Econ Test 1
different societies have used different types of money. the three functions of money are:
- medium of exchange - store of value - unit of account
In the writings of Karl Marx, the "bourgeoisie" referred to the _______ and the "proletariat" referred to the _________. A. Business owners; working class B. Unskilled workers; entrepreneurs C. Government planners; tax collectors D. Colonialists; nobility
A. Business owners; working class
Which of the following statements is a "positive statement"? A. Kennesaw State University was established on October 9, 1963 B. The production, possession, and consumption of all types of alcohol should be illegal C. our country would be a better place to live if we decreased spending on national defense and increased spending on education D. More than one (perhaps all) of the above answers is correct
A. Kennesaw State University was established on October 9, 1963
Which of the following is not a factor of production? A. Money B. Oil C. Time D. clean air
A. Money
Which of the following is one of the "Three Basic Economic Questions" that every society must address? A. More than one (perhaps all) of the option available is one of "Three basic economic questions" that every society address B. "Who gets to consume the goods and services that we have chosen to produce?" C. "How can we guarantee that all people have a sufficient amount of leisure time?" D. "what productive resources will be used to produce which goods and services"
A. More than one (perhaps all) of the option available is one of "Three basic economic questions" that every society address
The set of rules and methods put in place by a society to answer (directly or indirectly) the "three fundamental questions" of "what to produce?" , "how to produce it?" and "for who to produce it?" can be described as A. an economic system B. the invisible hand C. scarcity D. government
A. an economic system
one of the principle functions of money is that it serves as an "medium of exchange" this role could be described by recognizing that money is A. as asset use as payment when purchasing goods and services B. used as a basic unit of measuring economic activity C. an asset that can be used as a means to hold wealth D. none of the above
A. as asset use as payment when purchasing goods and services
Economic Man (aka, homo economicus) is A. both rational and self-interested. B. rational, but not self-interested. C. self-interested, but not rational. D. neither rational nor self-interested.
A. both rational and self-interested.
___________ is the subfield of economics that compares and contrasts the structure and performance of different types of economic organization. A. comparative economic systems B. international trade C. industrial organization D. public choice
A. comparative economic systems
"Good X" is a substitute for "Good Y." Consequently, if the price of "Good Y" were to increase, the for "Good X" equilibrium price would ______ and equilibrium quantity would _____. A. increase; increase B. increase; decrease C. decrease; increase D. decrease; decrease
A. increase; increase
______ refers to an asset that is socially and legally accepted as a medium of exchange. A. money B. profit C. the bargaining range D. demand
A. money
which of the following characteristic is a unique characterization of households? A. more than one (perhaps all) of the answers are correct B. do not behave as "rational decision makers" C. are the ultimate consumers of most finished goods/services D. are the primary suppliers of labor to firms
A. more than one (perhaps all) of the answers are correct
The preliminary circular flow diagram illustrates the A. movement of economic resources (i.e. factors of production and finished goods/services) B. Transfer of money between households and burns C.the limits of production that I society faces, by identifying the maximum amount of one good that can be produced for every possible level of production of another good D. Gains in output that can be realized when individuals focus their efforts on producing the goods for which they possessed a comparative advantage
A. movement of economic resources (i.e. factors of production and finished goods/services)
Andrea has $75 to spend and wants to purchase either a new amplifier for her guitar or a new MP3 player. Each good costs exactly $75, so she can only purchase one of the two items. This scenario illustrates the basic concept that A. people face tradeoffs B. most consumers are irrational C. rational people never respond to incentives D. economic insights are never useful for analyzing consumption decisions
A. people face tradeoffs
The quote by Milton Freidman on page 17 suggests that he believed Mother Theresa was A. rational and self-interested B. rational but not self-interested C. irrational and not self-interested D. irrational but self-interested
A. rational and self-interested
Demand A. refers to the entire relationship between the price of a good and the number of units that people are willing and able to purchase , all other factors fixed. B. refers to the amount of a good that consumers buy at the equilibrium price C. provides a summary of the behavior of both buyers and sellers in a market D. More than one (perhaps all) of the above answers are correct
A. refers to the entire relationship between the price of a good and the number of units that people are willing and able to purchase , all other factors fixed.
