Question 1

Technology is defined as

Accepted Answer

A)   the process of developing and revising models.
B)   new innovations and creations.
C)   the processes used to produce goods and services.
D)   the process of recycling products.E) B) and D)
F) C) and D)

Question 2

What is the difference between an invention and an innovation?

Accepted Answer

An invention is the development of a new good or a new process for making a good.An innovation is the practical application of an invention.Innovation could also refer to any significant improvement in a good or in the means of producing a good.

Question 3

An economic model is a simplified version of reality used to analyze real-world economic situations.

Accepted Answer

A) True 
 B)False  True

Question 4

How are the fundamental economic questions answered in a market economy?

Accepted Answer

A)   The government alone decides the answers.
B)   Individuals, firms, and the government interact in markets to decide the answers to these questions.
C)   Households and firms interact in markets to decide the answers to these questions.
D)   Large corporations alone decide the answers.E) A) and B)
F) C) and D)

Question 5

An economic ________ is a simplified version of some aspect of economic life used to analyze an economic issue.

Accepted Answer

A)   market
B)   trade-off
C)   variable
D)   modelE) B) and C)
F) All of the above D

Question 6

What is equity,and how does it differ from efficiency?

Accepted Answer

Equity refers to the fair distribution o...

Question 7

Which of the following statements about positive economic analysis is false?

Accepted Answer

A)   Positive analysis uses an economic model to estimate the costs and benefits of different course of actions.
B)   There is much more disagreement among economists over normative economic analysis than over positive economic analysis.
C)   There is much more disagreement among economists over positive economic analysis than over normative economic analysis.
D)   Unlike normative economic analysis, positive economic analysis can be tested.E) B) and D)
F) A) and B)

Question 8

The three fundamental questions that any economy must address are:

Accepted Answer

A)   What will be the prices of goods and services; how will these goods and services be produced; and who will receive them?
B)   What goods and services to produce; how will these goods and services be produced; and who receives them?
C)   Who gets jobs; what wages do workers earn; and who owns what property?
D)   How much will be saved; what will be produced; and how can these goods and services be fairly distributed?E) A) and B)
F) A) and C)

Question 9

One example of human capital is the amount of skills that you have.

Accepted Answer

A) True 
 B)False

Question 10

You explain to your roommate Surya,who makes beaded headbands,about an economic theory which asserts that consumers will purchase more of a product at lower prices than they will at higher prices.She contends that the theory is incorrect because over the past two years she has lowered the price of her headbands and yet has seen a decrease in sales.How would you respond to Surya?

Accepted Answer

A)   Surya is right; she has evidence to back her claim. The theory must be erroneous.
B)   Surya is making the mistake of assuming that correlation implies causation.
C)   I will explain to her that she is making the error of reverse causality: it is the decrease in demand that has caused her to lower her prices.
D)   I will explain to her that there are some omitted variables that have contributed to a decrease in her sales such as changes in income.E) B) and C)
F) All of the above

Question 11

Since 1994,obesity rates in the United States

Accepted Answer

A)   have been on a slow and steady decline.
B)   have increased in all 50 states.
C)   have primarily increased in the Southeast and remained constant or slightly decreased in the remainder of the country.
D)   have remained fairly constant throughout the country.E) All of the above
F) A) and B)

Question 12

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a problem inherent in centrally planned economies?

Accepted Answer

A)   Households and firms make poor decisions in choosing how resources are allocated.
B)   There is too little production of low-cost, high-quality goods and services.
C)   Production managers are more concerned with satisfying consumer wants than with satisfying government's orders.
D)   Exports tend to exceed imports.E) All of the above
F) A) and D)

Question 14

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal benefit.

Accepted Answer

A) True 
 B)False

Question 15

At a recent faculty meeting,Lorraine Waverly,president of Skywalker College,announced that enrollment is up by 12 percent over the previous semester.If enrollment the previous semester was 3,250 students,what is the student enrollment this semester?

Accepted Answer

A)   390
B)   2,860
C)   3,640
D)   4,030E) All of the above
F) A) and D)

Question 16

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Accepted Answer

A)   2 1/2 Russian tea cakes
B)   2/5 of a Russian tea cake
C)   $2.50
D)   $1.00E) A) and C)
F) B) and C)

Question 17

Allocative efficiency is achieved when firms produce goods and services

Accepted Answer

A)   at the lowest possible cost.
B)   that consumers value most.
C)   at the lowest opportunity cost.
D)   at a marginal cost of zero.E) None of the above
F) A) and D)

Question 18

Which of the following statements is true?

