Question 1

Applying for a loan in five-person groups is an example of:

Accepted Answer

A)   family and friends lending.
B)   party of five lending.
C)   group responsibility.
D)   trade-off.E) B) and D)
F) A) and D)

Question 2

Which of the following questions would a macroeconomist most likely try to answer?

Accepted Answer

A)   What stage of the business cycle is our economy currently in?
B)   Why do Broadway musicals and airlines have different price discrimination strategies?
C)   How much would marijuana consumption change if the market became legal?
D)   Should IZZE increase its distribution from national to international?E) C) and D)
F) None of the above

Question 3

The Bureau of Economic Analysis releases last quarter's growth rate in real GDP. This release would most likely have been written by a:

Accepted Answer

A)   monetary economist.
B)   macroeconomist.
C)   microeconomist.
D)   labor economist.E) A) and B)
F) A) and C)

Question 4

The problems created by scarcity:

Accepted Answer

A)   could be solved if more people worked overtime.
B)   are of no concern to the top income earners.
C)   concern individuals, but are not a concern on the macro level.
D)   apply to everyone because resources are limited in general.E) None of the above
F) A) and B)

Question 5

The principles of economics can explain which of the following?Why people choose to work or go to collegeWhy a country might prosperHow the value of money changes over time

Accepted Answer

A)   II and III only
B)   I and II only
C)   III only
D)   I, II, and IIIE) B) and C)
F) A) and C)

Question 6

Suppose Disney World decides to charge local residents a lower price than other park visitors. This would fall under which field of economics?

Accepted Answer

A)   Macroeconomics
B)   Public policy
C)   Customer service
D)   MicroeconomicsE) A) and B)
F) None of the above

Question 7

The deadline for your research paper is tomorrow and you anticipate you'll need a full day's worth of writing to complete the paper. Unfortunately, you are scheduled to work all day in the cafeteria. You can turn the paper in one day late for a 10 percent penalty or take the day off of work and turn the paper in by the deadline. Losing a day of wages will cost you $90. The marginal cost of turning the paper in on time is:

Accepted Answer

A)   the 10 percent penalty on your final score.
B)   $90 in forgone wages.
C)   respect from your professor.
D)   the 10 percent penalty on your score and $90 in forgone wages.E) B) and C)
F) C) and D)

Question 8

Jimmy is invited to a costume party with a 1990s theme. His first thought is to dress up as MC Hammer, but he is also considering going as a lifeguard from Baywatch. The opportunity cost of arriving dressed like MC Hammer is:

Accepted Answer

A)   the cost of purchasing parachute pants like those MC Hammer would wear.
B)   the money he saves since he doesn't need to purchase red swimming trunks.
C)   the enjoyment he would have received if he had dressed as a lifeguard.
D)   There is no opportunity cost because he was going to attend the party either way.E) B) and C)
F) A) and D)

Question 9

Jasmin purchases a coffee cup from her local gas station for $5.00 that can be refilled at any time for $0.50. The marginal cost of her 10th cup of coffee is:

Accepted Answer

A)   $0.50.
B)   $5.00.
C)   $10.00.
D)   $5.50.E) All of the above
F) A) and D)

Question 10

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) A) and D)
F) B) and C)

Question 11

Making a decision "on the margin" involves comparing:

Accepted Answer

A)   additional benefits against additional costs.
B)   total benefits against total costs, including benefits and costs from past decisions.
C)   sunk costs against opportunity costs.
D)   all of the benefits you could expect to get, without considering costs.E) B) and D)
F) B) and C)

Question 12

A journal reports that students who attend private schools have higher test scores. Which of the following is an example of an omitted variable that could explain this correlation?I. Parents' education levelII. Socio-economic statusIII. Private school tuition

Accepted Answer

A)   I only
B)   III only
C)   I, II, and III
D)   I and II onlyE) All of the above
F) B) and D)

Question 13

Suppose the owner of a rare piece of art has recently died, and their will specified that an economist should make sure that the painting is passed on "efficiently". Which of the following methods is most likely to result in efficiency?

Accepted Answer

A)   The painting is given to the owner's only child.
B)   The painting is put into storage to preserve its quality.
C)   The painting is auctioned to the highest bidder.
D)   All of these are equally efficient.E) C) and D)
F) A) and C)

Question 14

When the government alters normal market activity, this is known as:

Accepted Answer

A)   innovation.
B)   intervention.
C)   market failure.
D)   unexpected outcomes.E) All of the above
F) B) and C)

Question 15

A college student decides to spend his afternoon watching three movies rented from Redbox. The cost of each movie is $1. The student was willing to pay $4 to rent each of the first two movies and $2 to rent the third movie. What was the marginal benefit received by the student when renting the first movie?

Accepted Answer

A)   $1
B)   $8
C)   $4
D)   $2E) All of the above
F) A) and C)

Question 16

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) A) and B)
F) B) and C)

Question 17

Your sister always brags about how savvy she is as a grocery shopper, claiming she saves lots of money by using coupons and shopping at multiple stores to get the lowest prices on all goods. Why might your sister be overestimating her savings?

Accepted Answer

A)   She does not count the value of the time it takes her to sort and clip coupons as a cost.
B)   She does not count the cost of the gas she uses driving extra miles to multiple grocery stores.
C)   She does not count the value of the time it takes her to check out at multiple stores and use multiple coupons, compared to a trip to one store with no coupons.
D)   All of these are correct.E) B) and C)
F) A) and D)

Question 18

A fast-food chain announces a "buy one get one free" offer on breakfast sandwiches bought before 9am. This is an example of:

Accepted Answer

A)   the use of incentives.
B)   a macroeconomic decision.
C)   hoarding scarce resources.
D)   trade-offs.E) B) and C)
F) A) and B)

Question 19

Suppose that a policymaker is considering offering free college tuition to all low-to-moderate income families in your state. There are currently 1,000 students attending college who would meet the income qualifications to receive free tuition, and tuition is $10,000 per year. Which of the following statements is most likely to be true?

Accepted Answer

A)   This program will cost the state approximately $10 million per year.
B)   Some of the students will be disincentivized from attending college because they will have to apply for the program.
C)   The $10,000 is a sunk cost that policymakers shouldn't consider when estimating the funds needed to administer this program.
D)   Free tuition will incentivize more students to attend college, and this program will cost more than $10 million per year.E) C) and D)
F) All of the above

Question 20

A news article reports that students who take SAT preparation courses tend to have higher test scores. Which of the following describes an omitted variable that could explain this correlation?I. Parents with more education are more likely to enroll their children in SAT preparation courses.II. SAT preparation courses improve students' test-taking abilities.III. Students who are more motivated to attend college are more likely to enroll in SAT preparation courses.

Accepted Answer

A)   I only
B)   II and III only
C)   I, II, and III
D)   I and III onlyE) B) and C)
F) None of the above

Exam 1: Economicsand Life

The principles of economics can explain which of the following?Why people choose to work or go to collegeWhy a country might prosperHow the value of money changes over time

Correct Answer
verified

Suppose Disney World decides to charge local residents a lower price than other park visitors. This would fall under which field of economics?

Correct Answer
verified

Making a decision "on the margin" involves comparing:

Correct Answer
verified

Which of the following questions would a macroeconomist most likely try to answer?

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

Jimmy is invited to a costume party with a 1990s theme. His first thought is to dress up as MC Hammer, but he is also considering going as a lifeguard from Baywatch. The opportunity cost of arriving dressed like MC Hammer is:

Correct Answer
verified

A normative statement is generally based upon:

Correct Answer
verified

When the government alters normal market activity, this is known as:

Correct Answer
verified

Correct Answer
verified

Jasmin purchases a coffee cup from her local gas station for $5.00 that can be refilled at any time for $0.50. The marginal cost of her 10th cup of coffee is:

Correct Answer
verified

A fast-food chain announces a "buy one get one free" offer on breakfast sandwiches bought before 9am. This is an example of:

Correct Answer
verified

Applying for a loan in five-person groups is an example of:

Correct Answer
verified

Your sister always brags about how savvy she is as a grocery shopper, claiming she saves lots of money by using coupons and shopping at multiple stores to get the lowest prices on all goods. Why might your sister be overestimating her savings?

Correct Answer
verified

Correct Answer
verified

The problems created by scarcity:

Correct Answer
verified

A journal reports that students who attend private schools have higher test scores. Which of the following is an example of an omitted variable that could explain this correlation?I. Parents' education levelII. Socio-economic statusIII. Private school tuition

Correct Answer
verified

Correct Answer
verified

Suppose the owner of a rare piece of art has recently died, and their will specified that an economist should make sure that the painting is passed on "efficiently". Which of the following methods is most likely to result in efficiency?

Correct Answer
verified

Correct Answer
verified

The Bureau of Economic Analysis releases last quarter's growth rate in real GDP. This release would most likely have been written by a:

Correct Answer
verified

Exam 1: Economicsand Life

The principles of economics can explain which of the following?Why people choose to work or go to collegeWhy a country might prosperHow the value of money changes over time

Correct AnswerverifiedShow Answer

Suppose Disney World decides to charge local residents a lower price than other park visitors. This would fall under which field of economics?

Correct AnswerverifiedShow Answer

Making a decision "on the margin" involves comparing:

Correct AnswerverifiedShow Answer

Which of the following questions would a macroeconomist most likely try to answer?

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

Jimmy is invited to a costume party with a 1990s theme. His first thought is to dress up as MC Hammer, but he is also considering going as a lifeguard from Baywatch. The opportunity cost of arriving dressed like MC Hammer is:

Correct AnswerverifiedShow Answer

A normative statement is generally based upon:

Correct AnswerverifiedShow Answer

When the government alters normal market activity, this is known as:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Jasmin purchases a coffee cup from her local gas station for $5.00 that can be refilled at any time for $0.50. The marginal cost of her 10th cup of coffee is:

Correct AnswerverifiedShow Answer

A fast-food chain announces a "buy one get one free" offer on breakfast sandwiches bought before 9am. This is an example of:

Correct AnswerverifiedShow Answer

Applying for a loan in five-person groups is an example of:

Correct AnswerverifiedShow Answer

Your sister always brags about how savvy she is as a grocery shopper, claiming she saves lots of money by using coupons and shopping at multiple stores to get the lowest prices on all goods. Why might your sister be overestimating her savings?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The problems created by scarcity:

Correct AnswerverifiedShow Answer

A journal reports that students who attend private schools have higher test scores. Which of the following is an example of an omitted variable that could explain this correlation?I. Parents' education levelII. Socio-economic statusIII. Private school tuition

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose the owner of a rare piece of art has recently died, and their will specified that an economist should make sure that the painting is passed on "efficiently". Which of the following methods is most likely to result in efficiency?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Bureau of Economic Analysis releases last quarter's growth rate in real GDP. This release would most likely have been written by a:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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