Question 1

-What does the slope of the line shown in the above figure equal?

Accepted Answer

The slope equals the change in variable on the y-axis divided by the change in the variable on the x-axis, or (5 - 10)/(60 - 100) = 0.125.

Question 2

-What does the slope of the line shown in the above figure equal?

Accepted Answer

The slope equals the change in variable on the y-axis divided by the change in the variable on the x-axis, or (150 - 300)/(600 - 800) = 0.75.

Question 3

A graph of two variables is a vertical line. What is the interpretation of this result?

Accepted Answer

When the graph of two variables is a vertical line, the variables are not related because, with this graph, whenever the variable measured along the vertical axis changes, the variable measured along the horizontal axis does not change.

Question 4

-The slope of the line in the above figure is

Accepted Answer

A)  2/5 = 0.4. 
B)  5/2 = 2.5. 
C)  -2/5 = -0.4. 
D)  -5/2 = -2.5. 
A)  2/5 = 0.4. 
B)  5/2 = 2.5. 
C)  -2/5 = -0.4. 
D)  -5/2 = -2.5.

Question 5

A store remains open from 8 a.m. to 4 p.m. each weekday. The store owner is deciding whether to stay open an extra hour each evening. The owner's marginal benefit

Accepted Answer

A)  is the benefit the owner receives from staying open from 8 a.m. to 5 p.m. 
B)  depends on the revenues the owner makes during the day. 
C)  must be greater than or equal to the owner's marginal cost if the owner decides to stay open. 
D)  is the benefit the owner receives from staying open from 8 a.m. to 6 p.m. 
A)  is the benefit the owner receives from staying open from 8 a.m. to 5 p.m. 
B)  depends on the revenues the owner makes during the day. 
C)  must be greater than or equal to the owner's marginal cost if the owner decides to stay open. 
D)  is the benefit the owner receives from staying open from 8 a.m. to 6 p.m.

Question 6

Which factor of production earns most income in the United States?

Accepted Answer

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

Question 7

People must make choices because

Accepted Answer

A)  most people enjoy shopping. 
B)  of scarcity. 
C)  there are many goods available. 
D)  None of the above answers is correct. 
A)  most people enjoy shopping. 
B)  of scarcity. 
C)  there are many goods available. 
D)  None of the above answers is correct.

Question 8

Which of the following is a positive statement?

Accepted Answer

A)  State lotteries are good methods to use for raising revenues. 
B)  Increased prison sentences are the best way to reduce the crime rate. 
C)  An increase in gas prices leads people to car pool more. 
D)  Inflation is a more serious problem than is deflation. 
A)  State lotteries are good methods to use for raising revenues. 
B)  Increased prison sentences are the best way to reduce the crime rate. 
C)  An increase in gas prices leads people to car pool more. 
D)  Inflation is a more serious problem than is deflation.

Question 9

Along a straight line, when x equals 90, then y equals 30. When x equals 120, then y equals 40. The slope of the straight line is

Accepted Answer

A)  1/3. 
B)  -1/3. 
C)  3. 
D)  -3. 
A)  1/3. 
B)  -1/3. 
C)  3. 
D)  -3.

Question 10

Statements about what ought to be are called

Accepted Answer

A)  positive statements. 
B)  normative statements. 
C)  assumptions. 
D)  implications. 
A)  positive statements. 
B)  normative statements. 
C)  assumptions. 
D)  implications.

Question 11

Entrepreneurs do all of the following EXCEPT

Accepted Answer

A)  organize labor, land, and capital. 
B)  come up with new ideas about what and how to produce. 
C)  bear risk from business decisions. 
D)  own all the other resources used in the production process. 
A)  organize labor, land, and capital. 
B)  come up with new ideas about what and how to produce. 
C)  bear risk from business decisions. 
D)  own all the other resources used in the production process.

Question 12

In part, microeconomics is concerned with the study of

Accepted Answer

A)  unemployment and economic growth. 
B)  the Federal Reserve's policies. 
C)  the effect government regulation has on the price of a product. 
D)  national output of goods and services. 
A)  unemployment and economic growth. 
B)  the Federal Reserve's policies. 
C)  the effect government regulation has on the price of a product. 
D)  national output of goods and services.

