Question 1

The resource termed labor consists of the physical,but not the mental,talents that people contribute to the production process.

Accepted Answer

A) True 
 B)False

Question 2

In the text,economics is defined as the science of scarcity.

Accepted Answer

A) True 
 B)False

Question 3

Variables X and Y are independent of each other.If we plot X on the horizontal axis and Y on the vertical axis,the line that connects combinations of X and Y in a two-variable diagram is

Accepted Answer

A)  parallel to the horizontal axis. 
B)  downward-sloping (left to right). 
C)  parallel to the vertical axis. 
D)  upward-sloping (left to right). 
E)  a or c 
A)  parallel to the horizontal axis. 
B)  downward-sloping (left to right). 
C)  parallel to the vertical axis. 
D)  upward-sloping (left to right). 
E)  a or c

Question 4

All sellers may be tempted to raise the price of what they sell,but a negative unintended effect of raising the price could be __________ in units sold large enough to __________ their total revenue earned.

Accepted Answer

A)  an increase; raise 
B)  an increase; lower 
C)  a decrease; raise 
D)  a decrease; lower 
A)  an increase; raise 
B)  an increase; lower 
C)  a decrease; raise 
D)  a decrease; lower

Question 5

Decision making "at the margin" means making a choice based on __________ of a decision.

Accepted Answer

A)  the total benefits 
B)  the total costs 
C)  comparing the total benefits and costs 
D)  comparing the additional benefits and costs 
A)  the total benefits 
B)  the total costs 
C)  comparing the total benefits and costs 
D)  comparing the additional benefits and costs

Question 6

In general,there is a ______________ relationship between the number of hours spent studying for a test and the grade earned on the test.

Accepted Answer

A)  independent 
B)  direct 
C)  inverse 
D)  smooth 
A)  independent 
B)  direct 
C)  inverse 
D)  smooth

Question 7

The effect of a decrease in interest rates upon economic growth is an example of positive economics.

Accepted Answer

A) True 
 B)False

Question 8

In all cases,normative economics deals with

Accepted Answer

A)  what is. 
B)  what should be. 
C)  relatively small units in the economy. 
D)  the entire economy. 
A)  what is. 
B)  what should be. 
C)  relatively small units in the economy. 
D)  the entire economy.

Question 9

Exhibit 1-3
  
-Refer to Exhibit 1-3. According to the data provided in this table,what is the slope of the line between points A and B,if these data were graphed with X on the horizontal axis and Y on the vertical axis?

Accepted Answer

A)  -0.40 
B)  -2.50 
C)  0.40 
D)  2.50 
E)  none of the above 
A)  -0.40 
B)  -2.50 
C)  0.40 
D)  2.50 
E)  none of the above

Question 10

Which of the following is a normative macroeconomics statement?

Accepted Answer

A)  The central bank should increase the nation's money supply. 
B)  The increase in the nation's money supply helped push the nation's unemployment rate down in the short run. 
C)  Ford Motor Company's new advertising campaign ended up hurting General Motors' sales. 
D)  The local government ought to spend more on recreational facilities. 
A)  The central bank should increase the nation's money supply. 
B)  The increase in the nation's money supply helped push the nation's unemployment rate down in the short run. 
C)  Ford Motor Company's new advertising campaign ended up hurting General Motors' sales. 
D)  The local government ought to spend more on recreational facilities.

Question 11

The synonym economists commonly use for additional is

Accepted Answer

A)  capital. 
B)  rational. 
C)  marginal. 
D)  economic. 
A)  capital. 
B)  rational. 
C)  marginal. 
D)  economic.

Question 12

How is scarcity related to competition?

Accepted Answer

A)  Competition is an effect of scarcity. 
B)  Scarcity is an effect of competition. 
C)  Both scarcity and competition are effects of a rationing device. 
D)  Both scarcity and competition are effects of opportunity cost. 
E)  Scarcity produces disutility and competition produces utility. 
A)  Competition is an effect of scarcity. 
B)  Scarcity is an effect of competition. 
C)  Both scarcity and competition are effects of a rationing device. 
D)  Both scarcity and competition are effects of opportunity cost. 
E)  Scarcity produces disutility and competition produces utility.

Question 13

Many people buy one newspaper per day,but rarely do they buy two of the same newspapers on the same day. What is the economic justification for this behavior?

Accepted Answer

A)  The marginal benefit of purchasing the second newspaper exceeds the marginal cost of purchasing that paper. 
B)  The marginal cost of purchasing the second newspaper exceeds the marginal benefit of purchasing that paper. 
C)  The marginal benefit of purchasing the second newspaper equals the marginal cost of purchasing that paper. 
D)  none of the above is an appropriate economic justification for this behavior. 
A)  The marginal benefit of purchasing the second newspaper exceeds the marginal cost of purchasing that paper. 
B)  The marginal cost of purchasing the second newspaper exceeds the marginal benefit of purchasing that paper. 
C)  The marginal benefit of purchasing the second newspaper equals the marginal cost of purchasing that paper. 
D)  none of the above is an appropriate economic justification for this behavior.

Question 14

Which of the following is a positive economic statement?

Accepted Answer

A)  The temperature is too high today. 
B)  The temperature is 105 degrees today. 
C)  It is too hot to jog today. 
D)  I enjoy summer evenings when it cools off. 
A)  The temperature is too high today. 
B)  The temperature is 105 degrees today. 
C)  It is too hot to jog today. 
D)  I enjoy summer evenings when it cools off.

Question 15

Several years ago,a bookstore chain extended its closing time from 9 p.m.to 10 p.m.Now it is considering a further extension to 11 p.m.In making this marginal decision,the results of having gone from 9 p.m.to 10 p.m.are

Accepted Answer

A)  no longer relevant to the current decision. 
B)  relevant if the marginal costs and benefits were unequal. 
C)  relevant since they are part of the calculation of total costs and benefits. 
D)  relevant if the marginal costs and benefits were equal. 
A)  no longer relevant to the current decision. 
B)  relevant if the marginal costs and benefits were unequal. 
C)  relevant since they are part of the calculation of total costs and benefits. 
D)  relevant if the marginal costs and benefits were equal.

Question 16

Ceteris paribus means

Accepted Answer

A)  one variable too many. 
B)  the correct relationship specified. 
C)  assuming economic motives. 
D)  all other things held constant or nothing else changes. 
A)  one variable too many. 
B)  the correct relationship specified. 
C)  assuming economic motives. 
D)  all other things held constant or nothing else changes.

Question 17

Attempts to determine "what is" are part of __________ economics.

Accepted Answer

A)  positive 
B)  normative 
C)  positive and normative 
D)  neither positive nor normative 
A)  positive 
B)  normative 
C)  positive and normative 
D)  neither positive nor normative

Question 18

The physical and mental talents people bring to production processes comprise the resource called

Accepted Answer

A)  entrepreneurship. 
B)  natural resources. 
C)  capital. 
D)  labor. 
A)  entrepreneurship. 
B)  natural resources. 
C)  capital. 
D)  labor.

Question 19

Exhibit 1-1
  
-Refer to Exhibit 1-1. The student whose study habits are illustrated here will maximize the net benefits of studying when she has studied

Accepted Answer

A)  2 hours 
B)  4 hours 
C)  6 hours 
D)  8 hours 
A)  2 hours 
B)  4 hours 
C)  6 hours 
D)  8 hours

Question 20

Which of the following is not one of the four broad categories of resources?

Accepted Answer

A)  labor 
B)  government 
C)  capital 
D)  entrepreneurship 
E)  land 
A)  labor 
B)  government 
C)  capital 
D)  entrepreneurship 
E)  land

Exam 1: What Economics Is About

The resource termed labor consists of the physical,but not the mental,talents that people contribute to the production process.

In the text,economics is defined as the science of scarcity.

Variables X and Y are independent of each other.If we plot X on the horizontal axis and Y on the vertical axis,the line that connects combinations of X and Y in a two-variable diagram is

All sellers may be tempted to raise the price of what they sell,but a negative unintended effect of raising the price could be __________ in units sold large enough to __________ their total revenue earned.

Decision making "at the margin" means making a choice based on __________ of a decision.

In general,there is a ______________ relationship between the number of hours spent studying for a test and the grade earned on the test.

The effect of a decrease in interest rates upon economic growth is an example of positive economics.

In all cases,normative economics deals with

Exhibit 1-3 -Refer to Exhibit 1-3. According to the data provided in this table,what is the slope of the line between points A and B,if these data were graphed with X on the horizontal axis and Y on the vertical axis?

Which of the following is a normative macroeconomics statement?

The synonym economists commonly use for additional is

How is scarcity related to competition?

Many people buy one newspaper per day,but rarely do they buy two of the same newspapers on the same day. What is the economic justification for this behavior?

Which of the following is a positive economic statement?

Several years ago,a bookstore chain extended its closing time from 9 p.m.to 10 p.m.Now it is considering a further extension to 11 p.m.In making this marginal decision,the results of having gone from 9 p.m.to 10 p.m.are

Ceteris paribus means

Attempts to determine "what is" are part of __________ economics.

The physical and mental talents people bring to production processes comprise the resource called

Exhibit 1-1 -Refer to Exhibit 1-1. The student whose study habits are illustrated here will maximize the net benefits of studying when she has studied

Which of the following is not one of the four broad categories of resources?

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Macroeconomic Measurements: Prices and Unemployment

Macroeconomic Measurements: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money, Banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, Technology, Ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,Unions,and Labor

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case For and Against Government: Five Topics Considered

Stocks, Bonds, Futures, and Options

Agriculture: Problems, Policies, and Unintended Effects

Filters

All sellers may be tempted to raise the price of what they sell,but a negative unintended effect of raising the price could be in units sold large enough to their total revenue earned.