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Liberty University ECON 213 quiz 1 complete Answers | Rated A+
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Liberty University ECON 213 quiz 1 complete Answers | Rated A+

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Question 1

What is the strongest argument for why we need more economists today than ever before?

Question 2

Which scenario describes studying for an economics course without applying the scarcity principle?

Question 3

The U.S. federal government offers homeowners a tax deduction for their home loan interest payments. This reduction in taxes serves as a(n) ________ to buy a house.

Question 4

As a new firm in the applepicking business, you have considered adding an economist to your management team. What would this economist be unable to help your managerial team with?

Question 5

Some public transit systems use an “honor system” whereby patrons have to show that they have paid their fare only when asked for it by an enforcement officer. With what population would such a system be successful?

Question 6

The government has been trying to mint dollar coins instead of printing paper dollar bills, but people have been reluctant to use coins instead of paper bills. How would an economist explain this reluctance?

Question 7

Saudi Arabia has a comparative advantage in producing oil because it:

Question 8

Which of the following is not a type of incentive?

Question 9

The U.S. federal government offers homeowners a tax deduction for their home loan interest payments. This reduction in taxes may have encouraged too many people to own a home. If the tax deduction caused people who otherwise would have rented to own, the tax deduction serves as a(n):

Question 10

When you chose a major, you likely thought about your skills. Let’s say you don’t enjoy dealing with numbers. How could you explain to your parents, using logic from economics, why you chose to major in English instead of mathematics?

Question 11

A parent that pays a child an allowance for doing chores is providing a(n):

Question 12

I asked my neighbor to rake the leaves on his lawn because they are blowing into my yard. He responded that it wouldn’t be rational for him to do so. Why would this be the case?

Question 13

The basic goal of economics is:

Question 14

Economics is the study of:

Question 15

A good is ________ if it takes even a small amount of time, energy, or money to acquire.

Question 16

Many professors have a policy that punishes individuals if they don’t come to class. Instead of punishing students who don’t attend class, what could the professor do to provide a positive incentive to come to class?

Question 17

A person has a comparative advantage in the production of a good when she or he can produce the product at a(n) ________ opportunity cost compared to another person.

Question 18

When a parent tells you not to study economics because it is a pointless discipline, why is he or she incorrect?

Question 19

Indirect incentives create:

Question 20

Google has started a project to scan all books and make those that are not copyrighted available to people free of charge. Why is it important that only books without a copyright are available?

 

Rational decision-making under conditions of scarcity requires individuals to

Many stores are open 24 hours a day. When store managers make the decision to stay open 24 hours, it must be the case that

Google has started a project to scan all books and make those that are not copyrighted available to people free of charge. Why is it important that only books without a copyright are available

Which scenario describes studying for an economics course without applying the scarcity principle

Some public transit systems use an “honor system” whereby patrons have to show that they have paid their fare only when asked for it by an enforcement officer. With what population would such a system be successful

Public buildings in the United States are required to be accessible to the disabled and, as a result, almost all have an elevator. What would be an example of a positive direct incentive for those who can use stairs

The basic goal of economics is

What is the strongest argument for why we need more economists today than ever before

I asked my neighbor to rake the leaves on his lawn because they are blowing into my yard. He responded that it wouldn’t be rational for him to do so. Why would this be the case

What is the opportunity cost of taking this exam

The opportunity cost of going to school rather than working is the cost of

Which of the following concepts do economists focus their study on when explaining how humans behave

The U.S. federal government offers homeowners a tax deduction for their home loan interest payments. This reduction in taxes serves as a(n) ________ to buy a house

How are changes in opportunity cost related to decision-making behavior

The patent system

Economics is the study of

An example of a direct positive incentive is

Opportunity cost is the ________ alternative forfeited when a choice is made.

In a growing number of cities, stores are required either not to make available plastic or paper bags or to do so only for an additional fee. What kind of incentive is this fee?

Kelly is an architect, and she is trying to decide whether to hire Mike, a draftsman, to assist with her work. Kelly could hire Mike at $20 per hour, but it would take him three times as long to complete a task as it takes Kelly. Kelly is able to earn $90 per hour and has more architectural jobs than she is able to handle. Which of the following is true

 

Question 1 The opportunity cost of working rather than going to school is:

Question 2 I asked my neighbor to rake the leaves on his lawn because they are blowing into my yard. He responded that it wouldn’t be rational for him to do so. Why would this be the case?

