Question 1

Which of the following is a normative statement?

Accepted Answer

A)  The United States has a comparative advantage compared to the European Union in the production of wheat. 
B)  The main reason why the United States has a trade deficit with China is because China's trade practices are unfair. 
C)  Both these statements are normative. 
D)  Neither of these statements is normative. 
A)  The United States has a comparative advantage compared to the European Union in the production of wheat. 
B)  The main reason why the United States has a trade deficit with China is because China's trade practices are unfair. 
C)  Both these statements are normative. 
D)  Neither of these statements is normative.

Question 2

In the above figure, if household consumption is positively related to household income as well as related to the interest rate, then an increase in household income will

Accepted Answer

A)  shift the line rightward. 
B)  make the line positively sloped. 
C)  cause a movement along the line. 
D)  shift the line leftward. 
A)  shift the line rightward. 
B)  make the line positively sloped. 
C)  cause a movement along the line. 
D)  shift the line leftward.

Question 3

-In the above figure, using the slope across an arc, the slope of the curve between points a and c is

Accepted Answer

A)  5/3. 
B)  - 5/3. 
C)  3/5. 
D)  - 3/5. 
A)  5/3. 
B)  - 5/3. 
C)  3/5. 
D)  - 3/5.

Question 4

-In the above figure, which curve indicates that the level of food production does not affect the population growth rate?

Accepted Answer

A)  F 
B)  I 
C)  G 
D)  H 
A)  F 
B)  I 
C)  G 
D)  H

Question 5

-Use the table above. Place the number of workers on the horizontal axis and the total value of output on the vertical axis. The graph displaying the data provided in the table would show

Accepted Answer

A)  a positive relationship among all the data points. 
B)  a negative relationship among all the data points. 
C)  a horizontal line. 
D)  none of the above 
A)  a positive relationship among all the data points. 
B)  a negative relationship among all the data points. 
C)  a horizontal line. 
D)  none of the above

Question 6

A star athlete can afford a garage full of exotic cars while other people can only afford to take a city bus for transportation. This is most directly an example of an economy answering the _ question.

Accepted Answer

A)  "why" 
B)  "when" 
C)  "for whom" 
D)  "what" 
A)  "why" 
B)  "when" 
C)  "for whom" 
D)  "what"

Question 7

The relationship in the above figure suggests that when the interest rate is 5 percent,

Accepted Answer

A)  an increase in income will be associated with a decrease in expenditures. 
B)  a decrease in income will be associated with a decrease in expenditures. 
C)  a decrease in income will be associated with an increase in expenditures. 
D)  there is no relationship between expenditures and income. 
A)  an increase in income will be associated with a decrease in expenditures. 
B)  a decrease in income will be associated with a decrease in expenditures. 
C)  a decrease in income will be associated with an increase in expenditures. 
D)  there is no relationship between expenditures and income.

Question 8

Laura is a manager for HP. When Laura must decide whether to produce a few additional printers, she is choosing at the margin when she compares

Accepted Answer

A)  the extra revenue from selling a few additional printers to the average cost of producing the additional printers. 
B)  HP's printers to printers from competing companies, such as Lexmark. 
C)  the total revenue from sales of printers to the total cost of producing all the printers. 
D)  the extra revenue from selling a few additional printers to the extra costs of producing the printers. 
A)  the extra revenue from selling a few additional printers to the average cost of producing the additional printers. 
B)  HP's printers to printers from competing companies, such as Lexmark. 
C)  the total revenue from sales of printers to the total cost of producing all the printers. 
D)  the extra revenue from selling a few additional printers to the extra costs of producing the printers.

Question 9

A graph of two variables is a vertical line. What is the interpretation of this result?

Accepted Answer

When the graph of two variables is a ver

Question 10

-In the above figure, which of the graphs demonstrates a curve with a decreasing slope, that is, a slope getting smaller in magnitude as x increases?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 11

When the government decides to provide tax relief for small businesses while placing higher taxes on large corporations, it is facing the

Accepted Answer

A)  macroeconomic question. 
B)  "how" tradeoff. 
C)  "for whom" tradeoff. 
D)  "what" tradeoff. 
A)  macroeconomic question. 
B)  "how" tradeoff. 
C)  "for whom" tradeoff. 
D)  "what" tradeoff.

Question 12

-In the above figure, if the tax rate is increased from 20 percent to 30 percent, tax revenue

Accepted Answer

A)  may increase or decrease. 
B)  is constant. 
C)  increases. 
D)  decreases. 
A)  may increase or decrease. 
B)  is constant. 
C)  increases. 
D)  decreases.

Question 13

A graph that measures time on the horizontal axis and one or more variables on the vertical axis is called a(n)

Accepted Answer

A)  time- series graph. 
B)  cross- section graph. 
C)  one- dimensional graph. 
D)  inverted graph. 
A)  time- series graph. 
B)  cross- section graph. 
C)  one- dimensional graph. 
D)  inverted graph.