Accepted Answer

A)   Anytime you have to decide which action to take you are experiencing economic equity.
B)   Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale.
C)   Every individual, no matter how rich or poor, is faced with making trade-offs.
D)   Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited.E) A) and B)
F) A) and C)

Question 19

Explain the difference between a firm's revenue and its profit.

Accepted Answer

A firm's revenue is the total amount rec...

Question 20

The government makes all economic decisions in a mixed economy.

Accepted Answer

A) True 
 B)False

Exam 1: Economics: Foundations and Models

Technology is defined as

Correct Answer
verified

What is the difference between an invention and an innovation?

Correct Answer
verified
An invention is the development of a new good or a new process for making a good.An innovation is the practical application of an invention.Innovation could also refer to any significant improvement in a good or in the means of producing a good.

An economic model is a simplified version of reality used to analyze real-world economic situations.

Correct Answer
verified
True

How are the fundamental economic questions answered in a market economy?

Correct Answer
verified

An economic ________ is a simplified version of some aspect of economic life used to analyze an economic issue.

Correct Answer
verified
D

What is equity,and how does it differ from efficiency?

Correct Answer
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Equity refers to the fair distribution o...
View Answer

Which of the following statements about positive economic analysis is false?

Correct Answer
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The three fundamental questions that any economy must address are:

Correct Answer
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One example of human capital is the amount of skills that you have.

Correct Answer
verified

Correct Answer
verified

Since 1994,obesity rates in the United States

Correct Answer
verified

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

Correct Answer
verified

Which of the following is a problem inherent in centrally planned economies?

Correct Answer
verified

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal benefit.

Correct Answer
verified

At a recent faculty meeting,Lorraine Waverly,president of Skywalker College,announced that enrollment is up by 12 percent over the previous semester.If enrollment the previous semester was 3,250 students,what is the student enrollment this semester?

Correct Answer
verified

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Correct Answer
verified

Allocative efficiency is achieved when firms produce goods and services

Correct Answer
verified

Which of the following statements is true?

Correct Answer
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Explain the difference between a firm's revenue and its profit.

Correct Answer
verified
A firm's revenue is the total amount rec...
View Answer

The government makes all economic decisions in a mixed economy.

Correct Answer
verified

Exam 1: Economics: Foundations and Models

Technology is defined as

Correct AnswerverifiedShow Answer

What is the difference between an invention and an innovation?

Correct AnswerverifiedAn invention is the development of a new good or a new process for making a good.An innovation is the practical application of an invention.Innovation could also refer to any significant improvement in a good or in the means of producing a good.

An economic model is a simplified version of reality used to analyze real-world economic situations.

Correct AnswerverifiedTrue

How are the fundamental economic questions answered in a market economy?

Correct AnswerverifiedShow Answer

An economic ________ is a simplified version of some aspect of economic life used to analyze an economic issue.

Correct AnswerverifiedD

What is equity,and how does it differ from efficiency?

Correct AnswerverifiedEquity refers to the fair distribution o...View AnswerShow Answer

Which of the following statements about positive economic analysis is false?

Correct AnswerverifiedShow Answer

The three fundamental questions that any economy must address are:

Correct AnswerverifiedShow Answer

One example of human capital is the amount of skills that you have.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Since 1994,obesity rates in the United States

Correct AnswerverifiedShow Answer

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

Correct AnswerverifiedShow Answer

Which of the following is a problem inherent in centrally planned economies?

Correct AnswerverifiedShow Answer

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal benefit.

Correct AnswerverifiedShow Answer

At a recent faculty meeting,Lorraine Waverly,president of Skywalker College,announced that enrollment is up by 12 percent over the previous semester.If enrollment the previous semester was 3,250 students,what is the student enrollment this semester?

Correct AnswerverifiedShow Answer

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Correct AnswerverifiedShow Answer

Allocative efficiency is achieved when firms produce goods and services

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Explain the difference between a firm's revenue and its profit.

Correct AnswerverifiedA firm's revenue is the total amount rec...View AnswerShow Answer

The government makes all economic decisions in a mixed economy.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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An invention is the development of a new good or a new process for making a good.An innovation is the practical application of an invention.Innovation could also refer to any significant improvement in a good or in the means of producing a good.

Correct Answer
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True

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D

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Equity refers to the fair distribution o...
View 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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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A firm's revenue is the total amount rec...
View Answer

Correct Answer
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