Economics for Non-Majors Question Bank
Course Introduction
Economics for Non-Majors introduces students to the foundational concepts and analytical tools of economics, emphasizing real-world applications in both personal and professional contexts. The course covers basic principles such as supply and demand, market structures, opportunity cost, and the role of government in the economy, all with minimal technical jargon or advanced mathematics. By exploring current economic issues and everyday decision-making processes, students gain insights into how economic forces shape society and their own lives, preparing them to think critically about topics like inflation, unemployment, and international trade.
Recommended Textbook Essentials of Economics 4th Edition by R.
Glenn Hubbard
Available Study Resources on Quizplus
19 Chapters
6487 Verified Questions
6487 Flashcards
Source URL: https://quizplus.com/study-set/1388
Page 2
Chapter 1: Economics: Foundations and Models
Available Study Resources on Quizplus for this Chatper
444 Verified Questions
444 Flashcards
Source URL: https://quizplus.com/quiz/27665
Sample Questions
Q1) Cassie's Quilts alters,reconstructs and restores heirloom quilts.Cassie has just spent $800 purchasing,cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished.After having spent $800,Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task.Alternatively,she can sell the quilt "as is" now for $900.What is her marginal benefit if she sells the quilt "as is" now?
A)$100
B)$900
C)She makes a marginal loss of $600, not a marginal benefit.
D)The marginal benefit cannot be determined.
Answer: B
Q2) ________ is a problem that occurs when one concludes that a change in variable X caused a change in variable Y when in actual fact,it is a change in variable Y that caused a change in variable X.
A)The omitted variable
B)The positive-to-negative relationship
C)Reverse causality
D)Nonlinear slope
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter
Available Study Resources on Quizplus for this Chatper
498 Verified Questions
498 Flashcards
Source URL: https://quizplus.com/quiz/27666
Sample Questions
Q1) Refer to Table 2-20.What is Japan's opportunity cost of producing one wristwatch?
A)0.04 pounds of rice
B)4 pounds of rice
C)25 pounds of rice
D)40 pounds of rice
Answer: C
Q2) What does the term "increasing marginal opportunity cost" mean? How are increasing marginal opportunity costs represented on a bowed out production possibilities frontier?
Answer: Increasing marginal opportunity costs means that as more and more of a product is made,the opportunity cost of making each additional unit rises.They are represented by moving down a bowed out production possibilities frontier.
Q3) Any output combination along a production possibility frontier is associated with fully utilized resources.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Where Prices Come From: the Interaction of
Demand and Supply
Available Study Resources on Quizplus for this Chatper
475 Verified Questions
475 Flashcards
Source URL: https://quizplus.com/quiz/27667
Sample Questions
Q1) Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right,but the supply curve shifts more than the demand curve.As a result
A)both the equilibrium price and quantity of DVD players will decrease.
B)the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease.
C)the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase.
D)the equilibrium price of DVD players will decrease; the equilibrium quantity will increase.
Answer: D
Q2) If the price of train tickets decreases,what will be the impact in the market for bus travel?
A)The demand curve for bus travel shifts to the right.
B)The quantity of bus travel demanded increases.
C)The demand curve for bus travel shifts to the left.
D)The quantity of bus travel demanded decreases.
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Market Efficiency and Market Failure
Available Study Resources on Quizplus for this Chatper
465 Verified Questions
465 Flashcards
Source URL: https://quizplus.com/quiz/27668
Sample Questions
Q1) Refer to Figure 4-25.The market equilibrium price of gasoline is ________ per gallon.
A)$3.00
B)$3.75
C)$4.25
D)$5.00
Q2) Which of the following describes how a negative externality affects a competitive market?
A)The externality causes a difference between the private cost of production and the social cost.
B)The externality causes a difference between the private cost of production and the private benefit from consumption.
C)The externality causes consumer surplus to exceed producer surplus.
D)The externality causes a difference between the private cost of production and the equilibrium price.
Q3) What is a private cost of production? What is a social cost of production? When is the private cost of production equal to the social cost of production?
Q4) What area on a supply and demand graph represents producer surplus?
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: The Economics of Health Care
Available Study Resources on Quizplus for this Chatper
334 Verified Questions
334 Flashcards
Source URL: https://quizplus.com/quiz/27669
Sample Questions
Q1) Refer to Figure 5-2.The market equilibrium price is
A)$60.
B)$50.
C)$40.
D)<$40.
Q2) In the United States in 2012,the percentage of people without any form of health insurance was about
A)16%.
B)29%.
C)64%.
D)83%.
Q3) Under current U.S.tax laws individuals do not pay taxes on health insurance benefits they receive from their employers.
A)True
B)False
Q4) Adverse selection refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Firms, the Stock Market, and Corporate Governance
Available Study Resources on Quizplus for this Chatper
250 Verified Questions
250 Flashcards
Source URL: https://quizplus.com/quiz/27670
Sample Questions
Q1) Which of the following is an advantage of starting a new business as a corporation?
A)double taxation
B)ease in setting up
C)low expenses of legally organizing
D)greater ability to raise funds
Q2) In October 2013,General Motors (GM)posted a price-earnings ratio of 10.13.If the price of the stock at that time was $36 per share,which of the following must have been true?
A)GM's revenues that month were $364.68 million.
B)GM's earnings per share was $3.55.
C)GM's coupon payment was $36 per year.
D)GM's dividend yield for the year was 36.5%.
Q3) A bond's coupon payment divided by the bond's current price is equal to the bond's
A)dividend yield.
B)current yield.
C)price-earnings ratio.
D)maturity value.
Q4) What type of business has the potential for double taxation of profits and why?
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Consumer Choice and Elasticity
Available Study Resources on Quizplus for this Chatper
380 Verified Questions
380 Flashcards
Source URL: https://quizplus.com/quiz/27671
Sample Questions
Q1) Refer to the Article Summary.The idea that sports teams could charge more for tickets and still increase revenue indicates that tickets are being priced in the ________ portion of their demand curve.
A)elastic
B)inelastic
C)unit elastic
D)perfectly elastic
Q2) Most people would prefer to drive a luxury car that has all the options,but more people buy less expensive cars even though they could afford the luxury car because A)car buyers are irrational.
B)the total utility of less expensive cars is greater than that of luxury cars.
C)the marginal utility per dollar spent on the less expensive car is higher than that spent on luxury cars.
D)luxury cars cost a lot more than non-luxury cars.
Q3) If the price elasticity of demand is unit-elastic,a 10 percent increase in price will result in a 10 percent increase in revenue.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Technology, production, and Costs
Available Study Resources on Quizplus for this Chatper
276 Verified Questions
276 Flashcards
Source URL: https://quizplus.com/quiz/27672
Sample Questions
Q1) Refer to Table 8-7.What is the variable cost of production when the firm produces 115 lanterns?
A)$1,556
B)$1,157
C)$956
D)$10.05
Q2) In his book The Wealth of Nations,Adam Smith employed the example of a pin factory in order to explain what economic concept?
A)the relationship between the marginal and average product of labor
B)the law of diminishing returns
C)why no firm would want to hire so many workers as to experience a negative marginal product of labor
D)the division of labor
Q3) If 11 workers can produce 53 units of output while 12 workers can produce 56 units of output,what is the marginal product of the 12th worker?
A)0.16
B)3
C)4.67
D)36
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Firms in Perfectly Competitive Markets
Available Study Resources on Quizplus for this Chatper
297 Verified Questions
297 Flashcards
Source URL: https://quizplus.com/quiz/27673
Sample Questions
Q1) Which of the following is a characteristic of a firm in a perfectly competitive market?
A)The firm cannot make a profit in the short run because it is too small a part of the total market.
B)The firm can make a profit in the long run but not in the short run.
C)The firm can sell as much as it wants without having to lower its price.
D)The firm must lower its price in order to increase quantity demanded.
Q2) Refer to Figure 9-16.Which panel best represents the perfectly competitive organic produce market in which some firms are experiencing short-run losses,and consumers are displaying an increased preference for organic produce?
A)Panel A
B)Panel B
C)Panel C
D)Panel D
Q3) What is meant by the term "long-run competitive equilibrium?
Q4) An increase in a firm's fixed cost will not change the firm's profit-maximizing output in the short run.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Monopoly and Antitrust Policy
Available Study Resources on Quizplus for this Chatper
271 Verified Questions
271 Flashcards
Source URL: https://quizplus.com/quiz/27674
Sample Questions
Q1) In regulating a natural monopoly,the price strategy that ensures the highest possible output and zero profit is one that sets price
A)equal to average total cost where it intersects the demand curve.
B)equal to marginal cost where it intersects the demand curve.
C)equal to average variable cost where it intersects the demand curve.
D)corresponding to the demand curve where marginal revenue equals zero.
Q2) Consider two industries,industry W and industry X.In industry W there are five companies,each with a market share of 20% of total sales.In industry X,there are six companies.One company has a 50% market share and each of the other five firms has a market share of 10%.
a.Calculate the four-firm concentration ratio for each industry.
b.Calculate the Herfindahl-Hirschman Index (HHI)for each industry.
c.What do the values of the two concentration measures imply about the degree of market power in the two industries?
Q3) Economic efficiency requires that a natural monopoly's price be set corresponding to the quantity where marginal revenue equals marginal cost.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: Monopolistic Competition and Oligopoly
Available Study Resources on Quizplus for this Chatper
414 Verified Questions
414 Flashcards
Source URL: https://quizplus.com/quiz/27675
Sample Questions
Q1) In game theory,the three key characteristics of a game are
A)rules, strategies, and payoffs.
B)rules, regulations, and payoffs.
C)winners, losers, and rules.
D)risks, rewards, and penalties.
Q2) There are many cattle ranchers in the world,and there are also many McDonald's restaurants in the world.Why,then,does a McDonald's restaurant face a downward sloping demand curve while a cattle rancher faces a horizontal demand curve?
Q3) A monopolistically competitive firm is producing an output level where marginal revenue is greater than marginal cost.What should this firm do to increase its profit or reduce its losses?
A)The firm should raise its price.
B)The firm should decrease its fixed costs.
C)The firm should increase its implicit costs.
D)The firm should lower its price.
Q4) What is the difference between explicit collusion and implicit collusion?
Q5) Does the fact that monopolistically competitive firms do not achieve productive efficiency or allocative efficiency mean that there is a significant loss in consumer welfare?
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Gdp: Measuring Total Production and Income
Available Study Resources on Quizplus for this Chatper
266 Verified Questions
266 Flashcards
Source URL: https://quizplus.com/quiz/27676
Sample Questions
Q1) Which of the following equations correctly measures GDP in an economy?
A)GDP = C + I + G + X
B)GDP = C + net I + G + NX
C)GDP = C + I + G + NX
D)GDP = C + G + I - taxes
Q2) Refer to Table 12-22.Consider the data above for a simple economy: Using 2009 as the base year,calculate nominal GDP,real GDP,and the GDP deflator for 2013.Show your work.
Q3) The GDP deflator in year 2 is 105,using year 1 as the base year.This means that,on average,the cost of goods and services is
A)5% higher in year 2 than in year 1.
B)105% higher in year 2 than in year 1.
C)5% higher in year 1 than in year 2.
D)105% higher in year 1 than in year 2.
Q4) The purchase of a new house is included in
A)consumption expenditures.
B)investment expenditures.
C)government purchases.
D)net exports.
Q5) Why do we subtract import spending from total expenditures?
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Unemployment and Inflation
Available Study Resources on Quizplus for this Chatper
292 Verified Questions
292 Flashcards
Source URL: https://quizplus.com/quiz/27677
Sample Questions
Q1) If the federal government implements programs so that the unemployed are more quickly matched with jobs,then
A)the natural rate of unemployment will increase.
B)the natural rate of unemployment will decrease.
C)the natural rate of unemployment will not change.
D)the natural rate of unemployment could either increase or decrease.
Q2) Refer to Table 13-2.Assume the market basket for the consumer price index has two products - bread and milk - with the following values in 2006 and 2013 for price and quantity: The Consumer Price Index for 2013 equals
A)118.
B)116.
C)86.
D)85.
Q3) The most widely used measure of inflation is based on which of the following price indices?
A)the producer price index
B)the consumer price index
C)the GDP deflator
D)the wholesale price index
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: Economic Growth, the Financial System, and Business Cycles
Available Study Resources on Quizplus for this Chatper
257 Verified Questions
257 Flashcards
Source URL: https://quizplus.com/quiz/27678
Sample Questions
Q1) Potential GDP is defined as
A)the maximum of GDP that the economy can produce.
B)the amount of GDP produced if there is no frictional unemployment.
C)the level of GDP attained when all firms are producing at capacity.
D)the amount of GDP produced if there is no structural unemployment.
Q2) Explain why a centrally planned economy might not grow as rapidly as a market economy.
Q3) Suppose that real GDP for 2012 was $10,000 billion and real GDP for 2013 was $11,000 billion.What is the rate of growth of real GDP between 2012 and 2013?
A)1%
B)2%
C)5%
D)10%
Q4) In a closed economy,which of the following equations reflects investment? (Y = GDP,C = Consumption,G = Government purchases,T = Taxes,and TR = Transfers)
A)Y - C - G
B)Y - C - T
C)Y - T + TR
D)C + G -T
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Aggregate Demand and Aggregate Supply Analysis
Available Study Resources on Quizplus for this Chatper
284 Verified Questions
284 Flashcards
Source URL: https://quizplus.com/quiz/27679
Sample Questions
Q1) Most recessions in the United States since World War II have begun with
A)a decline in residential construction.
B)a rapid increase in the price level.
C)a substantial number of bank failures.
D)a stock market crash.
