Introduction to Economics Question Bank
Course Introduction
Introduction to Economics provides a foundational understanding of economic principles and concepts that shape individual and societal decision-making. The course explores the basic problem of scarcity, the allocation of resources, and the functioning of markets through the forces of supply and demand. Students will study how consumers and firms interact, the determination of prices, and the roles of government in economic systems. Emphasis is placed on both microeconomic and macroeconomic perspectives, including topics such as inflation, unemployment, and economic growth, equipping students with analytical tools to evaluate real-world economic issues.
Recommended Textbook
Economics 5th Edition by R. Glenn Hubbard
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Page 2
Chapter 1: Economics: Foundations and Models
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Sample Questions
Q1) If it costs Vijay $150 to design 5 websites and $175 to design 6 websites, then $175 is the marginal cost of producing the 6th website.
A)True
B)False
Answer: False
Q2) If the price of milk was $1.25 a gallon and it is now $2.25 a gallon, what is the percentage change in price?
A) 4.4 percent
B) 8 percent
C) 44 percent
D) 80 percent
Answer: D
Q3) List the five main factors of production.
Answer: The five main factors of production are labor, capital, human capital, natural resources, and entrepreneurial ability.
Q4) What is a marginal cost?
Answer: Marginal cost is the additional cost associated with continuing with an activity.
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3
Chapter 2: Trade-Offs, Comparative Advantage, and the Market System
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Sample Questions
Q1) Adam Smith's invisible hand refers to
A) the government's unobtrusive role in ensuring that the economy functions efficiently.
B) property ownership laws and the rule of the court system.
C) the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole.
D) the laws of nature that influence economics decisions.
Answer: C
Q2) Refer to Table 2-3. Assume Dina's Diner only produces sliders and hot wings. A combination of 80 sliders and 50 hot wings would appear
A) along Dina's production possibilities frontier.
B) inside Dina's production possibilities frontier.
C) outside Dina's production possibilities frontier.
D) at the vertical intercept of Dina's production possibilities frontier.
Answer: B
Q3) The basis for trade is comparative advantage, not absolute advantage.
A)True
B)False
Answer: True
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Chapter 3: Where Prices Come From: the Interaction of
Demand and Supply
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Sample Questions
Q1) A normal good is a good for which the demanded increases as income decreases, holding everything else constant.
A)True
B)False
Answer: False
Q2) A demand curve shows the relationship between
A) the price of a product and the quantity of the product demanded.
B) the amount of a product sellers are willing to sell at a particular price and the amount consumers are willing to buy at that price.
C) the quantity that consumers are willing and able to buy and the quantity that sellers are willing and able to offer.
D) the price of a produce and the demand for the product.
Answer: A
Q3) A decrease in supply is caused by a decrease in the price of the product.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Economic Efficiency, Government Price Setting, and Taxes
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Sample Questions
Q1) Price ceilings are illegal in the United States.
A)True
B)False
Q2) Refer to Figure 4-4. What is the value of consumer surplus at a price of $18?
A) $60
B) $120
C) $180
D) $240
Q3) The area ________ the market supply curve and ________ the market price is equal to the total amount of producer surplus in a market.
A) above; above
B) above; below
C) below; above
D) below; below
Q4) The additional benefit to a consumer from consuming one more unit of a good or service is the marginal benefit.
A)True
B)False
Page 6
Q5) What area on a supply and demand graph represents producer surplus?
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Chapter 5: Externalities, Environmental Policy, and Public Goods
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Sample Questions
Q1) Refer to Figure 5-6. What is the deadweight loss resulting from producing at the market equilibrium?
A) B + C
B) E + C
C) F
D) C
Q2) Refer to Figure 5-16. How much is Amit willing to pay to have 4 street lights installed?
A) $3,600
B) $2,700
C) $1,800
D) $900
Q3) What are transactions costs? Why do transactions costs create difficulties in finding a private solution to the problem of pollution?
Q4) A carbon tax which is designed to reduce pollution is an example of a A) command-and-control policy.
B) government administrative rule.
C) noneffective incentive.
D) market-based policy.
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Chapter 6: Elasticity: the Responsiveness of Demand and Supply
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Sample Questions
Q1) If demand is inelastic, the absolute value of the price elasticity of demand is A) one.
B) less than one.
C) greater than one.
D) greater than the absolute value of the slope of the demand curve.
Q2) When is demand perfectly elastic? When is demand perfectly inelastic? What are the values of the price elasticity of demand when demand is perfectly elastic or perfectly inelastic? What do perfectly elastic and perfectly inelastic demand curves look like?
Q3) If 50 units are sold at a price of $20 and 80 units are sold at a price of $15, what is the absolute value of the price elasticity of demand? Use the midpoint formula.
A) 0.17
B) 0.62
C) 1.62
D) 5
Q4) The demand for The Federalist Papers is likely to be more elastic than the demand for a best-selling mystery novel.
A)True
B)False
Page 8
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Chapter 7: The Economics of Health Care
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Sample Questions
Q1) In the United States in 2012, the percentage of people with some form of health insurance was about
A) 17%.
B) 29%.
C) 54%.
D) 84%.
Q2) Vaccinations tend to result in a negative externality.
A)True
B)False
Q3) One consequence of adverse selection in the market for used cars is that most used cars sold will be lemons.
A)True
B)False
Q4) Briefly describe the types of health care systems in Canada, Japan, and the United Kingdom.
Q5) The situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction is known as asymmetric information.
A)True
B)False
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Chapter 8: Firms, the Stock Market, and Corporate Governance
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Sample Questions
Q1) If you want to know the present value of $10,000 received in one year, and the interest rate is 4 percent, what formula can you use?
A) Present value equals $10,000 times 0.04.
B) Present value equals $10,000 divided by 1.04
C) Present value equals 1.04 divided by $10,000.
D) Present value equals $10,000 times 1.04.
Q2) Dividing the current market price of a stock by the firm's earnings per share gives the firm's
A) price-earnings ratio.
B) year-to-date percentage change.
C) dividend yield.
D) stock coupon maturity yield.
Q3) A decrease in liabilities will reduce a firm's net worth.
A)True
B)False
Q4) ________ is called an implicit cost, while ________ is called an explicit cost.
A) An accounting cost; an economic cost
B) A nonmonetary opportunity cost; a cost that involves spending money
C) A production cost; a sales cost
D) An actual cost; a hypothetical cost
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Chapter 9: Comparative Advantage and the Gains From International Trade
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Sample Questions
Q1) The intention of the U.S. tariff on Chinese tires was to
A) protect jobs in the U. S. tire industry.
B) protect infant industries in tire U.S. tire market.
C) insure that Chinese tires meet U.S. quality and safety standards.
D) save the government money by restricting the sale of more expensive Chinese-made tires.
Q2) Whenever a buyer and a seller agree to trade, both must believe they will be made better off
A) unless the buyer resides in a different country than the seller resides in. International trade may make the buyer or seller worse off.
B) unless one party is richer than the other.
C) only if the buyer and seller live in countries with market economies.
D) whether the buyer and seller live in the same city or different countries.
Q3) a. Define the term "globalization."
b. Describe the benefits of globalization.
c. Who is likely to oppose globalization and why?
Q4) Is the value of U.S. exports is typically larger or smaller than the value of U.S. imports.
Q5) What is a tariff?
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Chapter 10: Consumer Choice and Behavioral Economics
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Sample Questions
Q1) A network externality refers to a situation in which the usefulness of a product decreases with the number of consumers who use it.
A)True
B)False
Q2) Refer to Figure 10-8. If the price of biscotti is $1.50 and the price of a cappuccino is $3.00, what is the slope of the budget constraint?
A) -2
B) -(3.00 - 1.50)/(3.00 + 1.50) = -1/3
C) -1/2
D) The slope cannot be determined without the value of income.
Q3) Marginal utility can be
A) negative.
B) zero.
C) positive.
D) positive, negative or zero.
Q4) A common mistake made by consumers is the failure to take into account the monetary costs of their actions.
A)True
B)False
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Chapter 11: Technology, Production, and Costs
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Sample Questions
Q1) Refer to Figure 11-12. Which of the following statements about the input combinations shown in the diagram is false?
A) The firm produces a higher output level when it uses input combination b compared to input combination a.
B) The firm produces a lower output level when it uses input combination d compared to input combination a.
