Question 1

Scarcity applies to both the rich and the poor.)

Accepted Answer

A) True 
 B)False

Question 2

U.S. producers decide to produce more compact cars and fewer SUVs as the price of gasoline rises. Producers are answering the part of one of the two big economic questions.

Accepted Answer

A)  ʺhowʺ 
B)  ʺhow manyʺ 
C)  ʺwhatʺ 
D)  ʺwhenʺ 
A)  ʺhowʺ 
B)  ʺhow manyʺ 
C)  ʺwhatʺ 
D)  ʺwhenʺ

Question 3

-The above figure shows the relationship between the Jonesesʹ total consumption and total household income. The figure illustrates that the Jonesesʹ total consumption varies

Accepted Answer

A)  inversely with their total household income. 
B)  independently of their total household income. 
C)  negatively with their income. 
D)  directly with their total household income. 
A)  inversely with their total household income. 
B)  independently of their total household income. 
C)  negatively with their income. 
D)  directly with their total household income.

Question 4

-The above figure depicts a

Accepted Answer

A)  negative non-linear relationship between age and the number of hamburgers purchased per year. 
B)  positive non-linear relationship between age and the number of hamburgers purchased per year. 
C)  positive linear relationship between age and the number of hamburgers purchased per year. 
D)  negative linear relationship between age and the number of hamburgers purchased per year. 
A)  negative non-linear relationship between age and the number of hamburgers purchased per year. 
B)  positive non-linear relationship between age and the number of hamburgers purchased per year. 
C)  positive linear relationship between age and the number of hamburgers purchased per year. 
D)  negative linear relationship between age and the number of hamburgers purchased per year.

Question 5

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

Accepted Answer

A)  the activity will occur because the high marginal cost means it must be highly valued. 
B)  the person must concentrate on the activityʹs total benefits. 
C)  the forgone alternativesʹ costs must be increased. 
D)  an alternative action will be selected. 
A)  the activity will occur because the high marginal cost means it must be highly valued. 
B)  the person must concentrate on the activityʹs total benefits. 
C)  the forgone alternativesʹ costs must be increased. 
D)  an alternative action will be selected.

Question 6

Ben Bernanke, Chairman of the Federal Reserve, must choose whether tomorrow he meets with the Secretary of the Treasury or with the Congress regarding the financial crisis. This choice reflects the

Accepted Answer

A)  concept of entrepreneurship. 
B)  use of capital. 
C)  fact that Bernanke faces scarcity. 
D)  fact that Bernanke responds to incentives 
A)  concept of entrepreneurship. 
B)  use of capital. 
C)  fact that Bernanke faces scarcity. 
D)  fact that Bernanke responds to incentives

Question 7

Suppose you plan to go to school this summer. The cost of tuition and textbooks is $1,400 and housing, board, and entertainment will cost you $500. If you didnʹt go to school, youʹd live in your parentsʹ house for free, but your other living expenses would be about the same. Also, if you didnʹt go to school youʹd work full time and could earn $8,000. You can still work part time while attending the summer school, but you will earn only
$3,000.
a) What will the summer school cost you in terms of money explicitly paid?
b) What are the opportunity costs of going to summer school that you donʹt pay explicitly? Explain.
c) What is your total opportunity costs of going to school this summer? Explain your answer.

Accepted Answer

a) You explicitly pay the cost of tuitio

Question 8

Which of the following is a positive statement?

Accepted Answer

A)  Taxes should be lower because then people get to keep more of what they earn. 
B)  My economics class should last for two terms because it is my favorite class. 
C)  Given their negative impact on productivity, the government should eliminate labor unions. 
D)  A 10 percent increase in income leads to a 4 percent increase in the consumption of beef. 
A)  Taxes should be lower because then people get to keep more of what they earn. 
B)  My economics class should last for two terms because it is my favorite class. 
C)  Given their negative impact on productivity, the government should eliminate labor unions. 
D)  A 10 percent increase in income leads to a 4 percent increase in the consumption of beef.

Question 9

Entrepreneurs do all of the following EXCEPT

Accepted Answer

A)  organize labor, land, and capital. 
B)  own all the other resources used in the production process. 
C)  bear risk from business decisions. 
D)  come up with new ideas about what and how to produce. 
A)  organize labor, land, and capital. 
B)  own all the other resources used in the production process. 
C)  bear risk from business decisions. 
D)  come up with new ideas about what and how to produce.

Question 10

In evaluating a relationship between x and y, ceteris paribus means other variables

Accepted Answer

A)  are not relevant to x and y. 
B)  are not changing while x and y change. 
C)  move in the same direction as x and y. 
D)  move in opposite directions to x and y. 
A)  are not relevant to x and y. 
B)  are not changing while x and y change. 
C)  move in the same direction as x and y. 
D)  move in opposite directions to x and y.

Question 11

The study of the decisions of individual units in the economy is known as

Accepted Answer

A)  macroeconomics. 
B)  ceteris paribus study. 
C)  microeconomics. 
D)  the study of incentives. 
A)  macroeconomics. 
B)  ceteris paribus study. 
C)  microeconomics. 
D)  the study of incentives.

Question 12

Explain whether the statement, ʺThere is life on Mars,ʺ is a normative or positive statement.

Accepted Answer

The statement is a positive statement be

Question 13

Overtime worked by a JCPenney associate is considered and earns .

Accepted Answer

A)  human capital; interest. 
B)  labor; profit. 
C)  labor; wages. 
D)  entrepreneurship; profit. 
A)  human capital; interest. 
B)  labor; profit. 
C)  labor; wages. 
D)  entrepreneurship; profit.

Question 14

As a firm produces more and more CDs, the average cost of producing each CD falls. A curve showing the behavior of the average cost of a CD as more CDs are produced

Accepted Answer

A)  would be positively and then negatively-sloped. 
B)  would be horizontal. 
C)  would be positively sloped. 
D)  would be negatively sloped. 
A)  would be positively and then negatively-sloped. 
B)  would be horizontal. 
C)  would be positively sloped. 
D)  would be negatively sloped.

Question 15

-In the figure above, point B is .

Accepted Answer

A)  on the x-axis 
B)  on the y-axis 
C)  a coordinate 
D)  at the origin 
A)  on the x-axis 
B)  on the y-axis 
C)  a coordinate 
D)  at the origin

Question 16

-The slope of the line in the above figure is

Accepted Answer

A)  -5. 
B)  -10. 
C)  5. 
D)  10. 
A)  -5. 
B)  -10. 
C)  5. 
D)  10.

Question 17

Opportunity cost is best defined as

Accepted Answer

A)  all the alternatives that are given up to get something. 
B)  the highest-valued alternative that is given up to get something. 
C)  how much money is paid for something, taking inflation into account. 
D)  how much money is paid for something. 
A)  all the alternatives that are given up to get something. 
B)  the highest-valued alternative that is given up to get something. 
C)  how much money is paid for something, taking inflation into account. 
D)  how much money is paid for something.

Question 18

Which of the following is NOT a normative statement?

Accepted Answer

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

Question 19

The ʺgifts of natureʺ are included as part of which factor of production?

Accepted Answer

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

Question 20

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

Scarcity applies to both the rich and the poor.)

U.S. producers decide to produce more compact cars and fewer SUVs as the price of gasoline rises. Producers are answering the part of one of the two big economic questions.

-The above figure shows the relationship between the Jonesesʹ total consumption and total household income. The figure illustrates that the Jonesesʹ total consumption varies

-The above figure depicts a

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

Ben Bernanke, Chairman of the Federal Reserve, must choose whether tomorrow he meets with the Secretary of the Treasury or with the Congress regarding the financial crisis. This choice reflects the

Which of the following is a positive statement?

Entrepreneurs do all of the following EXCEPT

In evaluating a relationship between x and y, ceteris paribus means other variables

The study of the decisions of individual units in the economy is known as

Explain whether the statement, ʺThere is life on Mars,ʺ is a normative or positive statement.

Overtime worked by a JCPenney associate is considered and earns .

As a firm produces more and more CDs, the average cost of producing each CD falls. A curve showing the behavior of the average cost of a CD as more CDs are produced

-In the figure above, point B is .

-The slope of the line in the above figure is

Opportunity cost is best defined as

Which of the following is NOT a normative statement?

The ʺgifts of natureʺ are included as part of which factor of production?

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

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Exam 1: What Is Economics

Scarcity applies to both the rich and the poor.)

U.S. producers decide to produce more compact cars and fewer SUVs as the price of gasoline rises. Producers are answering the part of one of the two big economic questions.

-The above figure shows the relationship between the Jonesesʹ total consumption and total household income. The figure illustrates that the Jonesesʹ total consumption varies

-The above figure depicts a

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

Ben Bernanke, Chairman of the Federal Reserve, must choose whether tomorrow he meets with the Secretary of the Treasury or with the Congress regarding the financial crisis. This choice reflects the

Which of the following is a positive statement?

Entrepreneurs do all of the following EXCEPT

In evaluating a relationship between x and y, ceteris paribus means other variables

The study of the decisions of individual units in the economy is known as

Explain whether the statement, ʺThere is life on Mars,ʺ is a normative or positive statement.

Overtime worked by a JCPenney associate is considered and earns .

As a firm produces more and more CDs, the average cost of producing each CD falls. A curve showing the behavior of the average cost of a CD as more CDs are produced

-In the figure above, point B is .

-The slope of the line in the above figure is

Opportunity cost is best defined as

Which of the following is NOT a normative statement?

The ʺgifts of natureʺ are included as part of which factor of production?

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

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters