AnswerverifiedShow Answer

A resource is anything that:

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Gains from trade exist for:

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Specialization in production was the starting point for:

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For a student who owns his or her own home and doesn't plan to live in the dorm,the cost of going to college is:

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Handicapped-designated parking spaces are an example of the market economy achieving efficiency.

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When markets don't achieve efficiency:

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Nara has gone to three movies this week.She has some extra money,so she decides to go to another.Which economic principle does this statement BEST represent?

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When we are forced to make choices,we are facing the concept of:

Correct AnswerverifiedShow Answer

If the value of homes in University City increases and,as a result,the people of University City spend more,incomes in University City will:

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When markets fail:

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Florida schools offered cash bonuses to students who scored high on the state's standardized exams.The cash bonuses are motivated by which economic principle?

Correct AnswerverifiedShow Answer

A dozen friends got together to celebrate a birthday.If the birthday cake is cut into 12 pieces of the same size and each of the 12 partygoers gets a slice,this cake distribution is:

Correct AnswerverifiedShow Answer

Economists use the term equilibrium to describe situation when:

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In 2003,Congress passed a tax cut.The country did NOT incur any opportunity cost from this decision.

Correct AnswerverifiedShow Answer

Because people usually exploit opportunities to make themselves better off,to encourage young people to go to college in their home state,state universities can:

Correct AnswerverifiedShow Answer

A central and fundamental theme in economics is that:

Correct AnswerverifiedShow Answer

You can spend $100 on either a new economics textbook or a new tablet computer.If you choose to buy the new economics textbook,the opportunity cost is:

Correct AnswerverifiedShow Answer

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