C) The firm produces the same output level when it uses input combination a or c.
D) The firm incurs the same total cost when it uses input combination a or c to produce a given quantity of output.
Q2) In the short run, if average product is at its maximum, then average variable cost is at its minimum.
A)True
B)False
Q3) What is minimum efficient scale? What is likely to happen in the long run to firms that do not reach minimum efficient scale?
Q4) What is the marginal product of labor and what is the average product of labor.
Q5) Is it possible for technological change to be negative? If so, give an example.
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Page 13
Chapter 12: Firms in Perfectly Competitive Markets
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Sample Questions
Q1) Market supply is found by
A) vertically summing the relevant part of each individual producer's marginal cost curve.
B) horizontally summing the relevant part of each individual producer's marginal cost curve.
C) vertically summing each individual producer's average total cost curve.
D) horizontally summing each individual producer's average total cost curve.
Q2) To maximize profit, a firm will produce the level of output where MR = MC. If a firm actually makes a profit depends on the relationship of price to average total cost. What are the three possible relationships between price and average total cost that determine if a firm will make a profit, experience a loss, or break even?
Q3) Why would a company continue to operate for many years while never once turning a profit rather than shut down immediately? Using revenue and cost analysis, explain when the company would shut down.
Q4) Use a graph to show the demand, AVC, ATC, MC, and MR curves of a firm that should temporarily shut down in the short run. Identify the shutdown point on the graph.
Q5) What is meant by the term "long-run competitive equilibrium"?
Q6) Under what conditions should a competitive firm shut down in the short run?
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Chapter 13: Monopolistic Competition: the Competitive
Model in a More Realistic Setting
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Sample Questions
Q1) Assuming that the total market size remains constant, a monopolistically competitive firm earning profits in the short run will find the demand for its product decreasing in the long run because
A) new entrants into the market are more likely to have cutting edge products.
B) as the firm raises its price in the long run, it will lose some customers to new entrants in the market.
C) some of its customers have switched to purchasing the products of new entrants in the market.
D) its costs of production rises.
Q2) Refer to Figure 13-9. Which of the graphs in the figure depicts a monopolistically competitive firm that is earning economic profits?
A) Panel A
B) Panel B
C) Panel C
D) Panel A and Panel B
Q3) Why are demand and marginal revenue represented by the same curve for a firm in a perfectly competitive market, but by separate curves for a firm in a monopolistically competitive market?
Q4) What is the difference between the terms "marketing" and "advertising"?
Page 15
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Chapter 14: Oligopoly: Firms in Less Competitive Markets
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Sample Questions
Q1) When Wal-Mart decides to build a new retail store in a town, it will decide to build a large store rather than a small store if the large store is expected to earn a greater economic profit. What other motive would Wal-Mart have for choosing to build a large store?
A) A larger store will help Wal-Mart maintain its position as the leading retail company in the world more than a smaller store would.
B) A larger store will give Wal-Mart greater political influence in the community.
C) A larger store may deter entry into the town by a rival firm.
D) Because of economies of scale, the average total cost of production is less for a larger store than a smaller store.
Q2) Refer to Table 14-8. If the firms act out of individual self-interest, which prices will they select?
A) Both firms will select a high price.
B) Brawny Juice will select a high price, Power Fuel will select a low price.
C) Brawny Juice will select a low price, Power Fuel will select a high price.
D) Both firms will select a low price.
Q3) What is a sequential game? How are decision trees used to analyze sequential games?
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Chapter 15: Monopoly and Antitrust Policy
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Sample Questions
Q1) A monopoly differs from monopolistic competition in that
A) a monopoly has market power while a firm in monopolistic competition does not have any market power.
B) a monopoly can never make a loss but a firm in monopolistic competition can.
C) in a monopoly there are significant entry barriers, but there are low barriers to entry in a monopolistically competitive market structure.
D) a monopoly faces a perfectly inelastic demand curve while a monopolistic competitor faces an elastic demand curve.
Q2) The Clayton Act prohibited
A) all vertical mergers.
B) all horizontal mergers.
C) any merger if its effect was to substantially lessen competition or create a monopoly.
D) all conglomerate mergers.
Q3) The ability of a firm to charge a price greater than marginal cost is called A) monopoly power.
B) price-making power.
C) cost-plus pricing.
D) market power.
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17
Chapter 16: Pricing Strategy
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Sample Questions
Q1) Perfect price discrimination is also known as
A) monopoly.
B) first-degree price discrimination.
C) third-degree price discrimination.
D) yield management.
Q2) In which market structure is it not possible to practice price discrimination?
A) perfect competition
B) monopolistic competition
C) oligopoly
D) monopoly
Q3) Because each customer pays according to her willingness to pay, a consumer maximizes her consumer surplus under first-degree price discrimination.
A)True
B)False
Q4) Are sellers who practice arbitrage taking advantage of buyers?
Q5) Why is it necessary for a firm that practices price discrimination be a price maker rather than a price taker?
Q6) What is the difference between price discrimination and other forms of discrimination?
Page 18
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Chapter 17: The Markets for Labor and Other Factors of Production
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Sample Questions
Q1) Larry and Mike are equally skilled construction workers employed by the Brown and Root Company. Larry's job is riskier because he typically works on a scaffold 1,000 feet above ground. Larry's higher wage rate is the result of
A) economic discrimination.
B) a compensating differential.
C) a negative feedback loop.
D) a higher marginal revenue product.
Q2) Explain how the market for opticians is affected as a result of the development of laser technology which reduces the demand for glasses and contact lenses. In your explanation be sure to show the connection between the market for glasses and contact lenses and the market for opticians.
Q3) Refer to Table 17-4. What are the price and quantity of workers that result in the maximum amount of profit Apple would earn from selling iPods?
A) $140; 2
B) $160; 2
C) $140; 3
D) $180; 1
Q4) Why are there superstar baseball players but no superstar chiropractors?
Page 19
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Chapter 18: Public Choice, Taxes, and the Distribution of Income
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Sample Questions
Q1) Between 1980 and 2011, income inequality in the United States has increased in part due to rapid technological change. How does technological change contribute to income inequality?
A) Advancements in technology displace skilled and unskilled workers in certain fields, leading to higher unemployment rates.
B) Technology complements the skills of the well-educated while rendering redundant the labor services of unskilled and low-skilled workers. This causes a decline in the wages of low and unskilled workers relative to other workers.
C) The opportunity cost of investing in technology is investments in human capital. The resulting decrease in labor's marginal productivity has led to lower wages.
D) Technological change favors the owners of capital and since high income individuals tend to own capital, income inequality is further exacerbated.
Q2) "Sin taxes," such as taxes on alcoholic beverages, are intended to
A) increase the amount of the products supplied.
B) generate money to subsidize production of the products taxed.
C) reduce the quantity demanded.
D) generate funds to aid in the medical care of those harmed by the product.
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Page 20
Chapter 19: GDP: Measuring Total Production and Income
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Sample Questions
Q1) Refer to Table 19-24. Suppose that a very simple economy produces three goods: pizzas, haircuts, and backpacks. Suppose the quantities produced and their corresponding prices for 2007 and 2013 are shown in the table above. Use the information to compute real GDP in the year 2007 and 2013. Calculate real GDP in 2013 assuming the base year is 2007. Do the same calculation assuming the base year is 2013. Are the calculations different? Why?
Q2) In comparing China to Canada, China's relatively ________ growth rate in GDP would make you more likely to take a job in China, and China's relatively ________ level of GDP would make you less likely to take a job in China.
A) high; low
B) high; high
C) low; low
D) low; high
Q3) An example of an intermediate good would be
A) the bread that goes into a sub sandwich that is sold by Quiznos.
B) the soda pop sold by Quiznos.
C) a sub sandwich sold by Quiznos.
D) the potato chips sold by Quiznos.
Q4) Why do we subtract import spending from total expenditures?
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Chapter 20: Unemployment and Inflation
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Sample Questions
Q1) Refer to Table 20-19. Looking at the table above, what is the approximate rate of growth of real average hourly earnings from 2011 to 2012?
A) 15%
B) 4.4%
C) -1.5%
D) -4.8%
Q2) Since 1948, the labor force participation rate for adult men has ________ and for adult women has ________.
A) increased; increased
B) increased; decreased
C) decreased; increased
D) decreased; decreased
Q3) By offering training to workers whose firms laid them off because of competition from foreign firms, the federal government is attempting to reduce
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) seasonal unemployment.
E) unnatural unemployment.
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Page 22
Chapter 21: Economic Growth, the Financial System, and Business Cycles
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Sample Questions
Q1) Countries with high rates of economic growth tend to have
A) a labor force that is more productive.
B) a lower life expectancy at birth.
C) low rates of technological advancement.
D) a declining incidence of business cycle fluctuations.
Q2) 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.
Q3) An increase in the real interest rate will decrease consumption and investment.
A)True
B)False
Q4) If an economy is growing at a rate of 2.5% per year, how long will it take the economy to double in size?
A) 60 years
B) 43 years
C) 36 years
D) 28 years
Page 23
Q5) How are unemployment, inflation, and the business cycle related?
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Chapter 22: Long-Run Economic Growth: Sources and Policies
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Q1) The per-worker production function has a ________ slope, indicating that increases in capital per hour worked ________ real GDP.
A) negative; increase
B) positive; increase
C) negative; decrease
D) positive; decrease
Q2) According to the World Bank, Albania does one of the worst jobs as a country enforcing the rule of law. The consequence of a weak rule of law is
A) difficulty in attracting investment and low economic growth.
B) a decrease in cash transactions and increased efficiency.
C) more risk taking on the part of entrepreneurs and greater economic investment.
D) strong property rights enforcement leading to greater investment.
Q3) If property rights are not enforced in a country,
A) the market system will still work smoothly.
B) entrepreneurs are unlikely to risk their own funds investing in such an economy.
C) that country's growth rate will not be affected.
D) that country will grow more rapidly because of the reduction of law suits.
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Page 24
Chapter 23: Aggregate Expenditure and Output in the Short Run
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Q1) Firms in a small economy planned that inventories would grow over the past year by $300,000. Over that year, inventories actually grew by $400,000. This implies that A) aggregate expenditure that year was less than GDP that year.
B) there was an unplanned decrease in inventories that year.
C) there was a planned decrease in inventories that year.
D) aggregate expenditure that year was equal to GDP that year.
Q2) If consumption is defined as C = 1,350 + 0.6Y, then the marginal propensity to consume is 0.6.
A)True
B)False
Q3) Refer to the Article Summary. The increase in consumer spending discussed in the article summary was due in part to an improving housing market. This reason for the increase in consumer spending is most closely related to which of the following variables that determine the level of consumption?
A) the interest rate
B) current disposable income
C) household wealth
D) the price level
Q4) What are the four categories of aggregate expenditure?
Page 25
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Chapter 24: Aggregate Demand and Aggregate Supply Analysis
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Q1) Workers expect inflation to fall from 4% to 1% next year. As a result, this should A) shift the short-run aggregate supply curve to the left.
B) shift the short-run aggregate supply curve to the right.
C) move the economy up along a stationary short-run aggregate supply curve.
D) move the economy down along a stationary short-run aggregate supply curve.
Q2) Last week, 13 Mexican pesos could purchase one U.S. dollar. This week, it takes 11 Mexican pesos to purchase one U.S. dollar. This change in the value of the dollar will ________ exports from the United States to Mexico and ________ U.S. aggregate demand.
A) increase; increase
B) decrease; decrease
C) increase; decrease
D) decrease; increase
Q3) Refer to Figure 24-1. Ceteris paribus, an increase in the price level would be represented by a movement from A) AD1 to AD2.
B) AD2 to AD1.
C) point A to point B.
D) point B to point A.
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Chapter 25: Money, Banks, and the Federal Reserve System
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Q1) Although gold is highly valued by most people, it is difficult to use as a medium of exchange. Explain.
Q2) A decrease in the discount rate ________ bank reserves and ________ the money supply if banks respond appropriately to the change in the rate. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Q3) Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve reduces the required reserve ratio to 4 percent, then the bank can make a maximum loan of A) $0.
B) $4 million.
C) $6 million.
D) $10 million.
Q4) A person's wealth is the same as his income.
A)True
B)False
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Chapter 26: Monetary Policy
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Q1) In response to already low interest rates doing little to stimulate the economy, the Fed began buying 10-year Treasury notes and certain mortgage-backed securities to keep interest rates low. This policy is known as
A) inflation targeting.
B) contractionary monetary policy.
C) securities-bubble deflating.
D) quantitative easing.
Q2) When the Federal Reserve decreases the money supply, at the previous equilibrium interest rate households and firms will now want to
A) buy Treasury bills.
B) sell Treasury bills.
C) neither buy nor sell Treasury bills.
D) hold less money.
Q3) Expansionary monetary policy refers to the Fed's increasing the money supply and increasing interest rates to increase real GDP.
A)True
B)False
Q4) List the Fed's four main monetary goals.
Q5) What problems can high inflation rates cause for the economy?
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Chapter 27: Fiscal Policy
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Q1) An increase in government spending will force an appreciation of the dollar, which causes net exports to fall.
A)True
B)False
Q2) How does expansionary monetary policy increase spending in the economy compared to how expansionary fiscal policy increases spending in the economy?
Q3) Refer to Figure 27-9. Given that the economy has moved from A to B in the graph above, which of the following would the appropriate fiscal policy to achieve potential GDP?
A) increase taxes
B) increase government spending
C) decrease the money supply
D) increase interest rates
Q4) In Year 1 suppose the economy is at potential GDP and that the federal budget deficit equals $100 billion. In Year 2 the federal budget deficit rises to $150 billion, but the cyclically adjusted budget deficit falls to $75 billion. How can the actual budget deficit rise and the cyclically adjusted budget deficit fall?
Q5) What is the difference between federal purchases and federal expenditures?
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Chapter 28: Inflation, Unemployment, and Federal Reserve Policy
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Q1) Why is the credibility of the Fed's policy announcements particularly important?
Q2) Disinflation refers to
A) a decrease in the price level.
B) a rapid increase in the price level.
C) a reduction in the rate of inflation.
D) an increase in the rate of inflation.
Q3) Refer to Figure 28-9. A follower of the new classical macroeconomics would argue that ________ like that pursued by Paul Volcker in 1979, would result in a movement from C to A.
A) expansionary monetary policy
B) contractionary monetary policy
C) expansionary fiscal policy
D) contractionary fiscal policy
Q4) Deflation refers to
A) a decrease in the rate of inflation.
B) a falling price level.
C) Both A and B are correct.
D) None of the above is correct.
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Q5) Can the Federal Reserve achieve both low inflation and low levels of unemployment? Explain.
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Chapter 29: Macroeconomics in an Open Economy
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Q1) Which of the following is not "crowded out" by higher interest rates as a result of expansionary fiscal policy?
A) consumption
B) private investment
C) net exports
D) government spending
Q2) Which of the following equations is true in an open economy?
A) Private saving = net foreign investment + domestic investment.
B) Domestic saving = net capital flows.
C) Net exports = -Financial account balance.
D) Net exports = net foreign investment.
Q3) Explain the relationship between net exports and net foreign investment.
Q4) If the dollar depreciates against the Indian rupee,
A) Indian imports to the U.S. become less expensive.
B) U.S. exports to India become less expensive.
C) U.S. exports to India become more expensive.
D) The value of Indian imports to the United States does not change.
Q5) What are the three main sets of factors that cause the supply and demand curves in the foreign exchange market to shift?
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Q6) What is the difference between net exports and the current account balance?
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Chapter 30: The International Financial System
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Q1) In a fixed exchange rate system, speculation regarding an expected revaluation or devaluation of a currency makes it more difficult to maintain the existing exchange rate.
A)True
B)False
Q2) Both countries involved in a pegging of currency must agree to the terms of the pegging.
A)True
B)False
Q3) If currencies around the world are based on the gold standard, and the EU lowers the amount of gold for which the euro will trade, then holding all else constant,
A) the euro will depreciate against the dollar.
B) the euro will appreciate against the dollar.
C) the value of the euro relative to the dollar will stay constant.
D) the value of U.S. exports to EU countries in terms of the euro will decrease.
Q4) Will the use of the euro help increase economic growth in countries in the European Union? Will it help individual countries using the euro in times of recession? Explain.
Q5) What are the three main exchange rate systems, and how do they operate?
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