Question 1

Which of the following is a positive macroeconomics statement?

Accepted Answer

A) The central bank should increase the nation's money supply. 
B) The increase in the nation's money supply helped push the nation's unemployment rate down in the short run. 
C) Ford Motor Company's new advertising campaign ended up hurting General Motors' sales. 
D) The local government ought to spend more on recreational facilities. 
A) The central bank should increase the nation's money supply. 
B) The increase in the nation's money supply helped push the nation's unemployment rate down in the short run. 
C) Ford Motor Company's new advertising campaign ended up hurting General Motors' sales. 
D) The local government ought to spend more on recreational facilities.

Question 2

Economists sometimes refer to the resource category land as natural resources.

Accepted Answer

A) True 
 B)False

Question 3

Describe the difference between positive and normative economics. Cite an example of each.

Accepted Answer

Positive economics deals with "what is."

Question 4

Entrepreneurship is

Accepted Answer

A) the talent for organizing the use of land, labor and capital, among other things. 
B) skill in influencing government regulators and legislators. 
C) accumulated technical knowledge in using labor and capital. 
D) knowledge of the particular natural resources to be found in a given area. 
A) the talent for organizing the use of land, labor and capital, among other things. 
B) skill in influencing government regulators and legislators. 
C) accumulated technical knowledge in using labor and capital. 
D) knowledge of the particular natural resources to be found in a given area.

Question 5

The cost of building a new interstate highway system is reported to be high at $25 billion. Does it necessarily follow that the interstate highway is not worth building?

Accepted Answer

A) Yes, because it is better to spend $25 billion on ending poverty than on building another interstate highway system. 
B) No, because building a new interstate highway system promotes economic growth, which helps everyone. 
C) No, because the benefits of building a new interstate highway system may be greater than $25 billion. 
D) Yes, because the benefits of building a new interstate highway system may be greater than $25 billion. 
A) Yes, because it is better to spend $25 billion on ending poverty than on building another interstate highway system. 
B) No, because building a new interstate highway system promotes economic growth, which helps everyone. 
C) No, because the benefits of building a new interstate highway system may be greater than $25 billion. 
D) Yes, because the benefits of building a new interstate highway system may be greater than $25 billion.

Question 6

The higher the opportunity cost of attending college,

Accepted Answer

A) the more likely an individual will go to college. 
B) the more economics classes an individual will take at college. 
C) the fewer economics classes an individual will take at college. 
D) the less likely an individual will go to college. 
A) the more likely an individual will go to college. 
B) the more economics classes an individual will take at college. 
C) the fewer economics classes an individual will take at college. 
D) the less likely an individual will go to college.

Question 7

List and describe the four broad categories of resources. Cite an example of each to help support your answer.

Accepted Answer

Economists divide resources into four ca

Question 8

​Exhibit 1-4
  
-Refer to Exhibit 1-4. If the student whose marginal benefits and costs of good health are noted in this table, how many units of good health should the student obtain in order to maximize her net benefits of good health?

Accepted Answer

A) 2 units 
B) 3 units 
C) 4 units 
D) 5 units 
E) ​6 units 
A) 2 units 
B) 3 units 
C) 4 units 
D) 5 units 
E) ​6 units

Question 9

Which of the following pairs of variables is most likely to be directly related?

Accepted Answer

A) sales of toothpaste and sales of running shoes 
B) the price of ice cream and the price of airline tickets 
C) the number of children in a family and the number of toys the family owns 
D) the price of ice cream and sales of ice cream 
E) the outdoor temperature and sales of residential heating systems 
A) sales of toothpaste and sales of running shoes 
B) the price of ice cream and the price of airline tickets 
C) the number of children in a family and the number of toys the family owns 
D) the price of ice cream and sales of ice cream 
E) the outdoor temperature and sales of residential heating systems

Question 10

In every economy people vie for the economy's rationing device, a process called

Accepted Answer

A) competition. 
B) entrepreneurship. 
C) marginal benefit. 
D) positive economics. 
A) competition. 
B) entrepreneurship. 
C) marginal benefit. 
D) positive economics.

Question 11

Variables X and Y are independent of each other. If we plot X on the horizontal axis and Y on the vertical axis, the line that connects combinations of X and Y plotted in a two-variable diagram would be

Accepted Answer

A) parallel to the horizontal axis. 
B) downward-sloping. 
C) parallel to the vertical axis. 
D) upward-sloping. 
E) a or c 
A) parallel to the horizontal axis. 
B) downward-sloping. 
C) parallel to the vertical axis. 
D) upward-sloping. 
E) a or c

Question 12

To an economist, the terms factor and output are synonyms.

Accepted Answer

A) True 
 B)False

Question 13

Exhibit 1-1
  
-Refer to Exhibit 1-1. The efficient length of time for the student to study in the situation portrayed in this diagram is

Accepted Answer

A) 2 hours. 
B) 4 hours. 
C) 6 hours. 
D) 8 hours. 
E) There is not enough information provided to answer the question. 
A) 2 hours. 
B) 4 hours. 
C) 6 hours. 
D) 8 hours. 
E) There is not enough information provided to answer the question.

Question 14

In economics, a synonym for utility is

Accepted Answer

A) usefulness. 
B) satisfaction. 
C) sacrifice. 
D) a service. 
A) usefulness. 
B) satisfaction. 
C) sacrifice. 
D) a service.

Question 15

Exhibit 1-2
   ​
-Refer to Exhibit 1-2. Based on the data provided in this table, if these data were plotted in a two-variable diagram the result would be ______________ sloping ____________________.

Accepted Answer

A) a downward; (nonlinear) curve 
B) a downward; (straight) line 
C) an upward; (nonlinear) curve 
D) an upward; (straight) line 
E) none of the above 
A) a downward; (nonlinear) curve 
B) a downward; (straight) line 
C) an upward; (nonlinear) curve 
D) an upward; (straight) line 
E) none of the above

Question 16

Which of the following statements is false?

Accepted Answer

A) There are always opportunity costs to making choices. 
B) Because of scarcity, choices must be made. 
C) Elementary education at public schools is free. 
D) When government builds a new highway, taxpayers end up with less of some of the things they would otherwise have. 
A) There are always opportunity costs to making choices. 
B) Because of scarcity, choices must be made. 
C) Elementary education at public schools is free. 
D) When government builds a new highway, taxpayers end up with less of some of the things they would otherwise have.

Question 17

Define the term scarcity and discuss two of its consequences.

Accepted Answer

Scarcity is the condition in which our w

Question 18

Microeconomics is the branch of economics that deals with

Accepted Answer

A) highly aggregated markets or the entire economy. 
B) the production side of the economy, exclusively. 
C) the buying side of the economy, exclusively. 
D) human behavior and choices as they relate to relatively small units --- an individual, a firm, an industry. 
A) highly aggregated markets or the entire economy. 
B) the production side of the economy, exclusively. 
C) the buying side of the economy, exclusively. 
D) human behavior and choices as they relate to relatively small units --- an individual, a firm, an industry.

Question 19

The coordinates of point A are 400 units of X and 40 units of Y. The coordinates of point B are 480 units of X and 60 units of Y. With X on the horizontal axis and Y on the vertical axis, the slope of the line between points A and B is

Accepted Answer

A) + 0.25 
B) + 4.00 
C) + 0.33 
D) - 4.00 
E) - 0.25 
A) + 0.25 
B) + 4.00 
C) + 0.33 
D) - 4.00 
E) - 0.25

Question 20

In economics, a synonym for satisfaction is

Accepted Answer

A) utility. 
B) marginal. 
C) sacrifice. 
D) normative. 
A) utility. 
B) marginal. 
C) sacrifice. 
D) normative.

Exam 1: What Economics Is About

Which of the following is a positive macroeconomics statement?

Economists sometimes refer to the resource category land as natural resources.

Describe the difference between positive and normative economics. Cite an example of each.

Entrepreneurship is

The cost of building a new interstate highway system is reported to be high at $25 billion. Does it necessarily follow that the interstate highway is not worth building?

The higher the opportunity cost of attending college,

List and describe the four broad categories of resources. Cite an example of each to help support your answer.

​Exhibit 1-4 -Refer to Exhibit 1-4. If the student whose marginal benefits and costs of good health are noted in this table, how many units of good health should the student obtain in order to maximize her net benefits of good health?

Which of the following pairs of variables is most likely to be directly related?

In every economy people vie for the economy's rationing device, a process called

Variables X and Y are independent of each other. If we plot X on the horizontal axis and Y on the vertical axis, the line that connects combinations of X and Y plotted in a two-variable diagram would be

To an economist, the terms factor and output are synonyms.

Exhibit 1-1 -Refer to Exhibit 1-1. The efficient length of time for the student to study in the situation portrayed in this diagram is

In economics, a synonym for utility is

Exhibit 1-2 ​ -Refer to Exhibit 1-2. Based on the data provided in this table, if these data were plotted in a two-variable diagram the result would be ______________ sloping ____________________.

Which of the following statements is false?

Define the term scarcity and discuss two of its consequences.

Microeconomics is the branch of economics that deals with

The coordinates of point A are 400 units of X and 40 units of Y. The coordinates of point B are 480 units of X and 60 units of Y. With X on the horizontal axis and Y on the vertical axis, the slope of the line between points A and B is

In economics, a synonym for satisfaction is

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

Exhibit 1-4 -Refer to Exhibit 1-4. If the student whose marginal benefits and costs of good health are noted in this table, how many units of good health should the student obtain in order to maximize her net benefits of good health?

Exhibit 1-2 -Refer to Exhibit 1-2. Based on the data provided in this table, if these data were plotted in a two-variable diagram the result would be sloping ______.