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Which of the following contributed to the downfall of the Soviet Union in 1991?


A) government dissatisfaction with high living standards and political freedom
B) an inability to produce low-cost consumer goods that households wanted
C) an overabundance of high-quality goods and services
D) the lack of a strong dictator who could coordinate economic activities

E) B) and D)
F) B) and C)

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Scenario 1-2 Suppose a cigar manufacturer currently sells 1,500 cigars per week and makes a profit of $3,000 per week.The plant foreman observes,"Although the last 500 cigars we produced and sold increased our revenue by $7,500 and our costs by $7,000,we are only making an overall profit of $3,000 per week so I think we need to cut back on production. -Refer to Scenario 1-2.Had the firm not produced and sold the last 500 cigars,would its profit be higher or lower,and if so by how much?


A) Its profit would be $500 higher.
B) Its profit would be $1,000 higher.
C) Its profit would be $500 lower.
D) Its profit would be $1,500 lower.

E) A) and C)
F) B) and C)

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The processes used to produce goods and services describes


A) innovation.
B) entrepreneurship.
C) technology.
D) capital.

E) B) and C)
F) None of the above

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How are the fundamental economic decisions determined in Cuba?


A) Individuals,firms,and the government interact in a market to make these economic decisions.
B) These decisions are made by the country's elders who have had much experience in answering these questions.
C) The government decides because Cuba is a centrally planned economy.
D) The United Nations decides because Cuba is a developing economy.

E) A) and D)
F) B) and C)

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Very few businesses,and virtually no nonprofit organizations,hire economists.

A) True
B) False

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Table 1-1 Table 1-1 Eva runs a small bakery in the village of Roggerli.She is debating whether she should extend her hours of operation.Eva figures that her sales revenue will depend on the number of additional hours the bakery is open as shown in the table above.She would have to hire a worker for those hours at a wage rate of $12 per hour. -Refer to Table 1-1.What is Eva's marginal benefit if she decides to stay open for two hours instead of one hour? A) $25 B) $36 C) $60 D) $95 Eva runs a small bakery in the village of Roggerli.She is debating whether she should extend her hours of operation.Eva figures that her sales revenue will depend on the number of additional hours the bakery is open as shown in the table above.She would have to hire a worker for those hours at a wage rate of $12 per hour. -Refer to Table 1-1.What is Eva's marginal benefit if she decides to stay open for two hours instead of one hour?


A) $25
B) $36
C) $60
D) $95

E) B) and C)
F) None of the above

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Which of the following is counted as "capital" in economics?


A) the money people have
B) the machines that workers have to work with
C) the labor force
D) the wealth people have

E) All of the above
F) C) and D)

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If a straight line passes through the point x = 8 and y = 4 and also through the point x = 12 and y = 6,the slope of this line is


A) negative 4 divided by 2.
B) two.
C) negative one half.
D) one half.

E) None of the above
F) A) and D)

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Which of the following is a positive economic statement?


A) People should not buy imported fruits and vegetables.
B) The government should subsidize solar power for homeowners.
C) The minimum wage law causes unemployment.
D) The number of work visas should not be limited by the government.

E) A) and D)
F) All of the above

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In 2017,President Trump considered imposing a tariff on automobiles assembled by U.S.manufacturers in Mexico that were to be sold in the United States.If this tariff was imposed and as a result,some of these manufacturers moved their automobile assembly from Mexico back to the United States,these firms would be reacting to which of the three key economic ideas?


A) Firms attempt to maximize revenues.
B) Optimal decisions are made at the margin.
C) People are rational.
D) People respond to economic incentives.

E) C) and D)
F) A) and C)

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An office supply store sells a ream of printer paper at a fixed price of $4.50.Which of the following is a term used by economists to describe the money received from the sale of an additional ream of paper?


A) marginal revenue
B) gross earnings
C) pure profit
D) marginal costs
E) net benefit

F) C) and D)
G) A) and B)

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Figure 1-4 Figure 1-4 -Refer to Figure 1-4.Which of the following statements is true? A) The slope of the tangent at E is positive and the slope of the tangent at F is negative. B) The slope of the tangent at E is negative and the slope of the tangent at F is positive. C) The slope of the tangent at E and the slope of the tangent at F are negative. D) The slope of the tangent at E and the slope of the tangent at F are positive. -Refer to Figure 1-4.Which of the following statements is true?


A) The slope of the tangent at E is positive and the slope of the tangent at F is negative.
B) The slope of the tangent at E is negative and the slope of the tangent at F is positive.
C) The slope of the tangent at E and the slope of the tangent at F are negative.
D) The slope of the tangent at E and the slope of the tangent at F are positive.

E) A) and C)
F) All of the above

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Which of the following best describes an assumption economists make about human behavior?


A) They assume that individuals act rationally all the time in all circumstances.
B) They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time.
C) They assume that people take into account the question of fairness in all decisions they make.
D) They assume that individuals act randomly.

E) A) and D)
F) A) and C)

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What is the difference between physical capital and human capital?

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Physical capital includes manu...

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Which of the following statements is false?


A) Anytime you have to decide which action to take you are facing an economic trade-off.
B) Trade-offs do not apply when the consumers purchase a product for which there is excess supply,such as a stock clearance sale.
C) Every individual,no matter how rich or poor,is faced with making trade-offs.
D) Economics is a social science that studies the trade-offs we are forced to make because of scarcity.

E) A) and B)
F) A) and C)

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Which of the following is a positive economic statement?


A) People should use public transportation more often.
B) The government should ban diesel engines in automobiles.
C) Due to a decrease in state funding,university tuition has risen.
D) Foreign citizens should not be allowed to work without a work visa.

E) B) and D)
F) C) and D)

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Lionel's Lawn Care is a company that maintains residential yards.Lionel's cost for his standard package of mowing,edging,and trimming is $15,and he charges $25 for this service.For a total price of $40,Lionel will also trim shrubs,a service that adds an additional $10 to the total cost of the standard package.Should Lionel continue to offer the shrub-trimming service?


A) yes,his marginal benefit is greater than his marginal cost
B) yes,but only if he raises the price of the standard package
C) no,his marginal benefit is less than his marginal cost
D) More information is needed for Lionel to make this decision.

E) A) and B)
F) B) and D)

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Which of the following is a microeconomic question?


A) Why do economies experience periods of recession?
B) Will government intervention lower the unemployment rate?
C) Why has growth in the economy slowed down over the past decade?
D) How will Apple decide on a selling price for the iPad?

E) B) and D)
F) C) and D)

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Which of the following is an example of an activity undertaken by an entrepreneur?


A) choosing the color scheme for your renovated kitchen
B) being promoted to the position of Chief of Police
C) being appointed to the U.S.Supreme Court
D) starting a snow cone business

E) A) and D)
F) A) and C)

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The study of economics arises due to


A) money.
B) scarcity.
C) greed.
D) resources.

E) A) and D)
F) B) and C)

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