Exam 1: What Economics Is About

A mandatory seat-belt law ends up raising the number of traffic fatalities if it lowers fatalities per accident from 0.05 to 0.03 while raising the number of accidents per period from 30,000 to greater than ___________ accidents per period.

Which of the following is a positive microeconomics statement?

Two variables are independent if as one variable __________, the other variable __________.

Variables A and B are inversely related. If we plot A on the horizontal axis and B on the vertical axis, the line that connects combinations of A and B plotted in a two-variable diagram would be

Which of the following is a microeconomics topic?

If variable X rises as result of variable Y falling, then X and Y are

Which of the following is an example of a positive economic statement?

In economics, capital is defined as a financial asset such as stocks and bonds.

The absence of value judgments is the essence of

Variables A and B are directly related. If we plot A on the horizontal axis and B on the vertical axis, the line that connects combinations of A and B plotted in a two-variable diagram would be

A person goes into a store and buys a computer for $1,210. In this case, price is acting as a

What is the difference between macroeconomics and microeconomics? Give an example of a question that a macroeconomist might be interested in answering, then do the same for a microeconomist.

Which of the following statements uses the term ceteris paribus correctly?

Many people buy one newspaper per day, but rarely do they buy two of the same newspapers on the same day. What is the economic justification for this behavior?

Produced goods used as inputs for the production of other goods comprise the resource known as

In economics, something that provides utility is called a

Which of the following would NOT be considered a macroeconomic topic?

Positive economics is concerned with

Define the term rationing device and give an example of each of three possible rationing devices. Explain how scarcity implies the need for a rationing device.

Many years ago, chemists at 3M Corporation were trying to create a super-strong glue. Somehow they got their molecules twisted and came up with one of the weakest glues ever made. But, rather than pouring it down the drain, they tried coating some paper with it, and the "Post-It Note" was born. In this case, 3M was acting as a(n)