chapter 01 testbank principle of microeconomics 8e by mankiw

lOMoARcPSD|10523762 Chapter 01 - Testbank Microeconomics Microeconomics - UEH (Trường Đại học Kinh tế Thành phố Hồ Chí Minh) StuDocu is not sponsored or endorsed by any college or university Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapt er1 Te nPr i nc i pl e sofEc onomi c s MULTI PLECHOI CE Thewor dt tc ome sf r om t heGr e e kwor df or“ onewhomana ge sahous e hol d”i s a mar ke t b.c ons ume r c pr oduc e r d.e c onomy ANSWER: d e c onomy TYPE: M SECTI ON: 1DI FFI CULTY: Thewor de c onomyc ome sf r om t heGr e e kwor df or a “ e nvi r onme nt ” b.“ onewhomana ge sahous e hol d ” c “ onewhopar t i c i pa t e si namar ke t ” d.“ c ons e r va t i on ” ANSWER: b “ onewhomana ge sahous e hol d ” TYPE: M SECTI ON: 1DI FFI CULTY: Hous e hol dsande c onomi e sha vee ac hoft hef ol l owi ngi nc ommonEXCEPTbot h a mus tal l oc a t es c ar c er e s our c e s b.f ac emanyde c i s i ons c mus tal l oc a t et hegoodsands e r vi c e st he ypr oduc e d.mus tha veac e nt r alde c i s i onmake r ANSWER: d mus tha veac e nt r alde c i s i onmake r TYPE: M SECTI ON: 1DI FFI CULTY: Ec onomi c sde al spr i mar i l ywi t ht hec onc e ptof a s c ar c i t y b.pove r t y c c hange d.powe r ANSWER: a s c ar c i t y TYPE: M SECTI ON: 1DI FFI CULTY: Whi c hoft hef ol l owi ngi sNOTi nc l ude di nt hede c i s i onst te ve r ys oc i e t ymus tmake ? a wha tgoodswi l lbepr oduc e d b.whowi l lpr oduc egoods c wha tde t e r mi ne sc ons ume rpr e f e r e nc e s d.whowi l lc ons umet hegoods ANSWER: c wha tde t e r mi ne sc ons ume rpr e f e r e nc e s TYPE: M SECTI ON: 1DI FFI CULTY: Bot hhous e hol dsands oc i e t i e sf ac emanyde c i s i onsbe c aus e a r e s our c e sar es c ar c e b.popul a t i onsma yi nc r e as eorde c r e as eove rt i me c wa ge sf orhous e hol dsandt he r e f or es oc i e t yfluc t ua t ewi t hbus i ne s sc yc l e s d.pe opl e ,byna t ur e ,t e ndt odi s a gr e e ANSWER: a r e s our c e sar es c ar c e TYPE: M SECTI ON: 1DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762  Chapter 1/Ten Principles of Economics A goodi sc ons i de r e ds c a r c ei nas oc i e t ywhe n a mor eout putoft hegoodi spos s i bl e b.e ve r yonei nt ts oc i e t yc annotha veal lt he ywantoft hegood c t hegove r nme ntr e s t r i c t spr oduc t i onoft hegood d.onl yt her i c he s tpe opl ei nt hee c onomyc anbuyal lt he ywantoft hegood ANSWER: b e ve r yonei nt ts oc i e t yc annotha veal lt he ywantoft hegood TYPE: M SECTI ON: 1DI FFI CULTY: Sc ar c i t ye xi s t swhe n a t he r ei sl e s st hanani nfini t eamountofar e s our c eorgood b.s oc i e t yc anme e tt hewant sofe ve r yi ndi vi dual c t he r ei sl e s sofagoodorr e s our c ea vai l abl et hanpe opl ewi s ht oha ve d.t hegove r nme ntf l st opr oduc egoods ANSWER: c t he r ei sl e s sofagoodorr e s our c ea vai l abl et hanpe opl ewi s ht oha ve TYPE: M SECTI ON: 1DI FFI CULTY: Whi c hoft hef ol l owi ngwoul dNOTbet r uei nawor l dwi t houts c ar c i t y? a The r ewoul dbenone e df ort hes c i e nc eofe c onomi c s b.Eve r yonewoul dha veal lt hegoodsands e r vi c e st he ywant e d c The r ewoul dha vet obeani nfini t es uppl yofe ve r yr e s our c e d.The r ewoul dbeoppor t uni t yc os t s ANSWER: c The r ewoul dha vet obeani nfini t es uppl yofe ve r yr e s our c e TYPE: M SECTI ON: 1DI FFI CULTY: 10 Appr oxi ma t e l ywha tpe r c e nt a geoft hewor l d’ se c onomi e se xpe r i e nc es c ar c i t y? a 25% b.50% c 75% d.100% ANSWER: d 100% TYPE: M SECTI ON: 1DI FFI CULTY: 11 Whe nas oc i e t yc annotpr oduc eal lt hegoodsands e r vi c e spe opl ewi s ht oha vei ti ss dt tt hee c onomyi s e xpe r i e nc i ng a s c ar c i t y b.c ommuni s m c e xt e r nal i t i e s d.mar ke tf l ur e ANSWER: a s c ar c i t y TYPE: M SECTI ON: 1DI FFI CULTY: 12 Fors oc i e t y ,agoodi snots c ar c ei f a a tl e as tonei ndi vi duali ns oc i e t yc anobt nal lheors hewant soft hegood b.fir msar epr oduc i nga tf ul lc apac i t y c al lme mbe r sofs oc i e t yc anha veal lt he ywantofi t d.t hos ewhoha vee noughi nc omec anbuyal lt he ywantoft hegood ANSWER: c al lme mbe r sofs oc i e t yc anha veal lt he ywantofi t TYPE: M SECTI ON: 1DI FFI CULTY: 13 Whi c hpr oduc twoul dbec ons i de r e ds c ar c e ? a Ni kes hoe s b.Mone tpai nt i ngs c 1c ar a tdi amonds d.Al loft heabovear ec or r e c t ANSWER: d Al loft heabovear ec or r e c t TYPE: M SECTI ON: 1DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  14 Whi c hoft hef ol l owi nggoodsbe s tme e t st hede fini t i onofs c a r c i t y? a r b.wa t e ri nt heoc e an c wa t e ri nac i t y d.woodi naf or e s t ANSWER: c wa t e ri nac i t y TYPE: M SECTI ON: 1DI FFI CULTY: 15 Ec onomi c si sde fine dast hes t udyof a bus i ne s s b.how s oc i e t ymana ge si t ss c ar c er e s our c e s c c e nt r alpl anni ng d.gove r nme ntr e gul a t i on ANSWER: b how s oc i e t ymana ge si t ss c ar c er e s our c e s TYPE: M SECTI ON: 1DI FFI CULTY: 16 Ec onomi c si st hes t udyof a how s oc i e t ymana ge si t ss c ar c er e s our c e s b.t hegove r nme nt ’ sr ol ei ns oc i e t y c how amar ke ts ys t e mf unc t i ons d.how t oi nc r e as epr oduc t i on ANSWER: a how s oc i e t ymana ge si t ss c ar c er e s our c e s TYPE: M SECTI ON: 1DI FFI CULTY: 17 I nmos ts oc i e t i e s ,r e s our c e sar eal l oc a t e dby a as i ngl ec e nt r alpl anne r b.t hos ewhoownt her e s our c e s c t hos efir mst tus er e s our c e st opr ovi degoodsands e r vi c e s d.t hec ombi ne dac t i onsofmi l l i onsofhous e hol dsandfir ms ANSWER: d t hec ombi ne dac t i onsofmi l l i onsofhous e hol dsandfir ms TYPE: M SECTI ON: 1DI FFI CULTY: 18 Ec onomi s t ss t udyal loft hef ol l owi ngEXCEPT a how pe opl emakede c i s i ons b.how pe opl ei nt e r ac twi t honeanot he r c t hef or c e sandt r e ndst taffe c tt hee c onomyasawhol e d.how s oc i e t i e sc ngeove rt i me ANSWER: d how s oc i e t i e sc ngeove rt i me TYPE: M SECTI ON: 1DI FFI CULTY: 19 Whi c hoft hef ol l owi ngi sNOTama j orar e aofs t udyf ore c onomi s t s ? a how pe opl emakede c i s i ons b.how c ount r i e sc hoos ena t i onall e ade r s c how pe opl ei nt e r ac twi t he ac hot he r d.how f or c e sandt r e ndsaffe c tt heove r al le c onomy ANSWER: b how c ount r i e sc hoos ena t i onall e ade r s TYPE: M SECTI ON: 1DI FFI CULTY: 20 Theada ge ,“ The r ei snos uc ht hi ngasaf r e el unc h, ”i sus e dt oi l l us t r a t et hec onc e ptof a t r ade offs b.s c ar c i t y c pr oduc t i vi t y d.e ffic i e nc y ANSWER: a t r ade offs TYPE: M SECTI ON: 1DI FFI CULTY: 21 Theada ge ,“ The r ei snos uc ht hi ngasaf r e el unc h, ”me ans a e ve npe opl eonwe l f ar eha vet opa yf orf ood b.t hec os tofl i vi ngi sal wa ysi nc r e as i ng c t oge ts ome t hi ngwel i ke ,weus ual l yha vet ogi veupanot he rt hi ngwel i ke d.al lc os t sar ei nc l ude di nt hepr i c eofapr oduc t ANSWER: c t oge ts ome t hi ngwel i ke ,weus ual l yha vet ogi veupanot he rt hi ngwel i ke TYPE: M SECTI ON: 1DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762  Chapter 1/Ten Principles of Economics 22 Ec onomi s t sus et hephr as e“ The r ei snos uc ht hi ngasaf r e el unc h, ”t oi l l us t r a t e a how i nfla t i oni nc r e as e spr i c e s b.t tt oge tonet hi ng,wemus tgi veups ome t hi nge l s e c t tnot hi ngi sf r e ei namar ke te c onomy d.t ti fs ome t hi ngl ookst oogoodt obet r ue , i tpr obabl yi s ANSWER: b t tt oge tonet hi ng,wemus tgi veups ome t hi nge l s e TYPE: M SECTI ON: 1DI FFI CULTY: 23 Whi c hbe s tr e pr e s e nt st hec onc e ptr e pr e s e nt e dbyt heada ge , “ The r ei snos uc ht hi ngasaf r e el unc h”? a Me l i s s ac anonl ya t t e ndt hec onc e r ti fs het ake she rs i s t e rwi t hhe r b.Gr e gi shungr yandhome l e s s c Br i anmus tr e pai rt het i r eonhi sbi kebe f or ehec anr i dei tt oc l as s d.Ke ndr amus tde c i debe t we e ngoi ngt oCol or adoorCanc unf ors pr i ngbr e ak ANSWER: d Ke ndr amus tde c i debe t we e ngoi ngt oCol or adoorCanc unf ors pr i ngbr e ak TYPE: M SECTI ON: 1DI FFI CULTY: 24 Gunsandbut t e rar eus e dt or e pr e s e ntt hec l as s i cs oc i e t alt r ade offbe t we e ns pe ndi ngon a dur abl eandnondur abl egoods b.i mpor t sande xpor t s c na t i onalde f e ns eandc ons ume rgoods d.l a we nf or c e me ntanda gr i c ul t ur e ANSWER: c na t i onalde f e ns eandc ons ume rgoods TYPE: M SECTI ON: 1DI FFI CULTY: 25 He nr yde c i de st os pe ndt wohour spl a yi nggol fr a t he rt hanwor ki nga thi sj obwhi c hpa ys$8pe rhour He nr y’ s t r ade offi s a t he$16hec oul dha vee ar ne dwor ki ngf ort wohour s b.not hi ng,be c aus ehee nj oyspl a yi nggol fmor et hanwor ki ng c t hei nc r e as ei ns ki l lheobt nsf r om pl a yi nggol ff ort hos et wohour s d.not hi ng,be c aus ehes pe nt$16f orgr e e nf e e st opl a ygol f ANSWER: a t he$16hec oul dha vee ar ne dwor ki ngf ort wohour s TYPE: M SECTI ON: 1DI FFI CULTY: 26 Whe ns oc i e t yr e qui r e st tfir msr e duc epol l ut i on,t he r ei s a at r ade offbe c aus eofr e duc e di nc ome st ot hefir ms ’owne r s ,wor ke r s , andc us t ome r s b.not r ade off,s i nc ee ve r yonebe ne fit sf r om r e duc e dpol l ut i on c not r ade offf ors oc i e t yasawhol e ,s i nc et hec os tofr e duc i ngpol l ut i onf al l sonl yont hefir msaffe c t e