Question 1

The "gifts of nature" are included as part of which factor of production?

Accepted Answer

A)  labor 
B)  land 
C)  capital 
D)  entrepreneurship 
A)  labor 
B)  land 
C)  capital 
D)  entrepreneurship

Question 2

In a graph, a line has a negative slope if

Accepted Answer

A)  the line is vertical. 
B)  the line is horizontal. 
C)  the line rises from right to left. 
D)  the line rises from left to right. 
A)  the line is vertical. 
B)  the line is horizontal. 
C)  the line rises from right to left. 
D)  the line rises from left to right.

Question 3

Economists point out that scarcity confronts

Accepted Answer

A)  neither the poor nor the rich. 
B)  the poor but not the rich. 
C)  the rich but not the poor. 
D)  both the poor and the rich. 
A)  neither the poor nor the rich. 
B)  the poor but not the rich. 
C)  the rich but not the poor. 
D)  both the poor and the rich.

Question 4

The faster an automobile is driven (speed), the lower the miles per gallon (mpg) for that automobile. Given this information, we say that an automobile's speed and mpg have

Accepted Answer

A)  a direct relationship. 
B)  an inverse relationship. 
C)  a linear relationship. 
D)  a maximum relationship. 
A)  a direct relationship. 
B)  an inverse relationship. 
C)  a linear relationship. 
D)  a maximum relationship.

Question 5

Which of the following is CORRECT? Factors of production are

Accepted Answer

A)  land, labor, the price system, and capital. 
B)  the inputs used to produce goods and services. 
C)  the fundamental source of abundance. 
D)  only land and labor. 
A)  land, labor, the price system, and capital. 
B)  the inputs used to produce goods and services. 
C)  the fundamental source of abundance. 
D)  only land and labor.

Question 6

What is a tradeoff? Give an example.

Accepted Answer

A tradeoff occurs when one thing must be

Question 7

-The slope of the line in the above figure is

Accepted Answer

A)  -10. 
B)  10. 
C)  5. 
D)  -5. 
A)  -10. 
B)  10. 
C)  5. 
D)  -5.

Question 8

According to Adam Smith

Accepted Answer

A)  government intervention in markets is not desirable because an invisible hand leads decisions made in pursuit of self-interest to unintentionally promote the social interest. 
B)  politicians are well-equipped to regulate corporations and intervene in markets to improve market outcomes. 
C)  when big corporations pursue their self-interest of maximum profit, they will inevitably conflict with social interest. 
D)  in a market transaction buyers can either get what they want for less than they would be willing to pay or sellers can earn a profit, but both buyers and sellers can't gain simultaneously. 
A)  government intervention in markets is not desirable because an invisible hand leads decisions made in pursuit of self-interest to unintentionally promote the social interest. 
B)  politicians are well-equipped to regulate corporations and intervene in markets to improve market outcomes. 
C)  when big corporations pursue their self-interest of maximum profit, they will inevitably conflict with social interest. 
D)  in a market transaction buyers can either get what they want for less than they would be willing to pay or sellers can earn a profit, but both buyers and sellers can't gain simultaneously.

Question 9

"The difference between positive and normative statements is that a positive statement is always true while a normative statement might or might not be true." True or false? Explain.

Accepted Answer

A) True 
 B)False

Question 10

A linear relationship

Accepted Answer

A)  always has a maximum. 
B)  always has a constant slope. 
C)  always slopes up to the right. 
D)  never has a constant slope. 
A)  always has a maximum. 
B)  always has a constant slope. 
C)  always slopes up to the right. 
D)  never has a constant slope.

Question 11

The value of the x-coordinate of a point in a graph is the length of a line from the point to the

Accepted Answer

A)  origin. 
B)  scalar. 
C)  x-axis. 
D)  y-axis. 
A)  origin. 
B)  scalar. 
C)  x-axis. 
D)  y-axis.

Question 12

Panasonic sends its HDTV salespeople to training sessions. This is an example of

Accepted Answer

A)  a macroeconomic decision. 
B)  scarcity. 
C)  a firm investing in workers' human capital. 
D)  entrepreneurship. 
A)  a macroeconomic decision. 
B)  scarcity. 
C)  a firm investing in workers' human capital. 
D)  entrepreneurship.

Question 13

Which of the following is a normative statement?

Accepted Answer

A)  The United States has a comparative advantage compared to the European Union in the production of wheat. 
B)  The main reason why the United States has a trade deficit with China is because China's trade practices are unfair. 
C)  Both these statements are normative. 
D)  Neither of these statements is normative. 
A)  The United States has a comparative advantage compared to the European Union in the production of wheat. 
B)  The main reason why the United States has a trade deficit with China is because China's trade practices are unfair. 
C)  Both these statements are normative. 
D)  Neither of these statements is normative.

Question 14

Which of the following is a normative statement?

Accepted Answer

A)  The price of candy bars is $1.25 each. 
B)  Candy bars are more expensive than newspapers. 
C)  You should eat less candy. 
D)  Popcorn and candy are sold in movie theaters. 
A)  The price of candy bars is $1.25 each. 
B)  Candy bars are more expensive than newspapers. 
C)  You should eat less candy. 
D)  Popcorn and candy are sold in movie theaters.

Question 15

In broad terms the difference between microeconomics and macroeconomics is that

Accepted Answer

A)  they use different sets of tools and ideas. 
B)  microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy. 
C)  macroeconomics studies the effects of government regulation and taxes on the price of individual goods and services whereas microeconomics does not. 
D)  microeconomics studies the effects of government taxes on the national unemployment rate. 
A)  they use different sets of tools and ideas. 
B)  microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy. 
C)  macroeconomics studies the effects of government regulation and taxes on the price of individual goods and services whereas microeconomics does not. 
D)  microeconomics studies the effects of government taxes on the national unemployment rate.

Question 16

The study of economics

Accepted Answer

A)  focuses mainly on individual consumers. 
B)  arises from the fact that our wants exceed available resources. 
C)  recognizes that scarcity does not affect rich nations. 
D)  deals mainly with microeconomics. 
A)  focuses mainly on individual consumers. 
B)  arises from the fact that our wants exceed available resources. 
C)  recognizes that scarcity does not affect rich nations. 
D)  deals mainly with microeconomics.

Question 17

The slope of a positive relationship is

Accepted Answer

A)  positive. 
B)  undefined. 
C)  positive to the right of the maximum point and negative to the left. 
D)  constant as long as the relationship is nonlinear. 
A)  positive. 
B)  undefined. 
C)  positive to the right of the maximum point and negative to the left. 
D)  constant as long as the relationship is nonlinear.

Question 18

What is the difference between microeconomics and macroeconomics? Give an example of an issue each studies.

Accepted Answer

Essentially microeconomics studies indiv

Question 19

During the summer you have made the decision to attend summer school, which prevents you from working at your usual summer job in which you normally earn $6,000 for the summer. Your tuition cost is $3,000 and books and supplies cost $1,300. In terms of dollars, the opportunity cost of attending summer school is

Accepted Answer

A)  $10,300. 
B)  $6,000. 
C)  $4,300. 
D)  $3,300. 
A)  $10,300. 
B)  $6,000. 
C)  $4,300. 
D)  $3,300.

Question 20

-In the above figure, if household consumption is positively related to household income, then an increase in household income will

Accepted Answer

A)  shift the line rightward. 
B)  shift the line leftward. 
C)  make the line positively sloped. 
D)  cause a movement along the line. 
A)  shift the line rightward. 
B)  shift the line leftward. 
C)  make the line positively sloped. 
D)  cause a movement along the line.

The "gifts of nature" are included as part of which factor of production?

In a graph, a line has a negative slope if

Economists point out that scarcity confronts

The faster an automobile is driven (speed), the lower the miles per gallon (mpg) for that automobile. Given this information, we say that an automobile's speed and mpg have

Which of the following is CORRECT? Factors of production are

What is a tradeoff? Give an example.

-The slope of the line in the above figure is

According to Adam Smith

"The difference between positive and normative statements is that a positive statement is always true while a normative statement might or might not be true." True or false? Explain.

A linear relationship

The value of the x-coordinate of a point in a graph is the length of a line from the point to the

Panasonic sends its HDTV salespeople to training sessions. This is an example of

Which of the following is a normative statement?

Which of the following is a normative statement?

In broad terms the difference between microeconomics and macroeconomics is that

The study of economics

The slope of a positive relationship is

What is the difference between microeconomics and macroeconomics? Give an example of an issue each studies.

-In the above figure, if household consumption is positively related to household income, then an increase in household income will

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 1: What Is Economics

The "gifts of nature" are included as part of which factor of production?

In a graph, a line has a negative slope if

Economists point out that scarcity confronts

The faster an automobile is driven (speed), the lower the miles per gallon (mpg) for that automobile. Given this information, we say that an automobile's speed and mpg have

Which of the following is CORRECT? Factors of production are

What is a tradeoff? Give an example.

-The slope of the line in the above figure is

According to Adam Smith

"The difference between positive and normative statements is that a positive statement is always true while a normative statement might or might not be true." True or false? Explain.

A linear relationship

The value of the x-coordinate of a point in a graph is the length of a line from the point to the

Panasonic sends its HDTV salespeople to training sessions. This is an example of

Which of the following is a normative statement?

Which of the following is a normative statement?

In broad terms the difference between microeconomics and macroeconomics is that

The study of economics

The slope of a positive relationship is

What is the difference between microeconomics and macroeconomics? Give an example of an issue each studies.

-In the above figure, if household consumption is positively related to household income, then an increase in household income will

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters