Question 1

Variations in the standard of living across countries is due almost entirely to differences in each nation's total output of goods and services.

Accepted Answer

A) True 
 B)False

Question 2

One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new,fuel-efficient aircraft.

Accepted Answer

A) True 
 B)False

Question 3

When a government program is justified not on its merits but on the number of jobs it will create,

Accepted Answer

A)   the program is an efficient use of taxpayer dollars.
B)   it should be approved only if the unemployment rate is low.
C)   taxes should be raised to fund the program.
D)   it is known as the "broken window fallacy."

Question 4

Trade

Accepted Answer

A)   allows specialization, which increases costs.
B)   allows specialization, which reduces costs.
C)   reduces specialization, which increases costs.
D)   reduces specialization, which reduces costs.

Question 5

Which is the most accurate statement about trade?

Accepted Answer

A)   Trade can make every nation better off.
B)   Trade makes some nations better off and others worse off.
C)   Trading for a good can make a nation better off only if the nation cannot produce that good itself.
D)   Trade helps rich nations and hurts poor nations.

Question 6

The overriding reason why households and societies face many decisions is that

Accepted Answer

A)   resources are scarce.
B)   goods and services are not scarce.
C)   incomes fluctuate with business cycles.
D)   people, by nature, tend to disagree.

Question 7

Which of the following statements about trade is false?

Accepted Answer

A)   Trade increases competition.
B)   With trade, one country wins and one country loses.
C)   Bulgaria can benefit, potentially, from trade with any other country.
D)   Trade allows people to buy a greater variety of goods and services at lower cost.

Question 8

The historical rise in living standards of American workers is primarily a result of

Accepted Answer

A)   the influence of labor unions in America.
B)   tariff protection imposed by the American government.
C)   the enactment of minimum-wage laws in America.
D)   the rise in American productivity.

Question 9

If the price of a dozen eggs were fixed above the current price,then we would expect

Accepted Answer

A)   an increase in the number of eggs people want to buy and an increase in the number of eggs farmers want to sell.
B)   an increase in the number of eggs people want to buy and a decrease in the number of eggs farmers want to sell.
C)   a decrease in the number of eggs people want to buy and an increase in the number of eggs farmers want to sell.
D)   a decrease in the number of eggs people want to buy and a decrease in the number of eggs farmers want to sell.

Question 10

Prices direct economic activity in a market economy by

Accepted Answer

A)   influencing the actions of buyers and sellers.
B)   reducing scarcity of the goods and services produced.
C)   eliminating the need for government intervention.
D)   allocating goods and services in the most equitable way.

Question 11

Inflation increases the value of money.

Accepted Answer

A) True 
 B)False

Question 12

The income of a typical worker in a country is most closely linked to which of the following?

Accepted Answer

A)   population
B)   productivity
C)   market power
D)   government policies

Question 13

Which of the following is correct?

Accepted Answer

A)   The word economy comes from the Greek word for "rational thinker."
B)   Economists study the management of scarce resources.
C)   Because economists believe that people pursue their best interests, they are not interested in how people interact.
D)   All of the above are correct.

Question 14

Which of the following statements about markets is most accurate?

Accepted Answer

A)   Markets are usually a good way to organize economic activity.
B)   Markets are usually inferior to central planning as a way to organize economic activity.
C)   Markets fail and are therefore not an acceptable way to organize economic activity.
D)   Markets are a good way to organize economic activity in developed nations, but not in less developed nations.

Question 15

Irregular fluctuations in economic activity are known as the

Accepted Answer

A)   business cycle.
B)   broken window fallacy.
C)   tradeoff between inflation and unemployment.
D)   ten principles of economics.

Question 16

Which of the following can policy do?

Accepted Answer

A)   alter incentives
B)   alter trade-offs
C)   change opportunity costs
D)   All of the above are correct.

Question 17

Both The Wealth of Nations and the Declaration of Independence share the point of view that

Accepted Answer

A)   every person is entitled to life, liberty, and the pursuit of happiness.
B)   individuals are best left to their own devices without the government guiding their actions.
C)   the government plays a central role in organizing a market economy.
D)   because of human nature a strong legal system is necessary for a market system to survive.

Question 18

Using income tax revenue to fund the welfare system illustrates the conflict between efficiency and equality.

Accepted Answer

A) True 
 B)False

Question 19

In 2008,the average American earned about $47,000 while the average Nigerian earned about $1,400.Which of the following statements is likely?

Accepted Answer

A)   The average American purchases more televisions than the average Nigerian.
B)   The average American has better nutrition and healthcare than the average Nigerian.
C)   The average American has a longer life expectancy than the average Nigerian.
D)   All of the above are correct.

Question 20

Inflation is the primary determinant of a country's living standards.

Accepted Answer

A) True 
 B)False

Exam 1: Ten Principles of Economics.

Irregular fluctuations in economic activity are known as the

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Both The Wealth of Nations and the Declaration of Independence share the point of view that

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Which of the following statements about trade is false?

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Prices direct economic activity in a market economy by

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If the price of a dozen eggs were fixed above the current price,then we would expect

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The overriding reason why households and societies face many decisions is that

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When a government program is justified not on its merits but on the number of jobs it will create,

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Inflation is the primary determinant of a country's living standards.

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The income of a typical worker in a country is most closely linked to which of the following?

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Inflation increases the value of money.

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Which is the most accurate statement about trade?

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Using income tax revenue to fund the welfare system illustrates the conflict between efficiency and equality.

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Variations in the standard of living across countries is due almost entirely to differences in each nation's total output of goods and services.

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One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new,fuel-efficient aircraft.

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Which of the following is correct?

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Which of the following statements about markets is most accurate?

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Which of the following can policy do?

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Trade

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The historical rise in living standards of American workers is primarily a result of

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In 2008,the average American earned about $47,000 while the average Nigerian earned about $1,400.Which of the following statements is likely?

Correct AnswerverifiedShow Answer

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