dbyt he r e qui r e me nt s d.at r ade offonl yi fs omefir msar ef or c e dt oc l os e ANSWER: a at r ade offbe c aus eofr e duc e di nc ome st ot hefir ms ’owne r s ,wor ke r s , andc us t ome r s TYPE: M SECTI ON: 1DI FFI CULTY: 27 Dani e lde c i de st os pe ndt hel as tt wohour soft heni ghtbe f or ehi se c onomi c se xam s t udyi ngi ns t e adofs l e e pi ng For Dani e l , hi st r ade offwoul dbe a not hi ng,s i nc enodol l arval uec anbeputons l e e p b.not hi ng,s i nc es t udyi ngwoul dbemor ebe ne fic i alt hans l e e p c t hes i xhour sofs l e e phec oul dha vehadi fhehadgonet obe dbe f or emi dni ght d.t het wohour sofr e s thewoul dha vegot t e n ANSWER: d t het wohour sofr e s thewoul dha vegot t e n TYPE: M SECTI ON: 1DI FFI CULTY: 28 A t r ade offe xi s t sbe t we e nac l e ane nvi r onme ntandahi ghe rl e ve lofi nc omei nt t a s t udi e ss how t ti ndi vi dual swi t hhi ghe rl e ve l sofi nc omeac t ual l ypol l ut el e s st hanl owi nc omei ndi vi dual s b.t opa yf orpol l ut i onc l e anup,t hegove r nme ntmus ti nc r e as et ax e swhi c hl owe r si nc ome c l a wst tr e duc epol l ut i onr s ec os t sofpr oduc t i onandr e duc ei nc ome s d.bye mpl oyi ngi ndi vi dual st oc l e anuppol l ut i on,e mpl oyme ntandi nc omebot hr i s e ANSWER: c l a wst tr e duc epol l ut i onr s ec os t sofpr oduc t i onandr e duc ei nc ome s TYPE: M SECTI ON: 1DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  29 Whi c hoft hef ol l owi ngwoul dNOTbear e s ul tofl a wst tr e qui r efir mst or e duc epol l ut i on? a l owe rs pe ndi ngbygove r nme nt b.hi ghe rpr i c e st oc ons ume r s c l owe rwa ge st owor ke r s d.s mal l e rpr ofitt ofir ms ANSWER: a l owe rs pe ndi ngbygove r nme nt TYPE: M SECTI ON: 1DI FFI CULTY: 30 Pol l ut i onr e gul a t i onswi l l a i nc r e as epr ofitt ofir ms b.i mpos eat r ade offons oc i e t y c al l ow fir mst or s ewor ke r s ’wa ge s d.l owe rpr i c e sf orc ons ume r s ANSWER: b i mpos eat r ade offons oc i e t y TYPE: M SECTI ON: 1DI FFI CULTY: 31 Whi c hoft hef ol l owi ngbe s tde fine se ffic i e nc y? a abs ol ut ef r ne s s b.e qualdi s t r i but i on c mi ni mum was t e d.c ons ume rs ove r e i gnt y ANSWER: c mi ni mum was t e TYPE: M SECTI ON: 1DI FFI CULTY: 32 Whi c hoft hef ol l owi ngi st r ue ? a Effic i e nc yr e f e r st ot hes i zeoft hee c onomi cpi e ; e qui t yr e f e r st ohow t hepi ei sdi vi de d b.For t una t e l y ,gove r nme ntpol i c i e sar ede s i gne dt opr omot ebot he qui t yande ffic i e nc y c Asl ongast hee c onomi cpi ec ont i nual l yge t sl ar ge r ,noonewi l lha vet ogohungr y d.Effic i e nc yande qui t yc anbot hbeac hi e ve di ft hee c onomi cpi ei sc uti nt oe qualpi e c e s ANSWER: a Effic i e nc yr e f e r st ot hes i zeoft hee c onomi cpi e ; e qui t yr e f e r st ohow t hepi ei sdi vi de d TYPE: M SECTI ON: 1DI FFI CULTY: 33 Effic i e nc yme anst t a s oc i e t yi sc ons e r vi ngr e s our c e si nor de rt os a vet he mf ort hef ut ur e b.s oc i e t y’ sgoodsands e r vi c e sar edi s t r i but e df r l yamongs oc i e t y’ sme mbe r s c s oc i e t yhasl e s s e ne di t sde pe nde nc eonf or e i gne ne r gys our c e s d.s oc i e t yi sge t t i ngt hemos ti tc anf r om i t ss c ar c er e s our c e s ANSWER: d s oc i e t yi sge t t i ngt hemos ti tc anf r om i t ss c ar c er e s our c e s TYPE: M SECTI ON: 1DI FFI CULTY: 34 Ec onomi s t sus et hewor de qui t yt ode s c r i beas i t ua t i oni nwhi c h a e ac hme mbe rofs oc i e t yhast hes amei nc ome b.s oc i e t yi sge t t i ngt hemos ti tc anf r om i t ss c ar c er e s our c e s c t hos ei ns oc i e t ywhoha vet hel e as twi l lr e c e i vet hemos t d.t hebe ne fit sofs oc i e t y’ sr e s our c e sar edi s t r i but e df r l yamongs oc i e t y’ sme mbe r s ANSWER: d t hebe ne fit sofs oc i e t y’ sr e s our c e sar edi s t r i but e df r l yamongs oc i e t y’ sme mbe r s TYPE: M SECTI ON: 1DI FFI CULTY: 35 Onede fini t i onofe qui t ywoul dbe a e qual i t y b.e ffic i e nc y c f r ne s s d.s i mi l ar i t y ANSWER: c f r ne s s TYPE: M SECTI ON: 1DI FFI CULTY: 36 Whe ngove r nme ntpol i c i e sar ebe i ngde s i gne d, a t he r ei sus ual l yat r ade offbe t we e ne qui t yande ffic i e nc y b.e qui t yande ffic i e nc ygoal sar eus ual l yi nde pe nde ntofe ac hot he r c e qui t yc anus ual l ybea c hi e ve dwi t houtane ffic i e nc yl os s d.i nc r e as i nge ffic i e nc yus ual l yr e s ul t si nmor ee qui t y ANSWER: a t he r ei sus ual l yat r ade offbe t we e ne qui t yande ffic i e nc y TYPE: M SECTI ON: 1DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762  Chapter 1/Ten Principles of Economics 37 Whe ngove r nme ntpol i c i e ss uc hast hewe l f ar es ys t e mt r yt ohe l pt hemos tne e dyme mbe r sofs oc i e t y ,i t a i nc r e as e se qui t yandr e duc e se ffic i e nc y b.r e duc e sc har i t abl ec ont r i but i onsi nane c onomy c i nc r e as e st hepr oduc t i vi t yoft hene e dyi nt hes oc i e t y d.c aus e smar ke tf l ur et ooc c ur ANSWER: a i nc r e as e se qui t yandr e duc e se ffic i e nc y TYPE: M SECTI ON: 2DI FFI CULTY: 38 Whe nt hegove r nme nti mpl e me nt spr ogr amss uc haspr ogr e s s i vei nc omet axr a t e s ,whi c hoft hef ol l owi ngi sl i ke l yt o oc c ur ? a Equi t yi si nc r e as e dande ffic i e nc yi si nc r e as e d b.Equi t yi si nc r e as e dande ffic i e nc yi sde c r e as e d c Equi t yi sde c r e as e dande ffic i e nc yi si nc r e as e d d.Equi t yi sde c r e as e dande ffic i e nc yi sde c r e as e d ANSWER: b Equi t yi si nc r e as e dande ffic i e nc yi sde c r e a s e d TYPE: M SECTI ON: 2DI FFI CULTY: 39 Whe nt hegove r nme nta t t e mpt st oc utt hee c onomi cpi ei nt omor ee quals l i c e s , a i ti se as i e rt oc utt hepi e , andt he r e f or et hee c onomyc anpr oduc eal ar ge rpi e b.t hegove r nme ntc anmor ee as i l yal l oc a t et hepi et ot hos emos ti nne e d c t hepi ege t ss mal l e r ,andt he r ewi l lbel e s spi ef ore ve r yone d.t hee c onomywi l ls pe ndt oomuc ht i mec ut t i ngandl os e st heabi l i t yt opr oduc ee noughpi ef ore ve r yone ANSWER: c t hepi ege t ss mal l e r ,andt he r ewi l lbel e s spi ef ore ve r yone TYPE: M SECTI ON: 2DI FFI CULTY: 40 Whe nt hegove r nme nta t t e mpt st oi mpr ovee qui t yi nane c onomyt her e s ul ti sof t e n a ani nc r e as ei nove r al lout puti nt hee c onomy b.addi t i onalgove r nme ntr e ve nues i nc eove r al li nc omewi l li nc r e as e c anac t ualr e duc t i oni ne qui t y d.r e duc e de ffic i e nc yi nt hee c onomy ANSWER: d r e duc e de ffic i e nc yi nt hee c onomy TYPE: M SECTI ON: 2DI FFI CULTY: 41 Whe nt hegove r nme ntr e di s t r i but e si nc omef r om t her i c ht ot hepoor , a e ffic i e nc yi si mpr ove d,bute qui t yi snot b.bot hr i c hpe opl eandpoorpe opl ebe ne fitdi r e c t l y c pe opl ewor kl e s sandpr oduc ef e we rgoodsands e r vi c e s d.r i c hpe opl ec ons umef e we rgoods, butpoorpe opl ec ons umemor egoods ,r e s ul t i ngi nnor e alc hange ANSWER: c pe opl ewor kl e s sandpr oduc ef e we rgoodsa nds e r vi c e s TYPE: M SECTI ON: 1DI FFI CULTY: 42 I ne c onomi c s ,t hec os tofs ome t hi ngi s a t hedol l aramountofobt ni ngi t b.al wa ysme as ur e di nuni t soft i megi ve nupt oge ti t c wha tyougi veupt oge ti t d.us ual l yhi ghe rt hanpe opl et hi nki twi l lbe ANSWER: c wha tyougi veupt oge ti t TYPE: M SECTI ON: 1DI FFI CULTY: 43 Wha tyougi veupt oobt nani t e mi sc al l e dyour a oppor t uni t yc os t b.e xpl i c i tc os t c t r uec os t d.di r e c tc os t ANSWER: a oppor t uni t yc os t TYPE: M SECTI ON: 1DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  44 Theoppor t uni t yc os tofgoi ngt oc ol l e gei s a t het ot als pe ntonf ood,c l ot hi ng,books ,t r ans por t a t i on,t ui t i on,l odgi ng,andot he re xpe ns e s b.t heval ueoft hebe s toppor t uni t yas t ude ntgi ve supt oa t t e ndc ol l e ge c ze r of ors t ude nt swhoar ef or t una t ee nought oha veal loft he i rc ol l e gee xpe ns e spai dbys ome onee l s e d.ze r o, s i nc eac ol l e gee duc a t i onwi l lal l ow as t ude ntt oe ar nal ar ge ri nc omeaf t e rgr adua t i on ANSWER: b t heval ueoft hebe s toppor t uni t yas t ude ntgi ve supt oa t t e ndc ol l e ge TYPE: M SECTI ON: 1DI FFI CULTY: 45 Formos ts t ude nt s , t hel ar ge s ts i ngl ec os tofac ol l e gee duc a t i oni s a t hewa ge sgi ve nupt oa t t e nds c hool b.t ui t i on,f e e s ,andbooks c r oom andboar d d.t r ans por t a t i on,pa r ki ng, ande nt e r t nme nt ANSWER: a t hewa ge sgi ve nupt oa t t e nds c hool TYPE: M SECTI ON: 1DI FFI CULTY: 46 Thel ar ge s ts i ngl ec os tofgoi ngt oc ol l e gei sus ual l y a books b.r oom andboar d c t ui t i on d.l os twa ge s ANSWER: d l os twa ge s TYPE: M SECTI ON: 1DI FFI CULTY: 47 Theoppor t uni t yc os tofani t e mi s a t henumbe rofhour sne e de dt oe ar nmone yt obuyi t b.wha tyougi veupt oge tt ti t e m c us ual l yl e s st hant hedol l arval ueoft hei t e m d.t hedol l arval ueoft hei t e m ANSWER: b wha tyougi veupt oge tt ti t e m TYPE: M SECTI ON: 1DI FFI CULTY: 48 Mal l or yde c i de st os pe nd3hour swor ki ngove r t i mer a t he rt hanwa t c hi ngavi de owi t hhe rf r i e nds Shee ar ns$8an hour He roppor t uni t yc os tofwor ki ngi s a t he$24s hee ar nswor ki ng b.t he$24mi nust hee nj oyme nts hewoul dha