Mike Dikita's suggestion that football related injuries could likely be reduced by having participants play without helmets ( or at least without facemasks on their helmets) A. relies heavily upon the Incentive Principle B. does not make any sense whatsoever when analyzed using the tools of economics C. simplicity assumes that football players are irrational D. simplicity assumes that football players are not self-interested
A. relies heavily upon the Incentive Principle
On January 29, 2018, the NBA's L.A. Clippers and Detroit Pistons agreed to a trade involving six players (including superstar Blake Griffin) and two draft picks. Since this voluntary trade took place, we can infer that A. the L.A. Clippers thought the trade was in the best interest of their team B. the Detroit Pistons thought the trade was in the best interest of their team C. neither team thought the trade was in their own best interest, but league commissioner Adam Silver thought it was in the best interest of the NBA. D. None of the above answers are correct
A. the L.A. Clippers thought the trade was in the best interest of their team
Which of the following is a normative statement? A. the best way to encourage growth in the economy is through government spending B. children in the United States are required to go to school until they reach a certain age C. the women labor force participation rate has increased during the past 100 years D. the federal minimum wage is higher today than it was in 1990
A. the best way to encourage growth in the economy is through government spending
in a free market, the equilibrium quantity of trade and equilibrium price of a good are determined by A. the interaction of both self-interested buyers and self-interested sellers in the marketplace B. only the buyers in the market C. only the sellers in the market D. neither buyers nor sellers, but rather by a government bureaucrat
A. the interaction of both self-interested buyers and self-interested sellers in the marketplace
Trent enjoys going to the movies. In June he saw 6 movies in the theatre. His marginal benefit of the 6th movie was $20, while his marginal cost of the 6th movie was $14. Based upon this information alone, his economic surplus A. would have been smaller if he has instead gone to the movies 5 times B. would have been larger if he had instead gone to the movies 5 times C. was clearly maximized by going to the movies exactly 6 times D. would have been larger if he has instead gone the movies 7 times
A. would have been smaller if he has instead gone to the movies 5 times
who wrote "The Wealth of Nations", a book that many credit with establishing economics as a discipline?
Adam Smith
Which of the following is one of the "Three Basic Economic Questions" that every society must address? A. "How can we reduce our carbon footprint?" B. "Which productive resources should be used for the production of which goods?" C. "How can we guarantee that all people have access to healthcare?" D. More than one (perhaps all) of the above is one of the "Three Basic Economic Questions" that every society must address.
B. "Which productive resources should be used for the production of which goods?"
Jamal owns a popular food truck which he operates near campus. Last week he earned revenues of $3,500 and incurred costs of $2,500. Based upon these numbers, it follows that his profit was _______. A. -$1,000 B. $1,000 C. $3,000 D. $6,000
B. $1,000
Brian recently attended a concert by the rapper 2 Chainz at the Mississippi Coast Coliseum in Biloxi, MS. His total benefits from seeing this show were $125, while his total cost was $75. From this information it follows that his economic surplus from attending the show was: A. $75 - $125 = -$50 (negative fifty dollars) B. $125 - $75 = $50 C. $125 - $75 = $200 D. (2)($125 +$75) = $400
B. $125 - $75 = $50
consider an item for which Amy has a reservation price as a seller of $25 and Benny has a reservation price as a buyer of $45. Which of the following prices is inside their bargaining range? A. $20 B. $35 C. $70 D. more than one (perhaps all) of the above answers is correct
B. $35
The present economic system of the United Kingdom would be most accurately described as _______, while the present economic system of Spain ________. A. a mixed economy: would be most accurately described as pure socialism B. A mixed economy; would also be most accurately described as a mixed economy C. Pure capitalism; Will be most accurately described as pure socialism D. Pure socialism; would be most accurately described as communism
B. A mixed economy; would also be most accurately described as a mixed economy
__________ refers to someone who undertakes and oversees a business venture. A. An Invisible Hand B. An Entrepreneur C. A Central Planner D. A Social Surplus
B. An Entrepreneur
Which of the following BEST illustrates the economic concept of scarcity? A. Marie bought some stock for $1,000 last year, today she told the stock for $1,250 B. Dan wants a bag of chips and a cola. Each costs on dollar. Dan has just $1.50. C. In the winter, the hardware store charges more for snow shovels than it charges in the summer. D. Jorge's boss tells him that if he gets the stockroom cleaned up by closing time, he can have the day off tomorrow.