Question 14

An incentive

Accepted Answer

A)  could be either a reward or a penalty. 
B)  could be a penalty but could not be a reward. 
C)  is the opposite of a tradeoff. 
D)  could be a reward but could not be a penalty. 
A)  could be either a reward or a penalty. 
B)  could be a penalty but could not be a reward. 
C)  is the opposite of a tradeoff. 
D)  could be a reward but could not be a penalty.

Question 15

What is the difference between microeconomics and macroeconomics? Give an example of an issue each studies.

Accepted Answer

Essentially microeconomics studies indiv

Question 16

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

Accepted Answer

A)  1. 
B)  2. 
C)  - 2. 
D)  - 4. 
A)  1. 
B)  2. 
C)  - 2. 
D)  - 4.

Question 17

-The figure above shows the price of a DVD player from 2003 to 2007.
a) What type of graph is illustrated above?
b) What is the trend in the price of a DVD player?

Accepted Answer

a) The graph is a time- series graph bec

Question 18

A scatter diagram with the price of vacations to Mexico on the vertical axis and the price of vacations to California on the horizontal axis shows a positive relationship. If the price of vacations to Mexico were placed on the horizontal axis, and the price of vacations to California on the vertical axis, the relationship would be

Accepted Answer

A)  positive relationship, also called a direct relationship. 
B)  negative relationship, also called a direct relationship. 
C)  negative relationship, also called an inverse relationship. 
D)  positive relationship, also called an inverse relationship. 
A)  positive relationship, also called a direct relationship. 
B)  negative relationship, also called a direct relationship. 
C)  negative relationship, also called an inverse relationship. 
D)  positive relationship, also called an inverse relationship.

Question 19

A cost due to an increase in activity is called

Accepted Answer

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

Question 20

The term used to emphasize that making choices in the face of scarcity involves a cost is

Accepted Answer

A)  opportunity cost. 
B)  substitution cost. 
C)  accounting cost. 
D)  utility cost. 
A)  opportunity cost. 
B)  substitution cost. 
C)  accounting cost. 
D)  utility cost.

Which of the following is a normative statement?

In the above figure, if household consumption is positively related to household income as well as related to the interest rate, then an increase in household income will

-In the above figure, using the slope across an arc, the slope of the curve between points a and c is

-In the above figure, which curve indicates that the level of food production does not affect the population growth rate?

-Use the table above. Place the number of workers on the horizontal axis and the total value of output on the vertical axis. The graph displaying the data provided in the table would show

A star athlete can afford a garage full of exotic cars while other people can only afford to take a city bus for transportation. This is most directly an example of an economy answering the _ question.

The relationship in the above figure suggests that when the interest rate is 5 percent,

Laura is a manager for HP. When Laura must decide whether to produce a few additional printers, she is choosing at the margin when she compares

A graph of two variables is a vertical line. What is the interpretation of this result?

-In the above figure, which of the graphs demonstrates a curve with a decreasing slope, that is, a slope getting smaller in magnitude as x increases?

When the government decides to provide tax relief for small businesses while placing higher taxes on large corporations, it is facing the

-In the above figure, if the tax rate is increased from 20 percent to 30 percent, tax revenue

A graph that measures time on the horizontal axis and one or more variables on the vertical axis is called a(n)

An incentive

What is the difference between microeconomics and macroeconomics? Give an example of an issue each studies.

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

-The figure above shows the price of a DVD player from 2003 to 2007. a) What type of graph is illustrated above? b) What is the trend in the price of a DVD player?

A cost due to an increase in activity is called

The term used to emphasize that making choices in the face of scarcity involves a cost is

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 1: What Is Economics

Which of the following is a normative statement?

In the above figure, if household consumption is positively related to household income as well as related to the interest rate, then an increase in household income will

-In the above figure, using the slope across an arc, the slope of the curve between points a and c is

-In the above figure, which curve indicates that the level of food production does not affect the population growth rate?

-Use the table above. Place the number of workers on the horizontal axis and the total value of output on the vertical axis. The graph displaying the data provided in the table would show

A star athlete can afford a garage full of exotic cars while other people can only afford to take a city bus for transportation. This is most directly an example of an economy answering the _ question.

The relationship in the above figure suggests that when the interest rate is 5 percent,

Laura is a manager for HP. When Laura must decide whether to produce a few additional printers, she is choosing at the margin when she compares

A graph of two variables is a vertical line. What is the interpretation of this result?

-In the above figure, which of the graphs demonstrates a curve with a decreasing slope, that is, a slope getting smaller in magnitude as x increases?

When the government decides to provide tax relief for small businesses while placing higher taxes on large corporations, it is facing the

-In the above figure, if the tax rate is increased from 20 percent to 30 percent, tax revenue

A graph that measures time on the horizontal axis and one or more variables on the vertical axis is called a(n)

An incentive

What is the difference between microeconomics and macroeconomics? Give an example of an issue each studies.

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

-The figure above shows the price of a DVD player from 2003 to 2007. a) What type of graph is illustrated above? b) What is the trend in the price of a DVD player?

A cost due to an increase in activity is called

The term used to emphasize that making choices in the face of scarcity involves a cost is

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters