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Ch 1 HW
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Questions in this quiz (37)
1When the federal gov't crafts environmental policies that make it less expensive for firms to follow green initiatives:
- AThe policies are consistent with economic incentives
- BPolicies are likely more likely successful that policies that cost firms more, but they don't recognize economic incentives
- Cpolicies are futile because where the environment is concerned, it has been repeatedly shown that firms do not respond to economic incentives
- Dpollution is likely to increase
2Which statement is correct about the idea of people being rational?
- AIdea assumes that consumers and firms always make correct decisions
- BIdea assumes that consumers and firms take into account the benefits of their actions but ignore the costs
- CIdea assumes that consumers and firms take into account the costs of their actions but ignore the benefits
- DIdea assumes that consumers and firms use all available information as they act to achieve their goals
3Economists assume that the only reason people take the actions they do is in response to economic incentives
- ATrue
- BFalse
4Incremental means the same as
- A"extra"
since this is an "all or nothing" decision, incremental; revenue and incremental cost rather than total revenue and total cost must be examined - B"marginal". if the marginal revenue exceeds the marginal cost, the USPS's profit will increase. If the marginal cost exceeds the marginal revenue, the USPS's profit will decrease
- C"additional". Since this is an "all or nothing" decision, incremental revenue and incremental cost rather than total revenue and total cost must be examined
- D"marginal". If the marginal revenue exceeds the marginal cost, the USPS's profit will decrease. If the marginal cost exceeds the marginal revenue, the USPS's profit will decrease
- A"extra"
5What do economists mean by the word marginal?
- ASmall
- Bunimportant
- CExtra or additional
- Dfirst
6Economists believe that an activity should be continued up to the point where
- AThe marginal benefit from the activity plus the marginal cost equals to zero
- Bmarginal benefit from the activity is equal to the marginal cost
- CThe marginal benefit from the activity is greater than the marginal cost
- DThe marginal benefit from the activity is less than the marginal cost
7Economics is the study of the choices make to attain their goals, given their scarce resources
- ATrue
- BFalse
8Economists use the word marginal to mean extra or additional benefit or cost of a decision. An optimal decision occurs when
- Amarginal cost is 0
- BMarginal benefit is greater than marginal cost
- CMarginal benefit is maximized
- DMarginal benefit is equal to marginal cost
9A market is a group of _________ of a good or service and the institution or arrangement by which they come together to trade
- ABuyers
- BSellers
- CBuyers and sellers
10Microsoft charges a price of %599 for a copy of windows 7. Is this pricing decision rational?
- AMicrosoft's choice was rational: price will maximize profit
- BMicrosoft's choice cannot be rational: Price is clearly more than most people are willing and able to pay
- CWe cannot assume that this pricing decision was rational because we do not have enough information to make an assumption
- DWhen we assume the managers at Microsoft have used all available information and have weighed all known benefits and costs, we are assuming rationality
11One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls
- AThe market
- BScarcity
- CRationality
- DEconomics
12Societies organize their economies in two main ways to answer the 3 questions of what, how, and who. A society can have a _______ economy in which the government decides how economic resources will be allocated. Or a society can have a _________ economy in which the decisions of households and firms interacting in markets allocate economic resources
- ACentrally planned
Market - BMixed
Centrally planned - CMarket
Mixed - DMarket
Centrally planned - EMixed
Market
- ACentrally planned
13In a market system, how does society decide what goods and services will be produced
- AConsumers, firms, and the government determine what goods and services will be produced by the choices they make
- BWhat goods and services will be produced is determined by a vote of consumers
- CThe government decides what goods and services will be produced
- DFirms alone determine what goods and services will be produced
14In a market system, what determines how goods and servvices will be produced
- AThe government determines how goods and services will be produced
- BFirms determine how goods and services will be produced
- CConsumers determine how goods and services will be produced
- DConsumers, firms, and governments determine together how good and services are produced
15In market system, how does society decide who will receive the goods and services produced
- AWho receives the goods and services produced depends largely on how income is distributed
- BThe government determines the goods and services produced
- CConsumers determine who receives the goods and services produced
- DFirms determine who receives the goods and services produced
16Today, which of the following countries has a centrally planned economy?
- ACanada
- BGermany
- CU.S
- DNorth Korea
17How are economic resources allocated in a market economy?
- ABy consumers acting alone
- BBy the government
- CBy firms acting alone
- DBy the decisions of the households and firms interacting in markets
18Which of the following is correct about a mixed economy?
- AAll economic decisions are made in markets
- BMost economic decisions are made in markets but the government plays a significant role in the allocation of resources
- CThe government makes all economic decisions
- DMost economic decisions are made by the government but markets play a significant role in the allocation of resources
19Equity is
- AWhen poorer people's income is growing more rapidly than more wealthy people's income
- Bexact equal distribution of income
- Cfair distribution of economic benefits
- Dalways achieved by the market
20Firms choose how to produce the goods and services they sell. In many cases, firms face a trade-off between using more workers or using more machines. For example,
- AMany times in the past several decades, firms may have chosen between a production method in the U.S that uses fewer workers and more machines and a production method in China that uses more workers and fewer machines
- BMany times in the past several decades, firms may have chosen between a production method in the U.S that uses fewer machines and more workers and a production method in China that uses more machines and fewer workers
- Cmovie studios have to choose whether to produce animated films using more highly skilled animators to draw them by hand or fewer skilled animators and more low-skilled animators
- Da local service station has to choose whether to provide car repair services using more diagnostic computers to support their auto mechanics and fewer tools to support their auto mechanics or more tools to support their auto mechanics and fewer diagnostic computers to support their auto mechanics
21When does productive efficiency occur?
- Awhen an economy no longer relies on voluntary exchange
- Bwhen an economy achieves equity
- Cwhen a good or service is produced at the lowest possible cost
- Dwhen production is in accordance with consumer preferences
22When does allocative efficiency occur?
- Awhen the economy no longer relies on voluntary exchange
- Bwhen a good or service is produced at the lowest possible outcome
- Cwhen production is in accordance with consumer preferences
- Dwhen an economy achieves equity
23Opportunity cost is
- Awhen consumers and firms use all available information as they act to achieve their goals
- Bthe idea that because of scarcity, producing more of one good or service means producing less of another good or service
- Chighest valued alternative that must be given up to engage in an activity
- Dwhen unlimited wants exceed the limited resources available to fulfill those wants
24Trade-offs force society to make choices, particularly when answering the following 3 fundamental questions:
- A1. What goods and services will be produced?
2. How will the goods and services be produced
3. who will receive the goods and services produced - B1. what goods and services will be produced in foreign countries
2. who will produce the goods and services
3. who will receive the goods and services produced - C1. What goods and services will be produced
2. how will the goods and services be produced
3. Is the distribution of goods and services fair - D1. What goods and services will be produced domestically
2. how will the goods and services be produced
3. is the distribution of goods and services fair?
- A1. What goods and services will be produced?
25Why are models based on assumptions?
- ABecause models are very different from theories
- BModels are only concerned about questions in equity, not question of efficiency
- CModels are not intended to analyze real-world events
- DModels have to be simplified to be useful
26A hypothesis in an economic model is
- Atested before it can accepted (or not rejected)
- Busually about a casual relationship
- Ca statement that may be either correct or incorrect about an economic variable
- DAll of the above
27Any model is based on making assumptions because
- Amodels have to be simplified to be useful
- Bwe cannot analyze an economic issue unless we reduce its complexity
- Cboth A and B
- Dneither A or B
28Economics is about normative analysis rather than positive analysis
- ATrue
- BFalse
29Economics is a social science because
- Ait applies the scientific method to the study of the interactions among individuals
- Bit considers human behavior- particularly decision-making behavior
- Cit is based on studying the actions of individuals
- DAll of the above
30Macroeconomics is
- Athe study of firms as a group with special emphasis on how these firms interact with one another
- Bthe study of the economy as a whole, including topics such as inflation, unemployment, and economic growth
- Cthe study of "large" (greater than $100,000) economic transactions in the economy
- Dthe study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices
31Microeconomics is
- A"small" (less than $100,000) economic transactions in the economy
- Bthe economy as a whole, such as inflation, unemployment, and economic growth
- Cfirms as individual units excluding how these firms interact with one another
- Dhow households and firms make choices , how they interact in markets, and how the government attempts to influence their choices
32WHich one is correct about an economic variable?
- Aan economic variable must always be a positive number
- Ban economic variable must either be the price of a good or service or the quantity of a good or service
- Can economic variable is something measurable that can have different values
- DAn economic variable is always measured in dollars
33Which one is correct about a hypothesis?
- AAnother name for a model
- Bwill always incorporate a value judgement
- Ca statement must first be shown to be correct to be called a hypothesis
- Da statement that could in principle turn out to be incorrect
34Which one is correct about economics as a social science?
- AStudies the actions of the individuals
- Bnot useful in analyzing the effects of government policy
- Cuses normative analysis, but not positive analysis
- Dconsiders human behavior only in the context of business
35Which statement is correct?
- AA business has multiple locations, while a company has only a single location
- BEconomists use the terms firm, company, and business interchangeably
- CA business is always larger than a firm
- DA company is owned by one person, while a firm is owned by more than one person
36Which statement is correct?
- Aan invention is the practicable application of an innovation
- BAn innovation is the practicable application of an invention
- CThe word "technology" and the word "invention" have the same meaning
- DThe word "technology" and "innovation" have the same meaning
37When we graph the relationship between 2 variables, we often want to draw conclusions about whether changes in one variable are causing changes in the other variable. Doing so, however, can lead to incorrect conclusions. reasons for drawing incorrect conclusions about cause and effect include
- AAn omitted variable
- BReverse casualty
- Cboth A and B
- Dnone of the above
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- undergraduate Macroeconomics Quiz on Ch 1 HW , created by Brittany Shurack on 20/01/2022.
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- Brittany Shurack
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