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3. When an economy uses the most efficient means of farming to grow as much corn as
possible, this economy has achieved:
A) production efficiency and allocative efficiency.
B) neither production efficiency nor allocative efficiency.
C) production efficiency but not necessarily allocative efficiency.
D) allocative efficiency but not necessarily production efficiency.
Page 1
5. Which question would be considered a normative question?
A) How many people participated in obstacle course racing last year?
B) How much does an entry into an obstacle course race cost?
C) When and where are the major obstacle races held?
D) Should obstacle races be regulated to ensure the safety of its participants?
6. Tim woke up this morning with a stomachache and decided to skip class in order to get
more rest. What is the opportunity cost of Tim's decision to sleep in?
A) the improvement in how he feels by getting more rest
B) the level of pain he endured from the stomachache
C) the value of attending the class he decided to miss
D) the actual enjoyment of lying in bed instead of sitting in class
7. Students who never miss class and study hard generally earn higher grades than those
who do not. This is an example of:
A) incentives.
B) specialization.
C) market failure.
D) marginal cost.
8. At an amusement park, Sue achieves an enjoyment value of 10 on her first roller coaster
ride and an enjoyment value of 6 on her second ride. Her marginal benefit from her
second ride is:
A) 4.
B) 6.
C) 8.
D) 16.
Page 2
10. Which policy is MOST likely to contribute to improved standards of living over time?
A) addressing teacher shortages by closing schools and busing students to other
schools
B) allowing individuals the freedom to circumvent laws due to personal objections to
them
C) reducing the years that drug patents are valid to speed up production of generic
versions
D) adding after-school art and music programs to promote creativity
13. Economics is a:
A) natural science.
B) physical science.
C) life science.
D) social science.
14. Economics is a social science that involves the study of how individuals, firms, and
societies:
A) maximize happiness.
B) maximize incomes.
C) choose among alternatives to satisfy their unlimited wants.
D) develop their tastes and preferences.
Page 3
16. Scarcity is BEST defined as when:
A) the quantity demanded exceeds the quantity supplied.
B) the quantity supplied exceeds the quantity demanded.
C) unlimited resources exceed limited wants.
D) unlimited wants exceed limited resources.
19. Reasons to study economics include all of these EXCEPT that you:
A) will always live in a world of scarcity and choices.
B) will understand more about how governments and businesses interact.
C) may become a better prepared voter.
D) will learn exactly how to invest your cash short term for the highest return on
investment.
21. To say that economics is a way of thinking about how people make rational decisions
means that people:
A) don't consider the cost of their decisions.
B) consider only monetary terms in their decisions.
C) respond to incentives.
D) are irrational.
Page 4
22. When economists assume people make rational decisions, it means that:
A) people never make mistakes.
B) a rational person can never appear to make irrational decisions.
C) people are always selfish.
D) a rational person will respond to the benefits and costs associated with incentives.
26. The field of economics that focuses on decision making by individuals, businesses,
industries, and governments is called:
A) macroeconomics.
B) decision science.
C) minieconomics.
D) microeconomics.
27. The field of economics that is concerned about the broader issues in the economy, such
as inflation, unemployment, and national output of goods and services is called:
A) macroeconomics.
B) microeconomics.
C) national economics.
D) labor force economics.
Page 5
28. Microeconomics is concerned with issues such as:
A) inflation.
B) unemployment.
C) which job to take.
D) interest rates.
31. A recent decision regarding the Federal Reserve's impending interest rate increase is an
example of a _____ topic. On the other hand, a debate on the impact of the arrival of
Uber on local taxi businesses is an example of a _____ topic.
A) microeconomic; macroeconomic
B) macroeconomic; macroeconomic
C) microeconomic; microeconomic
D) macroeconomic; microeconomic
Page 6
33. Which scenario does NOT fall under the category of microeconomics?
A) Cooks at McDonalds supply labor in return for wages.
B) The cost of living has risen due to rising housing and food prices.
