Question 1

-In the above figure, the curve has a slope that is ________.

Accepted Answer

A)  positive and becoming larger in magnitude 
B)  positive and becoming smaller in magnitude 
C)  negative and becoming larger in magnitude 
D)  negative and becoming smaller in magnitude 
A)  positive and becoming larger in magnitude 
B)  positive and becoming smaller in magnitude 
C)  negative and becoming larger in magnitude 
D)  negative and becoming smaller in magnitude

Question 2

The opportunity cost of attending college includes the cost of

Accepted Answer

A)  the tuition but not the job at which you would otherwise have worked. 
B)  the highest valued alternative to attending college. 
C)  the highest valued alternative to attending college plus the cost of tuition. 
D)  tuition, books, and the lost wages for the hours spent studying. 
A)  the tuition but not the job at which you would otherwise have worked. 
B)  the highest valued alternative to attending college. 
C)  the highest valued alternative to attending college plus the cost of tuition. 
D)  tuition, books, and the lost wages for the hours spent studying.

Question 3

Which of the following is a microeconomic topic?

Accepted Answer

A)  How a trade agreement between the United States and Mexico affects both nations' unemployment rates. 
B)  Comparing inflation rates across countries. 
C)  How rent ceilings impact the supply of apartments. 
D)  How a tax rate increase will impact total production. 
A)  How a trade agreement between the United States and Mexico affects both nations' unemployment rates. 
B)  Comparing inflation rates across countries. 
C)  How rent ceilings impact the supply of apartments. 
D)  How a tax rate increase will impact total production.

Question 4

Suppose Canon Inc. decided to invest 45 billion yen in developing and launching a new model of its digital camera, expecting that it will bring additional sales of 60 billion yen. The company has already invested 38 billion yen when the marketing department suddenly finds out that the introduction of a similar camera by Sony will reduce Canon's expected additional sales to 30 billion yen. The company's management is trying to decide whether to continue investing in the new product or close the project. Canon hires you as an economic consultant. So, think like an economist to help the company's management make their decision:
a) At this point in time, what is Canon's marginal cost of introducing the new product?
b) What is Canon's marginal benefit from introducing the new product?
c) Will you advise Canon to finish the project and introduce the new product? Why or why not? What principles of economic thinking will help you analyze the situation and make the right choice?

Accepted Answer

a) Canon's marginal cost is the addition

Question 5

What is the difference between positive and normative statements?

Accepted Answer

Positive statements tell what is and nor

Question 6

As the number of days without rain increases, the amount of wheat per acre grown declines. A graph showing this relationship would have a curve

Accepted Answer

A)  that is a horizontal line. 
B)  that is a vertical line. 
C)  showing a positive relationship. 
D)  None of the above answers are correct. 
A)  that is a horizontal line. 
B)  that is a vertical line. 
C)  showing a positive relationship. 
D)  None of the above answers are correct.

Question 7

Scarcity can be eliminated through

Accepted Answer

A)  the use of market mechanisms. 
B)  exploration that helps us find new resources. 
C)  wise use of our resources. 
D)  None of the above because scarcity cannot be eliminated. 
A)  the use of market mechanisms. 
B)  exploration that helps us find new resources. 
C)  wise use of our resources. 
D)  None of the above because scarcity cannot be eliminated.

Question 8

The slope of a negative relationship is

Accepted Answer

A)  negative. 
B)  undefined. 
C)  positive to the right of the maximum point and negative to the left. 
D)  constant as long as the relationship is nonlinear. 
A)  negative. 
B)  undefined. 
C)  positive to the right of the maximum point and negative to the left. 
D)  constant as long as the relationship is nonlinear.

Question 9

From 8 P.M. to 10 P.M.., Susan can attend a movie, study, or talk with friends. Suppose that Susan decides to go to the movie but thinks that, if she hadn't, she would otherwise have talked with friends. The opportunity cost of attending the movie is

Accepted Answer

A)  talking with friends and studying. 
B)  studying. 
C)  talking with friends. 
D)  two hours of time. 
A)  talking with friends and studying. 
B)  studying. 
C)  talking with friends. 
D)  two hours of time.

Question 10

The marginal benefit is the

Accepted Answer

A)  additional gain from one more unit of an activity. 
B)  additional cost from one more unit of an activity. 
C)  loss of the highest-valued alternative. 
D)  additional gain from one more unit of an activity minus the additional cost from one more unit of the activity. 
A)  additional gain from one more unit of an activity. 
B)  additional cost from one more unit of an activity. 
C)  loss of the highest-valued alternative. 
D)  additional gain from one more unit of an activity minus the additional cost from one more unit of the activity.

Question 11

Jed had an exam score of 50 percentage points. There is an extra credit assignment that Jed can complete that will raise his exam score by 20 percentage points. Jed has determined that the extra credit assignment will take 10 hours of his time. Jed will complete the assignment he values the

Accepted Answer

A)  20 percentage points more than the 10 hours of his time. 
B)  10 hours of his time more than the 20 percentage points. 
C)  70 percentage points more than the 10 hours of his time. 
D)  wants a higher score. 
A)  20 percentage points more than the 10 hours of his time. 
B)  10 hours of his time more than the 20 percentage points. 
C)  70 percentage points more than the 10 hours of his time. 
D)  wants a higher score.

