Question 1

-The slope of a straight line is

Accepted Answer

A)  variable. 
B)  increasing. 
C)  decreasing. 
D)  constant. 
A)  variable. 
B)  increasing. 
C)  decreasing. 
D)  constant.

Question 2

Jill, an economics student, has already spent 5 hours cleaning her room. In deciding whether or not to continue cleaning for another hour, she applies the economic principle of

Accepted Answer

A)  scarcity. 
B)  ceteris paribus. 
C)  choosing at the margin. 
D)  productivity. 
A)  scarcity. 
B)  ceteris paribus. 
C)  choosing at the margin. 
D)  productivity.

Question 3

Which factor of production earns profit?

Accepted Answer

A)  land 
B)  human capital 
C)  money 
D)  entrepreneurship 
A)  land 
B)  human capital 
C)  money 
D)  entrepreneurship

Question 4

If the quantity of wood purchased decreases when the price of wood rises, a graph representing these variables would have

Accepted Answer

A)  time on the vertical axis. 
B)  the slope on the vertical axis. 
C)  a negative slope. 
D)  a positive slope. 
A)  time on the vertical axis. 
B)  the slope on the vertical axis. 
C)  a negative slope. 
D)  a positive slope.

Question 5

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

Accepted Answer

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

Question 6

What do economists mean when they discuss "scarcity"?

Accepted Answer

Scarcity occurs whenever people's wants

Question 7

-In the above figure, the relationship between income and expenditures is

Accepted Answer

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

Question 8

-In the above figure, if the interest rate is negatively related to household expenditures for any given level of household income, an increase in the interest rate will

Accepted Answer

A)  shift the line vertically upward. 
B)  shift the line vertically downward. 
C)  make the line negatively sloped. 
D)  cause no change in the line's position. 
A)  shift the line vertically upward. 
B)  shift the line vertically downward. 
C)  make the line negatively sloped. 
D)  cause no change in the line's position.

Question 9

Household consumption depends on both income and interest rates. In the above figure

Accepted Answer

A)  household consumption is held constant. 
B)  interest rates are held constant. 
C)  household income is held constant. 
D)  no variable is held constant. 
A)  household consumption is held constant. 
B)  interest rates are held constant. 
C)  household income is held constant. 
D)  no variable is held constant.

Question 10

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

Accepted Answer

A)  1/2. 
B)  1/3. 
C)  5/3. 
D)  6/5. 
A)  1/2. 
B)  1/3. 
C)  5/3. 
D)  6/5.

Question 11

-Using the data in the above table, if income is on the x-axis and the amount spent on restaurant meals is on the y-axis, the graph of the two variables would be

Accepted Answer

A)  upward sloping. 
B)  downward sloping. 
C)  vertical. 
D)  horizontal. 
A)  upward sloping. 
B)  downward sloping. 
C)  vertical. 
D)  horizontal.

Question 12

The term "opportunity cost" points out that

Accepted Answer

A)  there may be such a thing as a free lunch. 
B)  not all individuals will make the most of life's opportunities because some will fail to achieve their goals. 
C)  executives do not always recognize opportunities for profit as quickly as they should. 
D)  any decision regarding the use of a resource involves a costly choice. 
A)  there may be such a thing as a free lunch. 
B)  not all individuals will make the most of life's opportunities because some will fail to achieve their goals. 
C)  executives do not always recognize opportunities for profit as quickly as they should. 
D)  any decision regarding the use of a resource involves a costly choice.

Question 13

In every economic system, choices must be made because resources are ________ and our wants are ________.

Accepted Answer

A)  unlimited; limited 
B)  limited; unlimited 
C)  unlimited; unlimited 
D)  limited; limited 
A)  unlimited; limited 
B)  limited; unlimited 
C)  unlimited; unlimited 
D)  limited; limited

Question 14

A student is studying for an exam 2 hours a day and is debating whether to study an extra hour. The student's marginal benefit

Accepted Answer

A)  depends on the grade the student earns on the exam. 
B)  is the benefit the student receives from studying all 3 hours. 
C)  is the benefit the student receives from studying the extra hour. 
D)  is greater than the student's marginal cost. 
A)  depends on the grade the student earns on the exam. 
B)  is the benefit the student receives from studying all 3 hours. 
C)  is the benefit the student receives from studying the extra hour. 
D)  is greater than the student's marginal cost.

Question 15

Which of the following questions is NOT a microeconomic question?

Accepted Answer

A)  Can the Federal Reserve keep income growing by cutting interest rates? 
B)  How would a tax on e-commerce affect eBay? 
C)  What is Britney's opportunity cost of having another baby? 
D)  Does the United States have a comparative advantage in information technology services? 
A)  Can the Federal Reserve keep income growing by cutting interest rates? 
B)  How would a tax on e-commerce affect eBay? 
C)  What is Britney's opportunity cost of having another baby? 
D)  Does the United States have a comparative advantage in information technology services?

Question 16

Economics is the study of

Accepted Answer

A)  the distribution of surplus goods to those in need. 
B)  affluence in a morally bankrupt world. 
C)  the choices we make because of scarcity. 
D)  ways to reduce wants to eliminate the problem of scarcity. 
A)  the distribution of surplus goods to those in need. 
B)  affluence in a morally bankrupt world. 
C)  the choices we make because of scarcity. 
D)  ways to reduce wants to eliminate the problem of scarcity.

Question 17

The 2010 Patient Protection and Affordable Care Act (Obamacare) contains a provision that may require individuals to either purchase private health insurance or pay a tax. This is an example of

Accepted Answer

A)  a mixed economy. 
B)  market capitalism. 
C)  centrally planned socialism. 
D)  the invisible hand. 
A)  a mixed economy. 
B)  market capitalism. 
C)  centrally planned socialism. 
D)  the invisible hand.

Question 18

-Using the data in the table above, with y measured on the vertical axis, the slope of the line relating y to x is

Accepted Answer

A)  1/3. 
B)  1. 
C)  3. 
D)  6. 
A)  1/3. 
B)  1. 
C)  3. 
D)  6.

Question 19

The statement that "peach ice cream is better than chocolate ice cream"

Accepted Answer

A)  can be tested using the scientific approach. 
B)  is a normative statement. 
C)  is a positive statement. 
D)  provides a basis for predicting which type of ice cream will exhibit the most sales. 
A)  can be tested using the scientific approach. 
B)  is a normative statement. 
C)  is a positive statement. 
D)  provides a basis for predicting which type of ice cream will exhibit the most sales.

Question 20

In economics, positive statements are about

Accepted Answer

A)  the way things ought to be. 
B)  the way things are. 
C)  macroeconomics, not microeconomics. 
D)  microeconomics, not macroeconomics. 
A)  the way things ought to be. 
B)  the way things are. 
C)  macroeconomics, not microeconomics. 
D)  microeconomics, not macroeconomics.

Exam 1: What Is Economics

-The slope of a straight line is

Jill, an economics student, has already spent 5 hours cleaning her room. In deciding whether or not to continue cleaning for another hour, she applies the economic principle of

Which factor of production earns profit?

If the quantity of wood purchased decreases when the price of wood rises, a graph representing these variables would have

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

What do economists mean when they discuss "scarcity"?

-In the above figure, the relationship between income and expenditures is

-In the above figure, if the interest rate is negatively related to household expenditures for any given level of household income, an increase in the interest rate will

Household consumption depends on both income and interest rates. In the above figure

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

-Using the data in the above table, if income is on the x-axis and the amount spent on restaurant meals is on the y-axis, the graph of the two variables would be

The term "opportunity cost" points out that

In every economic system, choices must be made because resources are ________ and our wants are ________.

A student is studying for an exam 2 hours a day and is debating whether to study an extra hour. The student's marginal benefit

Which of the following questions is NOT a microeconomic question?

Economics is the study of

The 2010 Patient Protection and Affordable Care Act (Obamacare) contains a provision that may require individuals to either purchase private health insurance or pay a tax. This is an example of

-Using the data in the table above, with y measured on the vertical axis, the slope of the line relating y to x is

The statement that "peach ice cream is better than chocolate ice cream"

In economics, positive statements are about

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

In every economic system, choices must be made because resources are and our wants are .