Most missed questions from Unit 1

Which of the following represents an investment in human capital?

• A. The federal government invests in new post office trucks

• B. A cable TV company invests in advertising and hires new writers

• C. Sates invest in state universities that provide affordable college educations

• D. A restaurant raises the wages of all its employees

Which describes a method for allocating scarce resources?

• A group of stores get together to decide on the price of a good.

• B The Government of a country decides what to produce and for whom it will be produced.

• C Businesses begin a new advertising campaign.

• D. Lowering Opportunity cost

At what point should this person rationally STOP eating cookies?

• A After 1 because the marginal benefits decline after that

• B After 2 because their benefits are greater than the cost after that

• C After 3 because that is where the marginal benefit is equal to marginal cost

• D After 4 because there is no cost

Government agencies inspect restaurants on a regular basis to insure the restaurants are obeying health and food safety regulations. What economic effect does this have on the restaurants?

• A They charge higher prices to cover the costs of the time and resources used in meeting the regulations.

• B More food is produced because the regulations make the restaurant more productive.

• C Restaurants cannot serve food if they do not meet all of the regulations.

• D The price of food is typically lower because the regulations force restaurants to use cheaper ingredients.

Which of the following is an example how the US government regulates and/or effects the economy?

• A. Inflation

• Free Market

• Unrested Trade

• Consumer Protection

Because command economies have a high degree of government interaction, they are better suited to meet which economic goals?

• A freedom and growth

• B efficiency and freedom

• C growth and efficiency

• D stability and equity

Which of the following is NOT an element of the US free enterprise system?

• A. Voluntary Exchange

• B. Freedom

• C. Full-Employment

• D. Motivation to make a profit

Bill’s Business chooses to produces fluorescent toothbrushes that allow people to brush their teeth in the dark because he believes there is demand for them. He decided to embark on this adventure on his own, despite some skepticism from those who know him. Since the government does not force consumers to buy what they do not desire, Bill will have to convince people to purchase his toothbrushes of their own free will. The scenario MOSTLY an example of

• A. A mixed-Economy

• B. a free-enterprise system based on voluntary exchange

• C. Productivity and efficiency

• D. A cooperation at work

Economic growth is often tied to investment in machinery, new technology, and education of the population. This is because

• A these items lead to a greater productivity of inputs.

• B the only way to measure economic growth is to observe changes in these factors.

• C investment in these items are the sole determinant of output.

• D all of these items improve capital resources.

. Which BEST explains point Y?

• A The goods are not being sold quickly

• B Workers are overproducing the goods

• C The country is wasting potential resources

• D A natural disaster has permanently wiped out most of the country’s natural resources