Question 12

Which of the following is a positive statement?

Accepted Answer

A)  Taxes should be lower because then people get to keep more of what they earn. 
B)  My economics class should last for two terms because it is my favorite class. 
C)  A 10 percent increase in income leads to a 4 percent increase in the consumption of beef. 
D)  Given their negative impact on productivity, the government should eliminate labor unions. 
A)  Taxes should be lower because then people get to keep more of what they earn. 
B)  My economics class should last for two terms because it is my favorite class. 
C)  A 10 percent increase in income leads to a 4 percent increase in the consumption of beef. 
D)  Given their negative impact on productivity, the government should eliminate labor unions.

Question 13

If the government raises the tax on cigarettes, what is the effect on people's incentives and choices?

Accepted Answer

The government raises the tax on cigaret

Question 14

A cost due to an increase in activity is called

Accepted Answer

A)  an incentive loss. 
B)  a marginal cost. 
C)  a negative marginal benefit. 
D)  the total cost. 
A)  an incentive loss. 
B)  a marginal cost. 
C)  a negative marginal benefit. 
D)  the total cost.

Question 15

-If two points on a line are x = 2, y = 5 and x = 7, y= 10, what is the slope of this line?

Accepted Answer

The slope equals the change in

Question 16

In New State, the bottling law requires that people get a refund of five cents when they return an empty bottle or can. Why does the state pay people to return bottles? In your answer, be sure to mention the role played by incentives.

Accepted Answer

Policy makers know that people making ch

Question 17

-If the price of apples is on the vertical axis and the quantity of apples demanded is on the horizontal axis, the slope between two points on the line describing the relationship between price and quantity is

Accepted Answer

A)  the change in price multiplied by the change in quantity. 
B)  the change in price divided by the change in quantity. 
C)  the change in quantity divided by the change in price. 
D)  price divided by quantity. 
A)  the change in price multiplied by the change in quantity. 
B)  the change in price divided by the change in quantity. 
C)  the change in quantity divided by the change in price. 
D)  price divided by quantity.

Question 18

-If two variables both increase at the same time or decrease at the same time, they are

Accepted Answer

A)  unrelated to each other. 
B)  positively related. 
C)  negatively related. 
D)  conversely related. 
A)  unrelated to each other. 
B)  positively related. 
C)  negatively related. 
D)  conversely related.

Question 19

What are the two different types of relationships that variables can have? Explain each. What do these relationships look like when they are graphed?

Accepted Answer

Variables can have two relationships: po

Question 20

-The above figure shows how many pounds of peanuts farmers are willing to sell at different prices per pound of peanuts. If the price of a pound of peanuts is $1 and the price of a pound of pecans is $2, peanut farmers are willing to sell

Accepted Answer

A)  no peanuts. 
B)  1000 pounds of peanuts. 
C)  2000 pounds of peanuts. 
D)  4000 pounds of peanuts. 
A)  no peanuts. 
B)  1000 pounds of peanuts. 
C)  2000 pounds of peanuts. 
D)  4000 pounds of peanuts.

Exam 1: What Is Economics

-In the above figure, the curve has a slope that is ________.

The opportunity cost of attending college includes the cost of

Which of the following is a microeconomic topic?

What is the difference between positive and normative statements?

As the number of days without rain increases, the amount of wheat per acre grown declines. A graph showing this relationship would have a curve

Scarcity can be eliminated through

The slope of a negative relationship is

From 8 P.M. to 10 P.M.., Susan can attend a movie, study, or talk with friends. Suppose that Susan decides to go to the movie but thinks that, if she hadn't, she would otherwise have talked with friends. The opportunity cost of attending the movie is

The marginal benefit is the

Jed had an exam score of 50 percentage points. There is an extra credit assignment that Jed can complete that will raise his exam score by 20 percentage points. Jed has determined that the extra credit assignment will take 10 hours of his time. Jed will complete the assignment he values the

Which of the following is a positive statement?

If the government raises the tax on cigarettes, what is the effect on people's incentives and choices?

A cost due to an increase in activity is called

-If two points on a line are x = 2, y = 5 and x = 7, y= 10, what is the slope of this line?

In New State, the bottling law requires that people get a refund of five cents when they return an empty bottle or can. Why does the state pay people to return bottles? In your answer, be sure to mention the role played by incentives.

-If the price of apples is on the vertical axis and the quantity of apples demanded is on the horizontal axis, the slope between two points on the line describing the relationship between price and quantity is

-If two variables both increase at the same time or decrease at the same time, they are

What are the two different types of relationships that variables can have? Explain each. What do these relationships look like when they are graphed?

-The above figure shows how many pounds of peanuts farmers are willing to sell at different prices per pound of peanuts. If the price of a pound of peanuts is $1 and the price of a pound of pecans is $2, peanut farmers are willing to sell

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

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