1|Page
ECON 1500 Exam 2 QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+
Since air is limited in supply, it is scarce in the economic
sense. - .....ANSWER ...✔✔ False
Adam Smith is the Father of Economics. - .....ANSWER
...✔✔ True
Economic resources include labor, human capital, natural
resources, money, and capital. - .....ANSWER ...✔✔
False
Voluntary trade between Maria and Alex benefits both
individuals, and voluntary trade between Iceland and
Ireland benefits both countries, but trade between
Ireland and Iceland does not necessarily benefit all
individuals in both countries. - .....ANSWER ...✔✔ True
George has spent a long time on a project, and now it
seems that the marginal benefit of completing the
project is less than the marginal cost of completing it.
,2|Page
Nevertheless, if George is rational, he will complete the
project anyway, because he has already spent so much
time working on it. - .....ANSWER ...✔✔ False
Market failures include monopoly, externalities, and
others. - .....ANSWER ...✔✔ True
The opportunity cost to Jennifer of attending Utah State
University is her tuition, books, and living expenses. -
.....ANSWER ...✔✔ False
Adam Smith asked the question, "Why are some nations
rich and other nations poor" in 1776. That question is no
longer important to economists. - .....ANSWER ...✔✔
False
In the Constitutional Convention of 1787, the three
controversies were: (1) How much power should the
federal government have, relative to the States? (2)
Should representation in Congress be proportional to a
state's population, or should all states have equal
representation? (3) Should slavery be abolished? -
.....ANSWER ...✔✔ True
,3|Page
Economic policy is "positive economics", while economic
science is "normative economics". - .....ANSWER ...✔✔
False
The constitution established an institutional and legal
framework very favorable to the market system. -
.....ANSWER ...✔✔ True
If Canada has labor that is twice as productive as labor
in Bulgaria, then he standard of living in Canada will be
about twice as high as the standard of living in Bulgaria.
- .....ANSWER ...✔✔ True
Choices are necessary because of scarcity. -
.....ANSWER ...✔✔ True
Although needs, as defined by economists, are limited,
wants seem to be unlimited. - .....ANSWER ...✔✔ True
Services are tangible and goods are intangible. -
.....ANSWER ...✔✔ False
, 4|Page
The opportunity cost of using a resource in one way is
the value of the best alternative use of the resource. -
.....ANSWER ...✔✔ True
Economists believe that markets are usually a good way
to organize economic activity. - .....ANSWER ...✔✔
True
Brianne decided to attend class today rather than go
skiing. The value to Brianne of skiing today is her
opportunity cost of attending class. - .....ANSWER
...✔✔ True
The wealth of a nation is primarily determined by the
nation's labor-force participation rate. - .....ANSWER
...✔✔ False
There is trade-off in the long run between
unemployment and inflation, but not in the short run. -
.....ANSWER ...✔✔ False
If there is a market failure, government might be able to
improve the market outcome. - .....ANSWER ...✔✔
True
ECON 1500 Exam 2 QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+
Since air is limited in supply, it is scarce in the economic
sense. - .....ANSWER ...✔✔ False
Adam Smith is the Father of Economics. - .....ANSWER
...✔✔ True
Economic resources include labor, human capital, natural
resources, money, and capital. - .....ANSWER ...✔✔
False
Voluntary trade between Maria and Alex benefits both
individuals, and voluntary trade between Iceland and
Ireland benefits both countries, but trade between
Ireland and Iceland does not necessarily benefit all
individuals in both countries. - .....ANSWER ...✔✔ True
George has spent a long time on a project, and now it
seems that the marginal benefit of completing the
project is less than the marginal cost of completing it.
,2|Page
Nevertheless, if George is rational, he will complete the
project anyway, because he has already spent so much
time working on it. - .....ANSWER ...✔✔ False
Market failures include monopoly, externalities, and
others. - .....ANSWER ...✔✔ True
The opportunity cost to Jennifer of attending Utah State
University is her tuition, books, and living expenses. -
.....ANSWER ...✔✔ False
Adam Smith asked the question, "Why are some nations
rich and other nations poor" in 1776. That question is no
longer important to economists. - .....ANSWER ...✔✔
False
In the Constitutional Convention of 1787, the three
controversies were: (1) How much power should the
federal government have, relative to the States? (2)
Should representation in Congress be proportional to a
state's population, or should all states have equal
representation? (3) Should slavery be abolished? -
.....ANSWER ...✔✔ True
,3|Page
Economic policy is "positive economics", while economic
science is "normative economics". - .....ANSWER ...✔✔
False
The constitution established an institutional and legal
framework very favorable to the market system. -
.....ANSWER ...✔✔ True
If Canada has labor that is twice as productive as labor
in Bulgaria, then he standard of living in Canada will be
about twice as high as the standard of living in Bulgaria.
- .....ANSWER ...✔✔ True
Choices are necessary because of scarcity. -
.....ANSWER ...✔✔ True
Although needs, as defined by economists, are limited,
wants seem to be unlimited. - .....ANSWER ...✔✔ True
Services are tangible and goods are intangible. -
.....ANSWER ...✔✔ False
, 4|Page
The opportunity cost of using a resource in one way is
the value of the best alternative use of the resource. -
.....ANSWER ...✔✔ True
Economists believe that markets are usually a good way
to organize economic activity. - .....ANSWER ...✔✔
True
Brianne decided to attend class today rather than go
skiing. The value to Brianne of skiing today is her
opportunity cost of attending class. - .....ANSWER
...✔✔ True
The wealth of a nation is primarily determined by the
nation's labor-force participation rate. - .....ANSWER
...✔✔ False
There is trade-off in the long run between
unemployment and inflation, but not in the short run. -
.....ANSWER ...✔✔ False
If there is a market failure, government might be able to
improve the market outcome. - .....ANSWER ...✔✔
True
