Module 1 Exam

Question 1

The chronic failure of Socialist systems to produce shortages and surpluses is foremost caused by the incentive problem.

Accepted Answer

False

Question 2

Quasi Goods are Private Goods that Governments can produce due to negative externalities.

Accepted Answer

False

Question 3

The Policy which aims to resolve externalities by enforcing private property.

Accepted Answer

Coase Theorem

Question 4

Normative Economics deals with statements of fact.

Accepted Answer

False

Question 5

Which of these is an example of a private good?

Accepted Answer

Housing

Question 6

This field of economics focuses on the whole, i.e. the city, State, country, or world.

Accepted Answer

Macroeconomics

Question 7

If we cut taxes and we experience high immigration, what should we expect to happen within a market?

Accepted Answer

Output Increases, Prices Unknown

Question 8

When regulatory agencies are run by those entities that they are designed to regulate is called Rent-Seeking.

Accepted Answer

False

Question 9

When insurers are unable to individually discriminate so they assess risk based on the entire pool is Adverse Selection.

Accepted Answer

True

Question 10

Law of Demand says that, all else equal, as prices fall, the quantity demanded rises.

Accepted Answer

True

Question 11

A decentralized economic system is characterized by the social control of the means of production.

Accepted Answer

False

Question 12

If we were to subsidize the production of electric cars, we should expect price to rise and output to increase.

Accepted Answer

False

Question 13

We see a shift in preferences away from hamburgers to tacos, for hamburgers, we should expect?

Accepted Answer

Price and Output to Decrease

Question 14

Which of these are reasons for why the Demand Curve is downward sloping?

Accepted Answer

Diminishing Marginal Utility

Question 15

The term for when a third party experiences a benefit/cost from a transaction.

Accepted Answer

Externality

Question 16

In a capitalist system, every individual will receive what is produced by society so long as they work.

Accepted Answer

False

Question 17

The means of production are land, labor, entrepreneurship, and?

Accepted Answer

Physical Capital

Question 18

The Production Possibilities Frontier shows the potential production allocations for a country of two goods.

Accepted Answer

True

Question 19

The viewpoint that envisions individuals and institutions making rational decisions in their own self-interest.

Accepted Answer

The Economic Perspective

Question 20

In a Market System, determining what goods and services that will be produced is driven by what?

Accepted Answer

Consumer Sovereignty

Question 21

The Law of Supply states, all else equal, if price increases, supply increases.

Accepted Answer

False

Question 22

When voters convey contradicting preferences to representatives.

Accepted Answer

Paradox of Voting

Question 23

If household income rises $5,000, we should expect to see prices to rise and output to increase.

Accepted Answer

True

Question 24

Which of the following are institutions of capitalism?

Accepted Answer

All the Above

Question 25

The collapse of the coal industry in West Virginia by the advent of hydraulic fracking is an Ex. of what term?

Accepted Answer

Creative Destruction

Module 1 Exam

Questions 25

Module 1 Exam

Questions 25