Question 1

Since 1994,obesity rates in the United States
A)have been on a slow and steady decline.
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.

Accepted Answer

B

Question 2

Which of the following statements is true about scarcity?
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 arises when there is a wide disparity in income distribution.

Accepted Answer

Scarcity refers to the situation in which unlimited wants exceed limited resources. It is a fundamental economic problem that affects everyone, including the wealthy. It is not limited to countries with large populations or those with a wide income distribution.

Question 3

Suppose the U.S.government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000.These doctors would be 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.

Accepted Answer

This scenario demonstrates that people are responding to economic incentives. Offering a financial incentive to both new and retiring doctors encourages them to participate in the program and facilitates the transfer of medical practices from one generation of doctors to the next.

Question 4

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.
A)collective
B)cooperative
C)market
D)trade-off

Accepted Answer

In economics, the term "market" refers to the arrangement where buyers and sellers come together to exchange goods and services. Therefore, option C is the correct answer. Option A and B both refer to groups, but do not necessarily imply an exchange of goods or services. Option D refers to a concept of sacrificing one thing to gain another, but not necessarily in the context of buyers and sellers in a market.

Question 5

Suppose that some investors have decided that economic and financial uncertainty have made the prospect of investing in domestic stock markets more risky than investing in foreign stock markets,and therefore choose to invest in foreign markets.By using all available information as they act to achieve their goals,these investors 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.

Accepted Answer

The investors' decision to invest in foreign stock markets taking into account all available information reflects the economic idea that people are rational, as they are making decisions based on a careful evaluation of their options and their perceived risks and benefits.

Question 6

Suppose the U.S.government encouraged consumers to trade in their old automobiles for more efficient,new models by paying up to $5,000 for the old automobiles.These consumers would be 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.

Accepted Answer

This scenario is a clear example of how people respond to economic incentives. By offering a monetary reward for trading in their old cars, the government is providing a financial incentive for consumers to behave in a certain way (in this case, purchasing a more efficient car).

Question 7

Consider the following statements:
a.Car owners purchase more gasoline from a gas station that sells gasoline at a lower price than other rival gas stations in the area.
b.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.
c.Firms produce more of a particular DVD when its selling price rises.
Which of the above statements demonstrates that economic agents respond to incentives?
A)a only.
B)b only.
C)c only.
D)a and b.
E)a, b, and c.

Accepted Answer

The answer of Consider the following statements:
a.Car owners purchase more...

Question 8

Economists assume that rational behavior is useful in explaining choices people make
A)because irrational people do not make economic choices.
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.

Accepted Answer

Economists recognize and account for the fact that individuals may not always behave rationally, but still use the assumption of rationality as a useful starting point to help explain choices people make.

Question 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.

Accepted Answer

Economists generally assume that individuals are rational and respond to incentives. This means that people make choices based on their self-interest and will take actions to achieve the best outcome for themselves. This assumption forms the basis for many economic models and analysis.

Question 10

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.

Accepted Answer

The answer of Suppose that some teachers have decided that...

Question 11

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.

Accepted Answer

Economics is the study of the choices individuals and societies make in allocating scarce resources. While making money in a market economy and understanding supply and demand is a part of economics, they do not encompass the entire field. Option A only focuses on the stock market and ignores the broader field of economics.

Question 12

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.

Accepted Answer

Economists assume that individuals act in their own self-interest and weigh the benefits and costs of their actions. While this may sometimes result in actions that also benefit others, economists do not assume that individuals undertake activities that solely benefit others and hurt themselves, as this would not be considered rational behavior.

Question 13

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that
A)people with health insurance will be less likely to be overweight than people without health insurance.
B)people with health insurance will be more likely to be overweight than people without health insurance.
C)people with health insurance will be equally likely to be overweight as people without health insurance.
D)there is no correlation between having health insurance and being overweight.

Accepted Answer

The answer of Holding all other personal characteristics-such as age,gender,and...

Question 14

Recent changes occurring within the U.S.health care system,including lower insurance reimbursement rates,have resulted in
A)a growing number of doctor's choosing to open private practices.
B)more medical practices being owned by hospitals than by individual doctors.
C)a majority of hospitals closing routine medical practices in order to focus only on emergency care facilities.
D)a majority of doctors working directly for insurance companies.

Accepted Answer

Lower insurance reimbursement rates have made it difficult for individual doctors to maintain their own practices, leading to an increase in medical practices being bought out by hospitals. Hospitals have more resources and negotiating power to manage the reduced reimbursement rates.

Question 15

Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave ________,meaning they make the best decisions given their knowledge of the costs and benefits.
A)equitably
B)rationally
C)emotionally
D)selfishly

Accepted Answer

Economics assumes that economic agents behave rationally, meaning that they make decisions based on the knowledge of the costs and benefits without being influenced by emotions or other factors. This assumption allows economists to predict how individuals and markets will behave, and to analyze the impact of different policies and regulations on economic outcomes.

Question 16

The basic economic problem of ________ has always existed and will continue to exist.
A)scarcity
B)efficiency
C)inflation
D)recession

Accepted Answer

Scarcity refers to the limited resources available to fulfill unlimited wants and needs. This basic economic problem has existed since the beginning of human civilization and will continue to exist as long as there are finite resources and infinite wants. Efficiency, inflation, and recession are all economic concepts that can be affected by scarcity, but are not the root cause of the basic economic problem.

Question 17

An economic ________ is a simplified version of some aspect of economic life used to analyze an economic issue.
A)market
B)trade-off
C)variable
D)model

Accepted Answer

A model is a simplified representation of a real-world phenomenon. Economic models are used to study and analyze economic issues by highlighting the key factors that influence economic outcomes. They allow economists to test theories, make forecasts, and evaluate the potential impacts of policy decisions.

Question 18

In economics,choices must be made because we live in a world of
A)unemployment.
B)scarcity.
C)greed.
D)unlimited resources.

Accepted Answer

Scarcity refers to the limited availability of resources compared to unlimited wants and needs. Therefore, choices must be made as to how to allocate these limited resources among competing needs and wants.

Question 19

In economics,the term ________ means "additional" or "extra."
A)allocative
B)marginal
C)equity
D)optimal

Accepted Answer

The term "marginal" is widely used in economics to describe the additional benefit or cost of a decision. For example, marginal cost is the additional cost in producing an additional unit of a good or service, while marginal benefit is the additional benefit gained from consuming an additional unit.

Question 20

Where do economic agents such as individuals,firms and nations,interact with each other?
A)in public locations monitored by the government
B)in any arena that brings together buyers and sellers
C)in any physical location people 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

Accepted Answer

Economic agents such as individuals, firms, and nations interact with each other in any arena that brings together buyers and sellers like markets, stock exchanges, and trade shows, whether it is physical or virtual.

Quiz 1: Economics: Foundations and Models

Since 1994,obesity rates in the United States

Which of the following statements is true about scarcity?

Suppose the U.S.government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000.These doctors would be exemplifying the economic idea that

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Suppose the U.S.government encouraged consumers to trade in their old automobiles for more efficient,new models by paying up to $5,000 for the old automobiles.These consumers would be exemplifying the economic idea that

Economists assume that rational behavior is useful in explaining choices people make

Economists assume that individuals

By definition,economics is the study of

Economists assume that rational people do all of the following except

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that

Recent changes occurring within the U.S.health care system,including lower insurance reimbursement rates,have resulted in

Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave ________,meaning they make the best decisions given their knowledge of the costs and benefits.

The basic economic problem of ________ has always existed and will continue to exist.

An economic ________ is a simplified version of some aspect of economic life used to analyze an economic issue.

In economics,choices must be made because we live in a world of

In economics,the term ________ means "additional" or "extra."

Where do economic agents such as individuals,firms and nations,interact with each other?