B. Dan wants a bag of chips and a cola. Each costs on dollar. Dan has just $1.50.
Which of the following is a basic characteristic of capitalism? A. private ownership of property is illegal B. Economic decisions occur in markets C. Income is distributed on the basis of "need" D. Government owns the factors of production
B. Economic decisions occur in markets
Evan and Liam spend each workday assembling bicycles and fixing computers. Evan can assemble 24 bicycles in a single day, while Liam can assemble 18 bicycles in a single day. Based upon this information alone, we know that: A. Evan possesses a Comparative Advantage in assembling bicycles B. Evan possesses an Absolute Advantage in assembling bicycles C. Liam possess an Absolute Advantage in fixing computers D. More than one (perhaps all) of the above answers are correct
B. Evan possesses an Absolute Advantage in assembling bicycles
_________ are the decision-making entities whose primary objective is to obtain benefits from consuming goods and services. A. politicians B. Households C. Firms D. Entrepreneurs
B. Households
Which statement is correct? A. firms are primary demanders of goods and services B. Households are the suppliers of the factors of production C. firms are the primary consumers of goods and services D. households are the suppliers of goods and services
B. Households are the suppliers of the factors of production
A output combination is characterized by a productive efficiency if A. it cannot possibly be produced (given the limits imposed by the scar city of resources and current technology) B. It is possible to produce the output combination, in further it is not possible to increase the amount produced of any good without decreasing the amount produced of some other good C. It is possible to produce the output combination, in further it is possible to increase the amount produced of some good without decreasing the amount produced of any other good D. One single worker possesses a comparative advantage in producing every good that is the the part of the output combination
B. It is possible to produce the output combination, in further it is not possible to increase the amount produced of any good without decreasing the amount produced of some other good
A.C. and zack produced surfboards and hair gel. A.C's opportunity cost of producing a surfboard is lower than Zack opportunity cost of producing a surfboard. The _________ suggest that they can increase their total output of these two goods if A.C. Focuses his production on surfboards while Zack focuses his production on hair gel. A. law of absolute advantage B. Law of comparative advantage C. Cost benefit principle D. Incentive principle
B. Law of comparative advantage
_________ specify/specifies obligations of others not to interfere in your exercise of your rights A. positive rights B. Negative rights C. Control rights D. Social justice
B. Negative rights
While playing baseball in their front yard, Wally and his little brother break the windshield of Ward's car. Wally and his brother concedes that it is right for them to cover the cost of repairing the broken windshield. In taking this position, they are recognizing that Ward has a ________ in regards to his car windshield. A. right to control B. Right to restitution C. Right to transfer D. Write to consumer sovereignty
B. Right to restitution
Between July 2017 and July 2018 there was a decrease in both price and quantity traded of corn. This change in market equilibrium outcome would result from A. in increase in demand B. a decrease in demand C. an increase in supply D. a decrease in supply
B. a decrease in demand
The cost-benefit principle stipulates that A. a person is more likely to take an action if its benefits rises, and less likely to take an action if its cost rises. B. a person should take an action and only is the additional benefit of doing so is greater than or equal to the additional cost of doing so C. having more than one thing usually means having less of something else D. a society can produce a greater amount of total output when individuals focus their production on those activities for which they have a comparative advantage
B. a person should take an action and only is the additional benefit of doing so is greater than or equal to the additional cost of doing so
The basic circular flow diagram builds upon the preliminary circular flow diagram by A. deleting the illustration of the role played by firms in the economy B. adding an illustration of the movement of money between households and firms, which facilities the voluntary transfer if economic resources C. adding an illustration of how equilibrium price and quantity are each determined in a market D. adding an illustration of the role of government in collecting taxes from firms and households
B. adding an illustration of the movement of money between households and firms, which facilities the voluntary transfer if economic resources
consider the following two statements. Statement 1: "Tariffs and import quotas always increase the general welfare of society." Statement 2: "A ceiling on rents reduces the quantity and quality of available housing." Most economist would: A. disagree with both statement 1 and statement 2 B. agree with statement 2, but disagree with statement 1 C. agree with statement 1, but disagree with statement 2 D. agree with both statement 1 and statement 2
B. agree with statement 2, but disagree with statement 1
An increase in income will result in a decrease in demand for _________. A. a normal good B. an inferior good C. a substitute good D. a complementary good
B. an inferior good
A "Self-Interested" person: A. cares only about his own well-being (and does not care at all about the well being of others). B. cares about his own well-being more than the well-being of others C. cares about the well-being of others more than his own well-being D. does not care about the well-being of anyone (including himself)
B. cares about his own well-being more than the well-being of others
privately owned enterprises in a free market have a primary goal of A. producing goods of low quality B. earning as large of a profit as possible C. convincing consumers that they are "environmentally conscious" D. employing as many workers as possible
B. earning as large of a profit as possible
In 2017 High school graduates earned $9, 984 per year more than non-High school graduates. If this difference had instead been $15,000 per year then we would expect A. more people to drop out of school before graduating high school B. fewer people to drop out of school before graduating high school C. more children to start eating breakfast before school D. that nobody would change their behavior
B. fewer people to drop our of school before graduating high school
"Volunteer Trade" generally A. makes both parties to the trade worse off B. makes both parties to the trade better off C. makers buyers better off, but sellers worse off D. makers sellers better off, but buyers worse off
B. makes both parties to the trade better off
Which markets are represented in the Basic Circular Flow Diagram? A. Markets for "imports and exports" and markets for "factors of production" B. markets for "goods and services" and markets for "factors of production" C. markets for "goods and services" and markets for "financial assets" D. markets for "financial assets" and markets for "imports and exports"
B. markets for "goods and services" and markets for "factors of production"
___________ is the branch of economics which studies how individuals decision makers behave and interact with each other, often with a focus on how households and firms behave and interact with each other in markets. A. macroeconomics B. microeconomics C. comparative economic systems D. public choice
B. microeconomics
While playing baseball in their front yard, Wally and his little brother break the windshield of Ward's car. Wally and his brother concede that it is right for them to cover the costs of repairing the broken windshield. In taking this position, they are recognizing that Ward has a ______________ in regards to his car windshield. A. right to control B. right to restitution C. right to transfer D. right to consumer sovereignty
B. right to restitution
According to the theory of capitalism, in a "free market economy" profits A. refer to the "gain" that a buyer gets from purchasing a good/service B. serve as a "signaling device," directing resources to their most valued uses C. are only earned by firms who exploit workers D. more than one (perhaps all) of the above answers are correct
B. serve as a "signaling device," directing resources to their most valued uses
Socialism is defined as an economic system in which A. the means of production are privately owned by individuals B. the means of production are owned by the government C. all decision makers are motivated by selfless benevolence D. the government has established a wide range of programs intended to provide a "safety net" to people, thereby equalizing levels of income and consumption across households
B. the means of production are owned by the government
In general, the downward sloping nature of a production possibilities curve illustrates A. the difference between positive statements and normative statements B. the tradeoff in production that society faces C. the fact that every worker/resource must always possess an absolute advantage in the production of at least one good D. the fact that there is neither excess supply nor excess demand at the market equilibrium
B. the tradeoff in production that society faces
when interpreting a Production Possibilities Frontier, which of the following statements is true? A. "All attainable combinations of output are characterized by Productive Efficiency." B. "A combination of goods is characterized by Productive Inefficiency if it cannot possibly be produced with the currently available resources and technology." C. "A combination of goods is Unattainable if it cannot possibly be produced with the currently available resource and technology." D. None of the above answers are correct
C. "A combination of goods is Unattainable if it cannot possibly be produced with the currently available resource and technology."
Erika produces clothing and food. In a single day she can produce either 100 units of clothing or 25 units of food. it follows that her opportunity cost for producing a unit of food is _____ units of clothing. A. (25)(100) = 2,500 B. 100 - 25 = 75 C. 100 / 25 = 4 D. 25 / 100 = 1/4
C. 100 / 25 = 4
One of the three primary types of "economic incentives" is "moral suasion," which could be described as A. the use or threat of force or incarceration to obtain compliance B. The use of monetary rewards for direct increases in compensation which result from engaging in an activity C. Attempts to convince individuals to behave in a certain manner because doing so is "the right thing to do." D. The use of torture or other "enhanced interrogation techniques" in order to elicit information from someone
