Question 1

The income earned by the people who sell the services of the factor of production ________ is called ________.

Accepted Answer

A)  capital; rent 
B)  entrepreneurship; wages 
C)  land; profit 
D)  entrepreneurship; profit 
A)  capital; rent 
B)  entrepreneurship; wages 
C)  land; profit 
D)  entrepreneurship; profit

Question 2

-The slope of the line shown in the above figure is

Accepted Answer

A)  2. 
B)  0.75. 
C)  0.25. 
D)  1 1/3. 
A)  2. 
B)  0.75. 
C)  0.25. 
D)  1 1/3.

Question 3

When Susan makes the statement, "The government should spend less money to take care of national parks," she is

Accepted Answer

A)  making a normative statement. 
B)  making a positive statement. 
C)  testing an economic model. 
D)  not dealing with scarcity. 
A)  making a normative statement. 
B)  making a positive statement. 
C)  testing an economic model. 
D)  not dealing with scarcity.

Question 4

-If a graph shows a negative relationship between two variables which then becomes a positive relationship, this curve would

Accepted Answer

A)  always be an upward-sloping line. 
B)  have a minimum point. 
C)  have a maximum point. 
D)  always be a downward-sloping line. 
A)  always be an upward-sloping line. 
B)  have a minimum point. 
C)  have a maximum point. 
D)  always be a downward-sloping line.

Question 5

Scarcity exists because

Accepted Answer

A)  society and people are greedy and wasteful. 
B)  our wants exceed the resources available to satisfy them. 
C)  of the inefficient choices we make. 
D)  poor people need more food and other goods. 
A)  society and people are greedy and wasteful. 
B)  our wants exceed the resources available to satisfy them. 
C)  of the inefficient choices we make. 
D)  poor people need more food and other goods.

Question 6

Define marginal cost and marginal benefit.

Accepted Answer

Marginal cost is the opportuni

Question 7

-In the above, which figure shows a line with a slope of 1.0?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  both Figure A and Figure B 
D)  neither Figure A nor Figure B 
A)  Figure A 
B)  Figure B 
C)  both Figure A and Figure B 
D)  neither Figure A nor Figure B

Question 8

Which of the following is an example of a microeconomic decision?

Accepted Answer

A)  an individual deciding how to allocate the time he or she has for work and leisure 
B)  a small shoe factory deciding how much leather to purchase for the next quarter's production need 
C)  a multinational company deciding where to relocate its world headquarter 
D)  All of the above answers are correct. 
A)  an individual deciding how to allocate the time he or she has for work and leisure 
B)  a small shoe factory deciding how much leather to purchase for the next quarter's production need 
C)  a multinational company deciding where to relocate its world headquarter 
D)  All of the above answers are correct.

Question 9

Which of the following is a macroeconomic issue?

Accepted Answer

A)  How a rise in the price of sugar affects the market for sodas. 
B)  How federal government budget deficits affect interest rates. 
C)  What determines the amount a firm will produce. 
D)  The cause of a decline in the price of peanut butter. 
A)  How a rise in the price of sugar affects the market for sodas. 
B)  How federal government budget deficits affect interest rates. 
C)  What determines the amount a firm will produce. 
D)  The cause of a decline in the price of peanut butter.

Question 10

-In the above figure, the x-coordinate of point b is

Accepted Answer

A)  1. 
B)  2. 
C)  3. 
D)  14. 
A)  1. 
B)  2. 
C)  3. 
D)  14.

Question 11

The relationship between two variables, x and y, is a vertical line. Thus x and y are

Accepted Answer

A)  positively correlated. 
B)  negatively correlated. 
C)  not related. 
D)  falsely related. 
A)  positively correlated. 
B)  negatively correlated. 
C)  not related. 
D)  falsely related.

Question 12

The Occupy Wall Street movement advocates

Accepted Answer

A)  a shift away from market capitalism. 
B)  a shift towards more market capitalism. 
C)  centrally planned socialism. 
D)  following the teachings of Adam Smith. 
A)  a shift away from market capitalism. 
B)  a shift towards more market capitalism. 
C)  centrally planned socialism. 
D)  following the teachings of Adam Smith.

Question 13

-The figure above shows that in 1996, unemployment was equal to about ________ and the inflation rate was equal to about ________.

Accepted Answer

A)  7.0 percent; 3.0 percent 
B)  3.0 percent; 5.5 percent 
C)  5.5 percent; 3.0 percent 
D)  6.0 percent; 4.0 percent 
A)  7.0 percent; 3.0 percent 
B)  3.0 percent; 5.5 percent 
C)  5.5 percent; 3.0 percent 
D)  6.0 percent; 4.0 percent

Question 14

-Which of the following correctly describes the above figure? I. There is no relationship between the price of an avocado and a student's grade in economics.
II) The value of variable measured on the y-axis is constant as the variable measured on the x-axis increases.
III) As a student's grade in economics increases, the price of an avocado increases.

Accepted Answer

A)  I 
B)  I and II 
C)  II and III 
D)  I, II, and III 
A)  I 
B)  I and II 
C)  II and III 
D)  I, II, and III

Question 15

Suppose we are considering the relationship between two variables y and x. y is measured on the y-axis and x is measured on the x-axis, and the relationship between then is a straight line. Suppose that the slope of the line is positive and is less than 1. This slope means that a change in x is associated with

Accepted Answer

A)  a bigger change in y. 
B)  a smaller change in y. 
C)  no change in y. 
D)  an equal change in y. 
A)  a bigger change in y. 
B)  a smaller change in y. 
C)  no change in y. 
D)  an equal change in y.

Question 16

-A scatter diagram shows the

Accepted Answer

A)  level of one variable over time. 
B)  change in one variable over time. 
C)  relationship between two variables. 
D)  evolution of a variable. 
A)  level of one variable over time. 
B)  change in one variable over time. 
C)  relationship between two variables. 
D)  evolution of a variable.

Question 17

When Al makes the statement, "The cost of living has increased 10 percent over the past 10 years," he is

Accepted Answer

A)  making a normative statement. 
B)  making a positive statement. 
C)  testing an economic model. 
D)  facing the standard of living tradeoff. 
A)  making a normative statement. 
B)  making a positive statement. 
C)  testing an economic model. 
D)  facing the standard of living tradeoff.

Question 18

The branch of economics that deals with the analysis of the whole economy is called

Accepted Answer

A)  macroeconomics. 
B)  marginal analysis. 
C)  microeconomics. 
D)  metroanalysis. 
A)  macroeconomics. 
B)  marginal analysis. 
C)  microeconomics. 
D)  metroanalysis.

Question 19

If the change in the y-axis variable is 4 and the change in the x-axis variable is 2, the slope of this line is 1/2.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is an example of a positive statement?

Accepted Answer

A)  We should cut back on our use of carbon-based fuels such as coal and oil. 
B)  Increasing the minimum wage results in more unemployment. 
C)  Every American should have equal access to health care. 
D)  The Federal Reserve ought to cut the interest rate. 
A)  We should cut back on our use of carbon-based fuels such as coal and oil. 
B)  Increasing the minimum wage results in more unemployment. 
C)  Every American should have equal access to health care. 
D)  The Federal Reserve ought to cut the interest rate.

Exam 1: What Is Economics

The income earned by the people who sell the services of the factor of production ________ is called ________.

-The slope of the line shown in the above figure is

When Susan makes the statement, "The government should spend less money to take care of national parks," she is

-If a graph shows a negative relationship between two variables which then becomes a positive relationship, this curve would

Scarcity exists because

Define marginal cost and marginal benefit.

-In the above, which figure shows a line with a slope of 1.0?

Which of the following is an example of a microeconomic decision?

Which of the following is a macroeconomic issue?

-In the above figure, the x-coordinate of point b is

The relationship between two variables, x and y, is a vertical line. Thus x and y are

The Occupy Wall Street movement advocates

-The figure above shows that in 1996, unemployment was equal to about ________ and the inflation rate was equal to about ________.

-A scatter diagram shows the

When Al makes the statement, "The cost of living has increased 10 percent over the past 10 years," he is

The branch of economics that deals with the analysis of the whole economy is called

If the change in the y-axis variable is 4 and the change in the x-axis variable is 2, the slope of this line is 1/2.

Which of the following is an example of a positive statement?

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 income earned by the people who sell the services of the factor of production is called .

-The figure above shows that in 1996, unemployment was equal to about and the inflation rate was equal to about .