Question 1

Suppose you find R450.If you choose to use the R450 to go to a rugby match, your opportunity cost of going to the game is

Accepted Answer

A)  nothing, because you found the money.
B)  R450 (because you could have used the R450 to buy other things)  plus the value of your time spent at the game.
C)  R450 (because you could have used the R450 to buy other things)  plus the value of your time spent at the game, plus the cost of the dinner you purchased at the game.
D)  R450 (because you could have used the R450 to buy other things) .
E)  none of these answers.F) None of the above
G) B) and D)

Question 2

The Phillips curve shows that

Accepted Answer

A)  the business cycle has been eliminated.
B)  an increase in inflation temporarily increases unemployment.
C)  inflation and unemployment are unrelated in the short run.
D)  a decrease in inflation temporarily increases unemployment.
E)  None of these answers.F) A) and C)
G) D) and E)

Question 3

Which of the following activities is most likely to produce an externality? A student

Accepted Answer

A)  eats a hamburger in the student centre.
B)  reads a novel for pleasure.
C)  sits at home and watches TV.
D)  has a party in her university residence room.E) A) and B)
F) A) and C)

Question 4

Adam Smith's "invisible hand" concept describes how corporate business reaches into the pockets of consumers like an "invisible hand."

Accepted Answer

A) True 
 B)False

Question 5

Which of the following situations describes the greatest market power?

Accepted Answer

A)  BMW's impact on the price of cars.
B)  A farmer's impact on the price of corn.
C)  Microsoft's impact on the price of desktop operating systems.
D)  A student's impact on university fees.E) A) and B)
F) C) and D)

Question 6

Suppose that Rebecca throws her cola bottle out of her car window and it smashes on the road.Shaun drives over the broken glass and gets a flat tyre.Rebecca's cola consumption has resulted in

Accepted Answer

A)  the production of a public good.
B)  an externality.
C)  monopoly power for Rebecca.
D)  greater efficiency in consumption.E) A) and B)
F) C) and D)

Question 7

Define opportunity cost.What is the opportunity cost to you of attending university? What was your opportunity cost of coming to class today?

Accepted Answer

Whatever must be given up to obtain some...

Question 8

Which of the following is not part of the opportunity cost of going on holiday? The money you

Accepted Answer

A)  spent on a theatre show.
B)  could have made if you had stayed at home and worked.
C)  spent on airline tickets.
D)  spent on another opportunity.E) A) and D)
F) A) and C)

Question 9

In the short run, a reduction in inflation tends to cause a reduction in unemployment.

Accepted Answer

A) True 
 B)False

Question 10

Productivity is defined as the

Accepted Answer

A)  amount of goods and services produced from each unit of labour input.
B)  number of workers required to produce a given amount of goods and services.
C)  amount of labour that can be saved by replacing workers with machines.
D)  actual amount of effort workers put into an hour of working time.E) A) and B)
F) A) and C)

Question 11

When a jet flies overhead, the noise it generates is an externality.

Accepted Answer

A) True 
 B)False

Question 12

In a market economy

Accepted Answer

A)  people are rewarded according to their family size.
B)  people are rewarded according to how well they achieve the goals set by government.
C)  people are rewarded according to how many hours they work.
D)  people are rewarded according to their ability to produce things for which other people are willing to pay.E) A) and B)
F) A) and D)

Question 13

High and persistent inflation is caused by

Accepted Answer

A)  unions increasing wages too much.
B)  OPEC raising the price of oil too much.
C)  governments increasing the quantity of money too much.
D)  regulations raising the cost of production too much.E) A) and C)
F) B) and C)

Question 14

Productivity can be increased by

Accepted Answer

A)  improving the education of workers.
B)  raising union wages.
C)  raising minimum wages.
D)  restricting trade with foreign countries.E) A) and B)
F) A) and C)

Question 15

Government can improve market outcomes by

Accepted Answer

A)  directing labour to priority areas.
B)  printing money.
C)  using well designed policies to reduce firms' market power.
D)  taxing everyone equally.E) A) and D)
F) B) and C)

Question 16

Resources are

Accepted Answer

A)  scarce for households but plentiful for economies.
B)  plentiful for households but scarce for economies.
C)  scarce for households and scarce for economies.
D)  plentiful for households and plentiful for economies.E) A) and D)
F) A) and C)

Question 17

Why is a high quality education system important in raising living standards for future generations?

Accepted Answer

A high quality educational system will r...

Exam 1: What Is Economics

Resources are

Correct Answer
verified

In a market economy

Correct Answer
verified

Which of the following situations describes the greatest market power?

Correct Answer
verified

Productivity can be increased by

Correct Answer
verified

High and persistent inflation is caused by

Correct Answer
verified

Adam Smith's "invisible hand" concept describes how corporate business reaches into the pockets of consumers like an "invisible hand."

Correct Answer
verified

Which of the following activities is most likely to produce an externality? A student

Correct Answer
verified

In the short run, a reduction in inflation tends to cause a reduction in unemployment.

Correct Answer
verified

Which of the following is not part of the opportunity cost of going on holiday? The money you

Correct Answer
verified

Productivity is defined as the

Correct Answer
verified

Suppose you find R450.If you choose to use the R450 to go to a rugby match, your opportunity cost of going to the game is

Correct Answer
verified

Why is a high quality education system important in raising living standards for future generations?

Correct Answer
verified
A high quality educational system will r...
View Answer

Define opportunity cost.What is the opportunity cost to you of attending university? What was your opportunity cost of coming to class today?

Correct Answer
verified
Whatever must be given up to obtain some...
View Answer

When a jet flies overhead, the noise it generates is an externality.

Correct Answer
verified

Government can improve market outcomes by

Correct Answer
verified

Suppose that Rebecca throws her cola bottle out of her car window and it smashes on the road.Shaun drives over the broken glass and gets a flat tyre.Rebecca's cola consumption has resulted in

Correct Answer
verified

The Phillips curve shows that

Correct Answer
verified

Exam 1: What Is Economics

Resources are

Correct AnswerverifiedShow Answer

In a market economy

Correct AnswerverifiedShow Answer

Which of the following situations describes the greatest market power?

Correct AnswerverifiedShow Answer

Productivity can be increased by

Correct AnswerverifiedShow Answer

High and persistent inflation is caused by

Correct AnswerverifiedShow Answer

Adam Smith's "invisible hand" concept describes how corporate business reaches into the pockets of consumers like an "invisible hand."

Correct AnswerverifiedShow Answer

Which of the following activities is most likely to produce an externality? A student

Correct AnswerverifiedShow Answer

In the short run, a reduction in inflation tends to cause a reduction in unemployment.

Correct AnswerverifiedShow Answer

Which of the following is not part of the opportunity cost of going on holiday? The money you

Correct AnswerverifiedShow Answer

Productivity is defined as the

Correct AnswerverifiedShow Answer

Suppose you find R450.If you choose to use the R450 to go to a rugby match, your opportunity cost of going to the game is

Correct AnswerverifiedShow Answer

Why is a high quality education system important in raising living standards for future generations?

Correct AnswerverifiedA high quality educational system will r...View AnswerShow Answer

Define opportunity cost.What is the opportunity cost to you of attending university? What was your opportunity cost of coming to class today?

Correct AnswerverifiedWhatever must be given up to obtain some...View AnswerShow Answer

When a jet flies overhead, the noise it generates is an externality.

Correct AnswerverifiedShow Answer

Government can improve market outcomes by

Correct AnswerverifiedShow Answer

Suppose that Rebecca throws her cola bottle out of her car window and it smashes on the road.Shaun drives over the broken glass and gets a flat tyre.Rebecca's cola consumption has resulted in

Correct AnswerverifiedShow Answer

The Phillips curve shows that

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A high quality educational system will r...
View Answer

Correct Answer
verified
Whatever must be given up to obtain some...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified