Essentials of economics hubbard pdf

 

    Essentials of Economics (Hubbard/O'Brien) Chapter 1 Economics: Foundations and Models Three Key Economic Ideas 1) In an effort to serve. 4 days ago Essentials Of Economics Hubbard - [Free] Essentials Of Economics Hubbard [ PDF] [EPUB] ebookcom is the best free ebooks download. [Matching item] Essentials of economics / [R. Glenn] Hubbard [and others]. [Matching item] Essentials of economics / [R. Glenn] Hubbard [et al.]. [Matching item] Essentials of economics / R. Glenn Hubbard, Columbia University, Anthony Patrick O'Brien, Lehigh University.

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    Essentials Of Economics Hubbard Pdf

    , English, Book, Illustrated edition: Essentials of economics / R. Glenn Hubbard, Anne M. Garnett, Philip Lewis, Anthony O'Brien. Hubbard, Gleen R., ( author. Essentials Of Economics 4th Edition R Glenn Hubbard - [FREE] ESSENTIALS OF Internet Archive chartrolywfunccard.tk Books & Notes For All Semesters in PDF - 1st, 2nd. Test bank for Essentials of Economics 4th Edition by 1/08/ Hubbard & O' Brien answer this question by demonstrating that real businesses use.

    Adult; Specialized Summary The only Economics text that includes current Australian full articles and teaching application throughout the text. Hubbard includes solved problems within chapters. These solved problems keeps students focused on the main ideas of each chapter, and prevents them from getting bogged down due to a lack of basic math or word problem skills. A business approach is integrated throughout the book, using real-world business examples to teach economics. The digital offering available in this domain meets the current challenges and learning needs with the study plan reinforcing key concepts. Learning Catalytics enhances student engagement; analytics and gradebook assist academics in managing large student cohorts, requiring a high level of out-of-class support. The full text downloaded to your computer With eBooks you can: search for key concepts, words and phrases make highlights and notes as you study share your notes with friends eBooks are downloaded to your computer and accessible either offline through the Bookshelf available as a free download , available online and also via the iPad and Android apps. Upon download, you will receive via email the code and instructions on how to access this product. Time limit The eBooks products do not have an expiry date. You will continue to access your digital ebook products whilst you have your Bookshelf installed.

    Hit a particularly tricky question? Bookmark it to easily review again before an exam. The best part? As a Chegg Study subscriber, you can view available interactive solutions manuals for each of your classes for one low monthly price. Why download extra books when you can get all the homework help you need in one place? Can I get help with questions outside of textbook solution manuals?

    You bet! Just post a question you need help with, and one of our experts will provide a custom solution.

    You can also find solutions immediately by searching the millions of fully answered study questions in our archive. How do I view solution manuals on my smartphone? You can download our homework help app on iOS or Android to access solutions manuals on your mobile device. Recurring Learning Outcome: None 3 Which of the following statements about scarcity is true? 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 only arises when there is a wide disparity in income distribution.

    A Diff: Full file at https: A scarcity B efficiency C inflation D recession Answer: None 5 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. C Diff: A market B trade-off C variable D model Answer: D Diff: A in public locations monitored by the government B in any arena that brings together downloaders and sellers C in any physical location 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 Answer: A collective B cooperative C market D trade-off Answer: None 9 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.

    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. None 11 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. A equitably B rationally C emotionally D selfishly Answer: Car owners download more gasoline from a gas station that sells gasoline at a lower price than other rival gas stations in the area. 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.

    Firms produce more of a particular DVD when its selling price rises. Which of the above statements demonstrates that economic agents respond to incentives? E Diff: None 14 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. By using all available information as they act to achieve their goals, these investors are exemplifying the economic idea that A people are rational. None 16 Suppose the U. These doctors would be exemplifying the economic idea that A people are rational.

