Question 1

The slope of a line is the change in the y-axis variable divided by the change in the x-axis variable.

Accepted Answer

A) True 
 B)False

Question 2

An art museum decides to offer tours by having visitors listen to cassette tapes rather than have tour guides. The museum is answering the ________ part of one of the two big economic questions.

Accepted Answer

A)  "scarcity" 
B)  "what" 
C)  "why" 
D)  "how" 
A)  "scarcity" 
B)  "what" 
C)  "why" 
D)  "how"

Question 3

-The figure above shows ________ relationship between the two variables.

Accepted Answer

A)  a positive 
B)  a negative 
C)  no 
D)  an inverse 
A)  a positive 
B)  a negative 
C)  no 
D)  an inverse

Question 4

-You notice that when the inflation rate increases, the interest rate tends to increase. This observation indicates that

Accepted Answer

A)  there might be false causality between inflation and the interest rate. 
B)  higher inflation rates must cause a higher interest rate. 
C)  a scatter diagram of the inflation rate and the interest rate will show a positive relationship. 
D)  the variables have an inverse relationship. 
A)  there might be false causality between inflation and the interest rate. 
B)  higher inflation rates must cause a higher interest rate. 
C)  a scatter diagram of the inflation rate and the interest rate will show a positive relationship. 
D)  the variables have an inverse relationship.

Question 5

If the marginal cost of an activity exceeds the marginal benefit, then

Accepted Answer

A)  the activity will occur because the high marginal cost means it must be highly valued. 
B)  the forgone alternatives' costs must be increased. 
C)  an alternative action will be selected. 
D)  the person must concentrate on the activity's total benefits. 
A)  the activity will occur because the high marginal cost means it must be highly valued. 
B)  the forgone alternatives' costs must be increased. 
C)  an alternative action will be selected. 
D)  the person must concentrate on the activity's total benefits.

Question 6

-The slope of the line in the above figure is

Accepted Answer

A)  positive. 
B)  negative. 
C)  direct. 
D)  independent. 
A)  positive. 
B)  negative. 
C)  direct. 
D)  independent.

Question 7

Consider the following events: I. Samsung hires associates to market their HDTV sets to Best Buy.
II. The Dallas Cowboys build a new football stadium.
III. eBay fires 10 percent of its workforce.
IV. Ten million stocks were traded on the New York Stock Exchange in one day.
V. Pennsylvania builds a new state park.
Which of the events describe use of factors of production?

Accepted Answer

A)  I, II, III, and V 
B)  II, IV, and V 
C)  I and III only 
D)  IV only 
A)  I, II, III, and V 
B)  II, IV, and V 
C)  I and III only 
D)  IV only

Question 8

When a firm decides to produce more electric cars and fewer gas guzzlers, it is most directly answering the ________ part of one of the two big economic questions.

Accepted Answer

A)  "how" 
B)  "scarcity" 
C)  "what" 
D)  "for whom" 
A)  "how" 
B)  "scarcity" 
C)  "what" 
D)  "for whom"

Question 9

The largest part of what the United States produces today is ________ such as ________.

Accepted Answer

A)  goods; food and electronic equipment 
B)  goods; education and entertainment 
C)  services; trade and health care 
D)  services; textbooks and computers 
A)  goods; food and electronic equipment 
B)  goods; education and entertainment 
C)  services; trade and health care 
D)  services; textbooks and computers

Question 10

If the x-axis variable increases while the y-axis variable decreases, the variables x and y are negatively related.

Accepted Answer

A) True 
 B)False

Question 11

-The above table shows data on two variables. If these data were graphed, the slope of the line would be

Accepted Answer

A)  1/2. 
B)  4/3. 
C)  2/3. 
D)  3/4. 
A)  1/2. 
B)  4/3. 
C)  2/3. 
D)  3/4.

Question 12

Which of the following is a positive statement?

Accepted Answer

A)  The United States should fight inflation even if it raises unemployment. 
B)  What to do with Social Security is the most important economic issue today. 
C)  A 5 percent increase in income leads to a 3 percent increase in the consumption of orange juice. 
D)  Because they decrease productivity, labor unions should be eliminated. 
A)  The United States should fight inflation even if it raises unemployment. 
B)  What to do with Social Security is the most important economic issue today. 
C)  A 5 percent increase in income leads to a 3 percent increase in the consumption of orange juice. 
D)  Because they decrease productivity, labor unions should be eliminated.

Question 13

The night before a midterm exam, you decide to go to the movies instead of studying for the exam. You score 60 percent on your exam. If you had studied the night before, you'd have scored 70 percent. What was the opportunity cost of your evening at the movies?

Accepted Answer

A)  10 percent off your grade 
B)  60 percent 
C)  70 percent 
D)  zero 
A)  10 percent off your grade 
B)  60 percent 
C)  70 percent 
D)  zero

Question 14

Scarcity is a situation in which ________.

Accepted Answer

A)  some people are poor and others are rich 
B)  something is being wasted 
C)  we are unable to satisfy all our wants 
D)  long lines form at gas stations 
A)  some people are poor and others are rich 
B)  something is being wasted 
C)  we are unable to satisfy all our wants 
D)  long lines form at gas stations

Question 15

-In the above figure, the slope across the arc between a and b is

Accepted Answer

A)  2/5. 
B)  1. 
C)  3/2. 
D)  5/2. 
A)  2/5. 
B)  1. 
C)  3/2. 
D)  5/2.

Question 16

The loss of the highest-valued alternative defines the concept of

Accepted Answer

A)  marginal benefit. 
B)  scarcity. 
C)  entrepreneurship. 
D)  opportunity cost. 
A)  marginal benefit. 
B)  scarcity. 
C)  entrepreneurship. 
D)  opportunity cost.

Question 17

Normative economic statements

Accepted Answer

A)  describe what ought to be. 
B)  describe what is rather than what ought to be. 
C)  describe the process of economic policy-making. 
D)  deal with economic hypotheses that are not well-established laws. 
A)  describe what ought to be. 
B)  describe what is rather than what ought to be. 
C)  describe the process of economic policy-making. 
D)  deal with economic hypotheses that are not well-established laws.

Question 18

-The above figure plots income and consumption in a nation. In 2007

Accepted Answer

A)  consumption was equal to $25,000 and income was equal to $28,000. 
B)  consumption was equal to $28,000 and income was equal to $25,000. 
C)  consumption was equal to $25,000 and income was equal to $25,000. 
D)  consumption was equal to $27,000 and income was equal to $31,000. 
A)  consumption was equal to $25,000 and income was equal to $28,000. 
B)  consumption was equal to $28,000 and income was equal to $25,000. 
C)  consumption was equal to $25,000 and income was equal to $25,000. 
D)  consumption was equal to $27,000 and income was equal to $31,000.

Question 19

The study of the choices made by individuals is part of the definition of

Accepted Answer

A)  microeconomics. 
B)  positive economics. 
C)  macroeconomics. 
D)  normative economics. 
A)  microeconomics. 
B)  positive economics. 
C)  macroeconomics. 
D)  normative economics.

Question 20

Scarcity is

Accepted Answer

A)  our inability to satisfy all our wants. 
B)  a situation that exists during economic recessions but not during economic booms. 
C)  eliminated by choices. 
D)  an economic problem only for poor people. 
A)  our inability to satisfy all our wants. 
B)  a situation that exists during economic recessions but not during economic booms. 
C)  eliminated by choices. 
D)  an economic problem only for poor people.

Exam 1: What Is Economics

The slope of a line is the change in the y-axis variable divided by the change in the x-axis variable.

An art museum decides to offer tours by having visitors listen to cassette tapes rather than have tour guides. The museum is answering the ________ part of one of the two big economic questions.

-The figure above shows ________ relationship between the two variables.

-You notice that when the inflation rate increases, the interest rate tends to increase. This observation indicates that

If the marginal cost of an activity exceeds the marginal benefit, then

-The slope of the line in the above figure is

When a firm decides to produce more electric cars and fewer gas guzzlers, it is most directly answering the ________ part of one of the two big economic questions.

The largest part of what the United States produces today is ________ such as ________.

If the x-axis variable increases while the y-axis variable decreases, the variables x and y are negatively related.

-The above table shows data on two variables. If these data were graphed, the slope of the line would be

Which of the following is a positive statement?

The night before a midterm exam, you decide to go to the movies instead of studying for the exam. You score 60 percent on your exam. If you had studied the night before, you'd have scored 70 percent. What was the opportunity cost of your evening at the movies?

Scarcity is a situation in which ________.

-In the above figure, the slope across the arc between a and b is

The loss of the highest-valued alternative defines the concept of

Normative economic statements

-The above figure plots income and consumption in a nation. In 2007

The study of the choices made by individuals is part of the definition of

Scarcity is

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

Filters

The largest part of what the United States produces today is such as .