Question 1

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. What is the company's average cost?

Accepted Answer

The answer of Scenario 1-6
It costs a company $30,000 to...

Question 2

During the 1990s, the United Kingdom experienced low levels of inflation while Turkey experienced high levels of inflation. A likely explanation of these facts is that

Accepted Answer

A)   the United Kingdom has a better education system than Turkey.
B)   the rate of growth of the quantity of money was slower in the United Kingdom than in Turkey.
C)   workers in Turkey are more productive than workers in the United Kingdom.
D)   there are more instances of market power in Turkey than in the United Kingdom.E) B) and C)
F) A) and C)

Question 3

Cole is refinishing an antique china cabinet and has already spent $180 on the restoration. He expects to be able to sell the cabinet for $360. Cole discovers that he needs to do an additional $200 worth of work to make the cabinet worth $360 to potential buyers. He could also sell the cabinet now, without completing the additional work, for $100. What should Cole do?

Accepted Answer

A)   He should sell the cabinet now for $100.
B)   He should keep the cabinet since it wouldn't be rational to spend $380 restoring a cabinet and then sell it for only $360.
C)   He should complete the additional work and sell the cabinet for $360.
D)   It does not matter which action he takes since the outcome will be the same either way.E) None of the above
F) A) and D)

Question 4

Market power and externalities are two possible causes of market failure.

Accepted Answer

A) True 
 B)False

Question 5

An individual deciding how to allocate her limited time is dealing with both scarcity and trade-offs.

Accepted Answer

A) True 
 B)False

Question 6

Economists study how people make decisions.

Accepted Answer

A) True 
 B)False

Question 7

A rational decision maker takes an action if and only if

Accepted Answer

A)   the average benefit of the action exceeds the average cost.
B)   the average cost of the action exceeds the average benefit.
C)   the marginal benefit of the action exceeds the marginal cost.
D)   the marginal cost of the action exceeds the marginal benefit.E) None of the above
F) A) and B)

Question 8

Give an example of a trade-off faced by society.

Accepted Answer

Efficiency and equality; a cle...

Question 9

If an electric power plant does not bear the entire cost of the pollution it emits, it will

Accepted Answer

A)   not emit any pollution so as to avoid the entire cost of the pollution.
B)   emit lower levels of pollution.
C)   emit an acceptable level of pollution.
D)   emit too much pollution.E) B) and D)
F) B) and C)

Question 10

To raise productivity, policymakers could

Accepted Answer

A)   increase spending on education.
B)   provide tax credits to firms for capital improvements.
C)   fund research and development.
D)   All of the above are correct.E) All of the above
F) A) and D)

Question 11

The principle that trade can make everyone better off applies to

Accepted Answer

A)   individuals.
B)   families.
C)   countries.
D)   All of the aboveE) B) and D)
F) All of the above

Question 12

Inflation increases the value of money.

Accepted Answer

A) True 
 B)False

Question 13

The mainstream view among economists is that

Accepted Answer

A)   society faces a tradeoff between unemployment and inflation, but only in the short run.
B)   society faces a tradeoff between unemployment and inflation, but only in the long run.
C)   society faces a tradeoff between unemployment and inflation, both in the short run and in the long run.
D)   no tradeoff exists between unemployment and inflation, either in the short run or in the long run.E) A) and B)
F) None of the above

Question 14

Give an example of government intervention that is intended to reduce an externality.

Accepted Answer

Laws that restrict t...

Question 15

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.

Accepted Answer

A) True 
 B)False

Question 16

A society allocates its scarce resources to various jobs. These scarce resources include

Accepted Answer

A)   land.
B)   people.
C)   machines.
D)   All of the above are correct.E) None of the above
F) B) and C)

Question 17

Suppose the government taxes the wealthy at a higher rate than it taxes the poor and then develops programs to redistribute the tax revenue from the wealthy to the poor. This redistribution of wealth

Accepted Answer

A)   is more efficient and more equal for society.
B)   is more efficient but less equal for society.
C)   is more equal but less efficient for society.
D)   is less equal and less efficient for society.E) All of the above
F) A) and B)

Question 18

During the early 1920s in Germany, prices

Accepted Answer

A)   doubled annually.
B)   doubled monthly.
C)   tripled monthly.
D)   tripled annually.E) A) and B)
F) None of the above

Question 19

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

Accepted Answer

A)   enhance equality.
B)   reduce efficiency.
C)   reduce the reward for working hard.
D)   All of the above are correct.E) All of the above
F) A) and B)

Question 20

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. What is the company's marginal cost?

Accepted Answer

The answer of Scenario 1-3
It costs a company $35,000 to...

Exam 1: Ten Principles of Economics

During the early 1920s in Germany, prices

Correct Answer
verified

A society allocates its scarce resources to various jobs. These scarce resources include

Correct Answer
verified

Economists study how people make decisions.

Correct Answer
verified

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.

Correct Answer
verified

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

Correct Answer
verified

A rational decision maker takes an action if and only if

Correct Answer
verified

If an electric power plant does not bear the entire cost of the pollution it emits, it will

Correct Answer
verified

Give an example of a trade-off faced by society.

Correct Answer
verified
Efficiency and equality; a cle...
View Answer

Give an example of government intervention that is intended to reduce an externality.

Correct Answer
verified
Laws that restrict t...
View Answer

During the 1990s, the United Kingdom experienced low levels of inflation while Turkey experienced high levels of inflation. A likely explanation of these facts is that

Correct Answer
verified

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. What is the company's average cost?

Correct Answer
verified

The principle that trade can make everyone better off applies to

Correct Answer
verified

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. What is the company's marginal cost?

Correct Answer
verified

Market power and externalities are two possible causes of market failure.

Correct Answer
verified

To raise productivity, policymakers could

Correct Answer
verified

Correct Answer
verified

Suppose the government taxes the wealthy at a higher rate than it taxes the poor and then develops programs to redistribute the tax revenue from the wealthy to the poor. This redistribution of wealth

Correct Answer
verified

The mainstream view among economists is that

Correct Answer
verified

Inflation increases the value of money.

Correct Answer
verified

An individual deciding how to allocate her limited time is dealing with both scarcity and trade-offs.

Correct Answer
verified

Exam 1: Ten Principles of Economics

During the early 1920s in Germany, prices

Correct AnswerverifiedShow Answer

A society allocates its scarce resources to various jobs. These scarce resources include

Correct AnswerverifiedShow Answer

Economists study how people make decisions.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

Correct AnswerverifiedShow Answer

A rational decision maker takes an action if and only if

Correct AnswerverifiedShow Answer

If an electric power plant does not bear the entire cost of the pollution it emits, it will

Correct AnswerverifiedShow Answer

Give an example of a trade-off faced by society.

Correct AnswerverifiedEfficiency and equality; a cle...View AnswerShow Answer

Give an example of government intervention that is intended to reduce an externality.

Correct AnswerverifiedLaws that restrict t...View AnswerShow Answer

During the 1990s, the United Kingdom experienced low levels of inflation while Turkey experienced high levels of inflation. A likely explanation of these facts is that

Correct AnswerverifiedShow Answer

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. What is the company's average cost?

Correct AnswerverifiedShow Answer

The principle that trade can make everyone better off applies to

Correct AnswerverifiedShow Answer

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. What is the company's marginal cost?

Correct AnswerverifiedShow Answer

Market power and externalities are two possible causes of market failure.

Correct AnswerverifiedShow Answer

To raise productivity, policymakers could

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose the government taxes the wealthy at a higher rate than it taxes the poor and then develops programs to redistribute the tax revenue from the wealthy to the poor. This redistribution of wealth

Correct AnswerverifiedShow Answer

The mainstream view among economists is that

Correct AnswerverifiedShow Answer

Inflation increases the value of money.

Correct AnswerverifiedShow Answer

An individual deciding how to allocate her limited time is dealing with both scarcity and trade-offs.

Correct AnswerverifiedShow Answer

Correct Answer
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Efficiency and equality; a cle...
View Answer

Correct Answer
verified
Laws that restrict t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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