    None 17 Suppose the U. These consumers who did trade in their old automobiles to take advantage of the government offer would be exemplifying the economic idea that A people are rational. B people with health insurance are more likely to be overweight than people without health insurance.

    C people with health insurance are equally likely to be overweight as people without health insurance. D there is no correlation between having health insurance and being overweight. Making the Connection: 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. Special Feature: Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?

    None 22 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. None 23 Marginal analysis involves undertaking an activity A until its marginal costs start declining. B only when its marginal benefits are positive.

    C until its marginal benefits equal marginal costs. D only if its marginal costs are greater than its marginal benefits.

    A an additional unit B the total number of units C no units D only profitable units Answer: None 25 Making optimal decisions "at the margin" requires A making decisions according to one's whims and fancies. B making consistently irrational decisions.

    C weighing the costs and benefits of a decision before deciding if it should be pursued. D making borderline decisions. None 26 Making "how much" decisions involves A calculating the total benefits of the activity and determining if you are satisfied with that amount.

    Essentials of economics hubbard o brien pdf

    B calculating the total costs of the activity and determining if you can afford to incur that expenditure. C calculating the average benefit and the average cost of an activity to determine if it is worthwhile undertaking that activity. D determining the additional benefits and the additional costs of that activity. B marginal cost. C opportunity cost. D foregone cost. None 28 DeShawn's Detailing is a service that details cars at the customers' homes or places of work.

    What is DeShawn's marginal benefit if he sells a basic detailing package? D The marginal benefit cannot be determined. None 29 DeShawn's Detailing is a service that details cars at the customers' homes or places of work. What is the marginal cost of adding the engine detailing to the basic detailing package? Should DeShawn continue to offer the engine detailing service?

    A Yes, he still makes a profit by selling the engine detailing service with the basic detailing package. B Yes, but only if he raises the price of the basic detailing package. C No, his marginal benefit is less than his marginal cost.

    D More information is needed for DeShawn to make this decision. None 31 Allison's Auto Art is a company that applies pinstripes to vehicles. What is Allison's marginal benefit if she sells a basic 1-color job?

    None 32 Allison's Auto Art is a company that applies pinstripes to vehicles. What is the marginal cost of moving up from the 1-color application to the 3-color application? Should Allison continue to offer the 3-color pinstripe application? A Yes, she still makes a profit by selling the 3-color application B Yes, but only if she lowers the price of the 1-color application.

    C No, her marginal benefit is less than her marginal cost. D More information is needed for Allison to make this decision. We are producing the optimal number of cell phones.

    Using marginal analysis terminology, what is another economic term for the incremental revenue received from the sale of the last 3, cell phones? A gross earnings B marginal revenue C sales revenue D gross profit Answer: None 35 Refer to Scenario Using marginal analysis terminology, what is another economic term for the incremental cost of producing the last 3, cell phones?

    A marginal cost B operating cost C explicit cost D Any of the above terms are correct. Had the firm not produced and sold the last 3, cell phones, would its profit be higher or lower, and by how much? She is debating whether she should extend her hours of operation. Lydia figures that her sales revenue will depend on the number of extra hours the nail salon is open as shown in the table above. Using marginal analysis, by how many hours should Lydia extend her nail salon's hours of operation?

    What is Lydia's marginal benefit if she decides to stay open for an extra two hours instead of one hour? None 39 Refer to Table What is Lydia's marginal cost if she decides to stay open for an extra two hours instead of one hour? Thuy Anh figures that her sales revenue will depend on the number of extra hours the flower shop is open as shown in the table above. Using marginal analysis, by how many hours should Thuy Anh extend her flower shop's hours of operation?

    None 41 Refer to Table What is Thuy Anh's marginal benefit if she decides to stay open for an extra three hours instead of two hours? What is Thuy Anh's marginal cost if she decides to stay open for an extra three hours instead of two hours? None 43 Soo Jin shares a one-bedroom apartment with her classmate. She is considering moving to a studio apartment which she will not have to share with anyone.

    Recently, you ran into Soo Jin on campus and she tells you that she has moved into the studio apartment. Soo Jin is as rational as any other person. As an economics student, you rightly conclude that A Soo Jin did not have a choice; her roommate was a slob. D the cost of having one's own space outweighs the benefits.

    C as long as the weekly marginal cost does not rise. D until the marginal benefit the company receives reaches zero. Solved Problem: Consumers download more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area.

    Schools take steps to increase security since they believe it is more costly to allow vandalism than to hire additional security guards. Citrus growers produce more oranges when the selling price of oranges falls. A term used by economists to describe the money received from the sale of an additional large soft drink is A marginal revenue. B gross earnings. C pure profit. D net benefit. A revenue received from B extra cost of C total value of D sales tax on Answer: A Dinah's Diner is only open for breakfast and lunch.

    Dinah is trying to decide whether to open for dinner as well. B Zander has torn up his front yard and is debating whether to plant grass or install a rock garden. C You received a nice birthday check from your grandmother and are deciding on whether to spend it on a trip to New York or a trip to San Francisco. D Sergio quit his job to go back to school full time. None 49 Pookie's Pinball Palace restores old Pinball machines. What is his marginal benefit if he sells the machine "as is" now?

    None 50 Pookie's Pinball Palace restores old Pinball machines. What is the marginal cost of completing the task? What should he do? A He should sell the machine now to make the most profit. B It does not matter what he does; he is going to take a loss on his project.

    C He should rewire the machine, complete the task and then sell the machine. D He should have never downloadd the machine because he has already spent too much time on it and has not been paid for that time. We are producing the optimal number of hats. Using marginal analysis terminology, another economic term for the incremental revenue received from the sale of the last hats is A gross earnings.

    B marginal revenue. C sales revenue.

    Essentials of economics hubbard o brien pdf

    D gross profit. Using marginal analysis terminology, another economic term for the incremental cost of producing the last hats is A marginal cost. B operating cost. C explicit cost. D Any of the above terms are correct. None 54 Refer to Scenario Had the firm not produced and sold the last hats, would its profit be higher or lower, and by how much? He is debating whether he should extend his hours of operation. Santiago figures that his sales revenue will depend on the number of extra hours the store is open as shown in the table above.

    Using marginal analysis, by how many hours should Santiago extend his store's hours of operation? None 56 Refer to Table What is Santiago's marginal benefit if he decides to stay open for an extra two hours instead of one hour?

    What is Santiago's marginal cost if he decides to stay open for an extra two hours instead of one hour? None 58 Damian shares a small food truck with his sister. He has decided to get his own, newer food truck which he will not have to share with anyone. Damian is as rational as any other person. As an economics major, you rightly conclude that A Damian cannot afford the newer truck and will have to go back to sharing a truck with his sister. D the cost of having one's own truck outweighs the benefits.

    None 59 Technological progress has made it possible for firms such as Apple and Alivecor to develop small electronic devices, including smartwatches, smartphones, and products that can be attached to the smartwatches and smartphones, to serve consumers who have become more health conscious and wish to monitor various health conditions. A Firms attempt to maximize revenues. B Optimal decisions are made at the margin. C People are rational.

    D People respond to economic incentives. D resources. None 61 Scarcity refers to the situation in which A unlimited wants exceed limited resources. B unlimited resources exceed limited wants. C a country's population is larger than its resource base. D a nation's poverty level increases faster than its population.

    None 62 The basic economic problem of scarcity A has always existed and will continue to exist. B will eventually disappear as technology continues to advance. C is a problem only in developing economies. D does not apply to the wealthy in society. A downloads; unlimited B choices; scarce C income; available D decisions; household Answer: None 64 What is an economic model?

    A It is a description of an economic issue that includes all possible related information. B It is a description of an economic issue based on official government information. C It is a detailed version of some aspect of economic life used to analyze an economic issue.