Question 3 As a discipline, economics is best described by which of the following?

Question 4 Some public transit systems use an “honor system” whereby patrons have to show that they have paid their fare only when asked for it by an enforcement officer. With what population would such a system be successful?

Question 5 Which of the following is a microeconomic question?

Question 6 One way to promote a new business is to offer free items. If you were to open a new restaurant and offer free food, you likely would have a line out the door. How would an economist understand the behavior of those standing in line?

Question 7 How are changes in opportunity cost related to decision­making behavior?

Question 8 A camera takes a picture of drivers who do not stop at a red light, and this practice is used to issue a traffic ticket. These red light cameras can be understood as serving as a(n):

Question 9 The need to study economics would cease to exist if:

Question 10 An example of a direct positive incentive is:

Question 11 Saudi Arabia has a comparative advantage in producing oil because it:

Question 12 Public buildings in the United States are required to be accessible to the disabled and, as a result, almost all have an elevator. What would be an example of a positive direct incentive for those who can use stairs?

Question 13 According to economists, one reason few professional athletes have PhD’s is that the:

Question 14 Which scenario describes studying for an economics course without applying the scarcity principle?

Question 15 Microeconomics is the branch of economics that focuses on the:

Question 16 Which of the following is a macroeconomic question?

Question 17 The opportunity cost of a purchase is:

Question 18 Instead of taking an economics course, you could have taken a history course that meets at the exact same time. The total cost of taking the economics course would be:

Question 19 Economists believe that optimal decisions are made up to the point where:

Question 20 An economist is an individual who would be least able to answer which research question?

 

Question 1 Microeconomics is the branch of economics that focuses on the:

Question 2 The cost of a trade­off is known as the ________ of that decision.

Question 3 The U.S. federal government offers homeowners a tax deduction for their home loan interest payments. This reduction in taxes may have encouraged too many people to own a home. If the tax deduction caused people who otherwise would have rented to own, the tax deduction serves as a(n):

Question 4 In a growing number of cities, stores are required either not to make available plastic or paper bags or to do so only for an additional fee. If this fee can be refunded when you recycle the bag, the refund acts as a(n):

Question 5 More oranges are grown in Florida than North Dakota because Florida’s warm climate gives it a ________ in growing oranges.

Question 6 Because of scarcity:

Question 7 Economists believe that optimal decisions are made up to the point where:

Question 8 Why would economists find it surprising if the CEO of a large company does his or her own housework?

Question 9 When consumers discard their gasoline­powered automobiles for electric­powered ones, this partially reflects the ________ of gasoline:

Question 10 Opportunity cost is the ________ alternative forfeited when a choice is made.

Question 11 Economists believe that individuals compare the benefits and costs of various options when making a decision and in so doing act ________.

Question 12 The basic goal of economics is:

Question 13 The patent system:

Question 14 Who benefits from voluntary trade?

Question 15 As a new firm in the apple­picking business, you have considered adding an economist to your management team. What would this economist be unable to help your managerial team with?

Question 16 Public buildings in the United States are required to be accessible to the disabled and, as a result, almost all have an elevator. What would be an example of a positive direct incentive for those who can use stairs?

Question 17 A person has a comparative advantage in the production of a good when she or he can produce the product at a(n) ________ opportunity cost compared to another person.

Question 18 In economics, choices are necessary because of the presence of:

Question 19 Macroeconomics is the study of:

Question 20 Many stores are open 24 hours a day. When store managers make the decision to stay open 24 hours, it must be the case that:

 

Question 1 Economics professors are well aware of the importance of incentives. Which of the following situations shows the use of a positive incentive?

Question 2 Some public transit systems use an “honor system” whereby patrons have to show that they have paid their fare only when asked for it by an enforcement officer. With what population would such a system be successful?

Question 3 As a new firm in the apple­picking business, you have considered adding an economist to your management team. What would this economist be unable to help your managerial team with?

Question 4 Indirect incentives create:

Question 5 What is the opportunity cost of taking this exam?

