Question 1

Entrepreneurs tend to take greater risks if low tax rates offer greater after-tax profit potentials. The government's decision to offer low tax rates to entrepreneurs is:

Accepted Answer

A)   providing room for an economic expansion.
B)   providing an incentive, in the hopes that more entrepreneurs will take risk and create economic growth.
C)   providing a disincentive, in the hopes that more entrepreneurs will avoid risk and not grow.
D)   providing a disincentive, in the hopes that entrepreneurs will not get into tax default after assuming too much risk.E) C) and D)
F) A) and B)

Question 2

The problem created by "scarcity":

Accepted Answer

A)   could be solved if more people worked overtime.
B)   is not a concern for the top income earners.
C)   is an individual concern but not a concern on the macro level.
D)   applies to everyone because in general resources are limited.E) A) and B)
F) All of the above

Question 3

A local fast-food restaurant mails out coupons for a free sandwich to every home in the community. The opportunity cost of redeeming the sandwich for someone who was on a diet might be:

Accepted Answer

A)   lost wages due to spending time in a long line instead of eating a Healthy Choice meal in your office.
B)   not eating because you are on a "get fit for the summer" diet plan.
C)   eating a "Tough Man's Burger," which is one of your favorite fast food options.
D)   There was no opportunity cost for the sandwich because it was free.E) None of the above
F) C) and D)

Question 4

Which of the following is a positive incentive?

Accepted Answer

A)   deciding not to play golf due to rain
B)   making a donation to the Red Cross
C)   hiring 10 new workers as you decide to expand your operations
D)   offering a reward to anyone who finds your missing petE) A) and C)
F) A) and B)

Question 5

Why wasn't everyone else already implementing group responsibility to lend to the poor in the example in the text?

Accepted Answer

A)   Governments of poor countries had regulations against group responsibility.
B)   The idea was genuinely new.
C)   It was not profitable.
D)   It was easy for groups to provide false social security numbers for members that did not exist.E) None of the above
F) B) and C)

Question 6

Which of the following is an example of a normative statement?

Accepted Answer

A)   The American Recovery and Reinvestment Act should not have been passed during the Great Recession.
B)   Unemployment soared to 25 percent during the Great Depression.
C)   An increase in alcohol taxes will reduce the number of drunk driving accidents.
D)   Great Britain has fewer hospital beds per capita today than they did in 1948.E) B) and C)
F) A) and D)

Question 7

A relationship between two events where one event occurring brings about the other is described best as:

Accepted Answer

A)   a pattern.
B)   a trend.
C)   causation.
D)   correlation.E) A) and C)
F) C) and D)

Question 8

Which is not a characteristic of a good economic model?

Accepted Answer

A)   Focuses on important details
B)   Predicts cause and effect
C)   Utilizes vague assumptions
D)   Describes the world accuratelyE) All of the above
F) C) and D)

Question 9

An incentive is a concept that addresses which question used by economists?

Accepted Answer

A)   What are the wants and constraints of those involved?
B)   What are the trade-offs?
C)   How will others respond?
D)   Why isn't everyone already doing it?E) A) and B)
F) None of the above

Question 10

Which of the following is a not direct result of scarcity?

Accepted Answer

A)   Buildings in New York City are taller than buildings in Greenville, SC due to fewer acres of land per person.
B)   Due to high gas prices, Shana decides to trade her Chevy Tahoe for a Honda Accord.
C)   A college student misses a test review in order to sleep in.
D)   The total amount of air we can breathe as others draw breaths from that same air space.E) None of the above
F) B) and C)

Question 11

Economies that adopt more open trade policies have often historically enjoyed faster economic growth rates as a result. This is an example of what kind of statement?

Accepted Answer

A)   Marginal
B)   Normative
C)   Positive
D)   BiasedE) None of the above
F) A) and D)

Question 12

You are shopping at the local mall with an $80 gift certificate. Only three items catch your attention. The items include a Justin Bieber sheet set, a remote control helicopter, and an "Amazing Ab Belt." You would be willing to give up $60 for the sheets, $70 for the belt, and $80 for the helicopter. Knowing this, you decide to purchase the helicopter. The opportunity cost of the helicopter was:

Accepted Answer

A)   $130, the combined value of the alternatives forgone.
B)   $80, the amount of the gift certificate spent.
C)   $70, the value of the ab belt.
D)   $60, the value of the sheets.E) A) and B)
F) C) and D)

Question 13

Which of the following is considered a microeconomic issue?

Accepted Answer

A)   The local university decides to raise tuition for online course offerings.
B)   The country of Zimbabwe has experienced a decline in inflation.
C)   The economic growth rate was reported at 2.4 percent in the first quarter of 2013 for the United States.
D)   The unemployment rate in Greece is 22.8 percent.E) A) and D)
F) A) and B)

Question 14

A normative statement is generally based upon:

Accepted Answer

A)   data that can be tested.
B)   a factual claim.
C)   subjective beliefs.
D)   scientific fact.E) B) and C)
F) A) and B)

Question 15

The only rental house available at your favorite lake on July 4th is out of your price range. This is an example of:

Accepted Answer

A)   a resource constraint.
B)   why you should have a yard sale.
C)   why everyone isn't already doing it.
D)   an infringement upon your freedoms enjoyed as a patriotic American.E) A) and D)
F) A) and C)

Question 16

A local street festival that previously sold bracelets in exchange for unlimited alcohol consumption is now concerned about the overconsumption of alcohol. If they switch to selling tickets per drink, will overall consumption at next year's festival decrease?

Accepted Answer

A)   No, because the marginal cost per extra beer will decrease for consumers.
B)   No, because the marginal cost per extra beer will increase for consumers.
C)   Yes, because the marginal cost per extra beer will increase for consumers.
D)   Yes, because the marginal benefit per extra beer will increase for consumers.E) A) and B)
F) All of the above

Question 17

Hardee's announces "buy one get one free" breakfast sandwiches. This is an example of:

Accepted Answer

A)   the use of incentives.
B)   a macroeconomic decision.
C)   hoarding scarce resources.
D)   how people assess the health benefit of fast food breakfast.E) A) and B)
F) C) and D)

Question 18

When the price of milk rises, there is no change in the amount of dog food purchased. This is an example of:

Accepted Answer

A)   indifference trade-off between the two goods.
B)   the interaction between two correlated goods.
C)   two items that are uncorrelated.
D)   the value people place on dogs versus milk.E) B) and D)
F) None of the above

Question 19

Which of the following economic decisions would most likely be studied by a macroeconomist?

Accepted Answer

A)   Domino's Pizza decides to provide quantity discounts in order to increase revenue.
B)   A local entrepreneur decides to open a Waffle House in the local Walmart parking lot.
C)   The government of Estonia implements a flat rate personal income tax for all citizens.
D)   Prices for train fares rise as labor unions negotiate higher wage rates.E) A) and C)
F) A) and B)

Question 20

The problem of having unlimited wants under the constraint of limited resources can describe the problem of:

Accepted Answer

A)   opportunity cost.
B)   sunk costs.
C)   scarcity.
D)   the marginal principle.E) A) and B)
F) B) and C)

Exam 1: Economics and Life

A local fast-food restaurant mails out coupons for a free sandwich to every home in the community. The opportunity cost of redeeming the sandwich for someone who was on a diet might be:

Correct Answer
verified

A normative statement is generally based upon:

Correct Answer
verified

The problem created by "scarcity":

Correct Answer
verified

Economies that adopt more open trade policies have often historically enjoyed faster economic growth rates as a result. This is an example of what kind of statement?

Correct Answer
verified

An incentive is a concept that addresses which question used by economists?

Correct Answer
verified

The only rental house available at your favorite lake on July 4^th is out of your price range. This is an example of:

Correct Answer
verified

Correct Answer
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Which of the following is a positive incentive?

Correct Answer
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Why wasn't everyone else already implementing group responsibility to lend to the poor in the example in the text?

Correct Answer
verified

When the price of milk rises, there is no change in the amount of dog food purchased. This is an example of:

Correct Answer
verified

Entrepreneurs tend to take greater risks if low tax rates offer greater after-tax profit potentials. The government's decision to offer low tax rates to entrepreneurs is:

Correct Answer
verified

Which is not a characteristic of a good economic model?

Correct Answer
verified

Which of the following is considered a microeconomic issue?

Correct Answer
verified

A relationship between two events where one event occurring brings about the other is described best as:

Correct Answer
verified

The problem of having unlimited wants under the constraint of limited resources can describe the problem of:

Correct Answer
verified

Which of the following is a not direct result of scarcity?

Correct Answer
verified

A local street festival that previously sold bracelets in exchange for unlimited alcohol consumption is now concerned about the overconsumption of alcohol. If they switch to selling tickets per drink, will overall consumption at next year's festival decrease?

Correct Answer
verified

Which of the following economic decisions would most likely be studied by a macroeconomist?

Correct Answer
verified

Hardee's announces "buy one get one free" breakfast sandwiches. This is an example of:

Correct Answer
verified

Which of the following is an example of a normative statement?

Correct Answer
verified

Exam 1: Economics and Life

A local fast-food restaurant mails out coupons for a free sandwich to every home in the community. The opportunity cost of redeeming the sandwich for someone who was on a diet might be:

Correct AnswerverifiedShow Answer

A normative statement is generally based upon:

Correct AnswerverifiedShow Answer

The problem created by "scarcity":

Correct AnswerverifiedShow Answer

Economies that adopt more open trade policies have often historically enjoyed faster economic growth rates as a result. This is an example of what kind of statement?

Correct AnswerverifiedShow Answer

An incentive is a concept that addresses which question used by economists?

Correct AnswerverifiedShow Answer

The only rental house available at your favorite lake on July 4th is out of your price range. This is an example of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is a positive incentive?

Correct AnswerverifiedShow Answer

Why wasn't everyone else already implementing group responsibility to lend to the poor in the example in the text?

Correct AnswerverifiedShow Answer

When the price of milk rises, there is no change in the amount of dog food purchased. This is an example of:

Correct AnswerverifiedShow Answer

Entrepreneurs tend to take greater risks if low tax rates offer greater after-tax profit potentials. The government's decision to offer low tax rates to entrepreneurs is:

Correct AnswerverifiedShow Answer

Which is not a characteristic of a good economic model?

Correct AnswerverifiedShow Answer

Which of the following is considered a microeconomic issue?

Correct AnswerverifiedShow Answer

A relationship between two events where one event occurring brings about the other is described best as:

Correct AnswerverifiedShow Answer

The problem of having unlimited wants under the constraint of limited resources can describe the problem of:

Correct AnswerverifiedShow Answer

Which of the following is a not direct result of scarcity?

Correct AnswerverifiedShow Answer

A local street festival that previously sold bracelets in exchange for unlimited alcohol consumption is now concerned about the overconsumption of alcohol. If they switch to selling tickets per drink, will overall consumption at next year's festival decrease?

Correct AnswerverifiedShow Answer

Which of the following economic decisions would most likely be studied by a macroeconomist?

Correct AnswerverifiedShow Answer

Hardee's announces "buy one get one free" breakfast sandwiches. This is an example of:

Correct AnswerverifiedShow Answer

Which of the following is an example of a normative statement?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The only rental house available at your favorite lake on July 4^th is out of your price range. This is an example of:

Correct Answer
verified

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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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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