    D It is a simplified version of some aspect of economic life used to analyze an economic issue. None 65 The term "market" in economics refers to A a place where money changes hands. B a legal institution where exchange can take place. C a group of downloaders and sellers of a product and the arrangement by which they come together to trade. D an organization which sells goods and services. B consumer behavior is explained by the existence of unlimited resources.

    C people put other people's interests ahead of their own. D optimal decisions are made at the margin. None 67 Which of the following best describes an assumption economists make about human behavior? A They assume that individuals act rationally all the time in all circumstances. B They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time.

    C They assume that people take into account the question of fairness in all decisions they make. D They assume that individuals act randomly. None 68 Economists assume that rational people A never use all available information as they act to achieve their goals. C only weigh the benefits and costs of the most desirable alternative actions.

    But we know that everyone's human, and we all make mistakes. A Yes, I agree with her. One cannot make predictions about economic behavior because in reality people make incorrect choices in many situations.

    B I disagree with her. Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave rationally, meaning they make the best decisions given their knowledge of the costs and benefits. C Yes, I agree with her. Economic theory should allow for irrational behavior so that we can have more reliable predictions. D I disagree with her. If we cannot assume that decisions are correct, then we will not be able to examine the moral implications of these decisions.

    None 70 Consider the following statements: Consumers rent more kayaks from a vendor that rents kayaks at a lower price than other rival kayak vendors along Waikiki beach. Department stores take steps to increase security since they believe it is more costly to allow shoplifting than to install expensive security monitoring equipment. Farmers produce more cotton when its selling price falls. The New York City Police recommended steps the bank could take to deter robberies, including the installation of plastic barriers called "bandit barriers.

    According to a deputy commissioner of police, "Commerce does very little of what we recommend. They've told our detectives they have no interest in ever putting in the barriers.

    Why wouldn't they do it? A The banks would rather delay installation of any theft deterring equipment in anticipation of new, lower-cost innovations in the security devices market. B The banks must have weighed the cost of installing bandit barriers against the benefits and decided that they have "no interest in ever putting in the barriers. D The banks probably resent any interference from the police department. None 72 Holding all other personal characteristics-such as age, gender, and income-constant, economists would expect that A people without health insurance will be less likely to be overweight than people with health insurance.

    B people without health insurance will be more likely to be overweight than people with health insurance. C people without health insurance will be equally likely to be overweight as people with health insurance. D there is no correlation between not having health insurance and being overweight.

    A Colorado was the only state B there were only 5 states C there were more than 25 states D there were no states Answer: Which of the following is a term used by economists to describe the money received from the sale of an additional ream of paper? None 76 Economics promotes which of the following as the way to make the best decision?

    A Continue an enjoyable activity as long as you do not have to pay for it. B Continue an enjoyable activity until it is no longer enjoyable. C Continue an enjoyable activity until you cannot afford to pursue it. D Continue an enjoyable activity up to the point where its marginal benefit equals its marginal cost. None 78 The revenue received from the sale of an additional unit of a product A is a marginal benefit to the firm. B is called profit.

    C is called gross sales. D is called a net gain. None 79 The cost incurred from the production of an additional unit of a product A is a marginal cost to the firm. B is called a loss. C is called opportunity cost. D must be zero for a firm to be efficient. C as long as its marginal cost does not rise.

    D until the marginal benefit it receives reaches zero. None 82 Which of the following is an example of a "how much" decision? A The Pleasantville movie theatre is open only in the evenings. The theatre's manager is debating whether to add daily matinee shows. B The Zhous have demolished their old home and are debating whether to build a ranch-style house or a Craftsman home. C You're planning to hold a graduation party and must decide between having your party catered or having a pot-luck.

    D Chelsea has withdrawn from the swim team to take a full-time job. C You plan on going to Las Vegas for your birthday and are deciding if you should fly or drive. D Diana is trying to decide if she should open her pet shop on Sundays.

    A total cost B additional cost C opportunity cost D forgone cost Answer: None 85 Cassie's Quilts alters, reconstructs, and restores heirloom quilts.

    What is her marginal benefit if she sells the quilt "as is" now? None 87 Cassie's Quilts alters, reconstructs, and restores heirloom quilts. What should she do? A She should cut her losses and sell the quilt now. B It does not matter what she does; she is going to take a loss on her project. C She should download the period fabric, complete the task and then sell the quilt.

    D She should not do any more work on the quilt because she has already spent too much time on it and has not been paid for that time. None 88 Lionel's Lawn Care is a company that maintains residential yards. What is Lionel's marginal benefit if he sells the standard package? What is Lionel's marginal cost of adding the shrub-trimming service to the standard package? None 90 Lionel's Lawn Care is a company that maintains residential yards.

    Should Lionel continue to offer the shrub-trimming service? A Yes, his marginal benefit is greater than his marginal cost. B Yes, but only if he raises the price of the standard package. D More information is needed for Lionel to make this decision. We are producing the optimal number of t-shirts.

    Using marginal analysis terminology, what is another economic term for the incremental revenue received from the sale of the last t-shirts? None 92 Refer to Scenario Using marginal analysis terminology, what is another economic term for the incremental cost of producing the last t-shirts? None 93 Refer to Scenario Had the firm not produced and sold the last t-shirts, would its profit be higher or lower, and if so by how much? Eva figures that her sales revenue will depend on the number of additional hours the bakery is open as shown in the table above.

    Using marginal analysis, how many hours should Eva extend her bakery's hours of operation? None 95 Refer to Table What is Eva's marginal benefit if she decides to stay open for two hours instead of one hour? What is Eva's marginal cost if she decides to stay open for two hours instead of one hour?

    Julius figures that his sales revenue will depend on the number of additional hours the tailor shop is open as shown in the table above. Using marginal analysis, how many hours should Julius extend his shop's hours of operation? What is Julius's marginal benefit if he decides to stay open for three hours instead of two hours? None 99 Refer to Table What is Julius's marginal cost if he decides to stay open for three hours instead of two hours? None Tabitha shares a flea market booth with her sister.

    She is considering moving to her own, larger booth which she will not have to share with anyone. Recently, you ran into Tabitha in the grocery store and she tells you that she has rented the larger booth.

    Tabitha is as rational as any other person. As an economics major, you rightly conclude that A Tabitha did not have a choice; her sister was overcharging her. D the cost of having one's own booth outweighs the benefits. Soda drinkers download more soda from a grocery store that sells soda at a lower price than other rival grocery stores in the area. Homeowners do not take steps to increase security even though they believe it is more costly to allow burglaries than to install security monitoring equipment.

    Manufacturers produce less of a particular cell phone when its selling price rises. None Suppose the U. These teachers would be exemplifying the economic idea that A people are rational. What is his marginal benefit if he sells the weather vane without restoring it? None Zane's Vanes is a service that restores old weather vanes. What is his marginal cost to complete the restoration?

    A He should sell the weather vane now to make the most profit. B It does not matter what he does; he is going to take a loss on the project. C He should finish the restoration and then sell the weather vane.

    D He should sell the weather vane back to the party he downloadd it from and cut his losses. Using marginal analysis terminology, what is another economic term for the incremental revenue received from the sale of the last cigars? None Refer to Scenario Using marginal analysis terminology, what is another economic term for the incremental cost of producing the last cigars? Had the firm not produced and sold the last cigars, would its profit be higher or lower, and if so by how much?

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    Ivan figures that his sales revenue will depend on the number of additional hours the jewelry shop is open as shown in the table above. Using marginal analysis, how many hours should Ivan extend his hours of operation? None Refer to Table What is Ivan's marginal benefit if he decides to stay open for six hours instead of five hours?

    What is Ivan's marginal cost if he decides to stay open for six hours instead of five hours? None Fiona shares an office with her ex-husband. She is considering moving to a home office which she will not have to share with anyone. The home office will not cost her anything as far as extra rent or utilities. Recently, you ran into Fiona at the gym and she tells you that she has moved into her home office.

    Fiona is as rational as any other person. As an economics major, you rightly conclude that A Fiona did not have a choice; her ex-husband was a jerk.

    C Fiona figures that the benefit of having her own office as opposed to sharing is zero, since she is no longer paying rent and utilities. D The cost of having one's own space outweighs the benefits. None Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants. TRUE Diff: None Scarcity is a problem that will eventually disappear as technology advances.

    None The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal benefit. None Optimal decisions are made at the point where marginal cost equals zero. None Even if the population declines, scarcity will still exist.

    None The term "market" refers to trading arrangements by which downloaders and sellers come together. None The additional cost to a producer of hiring an additional unit of labor is called the marginal cost. None Marginal benefit refers to the additional benefit that your activity provides to you.

    OraSure Makes a Decision at the Margin All economic questions arise from the fact that resources are scarce. None As population declines, scarcity eventually disappears. None The term "market" refers only to trading arrangements that have been approved by the government. None Marginal benefit is the benefit that your activity provides to someone else. OraSure Makes a Decision at the Margin An economic model is a complex version of reality used to analyze real-world economic situations. OraSure Makes a Decision at the Margin Explain the economic assumption that "people are rational.

    Rational individuals weigh the benefits and costs of each action, and they choose an action only if the benefits exceed the costs. None Explain the economic idea that "people respond to incentives. Human beings act from a variety of motives, including religious belief, envy, and compassion. In economics, the word "marginal" means "extra" or "additional. What must the additional cost of this once-a-week advertising be to make this advertising economically rational?

    People Are Rational Learning Outcome: An economic model is a simplified version of reality used to analyze real-world economic situations. None What is a marginal benefit? Marginal benefit is the additional benefit received from continuing with an activity. None What is a marginal cost? Marginal cost is the additional cost associated with continuing with an activity.

    At what additional cost would this increase in advertising not be considered economically rational? OraSure Makes a Decision at the Margin What is scarcity, and why is it a fundamental concept in economics? Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants. Scarcity is a fundamental concept in economics because economics is the study of the choices people make to attain their goals, given their scarce resources.

    None What is an economic market? An economic market refers to a group of downloaders and sellers of a good or service and the institution or arrangement by which they come together to trade. None What does the word "marginal" mean in economics? What is a marginal benefit? What is a marginal cost? What is marginal analysis?

    Marginal analysis involves comparing marginal benefits and marginal costs. What must the additional cost of this daily advertising be to make this advertising economically rational? Economics is the study of the choices people make to attain their goals, given their scarce resources.

    None Describe what has happened to state obesity rates in the United States since There has been a dramatic increase in obesity between and In , in a majority of states between 10 percent and 14 percent of the adult population was obese, and in no state was more than 20 percent of the adult population obese.

    By , in every state at least 20 percent of the adult population was obese, and in 43 states, at least 25 percent of the adult population was obese. A What will be the prices of goods and services; how will these goods and services be produced; and who will receive them? B What goods and services to produce; how will these goods and services be produced; and who receives them? C Who gets jobs; what wages do workers earn; and who owns what property?

    D How much will be saved; what will be produced; and how can these goods and services be fairly distributed? B efficiency. C trade-off. D equity. None 3 Society faces a trade-off in all of the following situations except A when deciding who will receive the goods and services produced. B when deciding what goods and services will be produced.

    C when deciding how goods and services will be produced. D when some previously unemployed workers find jobs. None 4 Which of the following statements is true? A Any time you have to decide which action to take you are experiencing economic equity. B Trade-offs do not apply when the consumers download a product for which there is excess supply, such as with a stock clearance sale. C Every individual, no matter how rich or poor, is faced with situations that require trade-offs.

    D Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited. A whether it is cheaper to produce with more machines or with more workers B whether it is to outsource the production of a good or service C whether or not consumers will download its products D whether it should produce more of its product Answer: None 6 The highest valued alternative that must be given up to engage in an activity is the definition of A economic equity.

    B marginal benefit. D marginal cost. A decreased B increased C fallen to zero D not changed Answer: What is the opportunity cost of downloading a cappuccino? What is the opportunity cost of downloading a Russian tea cake?

    What is the opportunity cost of her decision? A zero, since she will no longer be earning a salary B It depends on the "going rate" for home-care providers.

    A What goods and services are to be produced? B How are the goods and services to be produced? C Who will receive the goods and services produced? D How will the economy be planned? None 12 Automobile manufacturers produce a range of automobiles such as sports utility vehicles, luxury sedans, pickup trucks, and compact cars. What fundamental economic question are they addressing by making this range of products?

    A How will goods that consumers want be produced? B Why produce a variety of automobiles? C What goods will be produced? D Who will automobiles be produced for? None 13 Consider the following economic agents: A the government B producers C consumers D consumers and producers E the government, consumers, and producers Answer: B workers deciding to produce only what the boss says must be produced. C producers deciding what society wants most. D consumers and firms choosing which goods and services to download or produce.

    E consumers dictating to firms what they need most. None 15 Which of the following statements about the economic decisions consumers, firms, and the government have to make is false? A Governments face the problem of scarcity in making economic decisions. B Only individuals face scarcity; firms and the government do not.

    C Both firms and individuals face scarcity. D Each faces the problem of scarcity which necessitates trade-offs in making economic decisions. None 16 Why is it necessary for all economic systems to not only provide people with goods and services, but also restrict them from getting as much of these goods and services as they wish? A Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others.

    B Failure to do this could lead to an inequitable allocation of goods and services produced. C Failure to do this could lead to drastic shortages of goods and services. D Failure to do this could reduce efficiency and lead to an inequitable allocation of output. A lawmakers and other politically favored groups B those who are willing and able to download them C everyone receives an equal amount D people who earn the highest incomes Answer: None 18 How are the fundamental economic decisions determined in North Korea?

    A Individuals, firms, and the government interact in a market to make these economic decisions. B These decisions are made by the country's elders who have had much experience in answering these questions.

    C The government decides because North Korea is a centrally planned economy. None 19 How are the fundamental economic questions answered in a market economy? A The government alone decides the answers. B Individuals, firms, and the government interact in markets to decide the answers to these questions.

    C Households and firms interact in markets to decide the answers to these questions. D Large corporations alone decide the answers. A Households and firms make poor decisions in choosing how resources are allocated. B There is too little production of low-cost, high-quality goods and services. C Production managers are more concerned with satisfying consumer wants than with satisfying government's orders.

    D Exports tend to exceed imports. None 21 All of the following contributed to the downfall of the Soviet Union in except A public dissatisfaction with low living standards and political repression.

    B an inability to produce low-cost consumer goods that households wanted. C lack of high-quality goods and services. D lack of a strong dictator who could coordinate economic activities. B firms produce the goods and services that consumers value most. C firms produce goods and services at the lowest cost.

    D there are no shortages or surpluses in the market. A allocative efficiency B productive efficiency C equity D efficient central planning Answer: None 25 Allocative efficiency is achieved when firms produce goods and services A at the lowest possible cost. B that consumers value most. C at the lowest opportunity cost.

    D at a marginal cost of zero. None 26 Markets promote A equity and competition. B voluntary exchange and equality. C equity and equality. D competition and voluntary exchange. A Competition forces firms to outsource the production of their labor-intensive products. B Competition forces firms to undercut their selling price, thus benefiting consumers who will be able to download products at the lowest price possible.

    C Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production. D Competition forces firms to add only low profit margins to their costs of production. None 29 Which of the following generates productive efficiency? A competition among sellers B competition among downloaders C government inspectors D government production rules and regulations Answer: A scarcity B allocative efficiency C productive efficiency D equity Answer: None 31 Which of the following is a result of a market economy?

    A environmental protection B an equal income distribution C agreement on equity D voluntary exchange Answer: None 32 Political candidates often hold fundraisers by charging "per plate" for dinner.

    Does this transaction benefit both parties? A No, political candidates should never be allowed to overcharge for a fundraising dinner as that limits the number of people who can afford to attend.

    B Yes, it was a voluntary exchange that benefited both parties. C No, Wendy paid too much for four dinners. B the hardest working individuals consume all they want. C only elected officials have high standards of living. D economic benefits are distributed fairly. None 34 Which of the following is motivated by an equity concern?

    A Some states have transferred funds to food bank programs in order to increase benefits to lower- income families. B Following the implementation of subsidies for energy conservation, household demand for rooftop solar panels increased quite significantly in California.

    C The United Network for Organ Sharing advocates a system of rationing scarce kidneys that would favor young patients over old in an effort to wring more life out of donated organs. D The United States offers patent protection to pharmaceutical manufacturers to prevent others from duplicating their products.

    None 35 Which of the following is motivated by an efficiency concern? A In December , the Bush administration restarted a short-term housing assistance program for victims of Hurricane Katrina. B Each year, the University of Notre Dame conducts a lottery to parcel out the 30, seats available to contributors, former athletes, and parents in the 80,seat stadium. D The federal government's housing choice voucher program assists very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market.

    Instead of allocating resources to states in proportion to reported AIDS cases, resources should flow first to those activities that prevent more infections per dollar and then to less and less effective combinations of programs and populations until funds are exhausted, even if it means that some populations would be left without any prevention services.

    B Concerned about the falling birth rate, the French government has pledged more money for families with three children, in an effort to encourage working women to have more babies. C Some U. D All New York City art museums are considering adopting a free-admission policy for local residents one weekend per month.

    None 37 Which of the following correctly describes the relationship between economic efficiency and economic equity? A They are both automatically achieved in a free market economy. B They always call for opposite outcomes. C There is no conflict between the two goals. D There is often a trade-off between the two.

    A how something will be produced; when something will be produced B when something will be produced; why something will be produced C why something will be produced; what will be produced D what will be produced; how something will be produced Answer: What is the opportunity cost of downloading a goldfish? What is the opportunity cost of his decision? None 41 Jewelry manufacturers produce a range of products such as rings, necklaces, bracelets, and brooches.

    What fundamental economic question are they addressing by offering this range of items? A How to produce goods that consumers want? B Why produce a variety of items? C What to produce? D Who to produce the items for? None 43 In a modern mixed economy, who decides what goods and services will be produced? A the producers B consumers C the government D all of the above Answer: None 44 How are most fundamental economic decisions now determined in China?

    C The government decides because China is a centrally planned economy. D The United Nations decides because China is a developing economy. A a marginal benefit to society equal to the marginal cost of producing it B a marginal benefit to society greater than the marginal cost of producing it C a marginal benefit to society less than the marginal cost of producing it D a marginal benefit to society equal to zero Answer: A increases; they both benefit B increases; only one party benefits C decreases; neither benefit D decreases; they both benefit Answer: None 47 All centrally planned economies A have been political dictatorships.

    B started out as market economies. C began as mixed economies. D have become mixed economies. Peabody chooses to invest in companies that produce goods and services at the lowest possible cost.

    Peabody is investing in companies that are A allocatively efficient. B productively efficient. C guaranteed to make a profit. D all of the above Answer: None 49 Mr. Peabody chooses to invest in companies that produce goods and services based on consumer preferences.