Econ 202 Quiz 1

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Trade-offs are required because wants are unlimited and resources are__________.

Scarce

Suppose you find $20.

$20(because you could have used the $20 to buy other things) plus you value of the time spent at the game.

Referring to question 17

800

Which of the following involve a trade-off?

All of the Above

A tax on liquor raises the price of liquor and produces and provides an incentive for consumers to drink more T/F

False

Adam Smith's "invisible Hand" concept describes how corporate business reaches into the pockets of consumers like an "invisible hand" T/F

False

An auto manufacturer T/F

False

An individual farmer T/F

False

In the short run, a reduction in inflation tends to cause a reduction in employment T/F

False

The United States will benefit economically if we eliminate trade with Asian countries because we will be forced to produce more of our own cars and clothes. T/F

False

When the government redistributes income with taxes and welfare, the economy becomes more efficient. T/F

False

Workers in the united states have a relatively high standard of living T/F

False

which of the following products would be least capable of producing an externality

Food

Which of the following statements is true about a market economy?

Market participants

Which of the following situations describes the greatest market power

Microsofts impact on the price of desktop operating system

An unintended consequence of public support for higher education is that low tuition provides an incentive T/F

True

High and persistent inflation is caused by excessive growth in the quantity of money in the economy T/F

True

Rational people act only when the marginal benefit of the action exceeds the marginal cost T/F

True

Sue is better at cleaning T/F

True

To a student T/F

True

When a jet flies overhead, the noise it generates is an externality. T/F

True

When economists say, "There aint no such thing as a free lunch," they mean that all economic decisions involve trade offs. T/F

True

you have spent 1000

YES

In the short run

a decrease in inflation

which of the following activities is most likely to produce an externality?

a student has a party in her dorm room

Foreign trade

allows a country to have a greater variety of products at a lower cost

high and persistent inflation is caused by

governments increasing the quantity too much

Raising taxes and increasing welfare payments________.

improves equality at the expense of efficiancy

an increase in the price of beef provides

information that tells producers

Economics is the study of how___________.

society manages its scarce resources

Because people respond to incentives we would expect

students will shift majors from education to accounting

A rational person does not act unless_______.

the action produces marginal benefits

which of the following is not part of the opportunity

the money you spend on food

Workers in the united states enjoy a high standard of living because

workers in the united states are highly prductive

productivity can be increase by

improving the education of workers


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