Question 1

In economics,the term ________ means "additional" or "extra."
A) allocative
B) marginal
C) equity
D) optimal

Accepted Answer

In economics, the term "marginal" means "additional" or "extra." For example, the marginal cost is the cost of producing one additional unit, and the marginal benefit is the benefit gained from consuming one additional unit. Choices A, C, and D are important concepts in economics, but they do not relate to the definition of "marginal."

Question 2

A grocery store sells a bag of potatoes at a fixed price of $2.30.Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?
A) marginal revenue
B) gross earnings
C) pure profit
D) marginal costs
E) net benefit

Accepted Answer

Marginal revenue is the term used by economists to describe the money received from the sale of an additional unit of a product. In this case, the additional unit is a bag of potatoes.

Question 3

Economists assume that individuals
A) behave in unpredictable ways.
B) will never take actions to help others.
C) prefer to live in a society that values fairness above all else.
D) are rational and respond to incentives.

Accepted Answer

Economists typically assume that individuals are rational, which means that they will respond predictably to incentives. This assumption allows economists to construct models and predict how individuals will behave in certain situations. While not all individuals may always act in a rational manner, the assumption of rationality is a useful tool for understanding human behavior in economics.

Question 4

By definition,economics is the study of
A) how to make money in the stock market.
B) how to make money in a market economy.
C) the choices people make to attain their goals, given their scarce resources.
D) supply and demand.

Accepted Answer

Economics is the study of how individuals and societies allocate limited resources to satisfy their unlimited wants and needs. This involves studying choices people make to attain their goals, given their scarce resources. While supply and demand is a fundamental concept in economics, it is not the sole focus or definition of the discipline. Making money in the stock market or a market economy is not the exclusive goal or subject of economics, but rather one aspect of it.

Question 5

An economic ________ is a simplified version of some aspect of economic life used to analyze an economic issue.
A) market
B) trade-off
C) variable
D) model

Accepted Answer

The term "model" refers to a simplified representation of an economic phenomenon or system that is used to understand economic behavior and make predictions. A model can be used to analyze an economic issue or problem, and can help to identify the key variables that are relevant to the situation. Models are often used in economics because they allow economists to test theories and hypotheses about how the economy works, without having to take into account all of the complexities and nuances of the real world.

Question 6

Suppose that some teachers have decided that economic and financial uncertainty have made the prospect of retiring more risky,and therefore carry a higher cost than not retiring.By using all available information as they act to achieve their goals,these teachers are exemplifying the economic idea that
A) people are rational.
B) people respond to economic incentives.
C) optimal decisions are made at the margin.
D) equity is more important than efficiency.

Accepted Answer

The answer of Suppose that some teachers have decided that...

Question 7

Economists assume that rational people do all of the following except
A) use all available information as they act to achieve their goals.
B) undertake activities that benefit others and hurt themselves.
C) weigh the benefits and costs of all possible alternative actions.
D) respond to economic incentives.

Accepted Answer

Economists assume that people act rationally, however, it is assumed that people undertake activities that they believe benefit themselves and not harm themselves. Therefore, choice B is incorrect.

Question 8

Economists reason that the optimal decision is to continue any activity up to the point where the
A) marginal benefit is zero.
B) marginal benefit is greater than the marginal cost.
C) marginal cost is zero.
D) marginal benefit equals the marginal cost.

Accepted Answer

Continuing an activity up to the point where the marginal benefit equals the marginal cost ensures that the benefits gained from the activity are maximized while minimizing the costs incurred. This is known as the optimal level of activity.

Question 9

In economics,choices must be made because we live in a world of
A) unemployment.
B) scarcity.
C) greed.
D) unlimited resources.

Accepted Answer

Scarcity refers to the limited availability of resources relative to unlimited wants and needs. As a result, choices must be made to allocate resources. Without scarcity, there would be no need for economics as society could have everything that is desired without any tradeoffs or opportunity costs.

Question 10

Where do economic agents such as individuals,firms and nations,interact with each other?
A) in public locations monitored by the government
B) in any arena that brings together buyers and sellers
C) in any physical location people where people can physically get together for selling goods, such as shopping malls
D) in any location where transactions can be monitored by consumer groups and taxed by the government

Accepted Answer

Economic agents such as individuals, firms, and nations interact with each other in any arena that brings together buyers and sellers, such as markets, stock exchanges, and online platforms. These interactions are not limited to public locations monitored by the government or physical locations like shopping malls. While transactions may be taxed by the government, they do not necessarily have to be monitored by consumer groups.

Question 11

Since 1994,obesity rates in the United States
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.

Accepted Answer

The answer of Since 1994,obesity rates in the United States
A)...

Question 12

Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave ________,meaning they make the best decisions given their knowledge of the costs and benefits.
A) equitably
B) rationally
C) emotionally
D) selfishly

Accepted Answer

Economics is predicated on the assumption that individuals act rationally, meaning they make choices that optimize their self-interest based on their knowledge of the costs and benefits of different options. This assumption is the basis for many of the models and theories that economists use to analyze economic behavior and outcomes.

Question 13

Which of the following statements is true about scarcity?
A) Scarcity refers to the situation in which unlimited wants exceed limited resources.
B) Scarcity is not a problem for the wealthy.
C) Scarcity is only a problem when a country has too large a population.
D) Scarcity arises when there is a wide disparity in income distribution.

Accepted Answer

Scarcity is the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources. This means that there are not enough resources available to satisfy all human wants and needs. It is a universal problem that affects everyone, regardless of income level or population size.

Question 14

Consider the following statements: a.Car owners purchase more gasoline from a gas station that sells gasoline at a lower price than other rival gas stations in the area.
B)Banks do not take steps to increase security since they believe it is less costly to allow some bank robberies than to install expensive security monitoring equipment.
C)Firms produce more of a particular DVD when its selling price rises.
Which of the above statements demonstrates that economic agents respond to incentives?
A) a only.
B) b only.
C) c only.
D) a and b.
E) a, b, and c.

Accepted Answer

The answer of Consider the following statements: a.Car owners purchase...

Question 15

The basic economic problem of ________ has always existed and will continue to exist.
A) scarcity
B) efficiency
C) inflation
D) recession

Accepted Answer

Scarcity refers to the limited resources available to fulfill unlimited wants and needs. This is a fundamental issue faced by individuals, households, businesses, and entire economies. As such, it has always existed and will continue to exist, making it the basic economic problem. Efficiency, inflation, and recession are all related economic problems, but they do not encompass the fundamental issue of scarcity.

Question 16

Suppose the U.S.government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000.These doctors would be exemplifying the economic idea that
A) people are rational.
B) people respond to economic incentives.
C) optimal decisions are made at the margin.
D) equity is more important than efficiency.

Accepted Answer

Encouraging new medical school graduates to take over existing practices by providing a financial incentive shows that people respond to economic incentives.

Question 17

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.
A) collective
B) cooperative
C) market
D) trade-off

Accepted Answer

The term in economics that matches the description given is "market". It is the platform where buyers and sellers come together to engage in trade. Collective refers to a group of people who act together as a single entity, while cooperative is a type of business organization owned and operated by its members. Trade-off refers to the idea of giving up one thing in exchange for another.

Question 18

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that
A) people with health insurance will be less likely to be overweight than people without health insurance.
B) people with health insurance will be more likely to be overweight than people without health insurance.
C) people with health insurance will be equally likely to be overweight as people without health insurance.
D) there is no correlation between having health insurance and being overweight.

Accepted Answer

The answer of Holding all other personal characteristics-such as age,gender,and...

Question 19

Recent changes occurring within the U.S.health care system,including lower insurance reimbursement rates,have resulted in
A) a growing number of doctor's choosing to open private practices.
B) more medical practices being owned by hospitals than by individual doctors.
C) a majority of hospitals closing routine medical practices in order to focus only on emergency care facilities.
D) a majority of doctors working directly for insurance companies.

Accepted Answer

Lower insurance reimbursement rates have made it difficult for individual doctors to maintain their own practices, leading to more medical practices being owned by hospitals instead. This allows for resource sharing and cost savings, as well as increased bargaining power with insurance companies.

Question 20

Economists assume that rational behavior is useful in explaining choices people make
A) because irrational people do not make economic choices.
B) even though people may not behave rationally all the time.
C) because individuals act rationally all the time in all circumstances.
D) even though people rarely, if ever, behave in a rational manner.

Accepted Answer

Economists recognize that people may not always behave rationally, but assuming that people generally act in a rational way can help in understanding their decision-making processes and predicting their choices.

Quiz 1: Economics: Foundations and Models

In economics,the term ________ means "additional" or "extra."

A grocery store sells a bag of potatoes at a fixed price of $2.30.Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?

Economists assume that individuals

By definition,economics is the study of

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

Economists assume that rational people do all of the following except

Economists reason that the optimal decision is to continue any activity up to the point where the

In economics,choices must be made because we live in a world of

Where do economic agents such as individuals,firms and nations,interact with each other?

Since 1994,obesity rates in the United States

Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave ________,meaning they make the best decisions given their knowledge of the costs and benefits.

Which of the following statements is true about scarcity?

The basic economic problem of ________ has always existed and will continue to exist.

Suppose the U.S.government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000.These doctors would be exemplifying the economic idea that

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that

Recent changes occurring within the U.S.health care system,including lower insurance reimbursement rates,have resulted in

Economists assume that rational behavior is useful in explaining choices people make