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EC210 Test #2 Chapt. 5-8 Question and answers verified to pass
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EC210 Test #2 Chapt. 5-8 Question and answers verified to pass The idea that an action should be undertaken if and only if the benefits exceed the costs is known as the concept of a. economic efficiency. b. public welfare maximization. c. marginal comparative advantage. d. monetary c...

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  • February 12, 2025
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  • 2024/2025
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EC210 Test #2 Chapt. 5-8 Question and
answers verified to pass
The idea that an action should be undertaken if and only if the benefits exceed
the costs is known as the concept of
a.
economic efficiency.
b.
public welfare maximization.
c.
marginal comparative advantage.
d.
monetary construction of values. - correct answer a.


economic efficiency.


When economists say that an activity meets the criterion for economic
efficiency, they mean
a.
a majority of citizens favor the activity.
b.
the benefits that result from the activity exceed the costs.
c.
the number of people who gain from the activity exceeds the number on
whom costs are imposed.
d.
the costs that result from the activity exceed the benefits. - correct answer .....

,If an economic action generates more costs than benefits, the action
a.
by definition increases the nation's economic welfare.
b.
should not be undertaken from an efficiency standpoint.
c.
should be subsidized by the government in order to make sure that it is
undertaken.
d.
is desirable from a public welfare standpoint even though many individuals will
be harmed. - correct answer b.
should not be undertaken from an efficiency standpoint.


The standard economists use to assess whether an activity should be
undertaken is
a.
majority vote
b.
the marginal benefit assessment.
c.
the gold standard
d.
economic efficiency. - correct answer d.
economic efficiency.

,Which of the following best explains why making automobiles completely safe
is not efficient?
a
After some level of safety is reached, making cars even safer will not be worth
the additional cost.
b.
Because human life is priceless, automobile safety generally doesn't matter.
c.
The benefit from additional automobile safety will generally rise as
automobiles are made safer, more than offsetting the opportunity cost
involved.
d.
Economic efficiency suggests that automobiles should be made as safe as
humanly possible. - correct answer a.
After some level of safety is reached, making cars even safer will not be worth
the additional cost.


Because the benefits derived from an activity decline as it is expanded, it is
generally wise to
a.
undertake all actions that generate benefits.
b.
expend the smallest possible amount of resources on this type of activity.
c.
avoid any activity with this characteristic.
d.
stop the activity before perfection is reached.. - correct answer d.
stop the activity before perfection is reached..

, There is substantial agreement among scholars that at least two functions of
government are legitimate. These two functions are the
a.
protection of the rights of individuals to their person and property and the
provision of goods that cannot easily be provided through markets.
b.
redistribution of income from some individuals to others and the waging of war
to expand the nation's territory.
c.
production of postal services and cable television.
d.
taxation of goods that are generally considered immoral or bad and the
regulation of large corporations. - correct answer a.
protection of the rights of individuals to their person and property and the
provision of goods that cannot easily be provided through markets.


Which of the following would be a protective function of government?
a.
legal enforcement of contracts and rules against fraud
b.
undertaking income redistribution
c.
providing national parks
d.
providing a stable monetary system - correct answer a.
legal enforcement of contracts and rules against fraud

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