Question 1

"If you hadn't gone to dinner with your friends, you would have stayed home and watched television." It follows that

Accepted Answer

A) watching television is the opportunity cost of having dinner with your friends. 
B) the price of having dinner with your friends is more than the price you would have had to pay to watch television. 
C) the opportunity cost of having dinner with your friends is lower than the opportunity cost of watching television. 
D) it is less costly to watch television than to have dinner with your friends. 
A) watching television is the opportunity cost of having dinner with your friends. 
B) the price of having dinner with your friends is more than the price you would have had to pay to watch television. 
C) the opportunity cost of having dinner with your friends is lower than the opportunity cost of watching television. 
D) it is less costly to watch television than to have dinner with your friends.

Question 2

Exhibit 1-2
   ​
-Refer to Exhibit 1-2. According to the data provided in this table, what is the slope of the line between points A and B, if these data were graphed with X on the horizontal axis and Y on the vertical axis?

Accepted Answer

A) -3.00 
B) -0.33 
C) 3.00 
D) 0.33 
E) none of the above 
A) -3.00 
B) -0.33 
C) 3.00 
D) 0.33 
E) none of the above

Question 3

Exhibit 1-3
   ​
-Refer to Exhibit 1-3. According to the data provided in this table, what is the approximate slope of the line between points C and D (if these data were graphed with X on the horizontal axis and Y on the vertical axis)?

Accepted Answer

A) -0.17 
B) -6.00 
C) 0.17 
D) 6.00 
E) none of the above 
A) -0.17 
B) -6.00 
C) 0.17 
D) 6.00 
E) none of the above

Question 4

Exhibit 1-1
  
-Refer to Exhibit 1-1. The student whose study habits are illustrated in this diagram will maximize the net benefits of studying when she has studied __________ hours.

Accepted Answer

A) 2 
B) 4 
C) 6 
D) 8 
A) 2 
B) 4 
C) 6 
D) 8

Question 5

Prior to attending college, Marvin is offered a lucrative four-year contract as an actor on a daytime soap opera. Assuming that acting and attending college are Marvin's preferred alternatives and that he must choose between these two options, his opportunity cost of attending college after receiving the offer on the soap opera ________________, making him ____________ likely to attend college than before he received the offer.

Accepted Answer

A) increases; less 
B) decreases; more 
C) stays the same; equally likely 
D) increases; more 
E) decreases; less 
A) increases; less 
B) decreases; more 
C) stays the same; equally likely 
D) increases; more 
E) decreases; less

Question 6

The branch of economics that studies the decisions of individuals and firms is called

Accepted Answer

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

Question 7

A rationing device is a method used to resolve who gets what of available goods and resources.

Accepted Answer

A) True 
 B)False

Question 8

If variable X rises as a result of variable Y falling, then X and Y have an inverse relationship.

Accepted Answer

A) True 
 B)False

Question 9

At the optimal or efficient level of an activity, the activity's marginal benefit must

Accepted Answer

A) be zero. 
B) be greater than zero. 
C) equal the marginal cost of the activity. 
D) exceed the marginal cost of the activity. 
A) be zero. 
B) be greater than zero. 
C) equal the marginal cost of the activity. 
D) exceed the marginal cost of the activity.

Question 10

Which of the following issues is most unlikely to be addressed by an economist practicing positive economics?

Accepted Answer

A) the relationship between the minimum wage and the number of unemployed unskilled workers 
B) the effect of a minimum wage increase on inner-city crime rates 
C) the desirability of a minimum wage increase 
D) the consequences of implementing a minimum wage law in China 
A) the relationship between the minimum wage and the number of unemployed unskilled workers 
B) the effect of a minimum wage increase on inner-city crime rates 
C) the desirability of a minimum wage increase 
D) the consequences of implementing a minimum wage law in China

Question 11

Explain how scarcity can exist in a relatively rich country such as the United States. Give examples to help support your answer.

Accepted Answer

Even in a wealthy country, the people li

Question 12

How are changes in opportunity cost predicted to affect behavior?

Accepted Answer

A) The lower the opportunity cost of doing X, the less likely X will be done. 
B) The higher the opportunity cost of doing X, the less likely X will be done. 
C) The lower the opportunity cost of doing X, the more likely X will be done. 
D) a and c 
E) b and c 
A) The lower the opportunity cost of doing X, the less likely X will be done. 
B) The higher the opportunity cost of doing X, the less likely X will be done. 
C) The lower the opportunity cost of doing X, the more likely X will be done. 
D) a and c 
E) b and c

Question 13

If an economist says "the higher the price of oranges, the fewer oranges individuals will buy, ceteris paribus," this means that

Accepted Answer

A) individuals don't like high-priced oranges. 
B) as the price of oranges rises, individuals' preferences change and they no longer like oranges as much as they once did. 
C) as the price of oranges rises, individuals' preferences do not change, nor does anything else, but individuals buy fewer oranges in response to the higher price of oranges. 
D) the higher the price of oranges, the fewer oranges individuals will buy, assuming that people have economic motives. 
A) individuals don't like high-priced oranges. 
B) as the price of oranges rises, individuals' preferences change and they no longer like oranges as much as they once did. 
C) as the price of oranges rises, individuals' preferences do not change, nor does anything else, but individuals buy fewer oranges in response to the higher price of oranges. 
D) the higher the price of oranges, the fewer oranges individuals will buy, assuming that people have economic motives.

Question 14

Scarcity means

Accepted Answer

A) wants are greater than the limited resources available to satisfy these wants. 
B) wants are less than the limited resources available to satisfy these wants. 
C) resources are infinite. 
D) wants are limited. 
E) both c and d 
A) wants are greater than the limited resources available to satisfy these wants. 
B) wants are less than the limited resources available to satisfy these wants. 
C) resources are infinite. 
D) wants are limited. 
E) both c and d

Question 15

A theory is an abstract representation of reality. This means a theory

Accepted Answer

A) is descriptive of the way the world is. 
B) is an unrealistic representation of reality. 
C) omits certain factors when trying to explain something. 
D) is usually expressed in professional jargon. 
E) none of the above 
A) is descriptive of the way the world is. 
B) is an unrealistic representation of reality. 
C) omits certain factors when trying to explain something. 
D) is usually expressed in professional jargon. 
E) none of the above

Question 16

Some economic studies have shown that mandatory seat belt laws do not lead to a reduction in traffic fatalities.

Accepted Answer

A) True 
 B)False

Question 17

Ceteris paribus means

Accepted Answer

A) "one variable too many." 
B) "the correct relationship specified." 
C) "assuming economic motives." 
D) "all other things constant" or "nothing else changes." 
A) "one variable too many." 
B) "the correct relationship specified." 
C) "assuming economic motives." 
D) "all other things constant" or "nothing else changes."

Question 18

Which of the following pairs of variables is most likely to be inversely 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) sales of tortilla chips and sales of salsa 
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) sales of tortilla chips and sales of salsa

Question 19

Most states have instituted mandatory seatbelt laws to reduce traffic fatalities. An economist may point out that an unintended effect of these laws is

Accepted Answer

A) an increase in the price of automobiles, further reducing fatalities. 
B) an increase in driving speed, reducing the number of accidents. 
C) a decrease in driving speed, further reducing fatalities. 
D) an increase in risky driving behavior, increasing fatalities. 
A) an increase in the price of automobiles, further reducing fatalities. 
B) an increase in driving speed, reducing the number of accidents. 
C) a decrease in driving speed, further reducing fatalities. 
D) an increase in risky driving behavior, increasing fatalities.

Question 20

Exhibit 1-1
  
-Refer to Exhibit 1-1. If the student whose study habits are illustrated here is currently studying for the 2nd hour she should

Accepted Answer

A) cut back on the number of hours she is studying because the marginal benefit of studying for the 2nd hour is less than the marginal cost of doing so. 
B) cut back on the number of hours she is studying because the marginal benefit of studying for the 2nd hour is greater than the marginal cost of doing so. 
C) increase the number of hours she is studying because the marginal benefit of studying for the 2nd hour is less than the marginal cost of doing so. 
D) increase the number of hours she is studying because the marginal benefit of studying for the 3rd , 4th, and 5th hours is greater than the marginal cost for each of these hours. 
A) cut back on the number of hours she is studying because the marginal benefit of studying for the 2nd hour is less than the marginal cost of doing so. 
B) cut back on the number of hours she is studying because the marginal benefit of studying for the 2nd hour is greater than the marginal cost of doing so. 
C) increase the number of hours she is studying because the marginal benefit of studying for the 2nd hour is less than the marginal cost of doing so. 
D) increase the number of hours she is studying because the marginal benefit of studying for the 3rd , 4th, and 5th hours is greater than the marginal cost for each of these hours.

Exam 1: What Economics Is About

"If you hadn't gone to dinner with your friends, you would have stayed home and watched television." It follows that

Exhibit 1-2 ​ -Refer to Exhibit 1-2. According to the data provided in this table, what is the slope of the line between points A and B, if these data were graphed with X on the horizontal axis and Y on the vertical axis?

Exhibit 1-3 ​ -Refer to Exhibit 1-3. According to the data provided in this table, what is the approximate slope of the line between points C and D (if these data were graphed with X on the horizontal axis and Y on the vertical axis)?

Exhibit 1-1 -Refer to Exhibit 1-1. The student whose study habits are illustrated in this diagram will maximize the net benefits of studying when she has studied __________ hours.

The branch of economics that studies the decisions of individuals and firms is called

A rationing device is a method used to resolve who gets what of available goods and resources.

If variable X rises as a result of variable Y falling, then X and Y have an inverse relationship.

At the optimal or efficient level of an activity, the activity's marginal benefit must

Which of the following issues is most unlikely to be addressed by an economist practicing positive economics?

Explain how scarcity can exist in a relatively rich country such as the United States. Give examples to help support your answer.

How are changes in opportunity cost predicted to affect behavior?

If an economist says "the higher the price of oranges, the fewer oranges individuals will buy, ceteris paribus," this means that

Scarcity means

A theory is an abstract representation of reality. This means a theory

Some economic studies have shown that mandatory seat belt laws do not lead to a reduction in traffic fatalities.

Ceteris paribus means

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

Most states have instituted mandatory seatbelt laws to reduce traffic fatalities. An economist may point out that an unintended effect of these laws is

Exhibit 1-1 -Refer to Exhibit 1-1. If the student whose study habits are illustrated here is currently studying for the 2nd hour she should

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 1-2 -Refer to Exhibit 1-2. According to the data provided in this table, what is the slope of the line between points A and B, if these data were graphed with X on the horizontal axis and Y on the vertical axis?

Exhibit 1-3 -Refer to Exhibit 1-3. According to the data provided in this table, what is the approximate slope of the line between points C and D (if these data were graphed with X on the horizontal axis and Y on the vertical axis)?