Question 1

Which of the following statements about market economies is correct?

Accepted Answer

A)  In a market economy, no one is looking out for the economic well-being of society as a whole.
B)  Market economies are characterized by decentralized decision making and self-interested decision makers.
C)  Market economies have proven remarkably successful in promoting overall economic well-being.
D)  All of the above are correct.E) All of the above
F) None of the above

Question 2

Under what conditions might government intervention in a market economy improve the economy's performance?

Accepted Answer

If there is a market failure, such as an...

Question 3

Economists use the term ______ to refer to fluctuations in economic activity, such as employment and production.

Accepted Answer

The answer of Economists use the term ______ to refer...

Question 4

In an economy in which decisions are guided by prices and individual self-interest, there is

Accepted Answer

A)  the potential to achieve efficiency in production.
B)  a strong need for government intervention in the market.
C)  less efficiency than would be observed in a centrally-planned economy.
D)  more need for a strong legal system to control individual greed than would be needed in a centrally-planned economy.E) C) and D)
F) A) and D)

Question 5

Scenario 1-2
Suppose that you have a choice between going to the movies with a friend for two hours or working at your job. If you go to the movies, you will spend $7 on a ticket and $5 on popcorn. If you choose to work, you will earn $10 an hour.
-Refer to Scenario 1-2. What is your opportunity cost of going to the movies?

Accepted Answer

The answer of Scenario 1-2
Suppose that you have a choice...

Question 6

The self-interest of the participants in an economy is guided into promoting general economic self-interest by

Accepted Answer

A)  the invisible hand.
B)  market power.
C)  government intervention.
D)  oikonomos.E) B) and C)
F) All of the above

Question 7

The term market failure refers to

Accepted Answer

A)  a situation in which the market on its own fails to allocate resources efficiently.
B)  an unsuccessful advertising campaign which reduces demand for a product.
C)  a situation in which competition among firms becomes ruthless.
D)  a firm that is forced out of business because of losses.E) A) and C)
F) B) and C)

Question 8

Following the implementation of laws requiring automobiles to have seat belts, which of the following occurred?

Accepted Answer

A)  An individual's probability of surviving an auto accident rose.
B)  There was an increase in pedestrian deaths.
C)  There was an increase in automobile accidents.
D)  All of the above are correct.E) C) and D)
F) None of the above

Question 9

The tradeoff between inflation and unemployment

Accepted Answer

A)  implies that policies designed to reduce unemployment also reduce inflation.
B)  was eliminated by improved economic policies in the 1900s.
C)  is a long-run tradeoff, persisting for decades, according to most economists.
D)  None of the above are correct.E) A) and B)
F) A) and D)

Question 10

Which of the following firms is likely to have the greatest market power?

Accepted Answer

A)  an electric company
B)  a farmer
C)  a grocery store
D)  a local electronics retailerE) A) and D)
F) All of the above

Question 11

The "invisible hand" influences market behavior through trade.​

Accepted Answer

A) True 
 B)False

Question 12

The relatively low inflation experienced in the United States in the 1990s is attributable to

Accepted Answer

A)  slow growth of U.S. productivity during the 1990s.
B)  slow growth of the quantity of money in the U.S. in the 1990s.
C)  low levels of government spending in the U.S. in the 1980s and 1990s.
D)  the eight-year presidency of William Jefferson Clinton during the 1990s.E) C) and D)
F) A) and D)

Question 13

Communist countries worked under the premise that

Accepted Answer

A)  people, when left on their own without government intervention, will find the best use of available resources
B)  central planners were in the best position to determine the allocation of scarce resources in the economy.
C)  households and firms, guided by an "invisible hand," could achieve the most efficient allocation of scarce resources.
D)  allowing the market forces of supply and demand to operate with no government intervention would achieve the most efficient allocation of scarce resources.E) None of the above
F) A) and B)

Question 14

Public policies

Accepted Answer

A)  may be able to improve either economic efficiency or equality.
B)  may be able to improve economic efficiency but cannot improve equality.
C)  may be able to improve equality but cannot improve economic efficiency.
D)  cannot improve either equality or economic efficiency.E) C) and D)
F) A) and D)

Question 15

​Which of the following industries has a marginal cost that is close to zero?

Accepted Answer

A)  ​automobile
B)  ​aircraft
C)  ​software
D)  ​furnitureE) A) and C)
F) C) and D)

Exam 1: Ten Principles of Economics

Economists use the term ______ to refer to fluctuations in economic activity, such as employment and production.

Correct Answer
verified

Following the implementation of laws requiring automobiles to have seat belts, which of the following occurred?

Correct Answer
verified

The term market failure refers to

Correct Answer
verified

The self-interest of the participants in an economy is guided into promoting general economic self-interest by

Correct Answer
verified

Under what conditions might government intervention in a market economy improve the economy's performance?

Correct Answer
verified
If there is a market failure, such as an...
View Answer

Public policies

Correct Answer
verified

Which of the following industries has a marginal cost that is close to zero?

Correct Answer
verified

Which of the following firms is likely to have the greatest market power?

Correct Answer
verified

In an economy in which decisions are guided by prices and individual self-interest, there is

Correct Answer
verified

The relatively low inflation experienced in the United States in the 1990s is attributable to

Correct Answer
verified

The "invisible hand" influences market behavior through trade.

Correct Answer
verified

Correct Answer
verified

Communist countries worked under the premise that

Correct Answer
verified

The tradeoff between inflation and unemployment

Correct Answer
verified

Which of the following statements about market economies is correct?

Correct Answer
verified

Exam 1: Ten Principles of Economics

Economists use the term ______ to refer to fluctuations in economic activity, such as employment and production.

Correct AnswerverifiedShow Answer

Following the implementation of laws requiring automobiles to have seat belts, which of the following occurred?

Correct AnswerverifiedShow Answer

The term market failure refers to

Correct AnswerverifiedShow Answer

The self-interest of the participants in an economy is guided into promoting general economic self-interest by

Correct AnswerverifiedShow Answer

Under what conditions might government intervention in a market economy improve the economy's performance?

Correct AnswerverifiedIf there is a market failure, such as an...View AnswerShow Answer

Public policies

Correct AnswerverifiedShow Answer

​Which of the following industries has a marginal cost that is close to zero?

Correct AnswerverifiedShow Answer

Which of the following firms is likely to have the greatest market power?

Correct AnswerverifiedShow Answer

In an economy in which decisions are guided by prices and individual self-interest, there is

Correct AnswerverifiedShow Answer

The relatively low inflation experienced in the United States in the 1990s is attributable to

Correct AnswerverifiedShow Answer

The "invisible hand" influences market behavior through trade.​

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Communist countries worked under the premise that

Correct AnswerverifiedShow Answer

The tradeoff between inflation and unemployment

Correct AnswerverifiedShow Answer

Which of the following statements about market economies is correct?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
If there is a market failure, such as an...
View Answer

Correct Answer
verified

Which of the following industries has a marginal cost that is close to zero?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The "invisible hand" influences market behavior through trade.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified