Question 1

People must make choices because

Accepted Answer

A)  there are many goods available. 
B)  of scarcity. 
C)  most people enjoy shopping. 
D)  None of the above answers is correct. 
A)  there are many goods available. 
B)  of scarcity. 
C)  most people enjoy shopping. 
D)  None of the above answers is correct.

Question 2

Which of the following questions is a topic that would be studied by microeconomics?

Accepted Answer

A)  How will a lower price of digital cameras affect the quantity of cameras sold? 
B)  What is the current unemployment rate in the United States? 
C)  Will the current budget deficit affect the well- being of the next generation? 
D)  Why did production and the number of jobs shrink in 2008? 
A)  How will a lower price of digital cameras affect the quantity of cameras sold? 
B)  What is the current unemployment rate in the United States? 
C)  Will the current budget deficit affect the well- being of the next generation? 
D)  Why did production and the number of jobs shrink in 2008?

Question 3

Your employer has asked you to start working overtime and has offered to pay $18 per hour for every hour you work beyond forty hours a week. The wage rate for each of the first forty hours will continue to be the usual $15 per hour. In terms of dollars, what is the marginal benefit of working each hour of overtime?

Accepted Answer

A)  $3.00 
B)  $18.00 
C)  $15.00 
D)  zero 
A)  $3.00 
B)  $18.00 
C)  $15.00 
D)  zero

Question 4

-In the figure above, when income equals $20,000, what does consumption equal?

Accepted Answer

A)  $0 
B)  $20,000 
C)  $10,000 
D)  impossible to tell 
A)  $0 
B)  $20,000 
C)  $10,000 
D)  impossible to tell

Question 5

Suppose you plan to take summer courses. The cost of tuition and textbooks is $1,200, housing will cost you $400, and you'll spend $300 on food. If you decide not to take courses in the summer, you'll live in your parents' house for free and spend only $100 on food. Also, if you don't take courses in the summer, you'll work full time and could earn at least $5,000. You can still work part time while taking courses, but the most you can earn is $1,000. What is your opportunity cost of taking courses in the summer?

Accepted Answer

A)  $6,900 
B)  $1,900 
C)  $4,000 
D)  $5,800 
A)  $6,900 
B)  $1,900 
C)  $4,000 
D)  $5,800

Question 6

Which of the following is a microeconomic topic?

Accepted Answer

A)  The effect of the government budget deficit on inflation. 
B)  The reasons why Kathy buys less orange juice. 
C)  The reasons why total employment decreases. 
D)  The reasons for a decline in average prices. 
A)  The effect of the government budget deficit on inflation. 
B)  The reasons why Kathy buys less orange juice. 
C)  The reasons why total employment decreases. 
D)  The reasons for a decline in average prices.

Question 7

An inducement to take a particular action is called

Accepted Answer

A)  the marginal benefit. 
B)  opportunity cost. 
C)  an incentive. 
D)  the marginal cost. 
A)  the marginal benefit. 
B)  opportunity cost. 
C)  an incentive. 
D)  the marginal cost.

Question 8

-The above figure shows sources of air pollution. The figure is

Accepted Answer

A)  a multi- variable line graph. 
B)  a scatter plot diagram. 
C)  a cross- section graph. 
D)  a time- series graph. 
A)  a multi- variable line graph. 
B)  a scatter plot diagram. 
C)  a cross- section graph. 
D)  a time- series graph.

Question 9

In a market economy, what people do in the pursuit of their self- interest

Accepted Answer

A)  usually forwards the social interest. 
B)  is always in conflict with the social interest. 
C)  is usually in conflict with the social interest. 
D)  always forwards the social interest. 
A)  usually forwards the social interest. 
B)  is always in conflict with the social interest. 
C)  is usually in conflict with the social interest. 
D)  always forwards the social interest.

Question 10

Whether a company produces fishing rods mostly by hand or using high- tech machinery is a question of

Accepted Answer

A)  why will the goods be produced. 
B)  how will the goods be produced. 
C)  for whom will goods be produced. 
D)  where will the goods be produced. 
A)  why will the goods be produced. 
B)  how will the goods be produced. 
C)  for whom will goods be produced. 
D)  where will the goods be produced.

Question 11

Your student association is looking for an auditorium to rent for an all- day conference. The university's Performing Arts Center is vacant on that day, so the association wants to rent it. The physical plant manager tells you that the daily rent is $660, which includes $400 to cover part of the cost paid to build the Center, $40 to cover part of its regular maintenance cost, $50 to help pay for the building's insurance, $100 to cover the extra cost of electricity that the university would incur because of the conference, and $70 to pay for additional janitori services for the conference. You know that no one else wants to rent the Center on that day and you think that th that the manager charges is too high. But how much should you pay? Use the economic way of thinking to answ question and to convince the manager to accept your offer:
a) If you rent the Center, what will be the university's marginal cost of renting the center to you?
b) If you rent the Center, what will be the university's marginal benefit of renting the center to you?
c) What amount of rent should you offer? Convince the manager to accept your offer.

Accepted Answer

a) The university's marginal cost is $17

Question 12

The United States produces more services than goods.

Accepted Answer

A) True 
 B)False

Question 13

Scarcity arises because of opportunity costs.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a normative statement?

Accepted Answer

A)  Owners of apartment buildings are free to charge whatever rent they want. 
B)  Low rents are good because they make apartments more affordable. 
C)  Low rents will restrict the supply of housing. 
D)  Housing costs are rising. 
A)  Owners of apartment buildings are free to charge whatever rent they want. 
B)  Low rents are good because they make apartments more affordable. 
C)  Low rents will restrict the supply of housing. 
D)  Housing costs are rising.

Question 15

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

Accepted Answer

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

Question 16

-The figure above is a

Accepted Answer

A)  cross- section graph. 
B)  time- series graph. 
C)  scatter diagram. 
D)  not a scatter diagram, nor a time series graph, nor a cross- section graph. 
A)  cross- section graph. 
B)  time- series graph. 
C)  scatter diagram. 
D)  not a scatter diagram, nor a time series graph, nor a cross- section graph.

Question 17

Studying the effects choices have on the individual markets within the economy is part of

Accepted Answer

A)  incentives. 
B)  macroeconomics. 
C)  scarcity. 
D)  microeconomics. 
A)  incentives. 
B)  macroeconomics. 
C)  scarcity. 
D)  microeconomics.

Question 18

Demonstrating how an economic variable changes from one year to the next is best illustrated by a

Accepted Answer

A)  one- variable graph. 
B)  cross- section graph. 
C)  time- series graph. 
D)  linear graph. 
A)  one- variable graph. 
B)  cross- section graph. 
C)  time- series graph. 
D)  linear graph.

Question 19

Which of the following is NOT a normative statement?

Accepted Answer

A)  People buy more of a good or service when its price falls. 
B)  The government ought to provide health care to everyone. 
C)  The distribution of income is fair. 
D)  Corporations should be more socially responsible. 
A)  People buy more of a good or service when its price falls. 
B)  The government ought to provide health care to everyone. 
C)  The distribution of income is fair. 
D)  Corporations should be more socially responsible.

Question 20

-In the above figure, x is

Accepted Answer

A)  positively related to both y and z. 
B)  negatively related to both y and z. 
C)  negatively related to y and positively related to z. 
D)  positively related to y and negatively related to z. 
A)  positively related to both y and z. 
B)  negatively related to both y and z. 
C)  negatively related to y and positively related to z. 
D)  positively related to y and negatively related to z.

People must make choices because

Which of the following questions is a topic that would be studied by microeconomics?

-In the figure above, when income equals $20,000, what does consumption equal?

Which of the following is a microeconomic topic?

An inducement to take a particular action is called

-The above figure shows sources of air pollution. The figure is

In a market economy, what people do in the pursuit of their self- interest

Whether a company produces fishing rods mostly by hand or using high- tech machinery is a question of

The United States produces more services than goods.

Scarcity arises because of opportunity costs.

Which of the following is a normative statement?

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

-The figure above is a

Studying the effects choices have on the individual markets within the economy is part of

Demonstrating how an economic variable changes from one year to the next is best illustrated by a

Which of the following is NOT a normative statement?

-In the above figure, x 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

People must make choices because

Which of the following questions is a topic that would be studied by microeconomics?

-In the figure above, when income equals $20,000, what does consumption equal?

Which of the following is a microeconomic topic?

An inducement to take a particular action is called

-The above figure shows sources of air pollution. The figure is

In a market economy, what people do in the pursuit of their self- interest

Whether a company produces fishing rods mostly by hand or using high- tech machinery is a question of

The United States produces more services than goods.

Scarcity arises because of opportunity costs.

Which of the following is a normative statement?

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

-The figure above is a

Studying the effects choices have on the individual markets within the economy is part of

Demonstrating how an economic variable changes from one year to the next is best illustrated by a

Which of the following is NOT a normative statement?

-In the above figure, x 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