Question 1

You notice that when interest rates increases, new residential housing prices tend to decrease. This observation indicates that

Accepted Answer

A)  a scatter diagram between interest rates and housing prices will show a negative relationship. 
B)  higher interest rates must cause low housing prices. 
C)  a scatter diagram between interest rates and housing prices will show a direct relationship. 
D)  there must be false causality between interest rates and housing prices. 
A)  a scatter diagram between interest rates and housing prices will show a negative relationship. 
B)  higher interest rates must cause low housing prices. 
C)  a scatter diagram between interest rates and housing prices will show a direct relationship. 
D)  there must be false causality between interest rates and housing prices.

Question 2

If there is an inverse relationship between two variables, the graph of this relationship

Accepted Answer

A)  might be horizontal. 
B)  will be downward-sloping. 
C)  will be upward-sloping. 
D)  will be a horizontal line. 
A)  might be horizontal. 
B)  will be downward-sloping. 
C)  will be upward-sloping. 
D)  will be a horizontal line.

Question 3

When a farmer decides to raise hogs instead of cattle, the farmer is answering the part of one of the two big economic questions.

Accepted Answer

A)  ʺfor whomʺ 
B)  ʺhowʺ 
C)  ʺwhatʺ 
D)  ʺwhyʺ 
A)  ʺfor whomʺ 
B)  ʺhowʺ 
C)  ʺwhatʺ 
D)  ʺwhyʺ

Question 4

What is opportunity cost?

Accepted Answer

Opportunity cost is the highest-valued a

Question 5

A normative statement is

Accepted Answer

A)  about what ought to be. 
B)  one that is based on an economic experiment. 
C)  about what is. 
D)  always true. 
A)  about what ought to be. 
B)  one that is based on an economic experiment. 
C)  about what is. 
D)  always true.

Question 6

Because we face scarcity, every choice involves

Accepted Answer

A)  money 
B)  an opportunity cost 
C)  giving up something for nothing. 
D)  the question ʺwhat.ʺ 
A)  money 
B)  an opportunity cost 
C)  giving up something for nothing. 
D)  the question ʺwhat.ʺ

Question 7

What does the slope of a straight line equal? How is the slope of a curved line calculated at a point on the curve?

Accepted Answer

The slope of a straight line is calculat

Question 8

-In the above figure, when income is zero, household expenditures equal

Accepted Answer

A)  0. 
B)  $4000. 
C)  $1000. 
D)  $8000. 
A)  0. 
B)  $4000. 
C)  $1000. 
D)  $8000.

Question 9

Two economists can agree that raising the minimum wage creates unemployment yet one might argue that raising the minimum wage is a good policy and the other that it is a bad policy. Why can this difference exist? Be sure to use the terms positive and normative in your answer.

Accepted Answer

Positive statements are statements that

Question 10

If the x-axis variable increases while the y-axis variable decreases, the variables x and y are negatively related.

Accepted Answer

A) True 
 B)False

Question 11

-In the above figure, the curve has a slope that is .

Accepted Answer

A)  negative and becoming larger in magnitude 
B)  positive and becoming smaller in magnitude 
C)  negative and becoming smaller in magnitude 
D)  positive and becoming larger in magnitude 
A)  negative and becoming larger in magnitude 
B)  positive and becoming smaller in magnitude 
C)  negative and becoming smaller in magnitude 
D)  positive and becoming larger in magnitude

Question 12

A scatter diagram plots the value of one economic variable against time.

Accepted Answer

A) True 
 B)False

Question 13

A lawn service is deciding whether to add an additional employee to its summer crew. The marginal cost of hiring this worker depends on the

Accepted Answer

A)  the additional revenue created by having an additional worker minus the cost of hiring the worker. 
B)  total amount paid to all previously hired workers. 
C)  the total amount paid to all the workers, both the new one and the previously hired workers. 
D)  total amount paid to only the new worker. 
A)  the additional revenue created by having an additional worker minus the cost of hiring the worker. 
B)  total amount paid to all previously hired workers. 
C)  the total amount paid to all the workers, both the new one and the previously hired workers. 
D)  total amount paid to only the new worker.

Question 14

A graph has a point that is either a maximum or a minimum. To the left of the point, the slope of relationship is positive. To the right of the point, the slope is negative. Is the point a maximum point or a minimum point? Be sure to draw a figure that supports your answer.

Accepted Answer

@#IMG-DLM& The point is a maximum point. Examine t

Question 15

$$\begin{array} { | l | l | } 
\hline x & y \
\hline 0 & 0 \
\hline 2 & 6 \
\hline 4 & 12 \
\hline 6 & 18 \
\hline 8 & 24 \
\hline 10 & 30 \
\hline
\end{array}$$
-In the table above, y is measured along the y-axis and x along the x-axis. The slope of the relationship between x = 0 and x = 2 is

Accepted Answer

A)  2. 
B)  3. 
C)  -6. 
D)  6. 
A)  2. 
B)  3. 
C)  -6. 
D)  6.

Question 16

Suppose that the government of New York state promises to decrease taxes to a firm if it decides to stay in New York instead of moving to another state. This policy on the part of the state constitutes
, to make the of the firm remaining in New York.

Accepted Answer

A)  an incentive; marginal cost exceed the marginal benefit 
B)  an incentive; marginal benefit exceed the marginal cost 
C)  a command; marginal cost exceed the marginal benefit 
D)  a command; marginal benefit exceed the marginal cost 
A)  an incentive; marginal cost exceed the marginal benefit 
B)  an incentive; marginal benefit exceed the marginal cost 
C)  a command; marginal cost exceed the marginal benefit 
D)  a command; marginal benefit exceed the marginal cost

Question 17

Scarcity affects only those who are in need.)

Accepted Answer

A) True 
 B)False

Question 18

ʺIf you hire 1 worker, the worker can produce 20 pizzas a day. If you hire a 2nd worker, that worker can produce 10 more pizzas. If you hire a 3rd worker, that worker can produce 2 more pizzas a day.ʺ A graph displaying this relationship between the number of employees and total pizza output per day would show

Accepted Answer

A)  a negatively-sloped curve that becomes less steep. 
B)  an upward-sloping curve that becomes less steep. 
C)  a positive linear relationship. 
D)  a negative linear relationship. 
A)  a negatively-sloped curve that becomes less steep. 
B)  an upward-sloping curve that becomes less steep. 
C)  a positive linear relationship. 
D)  a negative linear relationship.

Question 19

Chinaʹs population is about 1.5 billion, while the population of the United States is about 300 million. This fact means that China has much more human capital than the U.S. does. True or false? Explain your answer.

Accepted Answer

A) True 
 B)False

Question 20

The analysis of the behavior of individual decision-making units is the definition of

Accepted Answer

A)  normative economics. 
B)  positive economics. 
C)  microeconomics. 
D)  macroeconomics. 
A)  normative economics. 
B)  positive economics. 
C)  microeconomics. 
D)  macroeconomics.

You notice that when interest rates increases, new residential housing prices tend to decrease. This observation indicates that

If there is an inverse relationship between two variables, the graph of this relationship

When a farmer decides to raise hogs instead of cattle, the farmer is answering the part of one of the two big economic questions.

What is opportunity cost?

A normative statement is

Because we face scarcity, every choice involves

What does the slope of a straight line equal? How is the slope of a curved line calculated at a point on the curve?

-In the above figure, when income is zero, household expenditures equal

Two economists can agree that raising the minimum wage creates unemployment yet one might argue that raising the minimum wage is a good policy and the other that it is a bad policy. Why can this difference exist? Be sure to use the terms positive and normative in your answer.

If the x-axis variable increases while the y-axis variable decreases, the variables x and y are negatively related.

-In the above figure, the curve has a slope that is .

A scatter diagram plots the value of one economic variable against time.

A lawn service is deciding whether to add an additional employee to its summer crew. The marginal cost of hiring this worker depends on the

A graph has a point that is either a maximum or a minimum. To the left of the point, the slope of relationship is positive. To the right of the point, the slope is negative. Is the point a maximum point or a minimum point? Be sure to draw a figure that supports your answer.

x y 0 0 2 6 4 12 6 18 8 24 10 30 -In the table above, y is measured along the y-axis and x along the x-axis. The slope of the relationship between x = 0 and x = 2 is

Suppose that the government of New York state promises to decrease taxes to a firm if it decides to stay in New York instead of moving to another state. This policy on the part of the state constitutes , to make the of the firm remaining in New York.

Scarcity affects only those who are in need.)

Chinaʹs population is about 1.5 billion, while the population of the United States is about 300 million. This fact means that China has much more human capital than the U.S. does. True or false? Explain your answer.

The analysis of the behavior of individual decision-making units is the definition of

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

You notice that when interest rates increases, new residential housing prices tend to decrease. This observation indicates that

If there is an inverse relationship between two variables, the graph of this relationship

When a farmer decides to raise hogs instead of cattle, the farmer is answering the part of one of the two big economic questions.

What is opportunity cost?

A normative statement is

Because we face scarcity, every choice involves

What does the slope of a straight line equal? How is the slope of a curved line calculated at a point on the curve?

-In the above figure, when income is zero, household expenditures equal

Two economists can agree that raising the minimum wage creates unemployment yet one might argue that raising the minimum wage is a good policy and the other that it is a bad policy. Why can this difference exist? Be sure to use the terms positive and normative in your answer.

If the x-axis variable increases while the y-axis variable decreases, the variables x and y are negatively related.

-In the above figure, the curve has a slope that is .

A scatter diagram plots the value of one economic variable against time.

A lawn service is deciding whether to add an additional employee to its summer crew. The marginal cost of hiring this worker depends on the

A graph has a point that is either a maximum or a minimum. To the left of the point, the slope of relationship is positive. To the right of the point, the slope is negative. Is the point a maximum point or a minimum point? Be sure to draw a figure that supports your answer.

x y 0 0 2 6 4 12 6 18 8 24 10 30 -In the table above, y is measured along the y-axis and x along the x-axis. The slope of the relationship between x = 0 and x = 2 is

Suppose that the government of New York state promises to decrease taxes to a firm if it decides to stay in New York instead of moving to another state. This policy on the part of the state constitutes , to make the of the firm remaining in New York.

Scarcity affects only those who are in need.)

Chinaʹs population is about 1.5 billion, while the population of the United States is about 300 million. This fact means that China has much more human capital than the U.S. does. True or false? Explain your answer.

The analysis of the behavior of individual decision-making units is the definition of

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