Introduction to Economics Test
Preparation
Course Introduction
Introduction to Economics provides a foundational understanding of the principles that govern the production, distribution, and consumption of goods and services in society. This course explores key economic concepts such as supply and demand, market equilibrium, opportunity cost, scarcity, and the roles of consumers, firms, and government in economic systems. Students will gain insight into both microeconomic and macroeconomic perspectives, learning how markets function, how prices are determined, and how economic policies impact global and local economies. By the end of the course, participants will be equipped with analytical tools necessary to interpret real-world economic issues and make informed decisions.
Recommended Textbook Microeconomics 6th Edition by R. Glenn Hubbard
Available Study Resources on Quizplus
18 Chapters
4659 Verified Questions
4659 Flashcards
Source URL: https://quizplus.com/study-set/1511 Page 2
Chapter 1: Economics: Foundations and Models
Available Study Resources on Quizplus for this Chatper
234 Verified Questions
234 Flashcards
Source URL: https://quizplus.com/quiz/29915
Sample Questions
Q1) The decisions Apple makes in determining production levels for its iPhone is an example of a microeconomic topic.
A)True
B)False
Answer: True
Q2) Productive efficiency is achieved when
A)firms add a low profit margin to the goods and services they produce.
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.
Answer: C
Q3) What is an economic variable?
Answer: An economic variable is something measurable that can have different values, such as the wages of software programmers.
Q4) A college must decide if it wants to offer more Internet-based classes.This decision involves answering the economic question of "what to produce."
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Trade-Offs, Comparative Advantage, and the Market System
Available Study Resources on Quizplus for this Chatper
258 Verified Questions
258 Flashcards
Source URL: https://quizplus.com/quiz/29916
Sample Questions
Q1) Refer to Figure 2-4.Consider the following events:
A.an increase in the unemployment rate
B.a decrease in a nation's money supply
C.a war that kills a significant portion of a nation's population
Which of the events listed above could cause a movement from Y to W?
A)a, b, and c
B)a and b only
C)a and c only
D)a only
E)c only
Answer: E
Q2) If Tanisha can audit more tax returns in one hour than Libby, then Tanisha has an absolute advantage in auditing tax returns.
A)True
B)False
Answer: True
Q3) What is economic growth?
Answer: Economic growth refers to the ability of the economy to increase the production of goods and services.
Page 4
To view all questions and flashcards with answers, click on the resource link above.
Chapter 3: Where Prices Come From: the Interaction of
Demand and Supply
Available Study Resources on Quizplus for this Chatper
242 Verified Questions
242 Flashcards
Source URL: https://quizplus.com/quiz/29917
Sample Questions
Q1) If a decrease in income leads to an increase in the demand for sardines, then sardines are
A)an inferior good.
B)a neutral good.
C)a necessity.
D)a normal good.
Answer: A
Q2) All else equal, as the price of a product falls, the quantity supplied increases.
A)True
B)False
Answer: False
Q3) Chips and salsa are complements.If the price of salsa decreases, the demand for chips will increase.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Economic Efficiency, Government Price Setting, and Taxes
Available Study Resources on Quizplus for this Chatper
208 Verified Questions
208 Flashcards
Source URL: https://quizplus.com/quiz/29918
Sample Questions
Q1) David Card and Alan Krueger conducted a study of fast-food restaurants in New Jersey and Pennsylvania.The study found that
A)there was a large reduction in employment of low-skilled workers when the minimum wage was raised in these states.
B)the earned income tax credit is more effective in raising the incomes of low-skilled workers than increases in the minimum wage.
C)increases in the minimum wage had a very small impact on employment.
D)increases in the prices of food have a greater effect on wage increases in New Jersey than in Pennsylvania.
Q2) Refer to Figure 4-1.If the market price is $1.50, what is the consumer surplus on the second burrito?
A)$0.50
B)$1.00
C)$1.50
D)$3.50
Q3) Refer to Figure 4-7 which shows the market for vitamins.Suppose the government imposes a price ceiling of P .How will the price ceiling affect the quantity supplied, quantity demanded, and quantity exchanged?
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Externalities, Environmental Policy, and Public Goods
Available Study Resources on Quizplus for this Chatper
263 Verified Questions
263 Flashcards
Source URL: https://quizplus.com/quiz/29919
Sample Questions
Q1) Refer to Figure 5-16.Suppose Amit and Bree know each other's preferences so that it is not possible for one to deceive the other.Which of the following statements best describes the circumstances under which the optimal quantity of street lights could be achieved?
A)The optimal quantity will be installed only if the two parties agree to pay according to their willingness to pay as indicated by their respective demand curves.
B)Because there are only two consumers, it is likely that private bargaining will result in the optimal quantity being installed.
C)The optimal quantity will be installed only if the two parties split the cost of installation equally.
D)The optimal quantity will be installed only if Bree pays for the entire installation cost.
Q2) Public goods are distinguished by two primary characteristics.What are they?
A)nonrivalry and nonexcludability
B)government intervention and low prices
C)market failure and high prices
D)rivalry and exclusivity
Q3) What are some of the limitations of the Coase theorem in practice?
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Elasticity: the Responsiveness of Demand and Supply
Available Study Resources on Quizplus for this Chatper
295 Verified Questions
295 Flashcards
Source URL: https://quizplus.com/quiz/29920
Sample Questions
Q1) If demand is inelastic, the absolute value of the price elasticity coefficient is greater than one.
A)True
B)False
Q2) Refer to Table 6-8.What is the numerical value of the price elasticity of supply?
A)1
B)greater than 0 but less than 1
C)0
D)greater than 1
Q3) Opera Estate Girls' School is considering increasing its tuition to raise revenue.If the school believes that raising tuition will increase revenue it is assuming that the demand for attending the school is
A)inelastic.
B)elastic.
C)unit elastic.
D)perfectly elastic.
Q4) Explain the economic concept of price elasticity of supply.How is price elasticity of supply calculated?
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: The Economics of Health Care
Available Study Resources on Quizplus for this Chatper
171 Verified Questions
171 Flashcards
Source URL: https://quizplus.com/quiz/29921
Sample Questions
Q1) The Congressional Budget Office estimates that the Patient Protection and Affordable Care Act (ACA)will
A)increase federal government spending by about $2 trillion over 10 years.
B)cost the government significantly more than the additional taxes and fees enacted under the law will bring in.
C)eliminate the budget deficit within 10 years.
D)actually reduce government spending over a 20 year period.
Q2) How can improvements in health increase a country's total income?
Q3) Briefly explain 4 of the difficulties in making cross-country comparisons in health care outcomes.
Q4) The U.S.Bureau of Labor Statistics forecasts that ________ fastest-growing occupations over the next 10 years will be in health care.
A)over 95 percent of the
B)less than 2 of the 10
C)13 of the 20
D)just under half of the
Q5) How can changes over time of the average height of the people in a country help to indicate the standard of living in a country?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Firms, the Stock Market, and Corporate Governance
Available Study Resources on Quizplus for this Chatper
264 Verified Questions
264 Flashcards
Source URL: https://quizplus.com/quiz/29922
Sample Questions
Q1) An implicit cost is
A)a nonmonetary opportunity cost.
B)a cost unique to sole proprietorships.
C)a cost that involves spending money.
D)a cost unique to corporations.
Q2) Define a sole proprietorship.
Q3) The Sarbanes-Oxley Act of 2002 was passed in response to what event?
A)a series of accounting scandals
B)unexpected increases in dividend payments to stockholders at various corporations
C)volatility in NASDAQ indexes
D)historically low bond prices
Q4) Corporate managers and shareholders always have the same goals.
A)True
B)False
Q5) As a business type, corporations ________ in the United States.
A)earn the majority of revenues
B)are the most common
C)are the least common
D)are subject to the fewest taxes
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Comparative Advantage and the Gains From International Trade
Available Study Resources on Quizplus for this Chatper
188 Verified Questions
188 Flashcards
Source URL: https://quizplus.com/quiz/29923
Sample Questions
Q1) Dalton, Georgia, a town with a population less than 35,000, has developed into a leading producer of carpets, despite its small size.Some government officials argue that the success achieved by firms in Dalton in developing a comparative advantage in carpet making because of external economies can be used to justify trade barriers as a means to protect an "infant industry." After an infant industry gains experience it can compete in international markets and the trade barriers can be removed.What objections do economists make to this argument in favor of trade barriers?
Q2) A Federal Reserve publication proclaimed that "Trade is a win-win situation for all countries that participate." This statement is
A)false since it ignores the workers who lose their jobs as result of international trade.
B)false since not all countries participate in international trade.
C)true because it refers to countries; individuals may be losers as a result of international trade.
D)true because all consumers and workers benefit from international trade.