Q2) Suppose a developing country experiences a reduction in machinery and capital equipment as foreign entrepreneurs decrease the amount of investment in the economy.As a result
A)the long-run aggregate supply curve will shift to the right.
B)the long-run aggregate supply curve will shift to the left.
C)the economy will move up along the long-run aggregate supply curve.
D)the economy will move down along the long-run aggregate supply curve.
Q3) The long-run aggregate supply curve shows the relationship between the ________ and ________.
A)inflation rate; quantity of real GDP demanded
B)real interest rate; quantity of real GDP supplied
C)nominal interest rate; quantity of real GDP supplied
D)price level; quantity of real GDP supplied
Q4) What is the relationship among the AD,SRAS and LRAS curves when the economy is in macroeconomic equilibrium?
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Money, banks, and the Federal Reserve System
Available Study Resources on Quizplus for this Chatper
279 Verified Questions
279 Flashcards
Source URL: https://quizplus.com/quiz/27680
Sample Questions
Q1) According to the quantity theory of money,if the money supply grows at 20 percent and real GDP grows at 5 percent,then the inflation rate will be
A)15 percent.
B)20 percent.
C)25 percent.
D)100 percent.
Q2) The portion of ________ that a bank does not loan out or spend on securities is known as ________.
A)loans; reserves
B)deposits; reserves
C)deposits; securities
D)loans; securities
Q3) If the bank of Waterloo receives a $10,000 deposit,and the reserve requirement is 10 percent,how much can the bank loan out? (Assume that before the deposit this bank is just meeting its legal reserve requirement.)
A)$1,000
B)$9,000
C)$10,000
D)$11,000
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 17: Monetary Policy
Available Study Resources on Quizplus for this Chatper
277 Verified Questions
277 Flashcards
Source URL: https://quizplus.com/quiz/27681
Sample Questions
Q1) List the Fed's four main monetary goals.
Q2) In March 2008,the Fed announced that primary dealers wold be eligible to receive discount loans.
A)True
B)False
Q3) Expansionary monetary policy refers to the ________ to increase real GDP.
A)government's increasing spending and lowering taxes
B)government's decreasing spending and raising taxes
C)Federal Reserve's increasing the money supply and decreasing interest rates
D)Federal Reserve's decreasing the money supply and increasing interest rates
Q4) Federal Reserve Board Chairmen Paul Volcker,Alan Greenspan,and Ben Bernanke all have focused on which of the following as their main goal of monetary policy?
A)high employment
B)price stability
C)economic growth
D)stability of financial markets
Q5) A borrower defaults on a loan when he stops making payments on the loan.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Fiscal Policy
Available Study Resources on Quizplus for this Chatper
282 Verified Questions
282 Flashcards
Source URL: https://quizplus.com/quiz/27682
Sample Questions
Q1) Raising taxes on interest and dividend income will increase the level of investment and economic growth.
A)True
B)False
Q2) Refer to Figure 18-2.In the graph above,if the economy is at point A,an appropriate fiscal policy by the Congress and the president would be to
A)decrease the required reserve ratio.
B)sell government securities.
C)increase government expenditures.
D)decrease transfer payments.
Q3) Refer to Figure 18-8.In the graph above,suppose the economy in Year 1 is at point A and expected in Year 2 to be at point B.Which of the following policies could the Congress and the president use to move the economy to point C?
A)increase government purchases
B)decrease government purchases
C)increase income taxes
D)sell Treasury bills
Q4) What is fiscal policy,and who is responsible for fiscal policy?
Q5) What is the difference between federal purchases and federal expenditures?
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Comparative Advantage, international Trade, and Exchange Rates
Available Study Resources on Quizplus for this Chatper
446 Verified Questions
446 Flashcards
Source URL: https://quizplus.com/quiz/27683
Sample Questions
Q1) Which of the following statements is false?
A)Japan is less dependent on foreign trade than is the United States.
B)Imports and exports account for over one-half of the GDP of the Netherlands.
C)The United States is the leading exporting country, accounting for almost 10 percent of total world exports.
D)Because the cost of labor used on farms is so high, the United States exports very little of its wheat, rice and corn crops.
Q2) An increase in capital inflows will
A)increase net foreign investment.
B)increase capital outflows.
C)decrease capital outflows.
D)increase the value of the domestic currency.
Q3) When exchange rates are ________,we say that the country's exchange rate is fixed.
A)determined in the market
B)set by a country's central bank
C)determined by supply and demand
D)relatively stable
Q4) What was the GATT,why was it established,and why and with what was it replaced?
Q5) What are terms of trade?
To view all questions and flashcards with answers, click on the resource link above. Page 21