Preview Assessment: Quiz Chapter 1

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PRINCIPLES OF MACROECONOMICS (201220-ECON215-2) > CONTROL PANEL > PREVIEW ASSESSMENT: QUIZ CHAPTER 1

Preview Assessment: Quiz Chapter 1

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Quiz Chapter 1

Multiple Attempts Not allowed. This Test can only be taken once. Force Completion This Test can be saved and resumed later.

Question Completion Status: Question 1 Which of the following phrases best captures the notion of efficiency?
absolute fairness equal distribution minimum waste equitable outcome

10 points

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Question 2 A rational decisionmaker

ignores marginal changes and focuses instead on the big picture. ignores the likely effects of government policies when he or she makes choices.

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takes an action only if the marginal benefit of that action exceeds the marginal cost of that action. takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions.

Question 3 A marginal change is a

change that involves little, if anything, that is important. large, significant adjustment. change for the worse, and so it is usually a short-term change. small, incremental adjustment.

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Question 4

10 points Suppose the state of Illinois passes a law that bans smoking in restaurants. As a result, residents of Wisconsin who do not like breathing second-hand smoke begin driving across the border to Illinois to eat at restaurants there. Which of the following principles does this best illustrate?
People respond to incentives Rational people think at the margin

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Preview Assessment: Quiz Chapter 1

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Trade can make everyone better off Markets are usually a good way to organize economic activity

Question 5

10 points The decisions of firms and households are guided by prices and self-interest in a
command economy. centrally-planned economy. market economy. All of the above are correct.

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Question 6 Prices usually reflect

only the value of a good to society. only the cost to society of making a good. both the value of a good to society and the cost to society of making the good. neither the value of a good to society nor the cost to society of making the good.

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Question 7 An example of a firm with market power is a

delicatessen in New York. cable TV provider in St. Louis. clothing store in Los Angeles. family farm in Illinois.

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Question 8 The term "productivity"

means the same thing as "efficiency." is seldom used by economists, as its meaning is not precise.

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refers to the quantity of goods and services produced from each unit of labor input. refers to the variety of goods and services from which households can choose when they shop.

Question 9

10 points Which of the following would a permanent increase in the growth rate of the money supply change permanently?
inflation unemployment both inflation and unemployment neither inflation nor unemployment

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Question 10

10 points It once took 90 percent of our population to grow our food. It now takes only 3 percent of the population to grow our food. Which of the following statements is true?
This loss of jobs has been detrimental to our economy. The government should provide subsidies to encourage more people to become farmers. This reduction in the number of farmers explains the increase in the price of food. This is progress because freed-up labor that is used to produce other goods.

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