ver e c e i ve df r om wa t c hi ngt hevi de o c t hee nj oyme nts hewoul dha ver e c e i ve dhads hewa t c he dt hevi de o d.not hi ng,s i nc es hewoul dha ver e c e i ve dl e s st han$24ofe nj oyme ntf r om t hevi de o ANSWER: c t hee nj oyme nts hewoul dha ver e c e i ve dhads hewa t c he dt hevi de o TYPE: M SECTI ON: 1DI FFI CULTY: 49 Rus s e l ls pe ndsanhours t udyi ngi ns t e adofpl a yi ngt e nni s Theoppor t uni t yc os tt ohi m ofs t udyi ngi s a t hei mpr ove me nti nhi sgr ade sf r om s t udyi ngf ort hehour b.t hedi ffe r e nc ebe t we e nt hei mpr ove me nti nhi sgr ade sf r om s t udyi ngmi nust hee nj oyme ntofpl a yi ngt e nni s c t hee nj oyme ntande x e r c i s ehewoul dha ver e c e i ve dhadhepl a ye dt e nni s d.ze r o.Si nc eRus s e l lc hos et os t udyr a t he rt hant opl a yt e nni s , t heval ueofs t udyi ngmus tha vebe e ngr e a t e rt han t heval ueofpl a yi ngt e nni s ANSWER: c t hee nj oyme ntande x e r c i s ehewoul dha ver e c e i ve dhadhepl a ye dt e nni s TYPE: M SECTI ON: 1DI FFI CULTY: 50 Col l e ge a gea t hl e t e swhodr opoutofc ol l e get opl a ypr of e s s i onals por t s a ar enotr a t i onalde c i s i onmake r s b.ar ewe l la war et tt he i roppor t uni t yc os tofa t t e ndi ngc ol l e gei sve r yhi gh c ar ec onc e r ne dmor eaboutpr e s e ntc i r c ums t anc e st hant he i rf ut ur e d.unde r e s t i ma t et heval ueofac ol l e gee duc a t i on ANSWER: b ar ewe l la war et tt he i roppor t uni t yc os tofa t t e ndi ngc ol l e gei sve r yhi gh TYPE: M SECTI ON: 1DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762  Chapter 1/Ten Principles of Economics 51 Pe opl emakede c i s i onsa tt hemar gi nby a f ol l owi ngt r adi t i on b.e xpe r i e nc e c c al c ul a t i ngdol l arc os t s d.c ompar i ngc os t sandbe ne fit s ANSWER: d c ompar i ngc os t sandbe ne fit s TYPE: M SECTI ON: 1DI FFI CULTY: 52 Thewor d“mar gi n”me ans a e dge b.di s t anc e c s pac e d.me as ur e ANSWER: a e dge TYPE: M SECTI ON: 1DI FFI CULTY: 53 Maki ngde c i s i ons“ a tt hemar gi n”me anst tpe opl e a maket hos ede c i s i onst tdonoti mpos eamar gi nalc os t b.e val ua t ehow e as i l yade c i s i onc anber e ve r s e di fpr obl e msar i s e c c ompar et hemar gi nalc os t sandmar gi nalbe ne fit sofe ac hde c i s i on d.al wa ysc al c ul a t et hemar gi naldol l arc os t sf ore a c hde c i s i on ANSWER: c c ompar et hemar gi nalc os t sandmar gi nalbe ne fit sofe ac hde c i s i on TYPE: M SECTI ON: 1DI FFI CULTY: 54 A mar gi nalc hangei sa a l ongt e r mt r e nd b.l ar ge ,s i gni fic antadj us t me nt c c hangef ort hewor s e ,ands oi sus ual l ys hor t t e r m d.s mal li nc r e me nt aladj us t me nt ANSWER: d s mal li nc r e me nt aladj us t me nt TYPE: M SECTI ON: 1DI FFI CULTY: 55 Whi c hoft hef ol l owi ngi st hebe s te xampl eofamar gi nalc hange ? a Af t e rgr adua t i ngc ol l e ge , Audr e y’ si nc omei nc r e as e sf r om $500pe rmont ht o$3, 000pe rmont h b.Mor gange t sar s ea the rpar t t i mej obandi snow pai d$7 25pe rhouri ns t e adof$7 00 c Hous i ngpr i c e si nanar e nc r e as eby40 % whe nane wi nt e r s t a t ei sbui l ti nas mal lt own d.A har df r e e zewi pe southal foft heor angec r opi nFl or i daandt hepr i c eofor angej ui c edoubl e s ANSWER: b Mor gange t sar s ea the rpar t t i mej obandi snow pai d$7 25pe rhouri ns t e adof$7 00 TYPE: M SECTI ON: 1DI FFI CULTY: 56 Whi c hoft hef ol l owi ngi st hebe s te xampl eofamar gi nalc hange ? a Thepr i c eofhous i ngr os ei nSe a t t l eby5% i nl as tye ar b.Ki m ge t sabi gpr omot i ona twor k.Sheal s oge t sar s ef r om $25, 000pe rye art o$40, 000pe rye ar c Mar kgr adua t e sf r om c ol l e geandt ake saj ob.Hi si nc omei nc r e as e sf r om $10 , 000pe rye art o$50 , 000pe rye ar d.A dr oughthi t st heuppe rMi dwe s tandt hepr i c eofwhe a ti nc r e as e sf r om $4 00pe rbus he lt o$8 00pe rbus he l ANSWER: a Thepr i c eofhous i ngr os ei nSe a t t l eby5% i nl as tye ar TYPE: M SECTI ON: 1DI FFI CULTY: 57 A mar gi nalc hangei si l l us t r a t e dbywhi c hoft hef ol l owi ng? a Nanc yr e t i r e sandt ake sapar t t i mej ob.Shewaswor ki ng40hour spe rwe e kandnow wor ks10hour spe rwe e k b.St a t eUni ve r s i t yhasannounc e dt tduet os t a t ebudge tde fic i t s , t ui t i onmus tr i s eby25% ne xtye ar c Ryanmove dt oane w apar t me ntandnow pa ys40% mor er e ntt hanbe f or e d.Ar i z ona ,whi c hus ual l yr e c e i ve s10i nc he sofr npe rye ar ,r e c e i ve d11i nc he sl as tye ar ANSWER: d Ar i z ona ,whi c hus ual l yr e c e i ve s10i nc he sofr npe rye ar ,r e c e i ve d11i nc he sl as tye ar TYPE: M SECTI ON: 1DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  58 Af t e rmuc hc ons i de r a t i on,youha vec hos e nCanc unove rFt Laude r dal ef oryourSpr i ngBr e akt r i pt hi sye ar Fort hi s de c i s i ont oc hange ,whi c hoft hef ol l owi ngmus toc c ur ? a Themar gi nalbe ne fitofCanc unmus ti nc r e as e b.Themar gi nalc os tofCanc unmus tde c r e as e c Themar gi nalbe ne fitofFt Laude r dal emus ti nc r e as e d.Themar gi nalc os tofFt Laude r dal emus ti nc r e as e ANSWER: c Themar gi nalbe ne fitofFt Laude r dal emus ti nc r e as e TYPE: M SECTI ON: 1DI FFI CULTY: 59 Thea ve r a gec os tpe rs e a tont he50pas s e nge rFl oa t i ngOnAi rBusc ompa ny’ st r i pf r om Kans asCi t yt oSt Loui si s $40 I fnor e f r e s hme nt sar es e r ve dand3s e a t sar ee mpt y ,t hebusc ompanyc oul di nc r e as ei t spr ofitonl yi fi t a c har ge dnol e s st han$40f ort he3r e mai ni ngs e a t s b.c har ge dmor et han$40f ort he3r e mai ni ngs e a t s c c har ge danyt i c ke tpr i c ea bove$0f ort her e mai ni ngs e a t s d.l e f tt hes e a t se mpt y ANSWER: c c har ge danyt i c ke tpr i c ea bove$0f ort her e mai ni ngs e a t s TYPE: M SECTI ON: 1DI FFI CULTY: 60 A r a t i onalde c i s i onmake rt ake sanac t i ononl yi ft he a mar gi nalbe ne fiti sl e s st hant hemar gi nalc os t b.mar gi nalbe ne fiti sgr e a t e rt hant hemar gi nalc os t c a ve r a gebe ne fiti sgr e a t e rt hant hea ve r a gec os t d.mar gi nalbe ne fiti sgr e a t e rt hanbot ht hea ve r a gec os tandt hemar gi nalc os t ANSWER: b mar gi nalbe ne fiti sgr e a t e rt hant hemar gi nalc os t TYPE: M SECTI ON: 1DI FFI CULTY: 61 Mi kehass pe nt$500pur c has i ngandr e pai r i nganol dfis hi ngboa t ,whi c hhee xpe c t st os e l lf or$800onc et her e pai r s ar ec ompl e t e Hedi s c ove r st thene e dsanaddi t i onalr e pai r , whi c hwi l lc os t$400, i nor de rt oc ompl e t et her e pai r s Hec ans e l lt heboa tasi ti snow f or$300 Wha ts houl dhedo? a Hes houl dc uthi sl os s e sandt aket he$300 b.Hes houl dne ve rs e l ls ome t hi ngf orl e s st hani tc os t c Hes houl dc ompl e t et her e pai r sands e l lt heboa t d.I tdoe s n’ tma t t e rwhi c hac t i onhet ake s ; t heout c omei st hes amee i t he rwa y ANSWER: c Hes houl dc ompl e t et her e pai r sands e l lt heboa t TYPE: M SECTI ON: 1DI FFI CULTY: 62 St anbuysa1966Mus t ang,whi c hhepl anst or e s t or eands e l l Heant i c i pa t e st tt hec os toft hec arandt her e pai r s wi l lbe$10 , 000andt thec ans e l li tf or$13 , 000 Whe nhehass pe nt$10 , 000, hedi s c ove r shene e dst or e pl ac et he e ngi ne ,whi c hwi l lc os t$4 , 000 Hec ans e l lt hec arwi t houtt hene we ngi nef or$9, 000 St ans houl d a c ompl e t et her e pai r sands e l lt hec arf or$13 , 000 b.c uthi sl os s e sands e l lt hec arnow f or$9, 000 d.ne ve rt r ys uc hane xpe ns i vepr oj e c ta gai n c bet ot al l yi ndi ffe r e ntbe t we e nfini s hi ngt hepr oj e c tands e l l i ngt hec arnow ANSWER: d bet ot al l yi ndi ffe r e ntbe t we e nfini s hi ngt hepr oj e c tands e l l i ngt hec arnow TYPE: M SECTI ON: 1DI FFI CULTY: 63 A donuts hops e l l sf r e s hbake ddonut sf r om 5a m unt i l3p m e ve r yda ybutSunda y Thec os tofmaki ngands e l l i ng adoze ngl aze ddonut si s$1 00 Si nc et hi ss hopdoe snots e l lda yol ddonut st hene xtda y , wha ts houl dt hemana ge r doi fhes t i l lhas10doze nl e f ta t2 : 30p m ? a l owe rt hepr i c eoft her e mai ni ngdonut se ve ni ft hepr i c ef al l sbe l ow $1 00 b.l owe rt hepr i c eoft her e mai ni ngdonut sasl ongasi t ’ smor et han$1 00 c Lowe rt hepr i c eonal ldonut ss ot he ywi l lal lbes ol de ar l i e ri nt heda y d.t hr ow t he ma wa yandpr oduc e10f e we rdoze nt omor r ow ANSWER: a l owe rt hepr i c eoft her e mai ni ngdonut se ve ni ft hepr i c ef al l sbe l ow $1 00 TYPE: M SECTI ON: 1DI FFI CULTY: 64 Ec onomi s t sunde r s t andt tpe opl er e s pondt o a l a ws b.i nc e nt i ve s c t hr e a t smor et hanr e war ds d.pos i t i ve s ,butnotne ga t i ve s ANSWER: b i nc e nt i ve s TYPE: M SECTI ON: 1DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 14  Chapter 1/Ten Principles of Economics 95 Thec ol l aps eofc ommuni s mi nt heSovi e tUni onandEas t e r nEur opet ookpl ac ei nt he a 1960s b.1970s c 1980s d.1990s ANSWER: c 1980s TYPE: M SECTI ON: 2DI FFI CULTY: 96 Pr i ort oi t sc ol l aps e , c ommuni s tc ount r i e swor ke dont hepr e mi s et te c onomi cwe l l be i ngc oul dbeor gani ze donl y t hr ough/by a amar ke te c onomy b.gove r nme ntc e nt r alpl anne r s c gove r nme nt i mpos e dpr i va t emonopol i e s d.i nc r e as e dc ompe t i t i on ANSWER: b gove r nme ntc e nt r alpl anne r s TYPE: M SECTI ON: 2DI FFI CULTY: 97 Whi c hoft hef ol l owi ngobs e r va t i onswasmadef amousbyAdam Smi t hi nhi sbookTheWe a l t ho fNa t i o ns ? a The r ei snos uc ht hi ngasaf r e el unc h b.Pe opl ebuymor ewhe npr i c e sar el ow t hanwhe npr i c e sar ehi gh c Noma t t e rhow muc hpe opl ee ar n,t he yt e ndt os pe ndmor et hant he ye ar n d.Hous e hol dsandfir msi nt e r ac t i ngi nmar ke t sar egui de dbyan“i nvi s i bl ehand”t tl e adst he mt ode s i r abl e mar ke tout c ome s ANSWER: d Hous e hol dsandfir msi nt e r ac t i ngi nmar ke t sar egui de dbyan“i nvi s i bl ehand”t tl e adst he mt o de s i r abl emar ke tout c ome s TYPE: M SECTI ON: 2DI FFI CULTY: 98 Thet e r m “i nvi s i bl ehand”wasc oi ne dby a Adam Smi t h b.Da vi dRi c ar c J ohnMa ynar dKe yne s d.ThomasJ e ffe r s on ANSWER: a Adam Smi t h TYPE: M SECTI ON: 2DI FFI CULTY: 99 The“i nvi s i bl ehand”di r e c t se c onomi cac t i vi t yt hr ough a adve r t i s i ng b.pr i c e s c c e nt r alpl anni ng d.gove r nme ntr e gul a t i ons ANSWER: b pr i c e s TYPE: M SECTI ON: 2DI FFI CULTY: 100 Thei nvi s i bl ehand’ sabi l i t yt oc oor di na t et hede c i s i onsoft hefir msandhous e hol dsi nt hee c onomyc anbehi nde r e d by a gove r nme ntac t i onst tdi s t or tpr i c e s b.i nc r e as e dc ompe t i t i oni nt hemar ke t c e xt e nde dpe r i odsofune mpl oyme nt d.adr ama t i cr e duc t i oni nc ons ume rs pe ndi ng ANSWER: a gove r nme ntac t i onst tdi s t or tpr i c e s TYPE: M SECTI ON: 2DI FFI CULTY: 101 Adam Smi t h’ sbookTheWe a l t ho fNa t i o nswaspubl i s he di n a 1692 b.1776 c 1816 d.1936 ANSWER: b 1776 TYPE: M SECTI ON: 2DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  15 102 Bot hTheWe a l t ho fNa t i o nsandt heDe c l ar a t i onofI nde pe nde nc es har et hepoi ntofvi e wt t a e ve r ype r s oni se nt i t l e dt ol i f e , l i be r t y , andt hepur s ui tofhappi ne s s b.i ndi vi dual sar ebe s tl e f tt ot he i rownde vi c e swi t houtt hegove r nme ntgui di ngt he i rac t i ons c t hegove r nme nthasac e nt r alr ol ei nor gani zi ngamar ke te c onomy d.be c aus eofhumanna t ur eas t r ongl e gals ys t e mi sne c e s s ar yf oramar ke ts ys t e mt os ur vi ve ANSWER: b i ndi vi dual sar ebe s tl e f tt ot he i rownde vi c e swi t houtt hegove r nme ntgui di ngt he i rac t i ons TYPE: M SECTI ON: 2DI FFI CULTY: 103 Thei nvi s i bl ehandwor kst opr omot ege ne r alwe l l be i ngi nt hee c onomypr i mar i l yt hr ough a gove r nme nti nt e r ve nt i on b.t hepol i t i c alpr oc e s s c s e l fi nt e r e s t d.al t r ui s m ANSWER: c s e l fi nt e r e s t TYPE: M SECTI ON: 2DI FFI CULTY: 104 Tax e sadve r s e l yaffe c tt heal l oc a t i onofr e s our c e si ns oc i e t ybe c aus e a t he ydonotal wa ysf al lmor ehe a vi l yont her i c h b.t het ax e sc ol l e c t e dar enote nought ofinanc egove r nme nts pe ndi ng c note ve r yonepa yst ax e s d.t he ydi s t or tpr i c e sandt hust hede c i s i onsofhous e hol dsandfir ms ANSWER: d t he ydi s t or tpr i c e sandt hust hede c i s i onsofhous e hol dsandfir ms TYPE: M SECTI ON: 2DI FFI CULTY: 105 A pr i mar yf unc t i onofpr i c e si namar ke te c onomyi st opr ovi depar t i c i pant swi t h a e c onomi ci nf or ma t i on b.s pe ndi ngl i mi t s c ac c ount i ngc apa bi l i t i e s d.ane qui t abl edi s t r i but i onofgoods ANSWER: a e c onomi ci nf or ma t i on TYPE: M SECTI ON: 2DI FFI CULTY: 106 Whe nt hegove r nme ntpr e ve nt spr i c e sf r om adj us t i ngna t ur al l yt os uppl yandde mand, a i ts t a bi l i ze st hee c onomybyr e duc i ngmar ke tunc e r t nt i e s b.i tadve r s e l yaffe c t st heal l oc a t i onofr e s our c e s c t hei mpr ove me nti ne qui t yj us t i fie st her e duc t i oni ne ffic i e nc y d.t hei mpr ove me nti ne ffic i e nc yj us t i fie st her e duc t i oni ne qui t y ANSWER: b i tadve r s e l yaffe c t st heal l oc a t i onofr e s our c e s TYPE: M SECTI ON: 2DI FFI CULTY: 107 Onec ompone ntne c e s s ar yf ormar ke t st owor ki s a gove r nme nti nt e r ve nt i on b.abe ne vol e nts oc i e t y c pr ope r t yr i ght s d.abundantr e s our c e s ANSWER: c pr ope r t yr i ght s TYPE: M SECTI ON: 2DI FFI CULTY: 108 Onene c e s s ar yr ol eofgove r nme nti namar ke te c onomyi st o a t axgoodsands e r vi c e swhi c har emos tde s i r e dbyc ons ume r s b.mai nt nwe l f ar epr ogr amsf ort hepoor c pr ovi des e r vi c e ss uc hasmai lde l i ve r y d.e nf or c epr ope r t yr i ght s ANSWER: d e nf or c epr ope r t yr i ght s TYPE: M SECTI ON: 2DI FFI CULTY: 109 Thegove r nme nte nf or c e spr ope r t yr i ght sby a r e qui r i ngpr ope r t yowne r st opa ypr ope r t yt ax e s b.pr ovi di ngpol i c eandc our t s c al l owi ngpe opl et ode c i dewhe t he rornott he ywi s ht oownpr ope r t y d.pr ovi di ngas ys t e m ofr e c or di ngpr ope r t yde e ds ANSWER: b pr ovi di ngpol i c eandc our t s TYPE: M SECTI ON: 2DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 16  Chapter 1/Ten Principles of Economics 110 Wi t houtgove r nme nt ’ spr ot e c t i onofpr ope r t yr i ght s a bus i ne s s e swoul dha vel e s si nc e nt i vet opr ovi degoodsands e r vi c e s b.t he r ewoul dbel e s sgove r nme ntr e gul a t i onofbus i ne s s e sandpr i c e swoul dbel owe rf orc ons ume r s c t ax e swoul dbel owe rc aus i ngl e s smar ke ti ne ffic i e nc i e s d.bus i ne s s e swoul dha vemor ef r e e dom wi t hpr oduc t i onpr oc e s s e s ANSWER: a bus i ne s s e swoul dha vel e s si nc e nt i vet opr ovi degoodsands e r vi c e s TYPE: M SECTI ON: 2DI FFI CULTY: 111 Thet e r m mar ke tf l ur er e f e r st o a as i t ua t i oni nwhi c ht hemar ke toni t sownf l st oal l oc a t er e s our c e se ffic i e nt l y b.anuns uc c e s s f uladve r t i s i ngc ampai gnwhi c hr e duc e sbuye rde mand c as i t ua t i oni nwhi c hc ompe t i t i onamongfir msbe c ome sr ut hl e s s d.afir m whi c hi sf or c e doutofbus i ne s sbe c aus eofl os s e s ANSWER: a as i t ua t i oni nwhi c ht hemar ke toni t sownf l st oal l oc a t er e s our c e se ffic i e nt l y TYPE: M SECTI ON: 2DI FFI CULTY: 112 Whi c hoft hef ol l owi ngi sNOTar e as onf ort hegove r nme ntt oi nt e r ve nei nt hemar ke t ? a t opr omot ee ffic i e nc y b.t oe nf or c epr ope r t yr i ght s c t opr omot ee qui t y d.t opr ot e c tani ndus t r y ANSWER: d t opr ot e c tani ndus t r y TYPE: M SECTI ON: 2DI FFI CULTY: 113 Twor e as onsf oragove r nme ntt oi nt e r ve nei namar ke tar et o a r s er e ve nue sandt opr omot es t abi l i t y b.pr omot ee qui t yandt opr omot ee ffic i e nc y c pr omot ee qui t yandt opr omot es t abi l i t y d.pr omot ee ffic i e nc yandt opr omot es t abi l i t y ANSWER: b pr omot ee qui t yandt opr omot ee ffic i e nc y TYPE: M SECTI ON: 2DI FFI CULTY: 114 Caus e sofmar ke tf l ur ei nc l ude a e xt e r nal i t i e sandmar ke tpowe r b.mar ke tpowe randi nc or r e c tf or e c as t sofc ons ume rde mand c e xt e r nal i t i e sandf or e i gnc ompe t i t i on d.i nc or r e c tf or e c as t sofc ons ume rde mandandf or e i gnc ompe t i t i on ANSWER: a e xt e r nal i t i e sandmar ke tpowe r TYPE: M SECTI ON: 2DI FFI CULTY: 115 Mar ke tf l ur ec anbec aus e dby a l ow c ons ume rde mand b.gove r nme nti nt e r ve nt i onandpr i c ec ont r ol s c e xt e r nal i t i e sandmar ke tpowe r d.hi ghpr i c e sandf or e i gnc ompe t i t i on ANSWER: c e xt e r nal i t i e sandmar ke tpowe r TYPE: M SECTI ON: 2DI FFI CULTY: 116 Ane xt e r nal i t yi st hei mpac tof a onepe r s on’ sac t i onsont hewe l l be i ngofabys t ande r b.ape r s on’ sac t i onsont tpe r s on’ swe l l be i ng c s oc i e t y’ sde c i s i onsont hewe l l be i ngofs oc i e t y d.s oc i e t y’ sde c i s i onsont hewe l l be i ngofonepe r s oni nt hes oc i e t y ANSWER: a onepe r s on’ sac t i onsont hewe l l be i ngofabys t ande r TYPE: M 2SECTI ON:2DI FFI CULTY:1 Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  17 117 Ane xampl eofane xt e r nal i t yi st hei mpac tof a badwe a t he ront hei nc omeoff ar me r s b.t hepe r s onali nc omet axonape r s on’ sabi l i t yt opur c has egoodsands e r vi c e s c pol l ut i onf r om af ac t or yont hehe al t hofpe opl ei nt hevi c i ni t yoft hef ac t or y d.i nc r e as e si nhe al t hc ar ec os t sont hehe al t hofi ndi vi dual si ns oc i e t y ANSWER: c pol l ut i onf r om af ac t or yont hehe al t hofpe opl ei nt hevi c i ni t yoft hef ac t or y TYPE: M SECTI ON: 2DI FFI CULTY: 118 Whi c hoft hef ol l owi ngi smos tl i ke l yt oge ne r a t eane xt e r nal i t y? a Te ac he r sa tal oc alhi ghs c hoolha vepi zzade l i ve r e de ve r yFr i da yf orl unc h b.A youngmanf r om as mal lt owna t t e ndsme di c als c hoolt obe c omeadoc t or c A ne wl ywe dc oupl ebuysaTVf ort he i rf ami l yr oom d.J ohnbuysat r ac t ort omow hi sne wl ypur c has e d5ac r el ot ANSWER: b A youngmanf r om as mal lt owna t t e ndsme di c als c hoolt obe c omeadoc t or TYPE: M SECTI ON: 2DI FFI CULTY: 119 I fane xt e r nal i t yi spr e s e nti namar ke t , e c onomi ce ffic i e nc yma ybee nhanc e dby a gove r nme nti nt e r ve nt i on b.i nc r e as e dc ompe t i t i on c be t t e ri nf or me dmar ke tpar t i c i pant s d.mor ede fine dpr ope r t yr i ght s ANSWER: a gove r nme nti nt e r ve nt i on TYPE: M SECTI ON: 2DI FFI CULTY: 120 I fac oppe rr e fine r ydoe sNOTbe art hee nt i r ec os toft hes mokei te mi t s , i twi l l a note mi tanys mokes oast oa voi dt hee nt i r ec os toft hes moke b.e mi tl owe rl e ve l sofs moke c e mi tanac c e pt abl el e ve lofs moke d.e mi tt oomuc hs moke ANSWER: d e mi tt oomuc hs moke TYPE: M SECTI ON: 2DI FFI CULTY: 121 A mar ke te c onomyr e war dspe opl eac c or di ngt o a t he i rne e df orgoodsands e r vi c e s b.how wi l l i ngt he yar et owor k c t he i rabi l i t yt opr oduc et hi ngst tot he rpe opl ea r ewi l l i ngt opa yf or d.t he i rabi l i t yt opr oduc et hi ngsofc ul t ur ali mpor t anc e ANSWER: c t he i rabi l i t yt opr oduc et hi ngst tot he rpe opl ear ewi l l i ngt opa yf or TYPE: M SECTI ON: 2DI FFI CULTY: 122 Whi c hoft he s ec ons umpt i onac t i vi t i e swi l lmos tl i ke l yi mpos eane xt e r nalc os t ? a Ane x e c ut i vepl a ysavi gor ousgameofgol f b.A s t ude nti nador m pl a yshe rCDsa t120de c i be l sl a t ea tni ght c A youngmot he re x e r c i s e st oanae r obi c svi de o d.A c ons t r uc t i onwor ke re a t sas andwi c hdur i nghi sl unc hbr e ak ANSWER: b As t ude nti nador m pl a yshe rCDsa t120de c i be l sl a t ea tni ght TYPE: M SECTI ON: 2DI FFI CULTY: 123 Whi c hoft he s eac t i vi t i e swi l lmos tl i ke l yr e s ul ti nane xt e r nalbe ne fit ? a Ac ol l e ges t ude ntbuysade c kofc ar dst opl a ys ol i t r ei nhe rdor mr oom b.Ane l de r l ywomanpl ant saflowe rgar de nont hevac antl otne xtt ohe rhous e c Ane x e c ut i vepur c has e sabookt or e adonabus i ne s st r i p d.A t e nye ar ol dbuysne w Ni ke swi t hhi sal l owanc emone yhehass a ve d ANSWER: b Ane l de r l ywomanpl ant saflowe rgar de nont hevac antl otne xtt ohe rhous e TYPE: M SECTI ON: 2DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 18  Chapter 1/Ten Principles of Economics 124 I fe duc a t i onpr oduc e se xt e r nalbe ne fit sf ors oc i e t y ,whi c hoft hef ol l owi ngmi ghtNOTbeanappr opr i a t epol i c yf or s oc i e t yt oe s t abl i s hr e gar di nge duc a t i on? a t axi nc e nt i ve sf ors c hool i ng b.manda t or ymi ni mum l e ve l sofe duc a t i on c pr ogr amswhi c hpr omot et hehi r i ngofhi ghs c hooldr opout s d.publ i cs ubs i di e sofe duc a t i on ANSWER: c pr ogr amswhi c hpr omot et hehi r i ngofhi ghs c hooldr opout s TYPE: M SECTI ON: 2DI FFI CULTY: 125 I fas a wmi l lc r e a t e st oomuc hai rpol l ut i on, a i nt e r f e r e nc ebyt hegove r nme ntwi l ls ur e l ymaket hema t t e rwor s e b.as e ns eofs oc i alr e s pons i bi l i t ywi l lc aus et heowne r soft hemi l lt or e duc epol l ut i on c t hegove r nme ntc anr s ee c onomi cwe l l be i ngbypr ovi di nghe al t hc ar et ot hos eaffe c t e dbyt hepol l ut i on d.t hegove r nme ntc anr s ee c onomi cwe l l be i ngt hr oughe nvi r onme nt alr e gul a t i on ANSWER: d t hegove r nme ntc anr s ee c onomi cwe l l be i ngt hr oughe nvi r onme nt alr e gul a t i on TYPE: M SECTI ON: 2DI FFI CULTY: 126 Whe nas i ngl ee nt i t yhast heabi l i t yt oi nflue nc emar ke tpr i c e s , t he r ei s a c ompe t i t i on b.mar ke tpowe r c e ffic i e nc y d.pr oduc t i vi t y ANSWER: b mar ke tpowe r TYPE: M SECTI ON: 2DI FFI CULTY: 127 Mar ke tpowe rr e f e r st ot he a powe rofas i ngl epe r s onorgr oupt oi nflue nc emar ke tpr i c e s b.abi l i t yofape r s onorgr oupofpe opl et os uc c e s s f ul l ymar ke tne w pr oduc t s c powe roft hegove r nme ntt or e gul a t eamar ke t d.r e l a t i vei mpor t anc eofamar ke tt ot heove r al le c onomy ANSWER: a powe rofas i ngl epe r s onorgr oupt oi nflue nc emar ke tpr i c e s TYPE: M SECTI ON: 2DI FFI CULTY: 128 Ane xampl eofamonopol ywoul dbe a aj e we l r ys t or ei nMi ami ,Fl or i da b.as ouve ni rs hopi nCanc un,Me xi c o c ane l e c t r i cc ompa nyi nDe l i ght ,Ar kans as d.adoc t ori nDal l as , Te xas ANSWER: c ane l e c t r i cc ompa nyi nDe l i ght ,Ar kans as TYPE: M SECTI ON: 2DI FFI CULTY: 129 Whi c hoft hef ol l owi ngbus i ne s s e smos tl i ke l yhasmar ke tpowe r ? a af ur ni t ur es t or ei nGr e e ns bor o,Nor t hCar ol i na b.avi ne yar di nt heNapaVal l e yofCal i f or ni a c amapl es ugarc andys t or ei nBur l i ngt on,Ve r mont d.ahos pi t ali nKe ar ne y ,Ne br as ka ANSWER: d ahos pi t ali nKe ar ne y ,Ne br as ka TYPE: M SECTI ON: 2DI FFI CULTY: 130 Whi c hi st hemos tc or r e c ts t a t e me ntaboutt hei nvi s i bl ehand? a Thei nvi s i bl ehandal wa yse ns ur e sbot he qui t yande ffic i e nc y b.Thei nvi s i bl ehandc annote ns ur ee i t he re qui t yore ffic i e nc y c Thei nvi s i bl ehandi smor ee ffe c t i vea te ns ur i nge ffic i e nc yt hani ti sa te ns ur i nge qui t y6` 15 d.Thei nvi s i bl ehandi smor ee ffe c t i vea te ns ur i nge qui t yt hani ti sa te ns ur i nge ffic i e nc y ANSWER: c Thei nvi s i bl ehandi smor ee ffe c t i vea te ns ur i nge ffic i e nc yt hani ti sa te ns ur i nge qui t y TYPE: M SECTI ON: 2DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  19 131 Ac c or di ngt oAdam Smi t h,t hes uc c e s sofde c e nt r al i ze dmar ke te c onomi e si spr i mar i l yduet o a t hebas i cbe ne vol e nc eofs oc i e t y b.s oc i e t y’ sj us t i c e( l e gal )s ys t e m c i ndi vi dual s ’s e l f i nt e r e s t d.bas i chumans ur vi vali ns t i nc t s ANSWER: c i ndi vi dual s ’s e l f i nt e r e s t TYPE: M SECTI ON: 2DI FFI CULTY: 132 Thes e l f i nt e r e s toft hepar t i c i pant si nane c onomyi sgui de di nt opr omot i ngge ne r ale c onomi cs e l f i nt e r e s tby a t hei nvi s i bl ehand b.mar ke tpowe r c gove r nme nti nt e r ve nt i on d.pr ope r t yr i ght s ANSWER: a t hei nvi s i bl ehand TYPE: M SECTI ON: 2DI FFI CULTY: 133 I nt heUni t e dSt a t e s , hi ghe ri nc omet axr a t e sonr i c hpe opl ec oul dbej us t i fie dont hebas i sof a mar ke te ffic i e nc y b.t hel ac kofot he rs our c e sofgove r nme ntr e ve nue c e qui t yf ors oc i e t y d.gove r nme ntbi asa gai ns tt hewe al t hy ANSWER: c e qui t yf ors oc i e t y TYPE: M SECTI ON: 2DI FFI CULTY: 134 Thepr i mar yde t e r mi nantofac ount r y’ ss t andar dofl i vi ngi s a t hea bi l i t yt or e duc ef or e i gnc ompe t i t i on b.i t sabi l i t yt opr oduc egoodsands e r vi c e s c t het ot als uppl yofmone yi nt hee c onomy d.t hea ve r a gea geoft hec ount r y’ sl aborf or c e ANSWER: b i t sabi l i t yt opr oduc egoodsands e r vi c e s TYPE: M SECTI ON: 3DI FFI CULTY: 135 I n2000t hea ve r a geAme r i c anhadani nc omeofabout a $34, 000 b.$29, 000 c $20, 000 d.$15, 000 ANSWER: a $34, 000 TYPE: M SECTI ON: 3DI FFI CULTY: 136 I nt heUni t e dSt a t e s , i nc ome sha vehi s t or i c al l ygr owna bout2 % pe rye ar Att hi sr a t ei nc ome swi l ldoubl ee ve r y a 10ye ar s b.25ye ar s c 35ye ar s d.50ye ar s ANSWER: c 35ye ar s TYPE: M SECTI ON: 3DI FFI CULTY: 137 Thei nc omeofat ypi c alwor ke ri nac ount r yi smos tc l os e l yl i nke dt owhi c hoft hef ol l owi ng? a popul a t i on b.pr oduc t i vi t y c t henumbe rofl aboruni ons d.gove r nme ntpol i c i e s ANSWER: b pr oduc t i vi t y TYPE: M SECTI ON: 3DI FFI CULTY: 138 I ft hea ve r a gei nc omeofanAus t r al i ani shi ghe rt hant hea ve r a gei nc omeofaRus s i an,i ti smos tl i ke l ybe c aus e a pr oduc t i vi t yi shi ghe ri nAus t r al i at hani nRus s i a b.Aus t r al i ahasamor ei ndus t r i ale c onomyt hanRus s i a c t he r ei smor ec ompe t i t i oni nAus t r al i at hani nRus s i a d.l aboruni onsar emor ea ggr e s s i vei nAus t r al i at ni nRus s i a ANSWER: a pr oduc t i vi t yi shi ghe ri nAus t r al i at hani nRus s i a TYPE: M SECTI ON: 3DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 20  Chapter 1/Ten Principles of Economics 139 Suppos et tt hea ve r a gei nc omeofaKe nyani shi ghe rt hant hea ve r a gei nc omeofaSout hAf r i c an Youmi ght c onc l udet t a Sout hAf r i c anfir msar ef ac e dwi t hs t r i c t e rgove r nme ntr e gul a t i onst hanKe nyanfir ms b.t ot ali nc omei sdi vi de damongf e we rwor ke r si nKe nyas i nc ei thasas mal l e rl aborf or c et hanSout hAf r i c a c Ke nya ’ sc l i ma t eal l owsf orl onge rgr owi ngs e as onsandt he r e f or eKe nyac anpr oduc el ar gequant i t i e sofgr n d.pr oduc t i vi t yi nKe nyai shi ghe rt hani nSout hAf r i c a ANSWER: d pr oduc t i vi t yi nKe nyai shi ghe rt hani nSout hAf r i c a TYPE: M SECTI ON: 3DI FFI CULTY: 140 A t ypi c alwor ke ri nI t al yc anpr oduc e24uni t sofpr oduc ti nan8hourda y ,whe r eat ypi c alwor ke ri nPol and pr oduc e s25uni t sofpr oduc ti na10hourda y Wec anc onc l udet t a wor ke rpr oduc t i vi t yi nPol andi shi ghe rt hani nI t al y b.t hes t andar dofl i vi ngwi l lbehi ghe ri nI t al yt hani nPol and c pr oduc t i vi t yf ort hePol i s hwor ke ri s3uni t spe rhourand21/2uni t spe rhourf ort heI t al i anwor ke r d.t he r ewi l lbenodi ffe r e nc ebe t we e nt hes t andar dofl i vi ngi nI t a l yandPol and ANSWER: b t hes t andar dofl i vi ngwi l lbehi ghe ri nI t al yt hani nPol and TYPE: M SECTI ON: 3DI FFI CULTY: 141 A wor ke ri nBa ngl ade s hc ane ar n$1pe rda ymaki ngc ot t onc l ot honahandl oom.A wor ke ri nt heUni t e dSt a t e sc an e ar n$100pe rda ymaki ngc ot t onc l ot hwi t hame c hani c all oom.Wha tac c ount sf ort hedi ffe r e nc ei nwa ge s ? a U S.t e xt i l ewor ke r sbe l ongt oauni on b.The r ei sl i t t l ede mandf orc ot t onc l ot hi nBangl a de s handgr e a tde mandi nt heU S c Labori smor epr oduc t i vemaki ngc ot t onc l ot hwi t hame c hani c all oom t hanwi t hahandl oom d.Bangl ade s hhasal owwa gepol i c yt omakei t st e xt i l ei ndus t r ymor ec ompe t i t i vei nwor l dmar ke t s ANSWER: c Labori smor epr oduc t i vemaki ngc ot t onc l ot hwi t hame c hani c all oom t hanwi t hahandl oom TYPE: M SECTI ON: 3DI FFI CULTY: 142 Ove rt hepas tc e nt ur y , t hea ve r a gei nc omei nt heUni t e dSt a t e shasr i s e n a t wof ol d b.five f ol d c e i ght f ol d d.t e nf ol d ANSWER: c e i ght f ol d TYPE: M SECTI ON: 3DI FFI CULTY: 143 I nt heUni t e dSt a t e s , i nc ome sha vehi s t or i c al l ygr own a about10pe r c e ntpe rye ar b.about5pe r c e ntpe rye ar c about2pe r c e ntpe rye ar d.about0 5pe r c e ntpe rye ar ANSWER: c about2pe r c e ntpe rye ar TYPE: M SECTI ON: 3DI FFI CULTY: 144 Al mos tal lvar i a t i oni nl i vi ngs t andar dsi sa t t r i but abl et odi ffe r e nc e si nc ount r i e s ’ a popul a t i ongr owt hr a t e s b.e ndowme nt sofna t ur alr e s our c e s c na t i onalgove r nme ntbudge t s d.pr oduc t i vi t y ANSWER: d pr oduc t i vi t y TYPE: M SECTI ON: 3DI FFI CULTY: 145 Pr oduc t i vi t yi sde fine dast he a amountofgoodsands e r vi c e spr oduc e df r om e ac hhourofawor ke r ’ st i me b.numbe rofwor ke r sr e qui r e dt opr oduc eagi ve namountofgoodsands e r vi c e s c amountofl aborwhi c hc anbes a ve dbyr e pl ac i ngwor ke r swi t hmac hi ne s d.ac t ualamountofe ffor twor ke r sputi nt oanhourofwor ki ngt i me ANSWER: a amountofgoodsands e r vi c e spr oduc e df r om e ac hhourofawor ke r ’ st i me TYPE: M SECTI ON: 3DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  21 146 Theamountofgoodsands e r vi c e spr oduc e df r om e ac hhourofawor ke r ’ st i mei sc al l e d a t ot alout put b.pr oduc t i vi t y c mar gi nalpr oduc t d.e ffic i e nc y ANSWER: b pr oduc t i vi t y TYPE: M SECTI ON: 3DI FFI CULTY: 147 A di r e c torpos i t i ver e l a t i ons hi pe xi s t sbe t we e nac ount r y’ s a pr oduc t i vi t yandi t ss t andar dofl i vi ng b.gove r nme nts pe ndi ngandi t st axr a t e s c t ot alpopul a t i onandi t spe r c api t nc ome d.pr i c e sf ori t sgoodsands e r vi c e sandi t se xpor t s ANSWER: a pr oduc t i vi t yandi t ss t andar dofl i vi ng TYPE: M SECTI ON: 3DI FFI CULTY: 148 Thehi s t or i c alr i s ei nl i vi ngs t andar dsofAme r i c anwor ke r si spr i mar i l yar e s ul tof a t hei nflue nc eofl aboruni ons b.t ar i ffpr ot e c t i oni mpos e dbyt heU S.gove r nme nt c t hee nac t me ntofmi ni mumwa gel a ws d.t her i s ei nl aborpr oduc t i vi t y ANSWER: d t her i s ei nl aborpr oduc t i vi t y TYPE: M SECTI ON: 3DI FFI CULTY: 149 I ft hegove r nme ntwant e dt oe nac tapol i c yt oi nc r e as el i vi ngs t andar dsi nt hec ount r y ,i tmi ght a al l ow c or por a t et axwr i t e offsf ormone ys pe ntonwor ke rs af e t y b.makei tmor edi ffic ul tt or e c e i veune mpl oyme ntbe ne fit s c i nc r e as ee duc a t i onaloppor t uni t i e sf orwor ke r s d.pr ohi bi tuni onsf r om or gani zi ng ANSWER: c i nc r e as ee duc a t i onaloppor t uni t i e sf orwor ke r s TYPE: M SECTI ON: 3DI FFI CULTY: 150 Thes l ow gr owt hofU S.i nc ome sdur i ngt he1970sand1980sc anbe s tbee xpl ne dby a uns t abl ee c onomi cc ondi t i onsi nEas t e r nEur ope b.i nc r e as e dc ompe t i t i onf r om abr oad c l i nei nt her a t eofi nc r e as ei nU S pr oduc t i vi t y c ade d.as t r ongU S dol l ara br oad, hur t i ngU S.e xpor t s ANSWER: c ade c l i nei nt her a t eofi nc r e as ei nU S pr oduc t i vi t y TYPE: M SECTI ON: 3DI FFI CULTY: 151 Toi mpr ovel i vi ngs t andar ds ,pol i c ymake r ss houl d a i mpos er e s t r i c t i ononf or e i gnc ompe t i t i on b.f or mul a t epol i c i e sde s i gne dt oi nc r e as epr oduc t i vi t y c i mpos et oughe ri mmi gr a t i onpol i c i e s d.pr ovi det axbr e aksf ort hemi ddl ec l as s ANSWER: b f or mul a t epol i c i e sde s i gne dt oi nc r e as epr oduc t i vi t y TYPE: M SECTI ON: 3DI FFI CULTY: 152 Toi nc r e as el i vi ngs t andar ds ,publ i cpol i c ys houl d a e ns ur et twor ke r sar ewe l le duc a t e dandha vet hene c e s s ar yt ool sandt e c hnol ogy b.makeune mpl oyme ntbe ne fit smor el i be r al c movewor ke r si nt oj obsdi r e c t l yf r om hi ghs c hool d.e ns ur et twor ke r sha veac c e s st ouni onme mbe r s hi pandbe ne fit s ANSWER: a e ns ur et twor ke r sar ewe l le duc a t e dandha vet hene c e s s ar yt ool sandt e c hnol ogy TYPE: M SECTI ON: 3DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 22  Chapter 1/Ten Principles of Economics 153 Tor s epr oduc t i vi t y , pol i c ymake r sc oul d a i nc r e as es pe ndi ngone duc a t i on b.pr ovi det axc r e di t st ofir msf orc api t ali mpr ove me nt s c f undr e s e ar c handde ve l opme nt d.Bot haandcar ec or r e c t e Al loft heabovear ec or r e c t ANSWER: e Al loft heabovear ec or r e c t TYPE: M SECTI ON: 3DI FFI CULTY: 154 Ani nc r e as ei nt heove r al ll e ve lofpr i c e si na ne c onomyi sr e f e r r e dt oas a e c onomi cgr owt h b.i nfla t i on c mone t ar ypol i c y d.s uppl ys hoc ks ANSWER: b i nfla t i on TYPE: M SECTI ON: 3DI FFI CULTY: 155 I nfla t i oni sde fine das a ape r i odofr i s i ngpr oduc t i vi t yi nt hee c onomy b.ape r i odofr i s i ngi nc omei nt hee c onomy c ani nc r e as ei nt heove r al ll e ve lofout puti nt hee c onomy d.ani nc r e as ei nt heove r al ll e ve lofpr i c e si nt hee c onomy ANSWER: d ani nc r e as ei nt heove r al ll e ve lofpr i c e si nt hee c onomy TYPE: M SECTI ON: 3DI FFI CULTY: 156 Whe nt heGe r mangove r nme nti nc r e as e dt hequant i t yofmone yi nt heGe r mane c onomyi nt he1920s , a Ge r manye xpe r i e nc e dhype r i nfla t i on b.manype opl ei nGe r manybe c amer i c h c une mpl oyme nti nc r e as e d d.Ge r manywasabl et or e pa yal li t sf or e i gnde bt s ANSWER: a Ge r manye xpe r i e nc e dhype r i nfla t i on TYPE: M SECTI ON: 3DI FFI CULTY: 157 Dur i ngt hee ar l y1920si nGe r many , pr i c e s a doubl e dannual l y b.doubl e dmont hl y c t r i pl e dmont hl y d.t r i pl e dannual l y ANSWER: c t r i pl e dmont hl y TYPE: M SECTI ON: 3DI FFI CULTY: 158 Oneoft hewor s te pi s ode sofi nfla t i onoc c ur r e di n a t heUni t e dSt a t e si nt he1960 ’ s b.Ar ge nt i nai nt he1950 ’ s c Rus s i nt he1930’ s d.Ge r manyi nt he1920’ s v ANSWER: d Ge r manyi nt he1920s TYPE: M SECTI ON: 3DI FFI CULTY: 159 I nt heUni t e dSt a t e s , t heove r al ll e ve lofpr i c e smor et handoubl e ddur i ngt he a 1950s b.1960s c 1970s d.1980s ANSWER: c 1970s TYPE: M SECTI ON: 3DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  23 160 Lar georpe r s i s t e nti nfla t i oni sal mos tal wa ysc aus e dby a ani nc r e as ei nde mandf ordome s t i cpr oduc t i on b.gr owt hi nt hequant i t yofmone y c f or e i gnc ompe t i t i on d.hi ghe rwor ke rpr oduc t i vi t y ANSWER: b gr owt hi nt hequant i t yofmone y TYPE: M SECTI ON: 3DI FFI CULTY: 161 Pr e s i de ntGe r al dFor dr e f e r r e dt oi nfla t i onas a t hena t i onalt hi e f b.abl i ghtonourna t i on’ se c onomy c publ i ce ne mynumbe rone d.at or pe dot tc oul ds i nkoure c onomy ANSWER: c publ i ce ne mynumbe rone TYPE: M SECTI ON: 3DI FFI CULTY: 162 Thepe r s onwhor e f e r r e dt oi nfla t i onaspubl i ce ne mynumbe ronewas a Ge r al dFor d b.Al anGr e e ns pan c Ri c har dNi x on d.J ohnF Ke nne dy ANSWER: a Ge r al dFor d TYPE: M SECTI ON: 3DI FFI CULTY: 163 I nt he1990s ,i nfla t i oni nt heUni t e dSt a t e s a wasal mos tze r o b.wasabout3pe r c e ntpe rye ar c appr oac he ddoubl edi gi t s d.wasc aus e dbyt oomuc hc ons ume rs pe ndi ng ANSWER: b wasabout3pe r c e ntpe rye ar TYPE: M SECTI ON: 3DI FFI CULTY: 164 I nfla t i onc aus e s a i nc ome st of al l b.pr oduc t i vi t yt oi nc r e as e c t hegove r nme ntt ol owe rt ax e s d.t heval ueofmone yt of al l ANSWER: d t heval ueofmone yt of al l TYPE: M SECTI ON: 3DI FFI CULTY: 165 Whi c hoft hef ol l owi ngi st hemos tc or r e c ts t a t e me nta boutt her e l a t i ons hi pbe t we e ni nfla t i onandune mpl oyme nt ? a I nt hes hor tr un,r e duc i ngi nfla t i oni sas s oc i a t e dwi t hf al l i ngune mpl oyme nt b.I nt hes hor tr un,r e duc i ngi nfla t i oni sas s oc i a t e dwi t hr i s i ngune mpl oyme nt c I nt hel ongr un,r e duc i ngi nfla t i oni sas s oc i a t e dwi t hf al l i ngune mpl oyme nt d.I nt hel ongr un,r e duc i ngi nfla t i oni sas s oc i a t e dwi t hr i s i ngune mpl oyme nt ANSWER: b I nt hes hor tr un,r e duc i ngi nfla t i oni sas s oc i a t e dwi t hr i s i ngune mpl oyme nt TYPE: M SECTI ON: 3DI FFI CULTY: 166 Thec ur vet ti l l us t r a t e st het r ade offbe t we e ni nfla t i onandune mpl oyme nti sc al l e dt he a Laffe rc ur ve b.Lor e nzc ur ve c Phi l l i psc ur ve d.De mandc ur ve ANSWER: c Phi l l i psc ur ve TYPE: M SECTI ON: 3DI FFI CULTY: 167 I nt hes hor tr un,t hePhi l l i psc ur vei l l us t r a t e s a t het r ade offbe t we e ni nfla t i onandune mpl oyme nt b.t het r ade offbe t we e ne qui t yande ffic i e nc y c l aborpr oduc t i vi t yi nane c onomy d.t hel e ve lofgove r nme nti nt e r ve nt i oni namar ke te c onomy ANSWER: a t het r ade offbe t we e ni nfla t i onandune mpl oyme nt TYPE: M SECTI ON: 3DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 24  Chapter 1/Ten Principles of Economics 168 Al t hought hePhi l l i psc ur vei sc ont r ove r s i al ,mos te c onomi s t sbe l i e vet t a s oc i e t yf ac e sat r ade offbe t we e nune mpl oyme ntandi nfla t i oni nt hes hor tr unonl y b.s oc i e t yf ac e sat r ade offbe t we e nune mpl oyme ntandi nfla t i oni nt hel ongr unonl y c not r ade offe xi s t sbe t we e nune mpl oyme ntandi nfla t i on d.s oc i e t yf ac e sac ont i nuoust r ade offbe t we e nune mpl oyme ntandi nfla t i on ANSWER: a s oc i e t yf ac e sat r ade offbe t we e nune mpl oyme ntandi nfla t i oni nt hes hor tr unonl y TYPE: M SECTI ON: 3DI FFI CULTY: 169 Pol i c ymake r sc ani nflue nc et hec ombi na t i onofi nfla t i onandune mpl oyme ntt hee c onomye xpe r i e nc e sbyadj us t i ng e ac hoft hef ol l owi ngEXCEPT a t ax e s b.gove r nme nts pe ndi ng c t hemone ys uppl y d.mar ke tpr i c e s ANSWER: d mar ke tpr i c e s TYPE: M SECTI ON: 3DI FFI CULTY: 170 I nt hee ar l y1980 s , U S.e c onomi cpol i c ywasdi r e c t e dt owar dr e duc i ngi nfla t i on.Wha twoul dyouas s umeabout i nfla t i onandune mpl oyme ntdur i ngt hi spe r i od? a I nfla t i onf e l landune mpl oyme ntf e l l b.I nfla t i onandune mpl oyme ntwe r ebot hunaffe c t e d c I nfla t i onf e l landune mpl oyme nti nc r e as e d d.I nfla t i onf e l landune mpl oyme ntwasunc hange d ANSWER: c I nfla t i onf e l landune mpl oyme nti nc r e as e d TYPE: M SECTI ON: 3DI FFI CULTY: 171 Be t we e n1929and1933, t heU S e c onomywe ntf r om as i t ua t i onoff ul le mpl oyme ntt ooneof25pe r c e nt une mpl oyme nt Wha tdoyouas s umehappe ne dt opr i c e s ? a Pr i c e swe r eunaffe c t e d b.Pr i c e sf e l last hee c onomye xpe r i e nc e dde fla t i on c Pr i c e sr os east hee c onomye xpe r i e nc e di nfla t i on d.I ti si mpos s i bl et ogue s swha thappe ne dt opr i c e sf r om t hei nf or ma t i ongi ve n ANSWER: b Pr i c e sf e l last hee c onomye xpe r i e nc e dde fla t i on TYPE: M SECTI ON: 3DI FFI CULTY: 172 ThePhi l l i psc ur vei si mpor t antf orunde r s t andi ng a t hebus i ne s sc yc l e b.s uppl yandde mand c gove r nme nts pe ndi ng d.mone ys uppl yc hange s ANSWER: a t hebus i ne s sc yc l e TYPE: M SECTI ON: 3DI FFI CULTY: 173 Thebus i ne s sc yc l ei st he a r e l a t i ons hi pbe t we e nune mpl oyme ntandi nfla t i on b.i r r e gul arfluc t ua t i onsi ne c onomi cac t i vi t y c pos i t i ver e l a t i ons hi pbe t we e nt hequant i t yofmone yi nane c onomyandi nfla t i on d.pr e di c t abl ec hange si ne c onomi cac t i vi t yduet oc hange si ngove r nme nts pe ndi ngandt ax e s ANSWER: b i r r e gul arfluc t ua t i onsi ne c onomi cac t i vi t y TYPE: M SECTI ON: 3DI FFI CULTY: 174 Se na t orSmi t hwant st oi nc r e as et ax e sonpe opl ewi t hhi ghi nc ome sandus et hemone yt ohe l pt hepoor Se na t or J one sar gue st ts uc hat axwi l ldi s c our a ges uc c e s s f ulpe opl ef r om wor ki ngandwi l lt he r e f or emakes oc i e t ywor s e off.Ane c onomi s twoul ds a yt t a wes houl da gr e ewi t hSe na t orSmi t h b.wes houl da gr e ewi t hSe na t orJ one s c agoodde c i s i onr e qui r e st twer e c ogni zebot hvi e wpoi nt s d.t he r ear enot r ade offsbe t we e ne qui t yande ffic i e nc y ANSWER: c agoodde c i s i onr e qui r e st twer e c ogni zebot hvi e wpoi nt s TYPE: M SECTI ON: 1DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  25 175 Maur i c er e c e i ve s$100asabi r t hda ygi f t I nde c i di nghow t os pe ndt hemone y ,henar r owshi sopt i onsdownt of our c hoi c e s , Opt i onA,Opt i onB, Opt i onCandOpt i onD Ea c hopt i onc os t s$100 Fi nal l yhede c i de sonOpt i onB.The oppor t uni t yc os tofOpt i onBi s a t heval uet ohi m oft heOpt i onhewoul dha vec hos e ni fOpt i onBwe r enota vai l abl e b.t heval uet ohi m ofOpt i onsA,CandDc ombi ne d c $300 d.$100 ANSWER: a: t heval uet ohi m oft heOpt i onhewoul dha vec hos e ni fOpt i onBwe r enota vai l abl e TYPE: M SECTI ON: 1DI FFI CULTY: 176 A f ur ni t ur emake rc ur r e nt l ypr oduc e s100t a bl e spe rwe e kands e l l st he mf orapr ofit Shei sc ons i de r i nge xpandi ng he rope r a t i oni nor de rt omakemor et abl e s Shoul ds hee xpand? a Ye s ,be c aus emaki ngt a bl e si spr ofit abl e b.No, be c aus es hema ynotbeabl et os e l lt headdi t i onalt abl e s c I tde pe ndsont hemar gi nalc os tofpr oduc i ngmor et a bl e sandt hemar gi nalr e ve nues hewi l le ar nf r om s e l l i ng mor et abl e s d.I tde pe ndsont hea ve r a gec os tofpr oduc i ngmor et a bl e sandt hea ve r a ger e ve nues hewi l le ar nf r om s e l l i ngmor e t abl e s ANSWER: c I tde pe ndsont hemar gi nalc os tofpr oduc i ngmor et a bl e sandt hemar gi nalr e ve nues hewi l le a r nf r om s e l l i ngmor et abl e s TYPE: M SECTI ON: 1DI FFI CULTY: 177 I nt hena t i onofDi c t a t or l and, f ar me r st r adi t i onal l yf e e dgr nt ot he i rl i ve s t oc k Ce nt r alpl anne r s ,howe ve r , de c i de dt o i nc r e as et hepr i c eofgr nt omakegr nf a r me r shappyandt or e duc et hepr i c eofbr e admadef r om t tgr nt o makec i t ydwe l l e r shappy Now t hepr i c eofbr e adi sl owe rt hant hepr i c eofgr n.Wemi ghtnow e xpe c t a f ar me r st oc ont i nuet of e e dgr nt ot he i rl i ve s t oc k b.f ar me r st os t ar tf e e di ngbr e adt ot he i rl i ve s t oc k c c i t ydwe l l e r st os t ar tbuyi nggr nt omakebr e adt oe a t d.c i t ydwe l l e r st os t ar tbuyi nggr nt omakebr e adt os e l l ANSWER: b f ar me r st os t ar tf e e di ngbr e adt ot he i rl i ve s t oc k TYPE: M SECTI ON: 1DI FFI CULTY: 178 Se na t orSmar ti st r yi ngt oc onvi nc ewor ke r si nhe rdi s t r i c tt tt r adewi t hot he rc ount r i e si sbe ne fic i al Se na t orSmar t ar gue st tt r adec anbebe ne fic i al a onl yi fi tal l owsust oobt nt hi ngst twec oul dn’ tmakef orour s e l ve s b.be c aus ei tal l owss pe c i al i za t i on,whi c hi nc r e as e st ot alout put c t ousi fwec angai nandt heot he r si nvol ve di nt het r adel os e d.i nonl yal i mi t e dnumbe rofc i r c ums t anc e sbe c aus eot he r sar et ypi c al l ys e l f i nt e r e s t e d ANSWER: b be c aus ei tal l owss pe c i al i za t i on,whi c hi nc r e as e st ot alout put TYPE: M SECTI ON: 2DI FFI CULTY: 179 Adam Smi t har gue dt ti namar ke ts ys t e m,whe npe opl eac ti nt he i rowns e l f i nt e r e s t ,t he yt ypi c al l y a he l ponl yt he ms e l ve s b.har m ot he r s c he l pot he r s ,butnotasmuc hast he ywoul dha vei ft he ywe r enots e l f i nt e r e s t e d d.he l pot he r se ve nmor et hanwhe nt he ys e e kt ohe l pot he r s ANSWER: d he l pot he r se ve nmor et hanwhe nt he ys e e kt ohe l pot he r s TYPE: M SECTI ON: 2DI FFI CULTY: 180 A f r i e ndofyour sas ksyouwhymar ke tpr i c e sar ebe t t e rt hangove r nme nt de t e r mi ne dpr i c e s Yous a yt tmar ke t de t e r mi ne dpr i c e sar ebe t t e rbe c aus et he yge ne r al l yr e fle c t a t heval ueofagoodt os oc i e t y , butnott hec os tofmaki ngi t b.t hec os tofmaki ngagoodt os oc i e t y , butnoti t sval ue i tc bot ht heval ueofagoodt os oc i e t yandt hec os tofmaki ng d.ne i t he rt heval ueofagoodt os oc i e t ynort hec os tofmaki ngi t ANSWER: c bot ht heval ueofagoodt os oc i e t yandt hec os tofmaki ngi t TYPE: M SECTI ON: 2DI FFI CULTY: Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 26  Chapter 1/Ten Principles of Economics 181 Whi c hoft hef ol l owi ngi sNOTt r ue ? a I nt hepr e s e nc eofamar ke tf l ur e ,gove r nme nta c t i onmi ghtnoti mpr oveont hemar ke tout c omebe c aus e s ome t i me spubl i cpol i c i e ss i mpl yr e war dt hepol i t i c al l ypowe r f ul b.I nt hepr e s e nc eofamar ke tf l ur e ,gove r nme nta c t i onmi ghtnoti mpr oveont hemar ke tout c omebe c aus es ome l e ade r sar enotf ul l yi nf or me daboutt hee ffe c t soft he i rac t i ons c I nt hepr e s e nc eofamar ke tf l ur e ,gove r nme nta c t i onc ans ome t i me si mpr oveont hemar ke tout c ome d.I nt hepr e s e nc eofamar ke tf l ur e ,gove r nme ntac t i onwi l lal wa ysi mpr oveont hemar ke tout c ome ANSWER: d I nt hepr e s e nc eofamar ke tf l ur e ,gove r nme ntac t i onwi l lal wa ysi mpr oveont hemar ke tout c ome TYPE: M SECTI ON: 2DI FFI CULTY: 182 Whi c hoft hef ol l owi ngi smos tl i ke l yt or s et hea ve r a ges t andar dofl i vi ngi nt heUni t e dSt a t e s ? nc r e as ei ni nve s t me nti nne wc api t al a ani b.ac ont i nua t i onoft hee c onomi cpr obl e mse xpe r i e nc e dbyJ apan, wi t hwhom t heUni t e dSt a t e sc ompe t e si nwor l d mar ke t s c ani nc r e as ei nt hemi ni mum l e galwa ge d.s hor t e ni ngt hea ve r a gewor kwe e k ANSWER: a ani nc r e as ei ni nve s t me nti nne wc api t al TYPE: M SECTI ON: 3DI FFI CULTY: 183 Dur i ngt he1990s ,t heUni t e dKi ngdom e xpe r i e nc e dl ow l e ve l sofi nfla t i onwhi l eTur ke ye xpe r i e nc e dhi ghl e ve l sof i nfla t i on.Thedi ffe r e nc ec anbe s tbee xpl ne dbyt hef ac tt t a t heUni t e dKi ngdom i smor ei ndus t r i al i ze dt hanTur ke y b.t heUni t e dKi ngdom pr i nt e dmone ya tas l owe rr a t et hanTur ke y c wor ke r si nt heUni t e dKi ngdom ar emor epr oduc t i vet hanwor ke r si nTur ke y d.t he r ewe r emor ec as e sofmar ke tf l ur ei nTur ke yt hani nt heUni t e dKi ngdom ANSWER: b t heUni t e dKi ngdom pr i nt e dmone ya tas l owe rr a t et hanTur ke y TYPE: M SECTI ON: 3DI FFI CULTY: 184 Whi c hoft hef ol l owi ngi sc ons i s t e ntwi t ht hePhi l l i psCur ve ? a I fwei nc r e as et her a t eofi nfla t i onf r om 3pe r c e ntt o6pe r c e nt ,t he nt her a t eofune mpl oyme ntwi l lt e mpor ar i l y f al l b.I fwei nc r e as et her a t eofi nfla t i onf r om 3pe r c e ntt o6pe r c e nt ,t he nt her a t eofune mpl oyme ntwi l lt e mpor ar i l y r i s e c I fwei nc r e as et her a t eofi nfla t i onf r om 3pe r c e ntt o6pe r c e nt ,t he nt her a t eofune mpl oyme ntwi l lpe r mane nt l y f al l d.I fwei nc r e as et her a t eofi nfla t i onf r om 3pe r c e ntt o6pe r c e nt ,t he nt her a t eofune mpl oyme ntwi l lpe r mane nt l y r i s e ANSWER: a I fwei nc r e as et her a t eofi nfla t i onf r om 3pe r c e ntt o6pe r c e nt ,t he nt her a t eofune mpl oyme ntwi l l t e mpor ar i l yf al l TYPE: M SECTI ON: 3DI FFI CULTY: TRUE/ F ALSE Sc ar c i t yme anst tt he r ei sl e s sofagoodorr e s our c ea vai l abl et hanpe opl ewi s ht oha ve ANSWER: TTYPE:TSECTI ON:1RANDOM: Y Ec onomi c si st hes t udyofhow f r l ygoodsands e r vi c e sar edi s t r i but e dwi t hi ns oc i e t y ANSWER: FTYPE:TSECTI ON:1RANDOM: Y Wi t hc ar e f ulpl anni ng,wec anus ual l yge ts ome t hi ngt twel i kewi t houtha vi ngt ogi veups ome t hi nge l s et twe l i ke ANSWER: FTYPE:TSECTI ON:1RANDOM: Y Equi t yme anse ve r yonei nt hee c onomys houl dr e c e i veane quals har eoft hegoodsands e r vi c e spr oduc e d ANSWER: FTYPE:TSECTI ON:1RANDOM: Y Equi t yr e f e r st ohow t hepi ei sdi vi de d,ande ffic i e nc yr e f e r st ot hes i zeoft hee c onomi cpi e ANSWER: TTYPE:TSECTI ON:1RANDOM: Y Tui t i oni st hes i ngl e l ar ge s tc os tofa t t e ndi ngc ol l e gef ormos ts t ude nt s ANSWER: FTYPE:TSECTI ON:1RANDOM: Y Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  27 Thec os tofanac t i oni sme as ur e di nt e r msoff or e goneoppor t uni t i e s ANSWER: TTYPE:TSECTI ON:1RANDOM: Y A mar gi nalc hangei sas mal li nc r e me nt aladj us t me ntt oane xi s t i ngpl anofac t i on ANSWER: TTYPE:TSECTI ON:1RANDOM: Y I ft hea ve r a gec os toft r ans por t i ngapas s e nge ront het r nf r om Chi c a got oSt Loui si s$75, i twoul dbei r r a t i onalf or t her l r oadt oal l ow anypas s e nge rt or i def orl e s st han$75 ANSWER: FTYPE:TSECTI ON:1RANDOM: Y 10 A r a t i onalde c i s i onmake rt ake sanac t i oni fandonl yi ft hemar gi nalc os te x c e e dst hemar gi nalbe ne fit ANSWER: FTYPE:TSECTI ON:1RANDOM: Y 11 Tr adeal l owse ac hpe r s ont os pe c i al i zei nt heac t i vi t i e sheors hedoe sbe s t , t husi nc r e as i nge ac hi ndi vi dual ’ s pr oduc t i vi t y ANSWER: TTYPE:TSECTI ON:2RANDOM: Y 12 Tr adewi t hanyna t i onc anbemut ual l ybe ne fic i al ANSWER: TTYPE:TSECTI ON:2RANDOM: Y 13 A mar ke te c onomyc annotpr oduc eas oc i al l yde s i r abl eout c omebe c aus ei ndi vi dual sar emot i va t e dbyt he i rown s e l fis hi nt e r e s t s ANSWER: FTYPE:TSECTI ON:2RANDOM: Y 14 Thegove r nme ntc anpot e nt i al l yi mpr ovemar ke tout c ome si fmar ke ti ne qual i t i e sormar ke tf l ur ee xi s t s ANSWER: TTYPE:TSECTI ON:2RANDOM: Y 15 Mar ke tf l ur er e f e r st oas i t ua t i oni nwhi c ht hemar ke tdoe snotal l oc a t er e s our c e se ffic i e nt l y ANSWER: TTYPE:TSECTI ON:2RANDOM: Y 16 Si nc et ax e saffe c tonl yt hepr i c epai dbyt hebuye r ,t he yc annotha veanadve r s ei mpac tont heal l oc a t i onofs oc i e t y’ s r e s our c e s ANSWER: FTYPE:TSECTI ON:2RANDOM: Y 17 Pr oduc t i vi t yi sde fine dast hequant i t yofgoodsands e r vi c e spr oduc e df r om e ac hhourofawor ke r ’ st i me ANSWER: TTYPE:TSECTI ON:3RANDOM: Y 18 Pr oduc t i vi t yi st hepr i mar yde t e r mi nantofac ount r y‘ sl i vi ngs t andar ds ANSWER: TTYPE:TSECTI ON:3RANDOM: Y 19 I nfla t i oni nc r e as e st heval ueofmone y ANSWER: FTYPE:TSECTI ON:3RANDOM: Y 20 Gove r nme nts pe ndi ngi st heul t i ma t es our c eofi nfla t i on ANSWER: FTYPE:TSECTI ON:3RANDOM: Y 21 ThePhi l l i psCur ves howst hes hor t r unt r ade offbe t we e ni nfla t i onande c onomi cgr owt h ANSWER: FTYPE:TSECTI ON:3RANDOM: Y SHORTANSWER APPLI CATI ON/ SCENARI O Wha twoul dhappe nt ot hes t udyofe c onomi c si fs c a r c i t ydi s appe ar e d? ANSWER: Si nc ee c onomi c si st hes t udyofhow s oc i e t yal l oc a t e si t ss c ar c er e s our c e s , i ft he r ewe r enos c ar c i t y , t he r ewoul d benone e df ore c onomi c s Eve r yonec oul dha veal lt hegoodsands e r vi c e st he ywant e d Noonewoul dha vet omake de c i s i onsbas e dont r ade offs ,be c aus et he r ewoul dbenooppor t uni t yc os tas s oc i a t e dwi t ht hede c i s i on.( I ti sdi ffic ul t t oc onc e i veofas i t ua t i onwhe r et i mei snots c ar c e , howe ve r ) TYPE: SSECTI ON:1RANDOM:Y Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 28  Chapter 1/Ten Principles of Economics Onet r ade offs oc i e t yf ac e si sbe t we e ne ffic i e nc yande qui t y De finee ac ht e r m.I ft heU S gove r nme ntr e di s t r i but e s i nc omef r om t her i c ht ot hepoor ,e xpl nhow t hi sac t i onaffe c t se qui t yaswe l lase ffic i e nc yi nt hee c onomy ANSWER: Effic i e nc yi st hepr ope r t yofs oc i e t yge t t i ngt hemos ti tc anf r om i t ss c ar c er e s our c e s Equi t yi sde fine dast he pr ope r t yofdi s t r i but i nge c onomi cpr os pe r i t yf r l yamongt heme mbe r sofs oc i e t y Of t e n, t he s et wogoal sc onfli c t Whe nt hegove r nme ntr e di s t r i but e si nc omef r om t her i c ht ot hepoor ,i tr e duc e st her e war df orwor ki nghar d Fe we r goodsands e r vi c e sar epr oduc e dandt hee c onomi cpi ege t ss mal l e r Whe nt hegove r nme ntt r i e st oc utt hee c onomi c pi ei nt omor ee quals l i c e s ,t hepi ege t ss mal l e r Pol i c i e sai me da tac hi e vi ngamor ee qualdi s t r i but i onofe c onomi c we l l be i ng, s uc hast hewe l f ar es ys t e m,t r yt ohe l pt hos eme mbe r sofs oc i e t ywhoar emos ti nne e d Thei ndi vi dual i nc omet axas kst hefinanc i al l ys uc c e s s f ult oc ont r i but emor et hanot he r st os uppor tt hegove r nme nt TYPE: SSECTI ON:1RANDOM:Y De fineoppor t uni t yc os t Wha ti st heoppor t uni t yc os tt oyouofa t t e ndi ngc ol l e ge ?Wha twasyouroppor t uni t yc os t ofc omi ngt oc l as st oda y? ANSWER: Wha t e ve rmus tbegi ve nupt oobt ns omei t e mi ti t soppor t uni t yc os t Bas i c al l y ,t hi swoul dbeape r s on’ s s e c ondc hoi c e Theoppor t uni t yc os tofape r s ona t t e ndi ngc ol l e gei st heval ueoft hebe s tal t e r na t i veus eoft t pe r s on’ st i me Formos ts t ude nt st hi swoul dbet hei nc omet hes t ude ntgi ve supbynotwor ki ng As t ude nt ’ s oppor t uni t yc os tofc omi ngt oc l as swast heval ueoft hebe s toppor t uni t yt hes t ude ntga veup.( Formos ts t ude nt s , t ts e e mst obes l e e p ) TYPE: SSECTI ON:1RANDOM:Y Wi t ht heunde r s t andi ngt tpe opl er e s pondt oi nc e nt i ve s ,out l i net hepos s i bl eout c omef ort e ac he r si ft heK12 s c hoolye ari se xt e nde dt o11mont hspe rye ari ns t e adoft hee xi s t i ng9mont hspe rye ar ANSWER: Thec onc e ptofwor ki ngl onge rpe rye arwoul dbepe r c e i ve dbymanyt e a c he r sasade fini t ei nc r e as ei nt hec os tof t e ac hi ng Eve nwi t haddi t i onalc ompe ns a t i on,manyt e ac he r sl ooka ts umme r soffasama j orbe ne fitoft hee duc a t i on pr of e s s i on.I ft hi sbe ne fitwe r ee l i mi na t e dore ve ndi mi ni s he d,s omet e a c he r sma ype r c e i vet tt hemar gi nalc os tof t e ac hi ngwoul dnow begr e a t e rt hant hemar gi nalbe ne fitandwoul dc hoos et ol e a vet e a c hi ng TYPE: SSECTI ON:1RANDOM:Y Unde rwha tc ondi t i onsmi ghtgove r nme nti nt e r ve nt i oni nane c onomyi mpr ovet hemar ke tout c ome ? ANSWER: I ft he r ei samar ke tf l ur e ,s uc hasane xt e r nal i t yormonopol y ,gove r nme ntr e gul a t i onmi ghti mpr ovet hewe l l be i ngofs oc i e t ybypr omot i nge ffic i e nc y I ft hedi s t r i but i onofi nc omeorwe al t hi sc ons i de r e dt obeunf rbys oc i e t y , gove r nme nti nt e r ve nt i onmi ghta c hi e veamor ee qui t abl edi s t r i but i onofe c onomi cwe l l be i ng TYPE: SSECTI ON:2RANDOM:Y Expl nhow ana t t e mptbyt hegove r nme ntt ol owe ri nfla t i onc oul dc aus eune mpl oyme ntt oi nc r e as ei nt hes hor t r un ANSWER: Tol owe ri nfla t i on,t hegove r nme ntma yc hoos et or e duc et hemone ys uppl yi nt hee c onomy Whe nt hemone y s uppl yi sr e duc e d,pr i c e sdon’ tadj us ti mme di a t e l y Lowe rs pe ndi ngc ombi ne dwi t hpr i c e s ,whi c har et oohi gh, r e duc e ss al e sandc aus e swor ke r st obel doff He nc e ,t hel owe rpr i c el e ve li sas s oc i a t e dwi t hhi ghe rune mpl oyme nt TYPE: SSECTI ON:3RANDOM:Y Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) ... rpr ofitt ofir ms ANSWER: a l owe rs pe ndi ngbygove r nme nt TYPE: M SECTI ON: 1DI FFI CULTY: 30 Pol l ut i onr e gul a t i onswi l l a i nc r e as epr ofitt ofir ms b.i mpos eat r ade offons... Downloaded by ??ng khoa Nguy?n Minh (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  11 72 Suppos eyourmana ge me ntpr of e s s orhasbe e noffe r e... (nguyenminhdangkhoa237@gmail.com) lOMoARcPSD|10523762 Chapter 1/Ten Principles of Economics  17 117 Ane xampl eofane xt e r nal i t yi st hei mpac tof a badwe a t he ront hei nc omeoff ar me r s b.t hepe r s onali