Q3) A quota is the same as a voluntary export restraint.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Consumer Choice and Behavioral Economics
Available Study Resources on Quizplus for this Chatper
300 Verified Questions
300 Flashcards
Source URL: https://quizplus.com/quiz/29924
Sample Questions
Q1) Economists have noted that businesses of a certain type tend to congregate geographically, attracting workers with skills in those fields.This, in turn, lures more firms seeking employees with those skills.Some examples include commercial banking, software development, and the automobile industry.What mechanism is at work here? Briefly explain how the mechanism works to the advantage of employers and employees.
Q2) Which of the following describes the substitution effect of a price change?
A)The change in demand that results from a change in price, making the good more or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power.
B)The change in quantity demanded of a good that results from the effect of a change in price on consumer purchasing power, holding everything else constant.
C)The change in quantity demanded of a good that results from the change in the price of a substitute for the good.
D)The change in quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power.
Q3) What is marginal utility and what is the law of diminishing marginal utility?
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: Technology, Production, and Costs
Available Study Resources on Quizplus for this Chatper
328 Verified Questions
328 Flashcards
Source URL: https://quizplus.com/quiz/29925
Sample Questions
Q1) If production displays diseconomies of scale, the long-run average cost curve is
A)above the short-run average total cost curve.
B)above the long-run marginal cost curve.
C)upward sloping.
D)downward sloping.
Q2) Economic costs include implicit costs but not explicit costs.
A)True
B)False
Q3) Refer to Table 11-3.The table above refers to the relationship between the quantity of workers employed and the number of cardboard boxes produced per day by Manny's House of Boxes.The capital used to produce the boxes is fixed.Diminishing returns to labor are first observed in this example after Manny hires the ________ worker.
A)second
B)third
C)fourth
D)fifth
Q4) Accounting costs exclude implicit costs.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Firms in Perfectly Competitive Markets
Available Study Resources on Quizplus for this Chatper
296 Verified Questions
296 Flashcards
Source URL: https://quizplus.com/quiz/29926
Sample Questions
Q1) A firm will make a profit when A)P > AVC.
B)P > ATC.
C)P = ATC.
D)P = MC.
Q2) Refer to Table 12-3.What will Arnie's output be and how much profit will he earn if the market price of basketballs is $5.00?
A)Q = 1; profit = -$10.
B)Q = 3; profit = -$7.50
C)Q = 0; profit = -$10.00
D)Price and profit cannot be determined from the information given.
Q3) In analyzing the decision to shut down in the short run we assume that the firm's fixed costs are
A)implicit costs.
B)capital costs.
C)nonmonetary opportunity costs.
D)sunk costs.
Q4) What is meant by productive efficiency? How does a perfectly competitive firm achieve productive efficiency?
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Monopolistic Competition: the Competitive
Model in a More Realistic Setting
Available Study Resources on Quizplus for this Chatper
274 Verified Questions
274 Flashcards
Source URL: https://quizplus.com/quiz/29927
Sample Questions
Q1) Refer to Table 13-2.What is the marginal profit from producing and selling the 5th case?
A)$275
B)$145
C)$35
D)$20
Q2) Refer to Figure 13-18.Which of the following statements is true?
A)D represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the demand curve in the short run.
B)D represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the long-run demand curve in an increasing-cost industry.
C)D represents the long-run demand curve facing a perfect competitor while Db depicts the long-run demand curve facing a monopolistic competitor.
D)D represents the long-run supply curve in a perfectly competitive, constant-cost industry while Db depicts the long-run demand curve facing a monopolistic competitor in a decreasing-cost industry.
Q3) What is the difference between zero accounting profit and zero economic profit?
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Oligopoly: Firms in Less Competitive Markets
Available Study Resources on Quizplus for this Chatper
259 Verified Questions
259 Flashcards
Source URL: https://quizplus.com/quiz/29928
Sample Questions
Q1) A game in which each player adopts its dominant strategy
A)will not lead to an equilibrium.
B)must be a cooperative game.
C)could result in a Nash equilibrium.
D)can never result in a Nash equilibrium.
Q2) In the 1930s and 1940s, the Technicolor company was able to leverage its bargaining power over the movie industry because Technicolor was the sole producer of cameras and films needed to produce color films.
A)True
B)False
Q3) Which of the following statements is generally true?
A)Rivalry is less the larger the number of firms in an industry.
B)The smaller the number of firms in an industry, the greater the rivalry.
C)The larger the number of firms in an industry, the greater the rivalry.
D)The degree of rivalry in an industry is largely independent of the number of firms.
Q4) Firms in an oligopoly are said to be interdependent.What does this mean?
Q5) Collusion is common in oligopoly and monopolistically competitive industries.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Monopoly and Antitrust Policy
Available Study Resources on Quizplus for this Chatper
279 Verified Questions
279 Flashcards
Source URL: https://quizplus.com/quiz/29929
Sample Questions
Q1) In evaluating the degree of economic efficiency in a market, we can state that the size of the deadweight loss in a market will be smaller
A)the greater the difference between marginal cost and price.
B)the smaller the difference between marginal cost and average total cost.
C)the smaller the difference between marginal cost and price.
D)the greater the difference between marginal cost and average revenue.
Q2) Refer to Figure 15-3.Suppose the monopolist represented in the diagram above produces positive output.What is the profit-maximizing/loss-minimizing output level?
A)630 units
B)800 units
C)850 units
D)880 units
Q3) The National Football League has long-term leases with the stadiums in major cities.Control of these stadiums is an entry barrier to a potential new football league.
A)True
B)False
Q4) Explain why the monopolist has no supply curve?
Q5) What happens to a monopoly's revenue when it sells more units of its product?
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Pricing Strategy
Available Study Resources on Quizplus for this Chatper
261 Verified Questions
261 Flashcards
Source URL: https://quizplus.com/quiz/29930
Sample Questions
Q1) To successfully price discriminate, a firm must ensure that there are no opportunities for arbitrage.
A)True
B)False
Q2) Publishers practice price discrimination when they sell books at high prices to A)early adopters.
B)local bookstores.
C)large chain bookstores.
D)online book sellers.
Q3) Why is it necessary for a firm that practices price discrimination be a price maker rather than a price taker?
Q4) The law of one price states
A)federal and state statutes that prohibit price discrimination.
B)that all customers should pay the same price.
C)that identical products should sell for the same price everywhere.
D)government regulation of prices for all firms.
Q5) In a perfectly competitive market, in the long run, arbitrage profits will be bid away. A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: The Markets for Labor and Other Factors of Production
Available Study Resources on Quizplus for this Chatper
281 Verified Questions
281 Flashcards
Source URL: https://quizplus.com/quiz/29931
Sample Questions
Q1) Wally, Vijay, Sandra, and Consuela make up a software development team at Javasoft.The firm is considering implementing one of two incentive compensation schemes.In scheme A, each programmer receives an annual bonus if he or she meets all individual programming deadlines.In scheme B, members of the team share equally in a joint bonus if the team meets all of its product delivery deadlines.All four employees are equally talented but Wally is a slacker who does as little work as he can get away with.Which scheme might team members prefer? Which scheme will management prefer?
Q2) A monopsony restricts the quantity of a factor demanded to force down the price of the factor and increase profits.
A)True
B)False
Q3) According to the U.S.Bureau of Labor Statistics, between 2000 and 2005, real wages in concrete work fell by 16.5%, despite a soaring demand for workers.This implies that the supply of workers in this field increased faster than the demand for workers.
A)True
B)False
Q4) The demand for labor is a derived demand.Explain what is meant by the term "derived demand."
Page 19
To view all questions and flashcards with answers, click on the resource link above.
Chapter 18: Public Choice, Taxes, and the Distribution of Income
Available Study Resources on Quizplus for this Chatper
258 Verified Questions
258 Flashcards
Source URL: https://quizplus.com/quiz/29932
Sample Questions
Q1) Refer to Figure 18-4.Rank the above panels in terms of most unequal income distribution to least unequal income distribution.
A)Panel A, Panel B, Panel C
B)Panel B, Panel C, Panel A
C)Panel A, Panel C, Panel B
D)Panel C, Panel B, Panel A
Q2) A common belief among political analysts is that someone running for his or her party's nomination for president of the United States must choose a different strategy once the nomination is secured.To be nominated, the candidate must appeal to voters from one party - Democrat or Republican - but in a general election a party's nominee must appeal to voters from both parties as well as independent voters.Which of the following offers the best explanation for this change in strategy?
A)the Arrow impossibility theorem
B)the voting paradox
C)the median voter theorem
D)rent seeking
Q3) What is a Lorenz curve and what is a Gini coefficient?
Q4) If your income is $92,000 and you pay taxes of $19,475, what is your average tax rate? Show your work.
Page 20
To view all questions and flashcards with answers, click on the resource link above.