C) Jonathan decided to go to the movies instead of going to work.
D) Pepsi experienced an increase in revenue last quarter.
Page 7
39. Which topic is a macroeconomic topic?
A) the study of the business cycle
B) price of a pair of Nike shoes
C) total sales for GE in 2009
D) labor market for computer analysts
Page 8
45. Which statement regarding macroeconomics and microeconomics is TRUE?
A) Microeconomics examines consumer behavior, while macroeconomics studies
business behavior.
B) Macroeconomics employs many of the same analytical tools as microeconomics.
C) Because it focuses on national economies, macroeconomics does not study
international trade and finance.
D) Neither macroeconomics nor microeconomics is concerned with prices.
Page 9
51. Economists like to use graphs and equations primarily because:
A) these tools efficiently express economic concepts.
B) economics should be difficult.
C) mathematical aptitude is necessary to understand economics.
D) the use of mathematics reduces rigor.
52. A theory composed of a number of assumptions and facts boiled down to their basic
relevant elements is called a:
A) metaphor.
B) model.
C) conclusion.
D) practice.
Page 10
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57. _____ occur(s) when goods are produced at the lowest possible cost, and _____ occur(s)
when individuals who desire a product the most receive those goods and services.
A) Production efficiency; allocative efficiency
B) Production possibilities; allocative possibilities
C) Allocative possibilities; production possibilities
D) Allocative efficiency; production efficiency
60. When goods are produced at the lowest possible cost, an economy is said to have
achieved:
A) production efficiency.
B) allocative efficiency.
C) cheap production.
D) inferior quality goods.
Page 11
63. A society that is able to produce goods and services at the lowest possible cost is
experiencing:
A) allocative efficiency.
B) production efficiency.
C) opportunity costs.
D) scarcity.
64. In the study of economics, the goals of efficiency and equity are often:
A) compatible.
B) in conflict with one another.
C) objectively definable.
D) given equal emphasis.
Page 12
69. If a society produces a pie at the lowest possible cost and then distributes the pie evenly
among its population, then:
A) production and allocative efficiency are achieved.
B) only production efficiency is achieved.
C) neither production efficiency nor allocative efficiency is achieved.
D) only allocative efficiency is achieved.
71. Economists generally have _____ to say about equity than efficiency.
A) less
B) a little bit more
C) about the same
D) much more
74. When goods are produced at the lowest possible cost, the economy is experiencing:
A) allocative efficiency.
B) production efficiency.
C) equity.
D) deflation.
Page 13
75. When the individuals who get a good or service are the ones who desire that product the
most, the economy is experiencing:
A) allocative efficiency.
B) production efficiency.
C) equity.
D) deflation.
79. Consider the following statements. Which, if any, are positive statements?
I. Main Street needs more coffee shops.
II. A new parking garage on campus will reduce parking congestion.
III. Last winter, the state should have spent more money on snow removal.
A) I
B) I and II
C) II only
D) I, II, and III
Page 14
81. Scarcity:
A) is synonymous with poverty.
B) is eliminated with greater technology.
C) is faced by all individuals and societies.
D) can be eliminated with adequate resources.
82. The idea that wants are virtually unlimited but the resources to meet those wants are
limited is called:
A) the want–resource paradox.
B) the economic gap.
C) the dismal conclusion.
D) scarcity.
84. There would be no economic problems in a world where all resources are:
A) unlimited.
B) privately owned.
C) owned by the government.
D) scarce.
Page 15
87. When economists say that all societies face scarcity, they are describing:
A) free lunches.
B) unlimited resources.
C) unlimited wants.
D) tradeoffs societies must make.
90. What would be a possible opportunity cost of you going to a doctor for a check-up?
A) the cost of getting nontraditional care
B) the opportunity to make an acquaintance in the waiting room
C) lost income due to not being at work for those hours
D) the cost of the insurance reimbursing the doctor
91. An airline finds that its 6 A.M. flights are half-empty but the mid-afternoon flights are
full. Which would be the MOST plausible statement for an economist to make?
A) Cut the price of the early morning flight and raise the price of the afternoon flight.
B) Nothing can be done to rectify the situation because of consumer sovereignty.
C) Fewer flights should be scheduled in the afternoon to force travelers to take the
morning flight.
D) Nothing can be done because travelers are inflexible with their schedules.
Page 16
93. Assume that a student attends a four-year college with tuition costs of $20,000 per year,
room and board costs of $5,000 per year, and books/entertainment costs of $1,000 per
year. If the student did not go to college, she would work at a job that pays $25,000 per
year but still face the same room and board and entertainment expenses. The
opportunity cost of attending college for this student for four years is:
A) $180,000
B) $80,000
C) $100,000
D) $124,000
94. The opportunity cost of buying a ticket to a major league baseball game and then going
to the game is:
A) the price of the ticket.
B) the next best alternative that could have been undertaken.
C) the time spent at the game.
D) all other alternative activities that could have been undertaken.
95. _____ costs include the time and money that could have been spent on another highly
valued activity.
A) Opportunity
B) Marginal
C) Social
D) Total
96. John chose to buy a pizza. If he had not bought the pizza, he would have bought either
a hot dog or a burger. John's opportunity cost of buying the pizza is:
A) the hot dog
B) the burger
C) both the burger and the hot dog
D) whichever alternative, the hot dog or the burger, has the next highest value to John
Page 17
98. The _____ of parking at school includes the amount of time a person has to search for a
parking space.
A) opportunity cost
B) equity concerns
C) efficiency
D) productivity
99. If you were not studying economics, you could be doing one of the following: sleeping
in (which you value at $5), playing cards with your friends (which you value at $10), or
working (you would have earned an extra $8). The opportunity cost of studying
economics is therefore:
A) $23.
B) $10.
C) $8.
D) $5.
100. When the government chooses to use resources to build tourist centers, the selected
resources are no longer available to build highways. This BEST illustrates the concept
of:
A) macroeconomics.
B) scarcity.
C) opportunity cost.
D) efficiency.
101. Suppose Mike has three hours of time to spend so he ranks the following activities in
order of priority: (1) see a movie, (2) attend a ball game, (3) study economics. Assume
that each activity takes three hours. What is Mike's opportunity cost of seeing the
movie?
A) attending a ball game and studying economics
B) studying economics
C) attending a ball game
D) either attending a ball game or studying economics
102. The _____ the opportunity cost of an activity, the _____ a person will do that activity.
A) higher; more
B) higher; less
C) lower, less
D) It doesn't matter. Price alone will determine the action.
Page 18
103. Opportunity costs exist because:
A) using resources for one activity means that their use elsewhere must be given up.
B) sellers are unwilling to give up their product without a price.
C) there are opportunities to find ways to reduce costs.
D) buyers always have an opportunity to go to another seller.
104. The highest valued alternative that is forgone when you choose an action is called its:
A) opportunity cost.
B) utility.
C) scarcity.
D) benefit.
106. Which scenario can occur when specialization in tasks is coupled with trade?
A) It can lead to gains for all parties.
B) It leads to gains for one party and losses for the other parties.
C) It leads to losses for all parties.
D) It works only with government intervention.
108. Which statement is TRUE about specialization and exchange between two individuals?
A) They generally benefit the poorer individual at the expense of the richer individual.
B) They generally benefit the richer individual at the expense of the poorer individual.
C) They generally benefit the poorer individual as well as the richer individual.
D) They generally benefit neither the poorer individual nor the richer individual.
Page 19
109. Employers give stock options to full-time employees who have been on the job more
than three years. This is an example of:
A) people following incentives.
B) thinking on the margin.
C) irrational behavior.
D) opportunity costs.
Page 20
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115. Which statement is a key idea in economic thinking?
A) Scarcity exists for the poor but not for the rich.
B) Incentives matter.
C) The value of a good can be objectively measured and is the same for everyone.
D) All of these are key ideas in economic thinking.
118. Rational behavior requires thinking at the margin. Which example represents this type
of thinking?
A) deciding whether a second burger is worth the extra $2
B) deciding whether the overtime pay is worth working on your day off
C) deciding whether to pay a fine for polluting the local harbor or installing
antipollution machinery
D) All of these examples represent thinking at the margin.
120. Suppose that a store sells candy bars for $0.89 for one and $1.50 for two. The marginal
cost of the second candy bar is:
A) $0.61.
B) $0.75.
C) $0.89.
D) $1.50.
Page 21
121. Which question is NOT an example involving marginal analysis?
A) Should a university offer another section of a class?
B) Should a restaurant stay open another hour?
C) Should K-Mart rebrand all its stores to using the Sears name?
D) Should Boeing hire another assembly-line worker?
122. When economists use the word “additional,” they generally mean:
A) rational.
B) economics.
C) marginal.
D) opportunity cost.
123. Hitting your snooze alarm before you get out of bed is an example of:
A) thinking at the margin.
B) efficiency.
C) equity.
D) market equilibrium.
126. If a restaurant that traditionally has served only lunch and dinner wants to open for
breakfast, which of the following factors should be considered?
A) rent
B) furniture
C) cost of the additional food
D) insurance costs
Page 22
127. People use _____ to determine how many hours to work, and businesses use _____ to
determine how much of their product they are willing to supply to the market.
A) marginal analysis; marginal analysis
B) allocative efficiency; production efficiency
C) production efficiency; marginal analysis
D) marginal analysis; allocative efficiency
128. The extra cost associated with undertaking some action is its:
A) marginal benefit.
B) marginal cost.
C) net cost.
D) total cost.
129. Because people make decisions at the margin, when deciding whether to purchase a
second car, they would therefore compare:
A) the dollar cost of having two cars with the potential income the two cars may
generate.
B) the additional benefits expected from a second car with the total cost of the two
cars.
C) the additional benefits expected from a second car with the additional costs of the
second car.
D) None of the answers is correct.
Page 23
132. Heather has one employee in her sweater shop who can sew six sweaters a day. When
she hires a second person, the two employees can make ten sweaters together. Thinking
at the margin, the extra benefit received from hiring a second worker is _____ sweaters.
A) 16
B) 10
C) 4
D) 6
134. Private markets will typically maximize production efficiency because they provide:
A) incentives for profit.
B) equity.
C) market information.
D) tax revenue for the government sector.
Page 24
138. What drives and disciplines markets?
A) equity
B) prices and profits
C) ceteris paribus assumptions
D) efficiency
Page 25
144. One of the key ingredients in making rational choices is access to:
A) sufficient funds.
B) information.
C) foreign markets.
D) a university psychology department.
145. When consumers have no choice but to buy from one firm (local utility, etc.):
A) they usually end up paying too much for the good or service.
B) government regulation is usually used to protect consumers.
C) they will always get the good or service at the lowest price available.
D) None of these occur.
146. Which statement describes a time in the economy when the government should
intervene?
A) Consumers cannot make up their minds what they want to purchase.
B) Sellers make poor business decisions.
C) Producers use the least-cost methods of production.
D) The market fails to provide goods efficiently.
149. People tend to make rational choices for which they rely on:
A) scarcity.
B) utility.
C) information.
D) ceteris paribus.
Page 26
150. Economists believe that:
A) making information available to market participants improves market function.
B) information should be sold to the highest bidder.
C) the flow of information has minimal impact on market efficiency.
D) data is more important to traders than information.
151. When the _____ outweigh(s) the _____ of the information, people will attempt to obtain
the information.
A) costs; benefits
B) benefits; costs
C) equity; efficiency
D) efficiency; equity
152. Joan is trying to gather information on the membership at her Zen Center. She
estimates that it will cost around $1,000 to gather the information but expects the
information to lead to increased membership revenue of $1,100. Based on this
information, Joan should:
A) not gather the information since she will only gain $100.
B) gather the information since the net gain will be $100.
C) not gather the information since it will cost money and the Zen Center is a not-for-
profit organization
D) gather the information regardless of the cost.
154. For a nation, _____ productivity growth leads to _____ standards of living.
A) high; low
B) low; high
C) high; unchanging
D) high; high
Page 27
155. Economists generally do NOT define an institution as a:
A) government free of corruption.
B) government that controls resource allocation.
C) legal system that enforces contracts and laws.
D) strong monetary system.
157. The country of Economia has a higher productivity rate than Productstan. Which
statement is therefore correct?
A) Economia has a lower standard of living for its citizens than Productstan.
B) It cannot be determined from what is said which country has the higher standard of
living.
C) Economia has a higher standard of living for its citizens than Productstan.
D) It can be assumed that both have the same high standard of living because
productivity and living standards are unrelated.
Page 28
161. Time series graphs:
A) show data that can be split into percentages that, when combined, make up the
whole.
B) show the relative importance of some variable's components as a share of the
whole.
C) include the value of a variable on the horizontal axis and minutes, hours, days,
months, quarters, or years on the vertical axis.
D) include the value of a variable on the vertical axis and minutes, hours, days,
months, quarters, or years on the horizontal axis.
163. A graph of a business cycle that plots output on the vertical axis and quarters of the year
on the horizontal axis is an example of a:
A) bar chart.
B) pie chart.
C) scatter plot.
D) time series.
164. If you plot temperature on the y axis and time on the x axis, you have created a:
A) time series.
B) scatter plot.
C) pie chart.
D) bar chart.
Page 29
165. (Figure: Graph Examples) Which graph is an example of a scatter plot?
A) graph A
B) graph B
C) graph C
D) graph D
Page 30
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"Siellä täytyy varmasti olla haaskoja", mutisi van Bloom.
9. luku.
MAKAAVA LEIJONA.
10. luku.
LEIJONA SATIMESSA.
Voidakseen avata oven olisi leijonan pitänyt älytä nostaa säppiä tai
muussa tapauksessa murtautua läpi paksujen, vankkojen lautojen —
kumpaakaan ei tarvinnut pelätä.
Mutta akkuna oli vielä auki, ja sen kautta leijona voisi helposti
hypätä ulos. Swartboy aikoi tietysti sulkea sen samalla tavoin kuin
ovenkin.
11. luku.
LEIJONAN KUOLEMA.
Jos leijonan olisi voinut nähdäkin, ei ollut reikää, josta olisi voinut
työntää sisään pyssynsuun ja ampua. Se oli aivan yhtä turvassa kuin
sen vangitsijatkin; ja niin kauan kuin ovi pysyi kiinni, eivät he voineet
vahingoittaa sitä enemmän kuin sekään heitä.
He voisivat jättää sen telkien taa ja antaa sen kuolla nälkään. Se
voisi elää jonkun aikaa sillä, mitä sakaalit olivat jättäneet, ja kahden
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täytyisi antautua ja surkeasti menehtyä. Tämä ei kuitenkaan
näyttänyt niin varmalta van Bloomista ja hänen seuralaisistaan.
Huomatessaan olevansa todella häkkiin teljettynä, peto voisi ryhtyä
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murtautumaan sen lävitse.
Sekä ovessa että akkunassa oleva reikä sallisi heidän ampua petoa
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kenttäkornettia. Hänellä ja hänen joukollaan ei ollut aikaa tuhlata;
heidän hevosensa olivat nälästä heikkoja; ja pitkä matka oli heidän
edessään ennenkuin saisivat suupalaakaan. Ei, aikaa oli niukalta
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sinkoili kaikille suunnille. Savutorvi olisi kohta sen leveän rinnan
alapuolella, ja sitten —
12. luku.
PAKINAA LEIJONASTA.
MATKAMIEHET YÖPYVÄT.
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