Question 6 When most economists wake up in the morning, their first decision is whether or not to hit the snooze bar on the alarm clock. What statement best represents their thought process as a rational decision­maker?

Question 7 Who benefits from voluntary trade?

Question 8 Opportunity cost is the ________ alternative forfeited when a choice is made.

Question 9 The opportunity cost of a purchase is:

Question 10 Why would economists find it surprising if the CEO of a large company does his or her own housework?

Question 11 The U.S. federal government offers homeowners a tax deduction for their home loan interest payments. This reduction in taxes serves as a(n) ________ to buy a house.

Question 12 Many stores are open 24 hours a day. When store managers make the decision to stay open 24 hours, it must be the case that:

Question 13 What is the strongest argument for why we need more economists today than ever before?

Question 14 An opportunity cost is the:

Question 15 Economics is concerned with the trade­offs that emerge because of scarcity. The term “trade­offs” refers to:

Question 16 The government controls for many indirect incentives in safety net social programs by:

Question 17 Which of the following is a microeconomic question?

Question 18 Microeconomics is the study of:

Question 19 While generous disability insurance can help those who have been permanently injured, it can also increase the likelihood that individuals will falsely claim to be disabled. This likelihood is a(n):

Question 20 When consumers discard their gasoline­powered automobiles for electric­powered ones, this partially reflects the ________ of gasoline:

 

Question 1

Economics is the study of:

Select one:

a. markets

b. How to make workers more productive and firms more profitable.

c. How to allocate resources to satisfy wants and needs.

d. How to make money.

e. Capitalism

Question 2

An example of a direct positive incentive is:

Select one:

a. Threatening to fire those who do not perform well.

b. Unemployment insurance for those who are laid off.

c. A prison sentence for committing a crime.

d. Providing a workplace safety program.

e. Providing a commission for sales.

Question 3

A health insurance company may offer its policyholders a discount on their premiums if they prove that

they have stopped smoking. What type of incentive is the health insurance company offering?

Select one:

a. an unintended incentive.

b. A neutral incentive.

c. complementary incentive.

d. A direct incentive.

e. An indirect incentive.

Question 4

The cost of a trade-off is known as the ________ of that decision.

Select one:

a. opportunity cost

b. marginal cost

c. net cost

d. comparative cost

e. explicit cost

Question 5

Instead of taking an economics course, you could have taken a history course that meets at the exact

same time. The total cost of taking the economics course would be:

Select one:

a. the fact that you could not take the history course at the same time.

b. the tuition cost, the cost of the textbook and notebook, and the fact that you could not take the history

course at the same time.

c. the tuition cost for the economics course plus the price of the textbook and a notebook for the

economics course.

d. the price of the textbook and a notebook for the economics course.

e. the tuition cost for the economics course.

Feedback

Question 6

The opportunity cost of working rather than going to school is:

Select one:

a. zero because the person is earning an income by working.

b. the cost of clothing and transportation.

c. the higher wages that come with additional education.

d. the cost of food and housing.

e. the annual wages earned by working.

Question 7

On the television show “MythBusters,” the hosts design experiments, collect data, and test theories based

on popular myths. This is an example of:

Select one:

a. the scientific method as used in economics.

b. economic growth.

c. absolute advantage.

d. gains from trade.

e. production possibilities.

Question 8

The area inside (within) the production possibilities frontier (PPF) contains:

Select one:

a. normative points.

b. inefficient points.

c. efficient points.

d. positive points.

e. high opportunity cost points.

Question 9

How will a reduction in the national unemployment rate affect a nation’s production possibilities frontier

(PPF)?

Select one:

a. It will move society to a point farther inside the PPF.

b. It will cause the PPF to shift inward.

c. It will move society outward to a point closer to or on the PPF.

d. It will push society to a point outside its PPF.

e. It will cause the PPF to shift outward.

Question 12

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier—

Private Ryan. The movie is predominantly about how much was given up in an effort to save this one

particular soldier. The main economic theme of the movie is:

Select one:

a. opportunity cost.

b. comparative advantage.

c. positive advantage.

d. normative analysis.

e. absolute advantage.

Question 15

Consider the following scenario to answer the questions that follow: Two friends, Rachel and Joey, enjoy

baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to

make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie.

What is Joey’s opportunity cost of baking 1 loaf of bread?

Select one:

a. 1 loaf of bread

b. 1/2 loaf of bread.

c. 1 pie

d. 2 pies

e. 4 pies

Question 16

Consider the following scenario to answer the questions that follow: Two friends, Rachel and Joey, enjoy

baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to

make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie.

What is Rachel’s opportunity cost of baking 1 pie?

Select one:

a. 1 pie

b. 2 pies

c. 2 loaves of bread.

d. 1 loaf of bread

e. 1/2 loaf of bread

Question 17

The ability of one producer to create more of a good than another producer using the same quantity of

resources is called:

Select one:

a. a positive-sum game.

b. absolute advantage.

c. gains from trade

d. the law of increasing relative cost.

e. comparative advantage.

Question 18

The ability of one producer to produce a good at a lower opportunity cost than another producer is called:

Select one:

a. absolute advantage.

b. a zero-sum game.

c. comparative advantage.

d. a normative statement.

e. the law of increasing relative cost.

Question 19

For both parties to benefit from specialization and trade, the trading parties must agree on:

Select one:

a. the appropriate level of investment for the future.

b. the source of comparative advantage.

c. who has the absolute advantage in production.

d. a plan not to trade with other parties.

e. a price somewhere between their opportunity costs of production.

Question 20

Why do economists use models?

Select one:

a. Models allow us to control exogenous factors.

b. Models allow us to study a simplified version of a complex world.

c. Models make the world harder to understand.

d. Models allow us to examine more factors than what actually exists in our world.

e. Models are used to add complexity to a simple world.

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     1.   In economics, choices are necessary because of the presence of:

a.

luxuries.

b.

inefficiency.

c.

needs.

d.

scarcity.

e.

incentives.

 

     2.   Economics is the study of:

a.

how to make money.

b.

how to allocate resources to satisfy wants and needs.

c.

capitalism.

d.

how to make workers more productive and firms more profitable.

e.

markets.

 

 

     3.   Thomas Malthus’s prediction of mass starvation failed to come true because of increases in:

a.

population.

b.

productivity.

c.

temperature.

d.

government involvement.

e.

income.

 

     4.   The basic goal of economics is:

a.

controlling the effects of government actions.

b.

determining how to distribute all that is produced in an economy.

c.

addressing the scarcity problem created because the population’s desire for goods exceeds the ability to produce them.

d.

matching limited resources to people’s limited wants and needs.

e.

controlling tastes and wishes so that there will be enough resources to produce all the goods and services that people want.

 

     5.   An economist is an individual who would be least able to answer which research question?

a.

how much of a product is purchased at a specific price

b.

how the tastes and preferences of consumers are determined

c.

what firms decide to produce

d.

how goods and services are distributed to the population

e.

how firms decide to produce a good or service

 

     6.   The need to study economics would cease to exist if:

a.

the government stopped controlling people’s actions.

b.

people were free to make decisions on their own.

c.

people put forth the effort required to attain the goods and services they wanted.

d.

people earned more than they spent.

e.

there were enough resources to produce all the goods and services people would like to obtain.

 

     7.   As a discipline, economics is best described by which of the following?

a.

the study of how to control the effects of government actions

b.

the study of how to control the preferences of consumers so that there will be enough resources to produce all the goods and services that consumers want

c.

the study of how to use scarce resources to satisfy unlimited wants and needs

d.

the study of how to dispose of excess goods and services that nobody wants

e.

the study of how to maximize profits for firms

 

     8.   When a parent tells you not to study economics because it is a pointless discipline, why is he or she incorrect?

a.

The government continues to play a role in our daily lives.

b.

People have the freedom to do whatever they want, and economists have nothing to add to their decision-making process.

c.

There are not enough resources to produce all the goods and services that are wanted and needed.

d.

Economics has nothing to offer in terms of understanding the stock market.

e.

Economics has nothing to offer in terms of understanding government programs like Social Security.

     9.   When consumers discard their gasoline-powered automobiles for electric-powered ones, this partially reflects the ________ of gasoline:

a.

scarcity

b.

luxury

c.

necessity

d.

specialization

e.

incentive

 

   10.   As a new firm in the apple-picking business, you have considered adding an economist to your management team. What would this economist be unable to help your managerial team with?

a.

Determining the lowest cost way of picking apples

b.

Determining how many apples consumers will purchase at different prices

c.

Determining why people eat apples

d.

Determining the effect government regulations would have on the price of apples

e.

Determining the lowest cost way of distributing apples

 

   11.   A good is ________ if it takes even a small amount of time, energy, or money to acquire.

a.

abundant

b.

in shortage

c.

cheap

d.

scarce

e.

virtually free

 

   12.   Because of scarcity:

a.

individuals and societies are allowed no choice about which wants and needs to satisfy.

b.

individuals and societies must choose which wants and needs to satisfy.

c.

all choices about wants and using resources must be made by the government.

d.

choices can be made about which wants to satisfy, but not about which resources to use.

e.

choices must be made about which resources to use, but not about which wants to satisfy.

 

   13.   Which of the following statements best represents the fact that I cannot put in extra hours of work because of scarcity?

a.

I don’t have enough time for additional work because I need to spend time with my family and there are only so many hours in the day.

b.

I don’t like going to work, so why would I work more than I have to?

c.

I don’t think that overtime pay is high enough.

d.

I am worried that if I work extra hours, I will get bored with my job.

e.

I don’t want my coworkers to feel pressure to work more because I am working additional hours.

   14.   Which scenario describes studying for an economics course without applying the scarcity principle?

a.

I study two hours for every one hour I am in the classroom.

b.

I study three afternoons a week until I understand the material or until dinner, whichever comes first.

c.

I study with my roommate who is also taking the course, and we discuss economic concepts during any free time we can find.

d.

I study for this course and do nothing else.

e.

I talk to an economist whenever I have a chance to do so.

 

 

   15.   What is the strongest argument for why we need more economists today than ever before?

a.

We have a need for more wealth given the higher standard of living that individuals demand.

b.

Economists are needed to address the allocation of scarce resources as a result of the world’s growing population.

c.

Economists are needed to make sure that firms continue to make profits.

d.

Economists are needed to make sure that consumers are well informed about their possible purchase options and that they budget their finances appropriately.

e.

Economists are needed to make sure that the government doesn’t involve itself too much in the economy.

 

   16.   Macroeconomics is the study of:

a.

the economic motives of voters and elected officials.

b.

individual decision-making units such as households and businesses.

c.

how government purchases affect specific markets.

d.

the operation of the economy as a whole.

e.

the interaction between the government and businesses.

 

   17.   Which of the following is a macroeconomic question?

a.

How many textbooks should be published by a publisher?

b.

How much should English majors earn after college?

c.

How do members of a household decide whether to clean their own house or hire someone else to do it?

d.

What is the rate of unemployment?

e.

What is the price of a new 40-inch television?

 

   18.   Microeconomics is the study of:

a.

how government activities affect the economy.

b.

individual decision-making units.

c.

collective decision-making.

d.

the operation of the economy as a whole.

e.

the interaction between the government and businesses.

 

   19.   Microeconomics is the branch of economics that focuses on the:

a.

entire economy.

b.

production side of the economy.

c.

consumption side of the economy.

d.

involvement of the government in the entire economy.

e.

choices and decision-making of individuals and firms.

 

   20.   Which of the following is a microeconomic question?

a.

What are the total production levels in the economy?

b.

How can we best encourage economic growth?

c.

What is the overall price level in the economy?

d.

What are the variables that determine the price of a specific good?

e.

How can we reduce the unemployment rate among Hispanic men?

 

   21.   Which of the following is not a type of incentive?

a.

positive

b.

negative

c.

complementary

d.

indirect

e.

direct

 

   22.   The patent system:

a.

acts as a direct positive incentive.

b.

acts as a direct negative incentive.

c.

acts as an indirect positive incentive.

d.

acts as an indirect negative incentive.

e.

does not provide an incentive.

 

   23.   Which of the following concepts do economists focus their study on when explaining how humans behave?

a.

fairness

b.

money

c.

emotions

d.

incentives

e.

justice

 

   24.   Entrepreneurs are willing to take risks because:

a.

technology provides a way to sidestep the patent and copyright system.

b.

the patent and copyright system provides an exclusive right to sell the product for a period of time.

c.

the patent and copyright system guarantees a certain level of profit.

d.

technology always increases costs and prevents competitors from entering the market.

e.

the patent and copyright system guarantees that the risks taken will be rewarded.

 

   25.   Public buildings in the United States are required to be accessible to the disabled and, as a result, almost all have an elevator. What would be an example of a positive direct incentive for those who can use stairs?

a.

Using the stairs will make it seem that you care about your health and that you aren’t lazy.

b.

Using the stairs will increase the risk of tripping and falling.

c.

Using the stairs will take more time than taking the elevator and will increase the risk of missing an important meeting.

d.

Using the stairs will give you some exercise and make you healthier.

e.

Using the stairs will put elevator repair professionals out of work.

 

   26.   If the government wanted to give people a negative direct incentive not to save money, what would be the appropriate policy?

a.

providing individuals a subsidy to save their money

b.

providing funding for an advertising campaign encouraging people to spend more money

c.

informing individuals that saving money causes people not to spend money, which will cause them to lose their jobs

d.

imposing a tax on individuals for saving their money

e.

informing consumers about all that they could buy with their money with the hope that they spend more

 

   27.   An example of a direct negative incentive is:

a.

providing a commission for sales.

b.

awarding a promotion for hard work.

c.

threatening to fire those who do not perform well.

d.

providing an orientation for new employees.

e.

providing generous benefits and pay for employees.

   28.   An example of a direct positive incentive is:

a.

a prison sentence for committing a crime.

b.

unemployment insurance for those who are laid off.

c.

providing a workplace safety program.

d.

providing a commission for sales.

e.

threatening to fire those who do not perform well.

 

   29.   Actions and activities are encouraged with which type of incentive?

a.

positive

b.

negative

c.

neutral

d.

complementary

e.

unintended

 

   30.   A parent that pays a child an allowance for doing chores is providing a(n):

a.

positive incentive.

b.

negative incentive.

c.

neutral incentive.

d.

complementary incentive.

e.

unintended incentive.

 

   31.   Economics professors are well aware of the importance of incentives. Which of the following situations shows the use of a positive incentive?

a.

Students who show up late to class will not be allowed in the classroom.

b.

Students who do not have a doctor’s note will not be allowed to take an exam at a different time.

c.

Students can choose whether or not they want to attend class—there is no attendance policy.

d.

Students can choose to do extra credit at the end of the semester.

e.

The professor decides to teach the class by reading out of the textbook to the entire class.

 

   32.   A car insurance company is willing to offer accident-free drivers a discount. This is an example of:

a.

a positive incentive.

b.

a negative incentive.

c.

an opportunity cost.

d.

a comparative advantage.

e.

scarcity.

 

   33.   Many professors have a policy that punishes individuals if they don’t come to class. Instead of punishing students who don’t attend class, what could the professor do to provide a positive incentive to come to class?

a.

Those who come to class are given extra points.

b.

Those who do not come to class have their grade reduced.

c.

Those who come to class will be asked questions, and if they answer them incorrectly, their grade will be lowered.

d.

Those who come to class will be ridiculed.

e.

Those who do not come to class might be dropped from the course.

 

   34.   Actions and activities are discouraged with which type of incentive?

a.

positive

b.

negative

c.

neutral

d.

complementary

e.

unintended

 

   35.   A camera takes a picture of drivers who do not stop at a red light, and this practice is used to issue a traffic ticket. These red light cameras can be understood as serving as a(n):

a.

positive incentive to encourage individuals to stop at a red light.

b.

negative incentive to discourage individuals from driving through a red light.

c.

indirect incentive to encourage individuals to stop at a red light.

d.

direct incentive to encourage individuals to stop at a red light.

e.

negative incentive to encourage individuals to drive through a red light.

 

   36.   The government places warnings on cigarette and liquor packages. These warnings serve as a(n):

a.

positive incentive.

b.

negative incentive.

c.

indirect incentive.

d.

opportunity cost.

e.

way to make cigarettes and liquor more scarce.

 

   37.   When a ticket is given to a pedestrian for jaywalking, what type of incentive exists?

a.

a positive incentive

b.

a negative incentive

c.

a neutral incentive

d.

a complementary incentive

e.

an unintended incentive

 

   38.   Google has started a project to scan all books and make those that are not copyrighted available to people free of charge. Why is it important that only books without a copyright are available?

a.

If all books were scanned and available free of charge, copyright holders would face a positive incentive to continue writing and publishing books.

b.

If all books were scanned and available free of charge, copyright holders would face a negative incentive to continue writing and publishing books.

c.

If only copyrighted texts were scanned and available free of charge, copyright holders would face an indirect incentive to continue writing and publishing books.

d.

If only non-copyrighted books were scanned and available free of charge, copyright holders would face a negative incentive to continue writing and publishing books.

e.

If only non-copyrighted books were scanned and available free of charge, copyright holders would face an indirect incentive to continue writing and publishing books.

 

   39.   The U.S. federal government offers homeowners a tax deduction for their home loan interest payments. This reduction in taxes serves as a(n) ________ to buy a house.

a.

direct incentive

b.

indirect incentive

c.

neutral incentive

d.

complementary incentive

e.

unintended incentive

 

   40.   In a growing number of cities, stores are required either not to make available plastic or paper bags or to do so only for an additional fee. What kind of incentive is this fee?

a.

a direct incentive

b.

an indirect incentive

c.

a neutral incentive

d.

a complementary incentive

e.

an unintended incentive

 

   41.   In a growing number of cities, stores are required either not to make available plastic or paper bags or to do so only for an additional fee. If this fee can be refunded when you recycle the bag, the refund acts as a(n):

a.

direct incentive.

b.

indirect incentive.

c.

neutral incentive.

d.

complementary incentive.

e.

unintended incentive.

 

   42.   If you don’t like changing the oil in your car and pay your father to do it for you, you have provided him with a(n):

a.

direct incentive.

b.

indirect incentive.

c.

neutral incentive.

d.

complementary incentive.

e.

unintended incentive.

 

   43.   A health insurance company may offer its policy-holders a discount on their premiums if they prove that they have stopped smoking. What type of incentive is the health insurance company offering?

a.

a direct incentive.

b.

an indirect incentive.

c.

a neutral incentive.

d.

a complementary incentive.

e.

an unintended incentive.

 

   44.   Indirect incentives create:

a.

positive consequences.

b.

negative consequences.

c.

indirect consequences.

d.

direct consequences.

e.

unintended consequences.

 

   45.   The government controls for many indirect incentives in safety net social programs by:

a.

limiting payment to a specified time period.

b.

providing only a partial payment.

c.

allowing individuals to apply to only a certain number of safety net social programs.

d.

requiring individuals to repay the benefits they received.

e.

establishing income limits for those who apply for safety net social programs.

 

   46.   What is the indirect incentive in the unemployment insurance program?

a.

Workers get paid when they are laid off.

b.

Workers face an incentive to find a new job as quickly as possible.

c.

Workers face no incentive to find a new job until the insurance runs out.

d.

Workers are paid only a portion of their wages by the unemployment insurance program.

e.

Workers on unemployment insurance are given training opportunities.

 

   47.   The U.S. federal government offers homeowners a tax deduction for their home loan interest payments. This reduction in taxes may have encouraged too many people to own a home. If the tax deduction caused people who otherwise would have rented to own, the tax deduction serves as a(n):

a.

direct incentive.

b.

indirect incentive.

c.

neutral incentive.

d.

complementary incentive.

e.

unintended incentive.

 

   48.   While generous disability insurance can help those who have been permanently injured, it can also increase the likelihood that individuals will falsely claim to be disabled. This likelihood is a(n):

a.

direct incentive.

b.

indirect incentive.

c.

positive incentive.

d.

innovation.

e.

marginal cost.

 

   49.   The government has been trying to encourage the use of fuel-efficient cars. One way it has been doing this has been by allowing fuel-efficient cars to use a separate highway lane. This encourages people to use fuel-efficient cars because:

a.

those who place a high value on their scarce time may be encouraged to buy a fuel-efficient car to take advantage of the speedier separate highway lane.

b.

those who place a low value on their scarce time may be encouraged to buy a fuel-efficient car to take advantage of the speedier separate highway lane.

c.

those who are more concerned about the environment are also those who happen to place a high value on their time.

d.

those who purchase a fuel-efficient car are forced to pay more for a new car, and the use of the separate highway lane compensates them for this.

e.

those who purchase a fuel-efficient car are likely to be unhappy because it is less powerful or more cramped inside; use of the separate highway lane compensates them for this.

 

   50.   In the area of many college campuses, parking spaces are often scarce. If these parking spaces have parking meters, which population described below would pay for parking?

a.

A population that is willing to take risks and believes that they will not be caught if they don’t place change in the meter

b.

A population that places a high opportunity cost on making sure they have change and placing change in the meter

c.

A population that is willing to take risks, believes that they will not be caught if they don’t place change in the meter, and disregards any possible $5 ticket for parking illegally

d.

A population that is unwilling to take risks and believes there is a high chance that they will not be caught if they don’t pay for parking

e.

A population that is unwilling to take risks, believes there is a high chance that they will be caught if they don’t pay their share, and places a high value on doing the “right” thing

 

   51.   Some public transit systems use an “honor system” whereby patrons have to show that they have paid their fare only when asked for it by an enforcement officer. With what population would such a system be successful?

a.

a population that is willing to take risks and believes that they will not be caught if they don’t pay their fare

b.

a population that places a high opportunity cost on taking time to purchase a ticket

c.

a population that is willing to take risks, believes that they will not be caught if they don’t pay their fare, and treats fines for not paying a fare as a nuisance

d.

a population that is unwilling to take risks and believes there is a high chance that they will be caught if they don’t pay their fare

e.

a population that is unwilling to take risks, believes there is a high chance that they will not be caught if they don’t pay their fare, and places a low value on doing the right thing

 

   52.   Rational decision-making under conditions of scarcity requires individuals to:

a.

place a monetary value on everything.

b.

know the prices of all goods they might buy.

c.

be alert to price reductions on desired products.

d.

understand that trade-offs are necessary.

e.

earn as much income as possible.

 

   53.   Economics is concerned with the trade-offs that emerge because of scarcity. The term “trade-offs” refers to:

a.

the decision about whether households or businesses should bear the entire burden of the scarcity problem.

b.

the buying and selling that occur as unwanted goods are exchanged for goods that are desired.

c.

the alternatives given up when making choices.

d.

recycling and transforming old goods into new goods to reduce scarcity problems.

e.

forcing businesses to produce some goods and services and not others.

 

   54.   What is the opportunity cost of taking this exam?

a.

all of the things that you could have done by not studying

b.

each of the questions that you miss on the exam

c.

the highest valued alternative that you gave up to prepare for and attend the exam

d.

the money you spent purchasing the textbook and the other materials you study with

e.

the money you spent on tuition

 

   55.   Kelly is an architect, and she is trying to decide whether to hire Mike, a draftsman, to assist with her work. Kelly could hire Mike at $20 per hour, but it would take him three times as long to complete a task as it takes Kelly. Kelly is able to earn $90 per hour and has more architectural jobs than she is able to handle. Which of the following is true?

a.

Kelly should not hire Mike because it would be faster for her to do the work herself.

b.

Kelly should do the drafting work herself because she has the lower opportunity cost.

c.

Mike should be hired at the $20 per hour wage rate.

d.

Mike should be hired, but only if he is paid more than $30 per hour.

e.

Kelly should hire someone who earns minimum wage instead of Mike.

 

   56.   The cost of a trade-off is known as the ________ of that decision.

a.

marginal cost

b.

net cost

c.

opportunity cost

d.

comparative cost

e.

explicit cost

 

   57.   Opportunity cost is the ________ alternative forfeited when a choice is made.

a.

least-valued

b.

highest-valued

c.

most recently considered

d.

mos

Available solutions
  • Liberty University ECON 213 quiz 1 complete Answers | Rated A+
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    Question 1 What is the strongest argument for why we need more economists today than ever before? Question 2 Which scenario describes studying for an economics course without applying the scarcity principle?

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