Blue White Chapter One JPJ

5.Exchanges taking place in a market system: a. are voluntary. b. are inefficient. c. will benefit one party at the expense of another. d. are monitored by the government to ensure that scarce resources are being used wisely.

a. are voluntary.

4. An equilibrium outcome is one in which:a. no one has as incentive to change his or her decisions or behavior. b. there is no scarcity. c. there is no opportunity cost. d. the distribution of wealth is fair'.

a. no one has as incentive to change his or her decisions or behavior.

6. Market failures results When:a. the pursuit of individual self interest leads to bad results for society as a whole. b. the market fails to create an equal distribution of wealth. c. the market fails to create an equal distribution of income. d. the market foils to eliminate scarcity.

a. the government intervenes to improve society's welfare.

20. If market failures exist, the market can become efficient when:a. the government intervenes to improve society's welfare.b. people just ignore the problem.c. the government eliminates all market transactions.d. all citizens immigrate to a country where the market failure does not exist.

a. the government to intervene to improve society 's welfare. .

S. Most individuals choose careers in which they specialize in producing only one type of good or services, yet is consumers they have access to a wide variety of goods and services, principle allows for this?a. trade b. equity c. scarcity d. opportunity cost

a. trade

1. Economists generally agree that people are most likely to Change their behavior when they:a. are asked to do so voluntarily. b. arc given incentives to do so. c, live in a world without scarcity. d. live in a world without opportunity costs.

b. are given incentives to do so.

. The condition of scarcity means that:a. when the government produces something, there is no opportunity cost.b. choices must be made in the allocation of productive resources.c. you will not incur an opportunity cost if you make the right choice.d. only a command economy can make efficient use of resources.

b. choices must be made in the allocation of productive resources.

3, The condition of scarcity means that:a. when the government produces something, there is no opportunity cost. b. choices must be made in the allocation of productive resources. c. you will not incur an opportunity cost if you make the right choice. d. only a command economy can make efficient use of resources.

b. choices must be made in the allocation of productive resources.

7. Adam Smith used the idea of the invisible hand to refer to the ability of market economies to:a. recover from recessions. b. solve the problem of market failure. c. harness the power of individual self interest for the good of society as a whole. d. convince people that society is better off if its members sacrifice their own self interest for the c.use of the greater good.

b. specialization.

6. In his book The Wealth of Nations, Adam Smith used the example of penmaking to illustrate the advantages of:a. equity.b. specialization.c. marginal analysis.d. interaction of choices.

b. specialization. .

With which one of me following statements would economists be most likely to agree?a. When transactions occur voluntarily, the seller gains and the buyer loses. b. Market economics generate economic growth, but they do not promote efficiency. c. People usually exploit opportunities to make men, selves better off. d. If people make wise decisions, they can avoid incurring any opportunity cost.

c. People usually exploit opportunities to make men, selves better off.

7. With which one of the following statements would economists be most likely to disagree?a. People respond to incentives. b. Makin a choice involve an opportunity cost. c. Markets move towards equilibrium. d. Resources and inputs used in production are unlimited.

d. Resources and inputs used in production are unlimited.

8. With which one of the following statements would economists be most likely to disagree?a. People respond to incentives. b . Making a choice involves an opportunity cost. c. Markets move toward equilibrium. d. Resources and inputs used in production are unlimited.

d. Resources and inputs used in production are unlimited.

4. An economic system is in __________ when no individual would be better off by making a different choice.a. chaos b. decline c. jeopardy d. equilibrium

d. equilibrium

2. After finishing high School Lebron James decided to enter the NBA rather that going to college to begin his studies to become a doctor. This choice between, the two careers can best be described by:a. equilibrium. b. scarcity. c. market failure. d. opportunity cost.

d. opportunity cost.

7. An opportunity cost arises:a. only when a monetary cost is incurred.b. only when a time cost is incurred.c. only when the wrong decision is made.d. whenever any choice is made.

d. whenever any choice is made.