Question 1

The purpose of the ceteris paribus assumption is to allow economists to

Accepted Answer

A) determine the relationship among several variables. 
B) determine the impact of several variables on another variable. 
C) isolate the impact of one variable on several variables. 
D) isolate the relationship between two variables. 
A) determine the relationship among several variables. 
B) determine the impact of several variables on another variable. 
C) isolate the impact of one variable on several variables. 
D) isolate the relationship between two variables. D

Question 2

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 B

Question 3

Saying "the marginal costs are greater than the marginal benefits" is the same as saying

Accepted Answer

A) the average costs are greater than the average benefits. 
B) the total costs are greater than the average benefits. 
C) the benefits are greater than the costs. 
D) the additional costs are greater than the additional benefits. 
E) the costs minus the benefits equal the net costs. 
A) the average costs are greater than the average benefits. 
B) the total costs are greater than the average benefits. 
C) the benefits are greater than the costs. 
D) the additional costs are greater than the additional benefits. 
E) the costs minus the benefits equal the net costs. D

Question 4

Efficiency is consistent with

Accepted Answer

A) maximizing net benefits. 
B) equating marginal benefits and marginal costs. 
C) maximizing total benefits. 
D) minimizing total costs. 
E) a and b 
A) maximizing net benefits. 
B) equating marginal benefits and marginal costs. 
C) maximizing total benefits. 
D) minimizing total costs. 
E) a and b

Question 5

A mandatory seatbelt law ends up raising the number of traffic fatalities if it lowers fatalities per accident from 0.11 to 0.08 while raising the number of accidents per period from 100,000 to any more than

Accepted Answer

A) 108,000. 
B) 111,111. 
C) 137,500. 
D) 110,000. 
A) 108,000. 
B) 111,111. 
C) 137,500. 
D) 110,000.

Question 6

What is the most prominent rationing device you will likely find at your campus bookstore?

Accepted Answer

A) dollar price 
B) brute force 
C) anti-theft tags on the high-priced items 
D) none of the above 
A) dollar price 
B) brute force 
C) anti-theft tags on the high-priced items 
D) none of the above

Question 7

Scarcity occurs in both wealthy societies and poor societies.

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

Scarcity affects everyone, even billionaires.

Accepted Answer

A) True 
 B)False

Question 10

According to economists, competition exists because of

Accepted Answer

A) scarcity. 
B) capitalism. 
C) money. 
D) unintended effects. 
A) scarcity. 
B) capitalism. 
C) money. 
D) unintended effects.

Question 11

Here are three things you could do if you do not attend your economics class: watch television with some friends (you value this at $25), read a good book (you value this at $17), or go to work (you could earn $20 during the economics class). The opportunity cost of going to your economics class is

Accepted Answer

A) $20, because this is the only alternative of the three where you would actually receive a monetary payment. 
B) $17, because this is the lowest valued alternative forfeited. 
C) $25, because this is the highest valued alternative forfeited. 
D) $62, because this is the total dollar sum of the three forfeited alternatives. 
A) $20, because this is the only alternative of the three where you would actually receive a monetary payment. 
B) $17, because this is the lowest valued alternative forfeited. 
C) $25, because this is the highest valued alternative forfeited. 
D) $62, because this is the total dollar sum of the three forfeited alternatives.

Question 12

Normative economics is concerned with

Accepted Answer

A) value judgments. 
B) opinions. 
C) cause-effect relationships. 
D) observations that can be proved. 
E) both a and b 
A) value judgments. 
B) opinions. 
C) cause-effect relationships. 
D) observations that can be proved. 
E) both a and b

Question 13

All sellers may be tempted to raise the price of what they sell, but a negative unintended effect for the seller of raising the price could be __________ in units sold that is large enough to __________ the seller's 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 14

Which of the following is least likely to be an effect of scarcity?

Accepted Answer

A) rationing device 
B) choice 
C) opportunity cost 
D) dollar price 
E) utility 
A) rationing device 
B) choice 
C) opportunity cost 
D) dollar price 
E) utility

Question 15

In a two-variable diagram, there is a straight line which is parallel to the vertical axis. The slope of this line is

Accepted Answer

A) zero. 
B) infinite. 
C) indicative of an inverse relationship between two variables. 
D) indicative of a direct relationship between two variables. 
E) b and d 
A) zero. 
B) infinite. 
C) indicative of an inverse relationship between two variables. 
D) indicative of a direct relationship between two variables. 
E) b and d

Question 16

Opportunity cost is the value of __________________ when a choice is made.

Accepted Answer

A) the most highly valued forfeited alternative 
B) the alternative chosen 
C) a free good 
D) the sum of all forfeited alternatives 
A) the most highly valued forfeited alternative 
B) the alternative chosen 
C) a free good 
D) the sum of all forfeited alternatives

Question 17

The branch of economics that studies the decisions made by individuals and firms is called macroeconomics.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The study of an economy's price level is explicitly a part of

Accepted Answer

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

Question 20

Which of the following is most likely to be a negative unintended effect of placing safety caps on medicine containers?

Accepted Answer

A) It is now easier for people to open their medicine containers. 
B) People leave their medicine containers open more often, which ends up making it easier for children to get into the medicine. 
C) Fewer people get sick and need medicine. 
D) Medicine prices fall sharply. 
A) It is now easier for people to open their medicine containers. 
B) People leave their medicine containers open more often, which ends up making it easier for children to get into the medicine. 
C) Fewer people get sick and need medicine. 
D) Medicine prices fall sharply.

Exam 1: What Economics Is About

The purpose of the ceteris paribus assumption is to allow economists to

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

Saying "the marginal costs are greater than the marginal benefits" is the same as saying

Efficiency is consistent with

A mandatory seatbelt law ends up raising the number of traffic fatalities if it lowers fatalities per accident from 0.11 to 0.08 while raising the number of accidents per period from 100,000 to any more than

What is the most prominent rationing device you will likely find at your campus bookstore?

Scarcity occurs in both wealthy societies and poor societies.

In all cases, normative economics deals with

Scarcity affects everyone, even billionaires.

According to economists, competition exists because of

Here are three things you could do if you do not attend your economics class: watch television with some friends (you value this at $25), read a good book (you value this at $17), or go to work (you could earn $20 during the economics class). The opportunity cost of going to your economics class is

Normative economics is concerned with

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

Which of the following is least likely to be an effect of scarcity?

In a two-variable diagram, there is a straight line which is parallel to the vertical axis. The slope of this line is

Opportunity cost is the value of __________________ when a choice is made.

The branch of economics that studies the decisions made by individuals and firms is called macroeconomics.

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

The study of an economy's price level is explicitly a part of

Which of the following is most likely to be a negative unintended effect of placing safety caps on medicine containers?

Production Possibilities Frontier Framework

Supply and Demand Theory

Prices Free Controlled and Relative

Supply Demand and Price Applications

Macroeconomic Measurements Part I Prices and Unemployment

Macroeconomic Measurements Part II 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

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice 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

The Economic Case for and Against Government Five Topics Considered

Stocks Bonds Futures and Options

Filters

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