PE1 - Practice Exam 1 Multiple Choice Identify the letter...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Practice Exam 1 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Economics deals primarily with the concept of b. scarcity. ____ 2. Efficiency means that a. society is getting the most it can from its scarce resources. ____ 3. When government policies are being designed, b. there is usually a tradeoff between equity and efficiency. ____ 4. The opportunity cost of an item is b. what you give up to get that item. ____ 5. College-age athletes who drop out of school to play professional sports a. are making a bad economic decision, since they can't play forever. b. are unaware of their opportunity cost of attending college. c. underestimate the value of a college education. d. are well aware that their opportunity cost of attending college is very high. ____ 6. People make decisions at the margin by a. following tradition. b. comparing costs and benefits. c. experience. d. calculating dollar costs. ____ 7. A marginal change is a. a long-term trend. b. a large, significant adjustment. c. a change for the worse. d. a small incremental adjustment. ____ 8. Economists understand that people respond to a. the wishes of policymakers. b. incentives. c. threats more than rewards. d. tax breaks, but not tax hikes. ____ 9. One effect of a government imposed seat belt law has been a. fewer pedestrian deaths. b. safer driving. c. an increase in the number of accidents. d. that everyone now wears seat belts. ____ 10. Which is the most accurate statement about trade? a. Trade makes some nations better off and others worse off.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
b. Trade can make every nation better off. c. Trading for a good can make a nation better off only if the nation cannot produce that good. d. Trade helps rich nations and hurts poor nations. ____ 11. If Canada is better than the U.S. at producing hockey sticks, but the U.S. is better than Canada at producing roller blades, a. the U.S. should impose a tariff on Canadian hockey sticks in order to protect jobs in the U.S. roller blade industry. b. the U.S. should sell roller blades to Canada, and should buy Canadian hockey sticks. c. the U.S. should subsidize its hockey stick industry so that it can compete with Canadian hockey sticks. d. the U.S. should put a quota on the amount of Canadian hockey sticks imported. ____ 12. In a market economy, a. firms decide whom to hire and what to produce. b. profit and self-interest guide the decisions of firms and households. c. households decide which firms to work for and what to buy with their incomes. d. all of the above. ____ 13. The "invisible hand" directs economic activity through a. prices. b. mass media. c. subliminal messages. d. government regulations. ____ 14.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 19

PE1 - Practice Exam 1 Multiple Choice Identify the letter...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online