Question 13

Why do economists use graphs?

Accepted Answer

Graphs help economists, and others, to v

Question 14

Your employer has asked you to start working overtime and has offered to pay $18 per hour for every hour you work beyond forty hours a week. The wage rate for each of the first forty hours will continue to be the usual $15 per hour. In terms of dollars, what is the marginal benefit of working each hour of overtime?

Accepted Answer

A)  zero 
B)  $3.00 
C)  $15.00 
D)  $18.00 
A)  zero 
B)  $3.00 
C)  $15.00 
D)  $18.00

Question 15

Laura is a manager for HP. When Laura must decide whether to produce a few additional printers, she is choosing at the margin when she compares

Accepted Answer

A)  the total revenue from sales of printers to the total cost of producing all the printers. 
B)  the extra revenue from selling a few additional printers to the extra costs of producing the printers. 
C)  the extra revenue from selling a few additional printers to the average cost of producing the additional printers. 
D)  HP's printers to printers from competing companies, such as Lexmark. 
A)  the total revenue from sales of printers to the total cost of producing all the printers. 
B)  the extra revenue from selling a few additional printers to the extra costs of producing the printers. 
C)  the extra revenue from selling a few additional printers to the average cost of producing the additional printers. 
D)  HP's printers to printers from competing companies, such as Lexmark.

Question 16

Economics is best defined as the science of choice and how people cope with

Accepted Answer

A)  differences in wants. 
B)  differences in needs. 
C)  scarcity. 
D)  different economic systems. 
A)  differences in wants. 
B)  differences in needs. 
C)  scarcity. 
D)  different economic systems.

Question 17

Marginal cost is the cost

Accepted Answer

A)  that your activity imposes on someone else. 
B)  that arises from an increase in an activity. 
C)  of an activity that exceeds its benefit. 
D)  that arises from the secondary effects of an activity. 
A)  that your activity imposes on someone else. 
B)  that arises from an increase in an activity. 
C)  of an activity that exceeds its benefit. 
D)  that arises from the secondary effects of an activity.

Question 18

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 19

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 20

What do economists mean when they discuss "scarcity"?

Accepted Answer

Scarcity occurs whenever people's wants

-What does the slope of the line shown in the above figure equal?

-What does the slope of the line shown in the above figure equal?

A graph of two variables is a vertical line. What is the interpretation of this result?

-The slope of the line in the above figure is

A store remains open from 8 a.m. to 4 p.m. each weekday. The store owner is deciding whether to stay open an extra hour each evening. The owner's marginal benefit

Which factor of production earns most income in the United States?

People must make choices because

Which of the following is a positive statement?

Along a straight line, when x equals 90, then y equals 30. When x equals 120, then y equals 40. The slope of the straight line is

Statements about what ought to be are called

Entrepreneurs do all of the following EXCEPT

In part, microeconomics is concerned with the study of

Why do economists use graphs?

Laura is a manager for HP. When Laura must decide whether to produce a few additional printers, she is choosing at the margin when she compares

Economics is best defined as the science of choice and how people cope with

Marginal cost is the cost

Which of the following is a normative statement?

Which of the following is a normative statement?

What do economists mean when they discuss "scarcity"?

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 1: What Is Economics

-What does the slope of the line shown in the above figure equal?

-What does the slope of the line shown in the above figure equal?

A graph of two variables is a vertical line. What is the interpretation of this result?

-The slope of the line in the above figure is

A store remains open from 8 a.m. to 4 p.m. each weekday. The store owner is deciding whether to stay open an extra hour each evening. The owner's marginal benefit

Which factor of production earns most income in the United States?

People must make choices because

Which of the following is a positive statement?

Along a straight line, when x equals 90, then y equals 30. When x equals 120, then y equals 40. The slope of the straight line is

Statements about what ought to be are called

Entrepreneurs do all of the following EXCEPT

In part, microeconomics is concerned with the study of

Why do economists use graphs?

Laura is a manager for HP. When Laura must decide whether to produce a few additional printers, she is choosing at the margin when she compares

Economics is best defined as the science of choice and how people cope with

Marginal cost is the cost

Which of the following is a normative statement?

Which of the following is a normative statement?

What do economists mean when they discuss "scarcity"?

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters