Chapter 1 Môn Principles of Economics | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

lOMoAR cPSD| 58097008 Chapter 1
Ten Principles of Economics MULTIPLE CHOICE 1.
The word economy comes from the Greek word for a.“environment.”
b.“one who participates in a market.”
c.“one who manages a household. ” d.“conservation.”
ANSWER: c. “one who manages a household.” TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 2.
Economics deals primarily with the concept of a.poverty. b.scarcity . c.change. d.power. ANSWER: b. scarcity.
TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 3.
Which of the following is NOT included in the decisions that every society must make? a.what goods will be produced
b.what determines consumer preferences
(điều gì quyết định sở thích của người tiêu dùng) c.who will produce goods d.who will consume the goods
ANSWER: b. what determines consumer preferences
TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 4. Scarcity exists when 1 ANSWER: c.
“one who manages a household.” TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 2 ? ANSWER: b. scarcity.
TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 3 ? ANSWER: b.
what determines consumer preferences TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 4 ? ANSWER: b.
there is less of a good or resource available than people wish to have. lOMoAR cPSD| 58097008
2 Chapter 1/The Ten Principles of Economics a.
TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1
there is less than an infinite amount of a resource or good.
b.there is less of a good or resource available than people wish to have.
c.society can meet the wants of every individual. d.the price of a good rises.
ANSWER: b. there is less of a good or resource available than people wish to have. TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 5.
For society, a good is not scarce if
a.all members of society can have all they want of it.
b.at least one individual in society can obtain all he or she wants of the good.
c.firms are producing at full capacity.
d.those who have enough income can buy all they want of the good.
ANSWER: a. if all members of society can have all they want of it. TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 6.
Which of the following goods best meets the definition of scarcity? a.air b.wood in a forest c.water in the ocean d.water in a city ANSWER: d. water in a city
TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 7. Economics is defined as a.the study of business.
b.the study of how society manages its scarce resources .
c.the study of central planning.
d.the study of government regulation.
ANSWER: b. the study of how society manages its scarce resources. TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 8.
Which of the following is NOT a major area of study for economists? a.how people make decisions
b.how people interact with each other
c.how forces and trends affect the overall economy
d.how countries choose national leaders
( việc chọn người dẫn đầu đất nước không ảnh hưởng đến nghiên cứu)
ANSWER: d. how countries choose national leaders TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 9.
The adage, “There is no such thing as a free lunch,” means:
a.To get something we like, we usually have to give up another thing we like . ( he reason
there is no free lunch is that your choice to eat pizza out on the sidewalk in front of your school means that you are
giving up the opportunity to dine elsewhere )
b.Even people on welfare have to pay for food these days.
c.The cost of living is always increasing.
d.All costs are measured in dollars.
ANSWER: a. To get something we like, we usually have to give up another thing we like. TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 2 RANDOM: Y lOMoAR cPSD| 58097008
Chapter 1/The Ten Principles of Economics 3 a. b.
10. Daniel decides to spend an hour playing basketball rather than working at $6 per hour. His tradeoff is
nothing, because he enjoys playing basketball more than working.
the increase in skill he obtains from playing basketball for that hour. c.the $6 he could have earned .
d.nothing, because he spent $6 for admission into the sports complex to play basketball.
ANSWER: c. the $6 he could have earned.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 2 RANDOM: Y
11. When society requires that firms reduce pollution,
a.there is no tradeoff, since everyone benefits from reduced pollution.
b.there is no tradeoff for society as a whole, since the cost of reducing pollution falls only on the firms affected by the requirements.
c.there is a tradeoff ( sự đánh đổi) only if some firms are forced to close.
d.there is a tradeoff because of reduced incomes to the firms’ owners, workers, and customers.
ANSWER: d. there is a tradeoff because of reduced incomes to the firms’ owners, workers, and customers.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y 12. Efficiency means that
a.society is getting the most it can from its scarce resources .
b.society is conserving resources in order to save them for the future.
c.society’s goods and services are distributed fairly among society’s members.
d.society has lessened its dependence on foreign energy sources.