C. Attempts to convince individuals to behave in a certain manner because doing so is "the right thing to do."
One of the three primary types of "economic incentives" is "moral suasion," which could be described as A. they use or threat of force or incarceration to obtain compliance B. the use of monetary rewards or direct increases in consumption which result from engaging in activity C. Attempts to convince individuals to behave in certain manner because doing so is "the right thing to do." D. the use of torture or other "enhanced interrogation techniques" in order to elicit information from someone
C. Attempts to convince individuals to behave in certain manner because doing so is "the right thing to do."
___________ refers to the freedom of an individual to choose to purchase (or to choose to not purchase) a good or service at a price determined in a free market. A. The Invisible Hand B. Command Planning C. Consumer Sovereignty D. Indicative Planning
C. Consumer Sovereignty
______ refers to the freedom of an individual to choose to purchase ( or to choose to not purchase) a good or service at a price determined in the free-market A. the invisible hand B. Command planning C. Consumer sovereignty D. Indicative planning
C. Consumer sovereignty
Looking at the results of "the economic freedom of the world" Study, between 2000 and 2010, the EFWI value of the United States A. Increased from 56.72 up to 79.83, moving the United States up from the 27th Place to 2nd place in the ranking B. Increase from 5.53 up to 6.42, moving the United States up from 4th Place to 1st place in the ranking C. Decreased from 8.5 down to 7.69, moving the United States down from 3rd place to 18th place in the ranking D. Decrease from 9.1 down to 8.96, but because most other countries experienced large declines in economic freedom over this time- period the United States actually moved up from 12th place to 6th place in the ranking.
C. Decreased from 8.5 down to 7.69, moving the United States down from 3rd place to 18th place in the ranking
Consider a society consisting of only three people: Amy, Bill, and Carrie. amy and Bill spent all day producing clothing and food. At the end of each day they bring their output to carrie, who then divides in between the three individuals. The "Basic economic question" that Carrie is answering for this society is the A. resource use decision B. Production decision C. Distributional decision D. Choice of incentives
C. Distributional decision
_________ is an economic system in which the means of production are privately owned and operated for profit A. capitalism B. Communism C. Feudalism D. Socialism
C. Feudalism
Alec Nove described _________ as " when the state uses influence, subsidies, grants, [and] taxes [to influence economic decisions], but does not compel." A. consumer sovereignty B. Command planning C. Indicative planning D. The invisible hand
C. Indicative planning
Physical capital results in what kind of payment? A. Rent B. Profit C. Interest D. Wages
C. Interest
_________ first said "from each according to his ability, to each according to his need." A. Adam Smith B. Karl Marx C. Louis Blanc D. Max Weber
C. Louis Blanc
Consider the cost of complying with bureaucratic regulations to economic decision makers in China, Singapore, and Venezuela. According to the results of the "ease of doing business" Study, of these three countries, such costs are: A. Lowest in China and highest in Singapore B. Lowest in China and highest in Venezuela C. Lowest in Singapore and highest in Venezuela D. Lowest in Venezuela and highest in china
C. Lowest in Singapore and highest in Venezuela
________ observed that the government or the state differs from other decision-making entities in that it alone has established "the monopoly of the legitimate use of physical force within a given territory." A. Karl Marx B. egon Neuburger C. Max Weber D. Adam Smith
C. Max Weber
which of the following would be a part of macroeconomics? A. a study of the change in automobile sales due to a change in the price of automobiles B. a study of the impact of a tax reduction on the profits of a business C. a study of recessions D. a study of the unemployment of workers displaced by technological change in the typesetting industry
C. a study of recessions
Adam Smith was A. a 19th century German philosopher, economist, and revolutionary B. a 20th century American political scientist C. an 18th century Scottish economist D. a 17th century English mercantilist
C. an 18th century Scottish economist
Which of the following could NOT result in a "change in supply" for "MP3 players"? A. an improvement in the technology used to produce MP3 players B. a decrease in the number of sellers of MP3 players C. an increase in the market price of MP3 players D. a decrease in price of plastic (an input used in production of MP3 players)
C. an increase in the market price of MP3 players
Amen Alchain and Gordon Tullock: A. were the first to recognize that increasing the minimum wage would decrease the unemployment rate of young and unskilled workers B. argued that automobile accident rates could be decreased by installing "five point harness" seat belts and improved airbags in every car C. argued that automobile accident rates could be decreased by installing a sharp, irremovable, foot long, iron spike to the steering wheel of every car D. wrote a letter to FDR in 1939, advising him to have the U.S. Government assist physicists in the U.S. working on research related to the creation of a uranium bomb
C. argued that automobile accident rates could be decreased by installing a sharp, irremovable, foot long, iron spike to the steering wheel of every car
One of the three primary types of "economic incentives" is "moral suasion," which could be described as A. the use or threat of force or incarceration to obtain compliances B. the use of monetary rewards or direct increases in consumption which result from engaging in an activity C. attempts to convince individuals to behave in a certain manner because doing so is "the right thing to do." D. the use of torture or other "enhanced interrogation techniques" in order to elicit information from someone.
C. attempts to convince individuals to behave in a certain manner because doing so is "the right thing to do."
_____________ refers to the freedom of an individual to choose to purchase (or to choose to not purchase) a good or service at a price determined in a free market. A. the invisible hand B. Command planning C. consumer sovereignty D. indicative planning
C. consumer sovereignty
When considering potential government policies, it is important to recognize that A. most businesses are not run by "rational decision makers" B. voluntary trade generally makes sellers better off but buyers worse off C. if a policy alters the cost and/ or benefits for a decision maker, then the decision maker might change has behavior as a result of the policy D. voters are self-interested but politicians are not
C. if a policy alters the cost and/ or benefits for a decision maker, then the decision maker might change has behavior as a result of the policy
The incentive principle states that A. Scarcity is a universal phenomenon that arises because resources are limited B. an action should be taken if and only if the additional benefits from taking the action are at least as great as the additional costs of doing so. C. if the marginal benefit of an activity increases, then a rational person will engage in more of the activity. D. having more of one thing usually means getting by with less of something
C. if the marginal benefit of an activity increases, then a rational person will engage in more of the activity
Empirical health studies over the last decade have indicated that eating too much beef may be harmful to humans. Consequently, there has been a significant decrease in the amount of beef produced. Which of the following best explains this decrease in production? A. government officials ordered beef producers to produce relatively less beef (out of concern for consumers health) B. beef producers (whose primary concern is health of their consumers) decided to produce relatively less beef C. individual consumers (concerned about their own health) decreased their demand for beef (resulting in a decrease in both the equilibrium price and quantity of beef) D. animal rights activists have made it difficult for both buyers and sellers of beef to freely trade the good in free markets
C. individual consumers (concerned about their own health) decreased their demand for beef (resulting in a decrease in both the equilibrium price and quantity of beef)
which of the following is necessary in the formation of a capitalist system? A. a central planning agency B. child labor laws C. private property rights D. trade agreements
C. private property rights
A "Rational Decision Maker" should: A. always take every action for which there is a positive marginal benefit B. never take any action for which there is a positive marginal cost C. take an action if and only if the marginal benefit of the action is at least as great as the marginal cost of the action D. more than one (perhaps all) of the above answers is correct
C. take an action if and only if the marginal benefit of the action is at least as great as the marginal cost of the action
Economics is A. the art of communicating financial information about a business entity to stakeholders, such as employees, managers, shareholders, and customers. B. the social science that studies human mental functions and behavior, with a focus on phenomena such as perception, cognition, personality, and interpersonal relationships C. the social science that studies decision making in the face of scarcity and the resulting impact of such decisions on both society as a whole and on the individual members there in D. the social science that studies the allocation and transfer of power in decision making, systems of governance, and the effects of public policy
C. the social science that studies decision making in the face of scarcity and the resulting impact of such decisions on both society as a whole and on the individual members there in
In 2015, Walmart made cash donations of _______ to private charities. A. $0 (since Walmart is a for-profit company, and such companies never take any actions that do not maximize profit) B. $895,256 C. $17.4 million D. $301 million
D. $301 million
Which of the following demonstrates the "Law of Demand"? A. after Clarissa got a raise at work, she bought more donuts at a price of $8.00 per dozen than she did before her raise B. after the price of flour increased by 8%, Sabrina chose to sell fewer donuts. C. Melissa would choose to sell more donuts at $7.50 per dozen than at $6.25 per dozen D. Joan would choose to buy fewer donuts at $10.00 per dozen than at $8.50 per dozen
D. Joan would choose to buy fewer donuts at $10.00 per dozen than at $8.50 per dozen
In March 2010, when the "Patient Protection and Affordable Care Act" (aka Obamacare) was being finalized by and debated in Congress: A. over 40 economists (including Daniel Kahneman, one of the co-recipients of the 2002 Nobel Prize in economics) wrote a letter to President Obama supporting the legislation B. over 130 economists (including Vernon Smith, one of the co-recipients of the 2002 Noble Prize in economics) wrote a letter to House Minority Leader Rep. John Boehner opposing the legislation C. no economist publicly expressed any opinion on the legislation (upholding a long-standing tradition within the profession of never getting involved in public policy debates) D. More than one (perhaps all) of the above answers is correct
D. More than one (perhaps all) of the above answers is correct
Positive Statements A. attempt to describe how the world actually is or actually functions B. are scientific in nature, in rear given enough research, evidence, and data, they can potentially be shown to be either true or false. C. are supported (either simplicity or explicity) by the priorities, goals, and value judgements of the person making the statement. D. More than one (perhaps all) of the above answers is correct
D. More than one (perhaps all) of the above answers is correct but A is true
Which of the following countries currently has an economic system which would be best described as "pure socialism"? A. Sweden B. China C. India D. None of the above answers are correct
D. None of the above answers are correct
which of the following countries currently has an economic system which would be best described as "pure socialism"? A. Sweden B. China C. India D. None of the above answers are correct
D. None of the above answers are correct
On September 4, 2009, former California Gov. Arnold Schwarzenegger offered a 100,000 reward for anyone who could provide information leading to the arrest and conviction of arsonist who set a wildfire in Southern California which claimed the lives of two firefighters. In this situation, gov. Schwarzenegger was attempting to obtain the desired information by A. Coercion B. Command planning C. Moral suasion D. Offering a material reward
D. Offering a material reward
________ is a general concept that refers to the cost of giving up the best alternative that must be foregone in order to do or acquire something. A. a property right B. Comparative advantage C. The resource use decision D. Opportunity cost
D. Opportunity cost
"Vinny's Sports Pub" is Jessica's favorite restaurant. After recently joining their frequent dinner club for free, she got a coupon by email which can be redeemed for either a free order of buffalo wings for free slice of pizza. Last night she used the coupon to get a free slice of pizza. Her opportunity cost of the slice of pizza is A.zero, since she received the code for free B. The maximum amount of money she would have been willing to pay for the slice of pizza she did not have the coupon C. The regular menu price of a slice of pizza D. The value she places on a order of buffalo wings
D. The value she places on a order of buffalo wings
In which of the following countries do individuals enjoy the least amount of Economic Freedom? A. Hong Kong B. New Zealand C. The United States D. Venezuela
D. Venezuela
A central planned economy can run efficiently provided.... A. planners have access to good information B. planners prioritize economic efficiency C. planners are not corrupted by personal or political agendas D. all of the above
D. all of the above
In April 2018 professional golfer Rickie Fowler finished in second place at The Masters (one of the four most prestigious tournaments of the year), one stroke behind winner Patrick Reed. Around the same time a plane crash in Algeria killed 257 people. If Rickie was more upset about the outcome of the Masters than about the loss of life from the accident in Algeria, then is would seemingly suggest that he: A. is not as good of a person as Patrick Reed B. does not care about anyone other than himself C. is an irrational individual D. is a self-interested individual
D. is a self-interested individual
The ________ provide a guide for allocating scarce productive resources to various uses, which states that when increasing the production of a good, a society should use the available productive resources with the lowest opportunity cost A. opportunity cost principle B. Economic distribution principle C.Law absolute advantage D. law of comparative advantage
D. law of comparative advantage
A "seller's reservation price" A. refers to the maximum dollar amount a buyer is willing to pay for an item B. refers to the minimum dollar amount a seller is willing to accept in exchange for an item C. is visually illustrated by the height of the supply curve D. more than one (perhaps all) of the above answers is correct
D. more than one (perhaps all) of the above answers is correct
in a typical modern economy, it is common for Government to have an impact on economic outcomes by A. defining and enforcing property rights B. regulating the behavior of business C. redistributing income D. more than one (perhaps all) of the above answers is correct
D. more than one (perhaps all) of the above answers is correct
a situation in which the sum of gains and losses over all people is positive in value is defined as a A. win-win outcome B. win-lose outcome C. negative-sum environment D. positive-sum environment
D. positive-sum environment
Total economic surplus is maximized at A. the level where marginal costs are smallest B. the level where the difference between MB and MC is largest C. the level where marginal benefits are largest D. the level where marginal benefits are equal to marginal cost
D. the level where marginal benefits are equal to marginal cost
Production refers to A. the consumption of goods/services B. the creation of additional scarce resources/inputs C. inputs, which can be broadly categorized as land, labor, and capital D. the process by which inputs are transformed into outputs
D. the process by which inputs are transformed into outputs
Consider an outcome in which Joe gains $30, Kevin gains $20, and Nick loses $40. Based upon this alone information, it appears as if this is a A. win-win outcome in a positive-sum environment B. win-win outcome in a negative-sum environment C. win-lose outcome in a zero-sum environment D. win-lose outcome in a positive-sum environment
D. win-lose outcome in a positive-sum environment
who proposed that "government abolish ownership of property by way of seizing the wrongful property of the bourgeoisie, thereby destroying the capitalist system in the process"?
Karl Marx
who wrote "Das Kapital" and co wrote "The Communist Manifesto" (1818) with Fredrich Engels, two books that man credit with establishing communism as a discipline?
Karl Marx
given that chicken and beef are substitute goods, if the price of chicken decreases substantially, there would be
a decrease in the demand for beef
when interpreting a production possibilities frontier, which of the following statements is true
all output combinations about the PPF are unattainable
one of the principle functions of money is that it serves as a "store of value" this role could be described by recognizing that money is
an asset that can be used as a means to hold wealth
the law of demand states that, other things equal:
as the price increases, the quantity of demand will decrease
in the writing of Karl Marx, the "bourgeoisie" referred to the ____ and the "proletariat" referred to the ______
business owners; working class
if goods A and B are substitutes, a decrease in the price of good B will
decrease the demand for good A
if goods A and Z are complements, and increase in the price of good Z will:
decrease the demand for good A
a negative relationship between the quantity demanded and price is called the law of
demand
prices in capitalists economies are
determined in competitive markets
compared to a command economy, a capitalist economy emphasizes
efficiency
the market for labor would be considered a ____ market
factor
in the market for goods and services in the circular flow diagram, households
get goods and services from firms
with respect to the circular flow diagram, businesses provide households with which of the following?
goods, services and income
Alec nove described _____ as "when the state uses influence, subsidies, grants, and taxes to influence economic decisions, but does not compel"
indicative planning
scarcity
is an issue in every economy
which kind of economy do most nations in the world have today?
mixed economy
if the relative price of coffee rises due to a change in taste in a capitalists society, then
more resources will be devoted to coffee production
a free market/ capitalist economy depends on
private ownership and control of resources
market economies
rely on markets to coordinate economic activity
if a capitalist society wants more coffee, then the relative price of coffee will
rise
if buyers bid up the price of a good, then
sellers will try to bring more of it to the market
if steaks and potatoes are complements, when the price of steak goes up, the demand curve for potatoes:
shifts to the left
in which type of economic system does the government control all economic resources and answer all the fundamental economic questions?
socialist
the "law of supply" implies that
supply curves should be "upward sloping"
in a command economy
the central government dictates the answers to all fundamental economic questions
law of comparative advantage
the idea that a nation is better off when it produces goods and services for which it has comparative advantage
capitalism is defined as an economic system in which
the means of production are privately owned and operated for a profit
the preliminary circular flow diagram illustrates
the movement of economic resources between households and firms
suppose you manage a corner grocery store. if peanut butter is an inferior good, what do you suppose would happen to the price and quantity of peanut butter as incomes fall during an economic recession
the price and quantity would both increase
macroeconoomics
the study of the functioning and performance of a society's economy as a whole, often with a focus on levels of and changes in aggregate measures such as the inflation rate, unemployment rate, and gross domestic product growth rate
in general, the downward slopping nature of a production possibilities curve illustrates
the trade-off in production that society faces
if the market for corn ic competitive, then
there must be many buyers and sellers
a good is normal if
when income increases, the demand increases
the invisible hand, created by Adam Smith
works in capitalists societies