ANSWER: a. society is getting the most it can from its scarce resources.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y
13. Equity means that ( tính công bằng )
a.all members of society have the same income.
b.society is getting the most it can from its scarce resources.
c.society’s goods and services are distributed according to need.
d.the benefits of society’s resources are distributed fairly among society’s members .
ANSWER: d. the benefits of society’s resources are distributed fairly among society’s members.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y
14. A good definition of equity would be
a.everyone receiving the same income. b.fairness . c.efficiency.
d.eliminating extreme affluence. ANSWER: b. fairness.
TYPE: M KEY 1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y
15. When government policies are being designed,
a.equity and efficiency goals are usually independent of each other.
b.there is usually a tradeoff between equity and efficiency .
c.equity can usually be achieved without an efficiency loss.
d.increasing efficiency usually results in more equity.
ANSWER: b. there is usually a tradeoff between equity and efficiency.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y lOMoAR cPSD| 58097008
4 Chapter 1/The Ten Principles of Economics a.
16. When the government redistributes ( phân phối lại ) income from the rich to the poor, lOMoAR cPSD| 58097008
5 Chapter 1/The Ten Principles of Economics a. b. efficiency is improved.
both rich people and poor people benefit directly.
c.people work less and produce fewer goods and services .
d.rich people consume fewer goods and poor people consume more goods, resulting in no real change.
ANSWER: c. people work less and produce fewer goods and services.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 3 RANDOM: Y
17. In economics, the cost of something is
a.the out-of-pocket expense of obtaining it. b.what you give up to get it .
c.always measured in units of time.
d.always higher than people think.
ANSWER: b. what you give up to get it.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y
18. The opportunity cost of going to college is
a.the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses.
b.zero for students who are fortunate enough to have all of their college expenses paid by someone else.
c.the value of the best opportunity a student gives up to attend college .
d.zero, since a college education will allow a student to earn a larger income after graduation.
ANSWER: c. the value of the best opportunity a student gives up to attend college.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 3 RANDOM: Y
19. For most students, the largest single cost of a college education is
a.transportation, parking, and entertainment. b.tuition, fees, and books. c.room and board.
d.the wages given up to attend school .
ANSWER: d. the wages given up to attend school.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 2 RANDOM: Y
20. The opportunity cost of an item is
a.the number of hours needed to earn money to buy it.
b.what you give up to get that item .
c.always less than the dollar value of the item.
d.always equal to the dollar value of the item. ANSWER: b. what you give up to get that item.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y
21. Carolyn decides to spend an additional hour working overtime rather than watching a video with her friends.
She earns $8 for her hour’s work. Her opportunity cost of working is ( từ bỏ xem video để đi làm thêm kiếm tiền) a.the $8 she
b.the enjoyment she would have received had she watched the video earns. . ( opp. Cost sẽ là
phương án bị từ bỏ đó là việc tận hưởng xem video )
c.the $8 minus the enjoyment she would have received from watching the video.
d.nothing, since she would have received less than $8 of enjoyment from the video.
ANSWER: b. the enjoyment she would have received had she watched the video. lOMoAR cPSD| 58097008
6 Chapter 1/The Ten Principles of Economics
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 4 RANDOM: Y
22. Ryan spends an hour studying instead of going for a bike ride. The opportunity cost to him of studying is ( từ
bỏ việc đi xe đạp và sử dụng phương án học bài )
the improvement in his grades from studying for the hour. the difference between the
improvement in his grades from studying minus the enjoyment of a bike ride.
c.the enjoyment and exercise he would have received had he gone for a bike ride .
d.zero. Since Ryan chose to study rather than to ride his bike, the value of studying must have been greater
than the value of the bike ride.
ANSWER: c. the enjoyment and exercise he would have received had he gone for a bike ride.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 3 RANDOM: Y
23. College-age athletes who drop out of school to play professional sports ( vận động viên ở đội tuổi đại học bỏ
học để chơi thể thao chuyên nghiệp )
a.are making a bad economic decision, since they can’t play forever.
b.are unaware of their opportunity cost of attending college.
c.underestimate the value of a college education.
d.are well aware that their opportunity cost of attending college is very high .
ANSWER: d. are well aware that their opportunity cost of attending college is very high.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 4 RANDOM: Y
24. The term which means whatever must be given up to obtain an item is a.efficiency. b.externality. c.opportunity cost . d.market failure. ANSWER: c. opportunity cost.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 3 RANDOM: Y
25. People make decisions at the margin ( mức cận biên ) by a.following tradition.
b.comparing costs and benefits . c.experience. d.calculating dollar costs.
ANSWER: b. comparing costs and benefits.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 4 RANDOM: Y 26. A marginal change is a.a long-term trend.
b.a large, significant adjustment. c.a change for the worse.
d.a small incremental adjustment
. ( sự điều chỉnh tăng dần nhỏ )
ANSWER: d. a small incremental adjustment.
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27. Which of the following is the best example of a marginal change? ( tăng thêm hay giảm đi một lượng nào đó )
a.Mark graduates from college and takes a job. His income increases from $10,000 per year to $50,000 per year.
b.The price of housing rises in Seattle by 25% in one year. lOMoAR cPSD| 58097008
Chapter 1/The Ten Principles of Economics 7 a. b.
c.Kim works at the college bookstore. She gets a raise from $5.15 per hour to $5.20 per hour.
d.A drought hits the upper Midwest and the price of wheat increases from $4.00 per bushel to $8.00 per bushel.
ANSWER: c. Kim works at the college bookstore. She gets a raise from $5.15 per hour to $5.20 per hour.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 4 RANDOM: Y
28. A rational decisionmaker takes an action only if
a.the marginal benefit is greater than the marginal cost
. ( lợi ích cận biên lớn hơn chi phí cận biên )
b.the marginal benefit is less than the marginal cost.
c.the average benefit is greater than the average cost.
d.the marginal benefit is greater than both the average cost and the marginal cost.
ANSWER: a. the marginal benefit is greater than the marginal cost.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 4 RANDOM: Y
29. You have spent $500 purchasing and repairing an old car which you expect to sell for $800 once the repairs
are complete. You discover that you need an additional part, which will cost $400, including labor, in order to
complete the repairs. You can sell the car as it is now for $300. What should you do?
a.You should complete the repairs and sell the car .
b.You should cut your losses and take the $300.
c.You should never sell something for less than it costs.
d.It doesn’t matter which action you take; the outcome is the same either way. ( việc thực hiện hành động
nào ko quan trọng dù gì kết quả cũng dẫn đến giống nhau thôi ) ANSWER: a. You should complete the repairs and sell the car.
TYPE: M KEY1: E SECTION: 1 OBJECTIVE: 4 RANDOM: Y
30. Economists understand that people respond to a.the wishes of policymakers. b.incentives . c.threats more than rewards.
d.tax breaks, but not tax hikes. ANSWER: b. incentives.
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31. Which of the following is important for policy makers to consider when designing public policy?
a.the possibility that policies might change behavior
b.the direct effect of policies
c.the indirect effect of policies d.all of the above ANSWER: d. all of the above
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 5 RANDOM: Y
32. U.S. laws requiring that drivers wear seat belts have resulted in
a.a reduction in both driver deaths and pedestrian deaths.
b.fewer accidents and fewer deaths per accident.
c.little change in the number of driver deaths, but more accidents and more pedestrian ( người đi bộ ) deaths.
d.fewer driver deaths, fewer accidents and fewer pedestrian deaths.
ANSWER: c. little change in the number of driver deaths, but more accidents and more pedestrian deaths. lOMoAR cPSD| 58097008
8 Chapter 1/The Ten Principles of Economics
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33. One effect of a government imposed seat belt law has been a.fewer pedestrian deaths. b.safer driving.
c.an increase in the number of accidents .
d.that everyone now wears seat belts.
ANSWER: c. an increase in the number of accidents.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 5 RANDOM: Y lOMoAR cPSD| 58097008
Chapter 1/The Ten Principles of Economics 9
34. In the former Soviet Union, producers were paid for meeting output targets ( mục tiêu đầu ra ) , not for
selling products. Under those circumstances, what were the economic incentives ( ưu đãi kinh tế ) for producers?
a.to produce good quality products so that society benefits from the resources used
b.to conserve on costs, so as to maintain efficiency in the economy
c.to produce those products that society desires most
d.to produce enough to meet the output target, without regard for quality or cost
ANSWER: d. to produce enough to meet the output target, without regard for quality or cost
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 5 RANDOM: Y
35. Trade can benefit a family
a.by allowing the family to buy a greater variety of goods and services at a lower cost.
b.by allowing each person to specialize in the activities he or she does best. c.a and b
d.only if the family is not in economic competition with other families. ANSWER: c. a and b
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 6 RANDOM: Y
36. Which is the most accurate statement about trade?
a.Trade makes some nations better off and others worse off.
b.Trade can make every nation better off.
c.Trading for a good can make a nation better off only if the nation cannot produce that good.
d.Trade helps rich nations and hurts poor nations. ANSWER: b. Trade can make every nation better off.
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37. Trade between the United States and Mexico
a.is a losing proposition for Mexico because U.S. workers are more productive.
b.is a losing proposition for the U.S. because Mexico has cheaper labor.
c.is like a sports contest: one side wins and the other side loses.
d.benefits both the United States and Mexico.
ANSWER: d. benefits both the United States and Mexico.
TYPE: M KEY1: C SECTION: 2 OBJECTIVE: 6 RANDOM: Y
38. The United States can benefit from trade a.with any nation.
b.only with nations which can produce goods the U.S. cannot produce.
c.with any nation not in economic competition with the U.S.
d.only with less-developed nations. ANSWER: a. with any nation.
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39. If Canada is better than the U.S. at producing hockey sticks, but the U.S. is better than Canada at producing roller blades,
a.the U.S. should impose a tariff on Canadian hockey sticks in order to protect jobs in the U.S. roller blade industry.
b.the U.S. should sell roller blades to Canada, and should buy Canadian hockey sticks.
c.the U.S. should subsidize its hockey stick industry so that it can compete with Canadian hockey sticks.
d.the U.S. should put a quota on the amount of Canadian hockey sticks imported.
ANSWER: b. the U.S. should sell roller blades to Canada, and should buy Canadian hockey sticks.
TYPE: M KEY1: C SECTION: 2 OBJECTIVE: 6 RANDOM: Y
40. Which of the following is the best statement about markets? lOMoAR cPSD| 58097008
10 Chapter 1/The Ten Principles of Economics
a.Markets are usually a good way to organize economic activity.
b.Markets are usually inferior to central planning as a way to organize economic activity.
c.Markets are flawed and are therefore not an acceptable way to organize economic activity.
d.Markets are a good way to organize economic activity in developed nations, but not in less-developed nations.
ANSWER: a. Markets are usually a good way to organize economic activity.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y 41. In a market economy, 40 ? ANSWER: a.
Markets are usually a good way to organize economic activity.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y 41 ? ANSWER: d. all of the above
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y 5 ? ANSWER: a.
if all members of society can have all they want of it. TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 6 ? ANSWER: d. water in a city
TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 7 ? ANSWER: b.
the study of how society manages its scarce resources. TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 8 ? ANSWER: d.
how countries choose national leaders TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y 9 ? ANSWER: lOMoAR cPSD| 58097008
Chapter 1/The Ten Principles of Economics 11 a.
To get something we like, we usually have to give up another thing we like. TYPE: M KEY1: D
SECTION: 1 OBJECTIVE: 2 RANDOM: Y 10
a.firms decide whom to hire and what to produce.
b.profit and self-interest guide the decisions of firms and households.
c.households decide which firms to work for and what to buy with their incomes. d.all of the above ANSWER: d. all of the above
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y ? ANSWER: c. the $6 he could have earned.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 2 RANDOM: Y 11 ? ANSWER: d.
there is a tradeoff because of reduced incomes to the firms’ owners, workers, and customers.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y 12 ? ANSWER: a.
society is getting the most it can from its scarce resources.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y 13 ? ANSWER: d.
the benefits of society’s resources are distributed fairly among society’s members.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y 14 ? ANSWER: b. fairness.
TYPE: M KEY 1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y 15 ? ANSWER: b.
there is usually a tradeoff between equity and efficiency.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y 16 lOMoAR cPSD| 58097008
12 Chapter 1/The Ten Principles of Economics ? ANSWER: c.
people work less and produce fewer goods and services.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 3 RANDOM: Y 17 lOMoAR cPSD| 58097008
Chapter 1/The Ten Principles of Economics 13
42. In a market economy, economic activity is guided by a.the government. b.prices. c.central planners. d.corporations. ANSWER: b. prices.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y ? ANSWER: b. what you give up to get it.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y 18 ? ANSWER: c.
the value of the best opportunity a student gives up to attend college. TYPE: M KEY1: C
SECTION: 1 OBJECTIVE: 3 RANDOM: Y 19 ? ANSWER: d.
the wages given up to attend school.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 2 RANDOM: Y 20 ? ANSWER: b.
what you give up to get that item.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y 21 ? ANSWER:
b. the enjoyment she would have received had she watched the video. TYPE: M KEY1: C
SECTION: 1 OBJECTIVE: 4 RANDOM: Y 22 ? ANSWER:
c. the enjoyment and exercise he would have received had he gone for a bike ride.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 3 RANDOM: Y 23 ? ANSWER:
d. are well aware that their opportunity cost of attending college is very high. TYPE: M
KEY1: C SECTION: 1 OBJECTIVE: 4 RANDOM: Y 24 lOMoAR cPSD| 58097008
14 Chapter 1/The Ten Principles of Economics ? ANSWER:
43. One advantage market economies have over central planning is that market economies a.are more efficient.
b.solve the problem of scarcity.
c.establish government economic control.
d.provide an equal distribution of goods and services to consumers. ANSWER: a. are more efficient.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y c. opportunity cost.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 3 RANDOM: Y 25 ? ANSWER: b. comparing costs and benefits.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 4 RANDOM: Y 26 ? ANSWER: d.
a small incremental adjustment.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 4 RANDOM: Y 27 ? ANSWER:
c. Kim works at the college bookstore. She gets a raise from $5.15 per hour to $5.20 per hour.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 4 RANDOM: Y 28 ? ANSWER: a.
the marginal benefit is greater than the marginal cost.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 4 RANDOM: Y 29 ? ANSWER: a.
You should complete the repairs and sell the car.
TYPE: M KEY1: E SECTION: 1 OBJECTIVE: 4 RANDOM: Y 30 ? ANSWER: b. incentives.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 5 RANDOM: Y 31 lOMoAR cPSD| 58097008
Chapter 1/The Ten Principles of Economics 15 ? ANSWER: d. all of the above
44. Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?
a.There is no such thing as a free lunch.
b.People buy more when prices are low than when prices are high.
c.No matter how much people earn, they tend to spend more than they earn.
d.Households and firms interacting in markets are guided by an “invisible hand” that
leads them to desirable market outcomes.
ANSWER: d. Households and firms interacting in markets are guided by an “invisible hand” that leads them to desirable market outcomes.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y
45. The “invisible hand” directs economic activity through
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 5 RANDOM: Y 32 ? ANSWER: c.
little change in the number of driver deaths, but more accidents and more pedestrian deaths.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 5 RANDOM: Y 33 ? ANSWER: c.
an increase in the number of accidents.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 5 RANDOM: Y 34 ? ANSWER: d.
To produce enough to meet the output target, without regard for quality or cost.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 5 RANDOM: Y 35 ? ANSWER: c. a and b
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 6 RANDOM: Y 36 ? ANSWER: b.
Trade can make every nation better off.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 6 RANDOM: Y 37 ? ANSWER: d.
benefits both the United States and Mexico.
TYPE: M KEY1: C SECTION: 2 OBJECTIVE: 6 RANDOM: Y lOMoAR cPSD| 58097008
16 Chapter 1/The Ten Principles of Economics 38 ? ANSWER: a. with any nation. lOMoAR cPSD| 58097008
Chapter 1/The Ten Principles of Economics 17 a.prices. b.mass media. c.subliminal messages. d.government regulations. ANSWER: a. prices.
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46. Adam Smith's book The Wealth of Nations was published in a.1692. b.1776. c.1816. d.1936. ANSWER: b. 1776.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y
TYPE: M KEY1: C SECTION: 2 OBJECTIVE: 6 RANDOM: Y 39 ? ANSWER: b.
the U.S.should sell roller blades to Canada, and should buy Canadian hockey sticks.
TYPE: M KEY1: C SECTION: 2 OBJECTIVE: 6 RANDOM: Y 42 ? ANSWER: b. prices.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y 43 ? ANSWER: a. are more efficient.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y 44 ? ANSWER: d.
Households and firms interacting in markets are guided by an “invisible
hand” that leads them to desirable market outcomes.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y 45 ? ANSWER: a. prices.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y 46 lOMoAR cPSD| 58097008
18 Chapter 1/The Ten Principles of Economics ? ANSWER: b. 1776.
47. The invisible hand works to promote general well-being in the economy primarily through a.government intervention. b.the political process. c.self interest. d.altruism. ANSWER: c. self interest.
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48. Taxes adversely affect the allocation of resources in society because
a.they do not always fall more heavily on the rich.
b.the taxes collected are not enough to finance government.
c.they distort prices and thus the decisions of households and firms. d.not everyone pays taxes.
ANSWER: c. they distort prices and thus the decisions of households and firms.
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49. When the government prevents prices from adjusting naturally to supply and demand, a.it stabilizes the economy.
b.it adversely affects the allocation of resources.
c.the improvement in equity justifies the reduction in efficiency.
d.the reduced uncertainty associated with fixed prices is worth more than the cost in lower efficiency.
ANSWER: b. it adversely affects the allocation of resources.
TYPE: M KEY1: C SECTION: 2 OBJECTIVE: 8 RANDOM: Y
50. The term market failure refers to 47 ? ANSWER: c. self interest.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y 48 ? ANSWER: c.
they distort prices and thus the decisions of households and firms.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 8 RANDOM: Y 49 ? ANSWER: b.
it adversely affects the allocation of resources.
TYPE: M KEY1: C SECTION: 2 OBJECTIVE: 8 RANDOM: Y lOMoAR cPSD| 58097008
Chapter 1/The Ten Principles of Economics 19 50 ? ANSWER: d.
a situation in which the market on its own fails to allocate resources efficiently.
a.a firm which is forced out of business because of losses.
b.an unsuccessful advertising campaign.
c.a situation in which competition among firms becomes ruthless.
d.a situation in which the market on its own fails to allocate resources efficiently.
ANSWER: d. a situation in which the market on its own fails to allocate resources efficiently.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y
51. The two best reasons for a government to intervene in a market are
a.to raise revenues and to promote stability.
b.to promote equity and to raise revenues.
c.to promote efficiency and to raise revenues.
d.to promote equity and to promote efficiency.
ANSWER: d. to promote equity and to promote efficiency.
TYPE: M KEY1: C SECTION: 2 OBJECTIVE: 7 RANDOM: Y
52. Causes of market failure include
a.externalities and foreign competition.
b.market power and incorrect forecasts of consumer demand.
c.externalities and market power.
d.incorrect forecasts of consumer demand and foreign competition. ANSWER: c. externalities and market power.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y 53. An externality is
a.the impact of society’s decisions on the well-being of society.
b.the impact of a person’s actions on that person’s well-being.
c.the impact of society’s decisions on the well-being of one person.
d.the impact of one person’s actions on the well-being of a bystander.
ANSWER: d. the impact of one person’s actions on the well-being of a bystander.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y 51 ? ANSWER: d.
to promote equity and to promote efficiency. TYPE: M KEY1: C
SECTION: 2 OBJECTIVE: 7 RANDOM: Y 52 lOMoAR cPSD| 58097008
20 Chapter 1/The Ten Principles of Economics ? ANSWER: c.
externalities and market power.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y 53 ? ANSWER: d.
the impact of one person’s actions on the well-being of a bystander.