Question 1

-As a firm produces more and more DVDs, the average cost of producing each DVD falls. A curve showing the behavior of the average cost of a DVD as more DVDs are produced

Accepted Answer

A)  would be positively and then negatively sloped. 
B)  would be positively sloped. 
C)  would be horizontal. 
D)  would be negatively sloped. 
A)  would be positively and then negatively sloped. 
B)  would be positively sloped. 
C)  would be horizontal. 
D)  would be negatively sloped.

Question 2

Which of the following is NOT a factor of production?

Accepted Answer

A)  the water used to cool a nuclear power plant 
B)  the effort of farmers raising cattle 
C)  the wages paid to workers 
D)  the management skill of a small business owner 
A)  the water used to cool a nuclear power plant 
B)  the effort of farmers raising cattle 
C)  the wages paid to workers 
D)  the management skill of a small business owner

Question 3

Studying the determination of prices in individual markets is primarily a concern of

Accepted Answer

A)  positive economics. 
B)  negative economics. 
C)  macroeconomics. 
D)  microeconomics. 
A)  positive economics. 
B)  negative economics. 
C)  macroeconomics. 
D)  microeconomics.

Question 4

If the government raises the tax on cigarettes, what is the effect on people's incentives and choices?

Accepted Answer

The government raises the tax on cigaret

Question 5

If two variables both increase at the same time or decrease at the same time, they are

Accepted Answer

A)  unrelated to each other. 
B)  positively related. 
C)  negatively related. 
D)  conversely related. 
A)  unrelated to each other. 
B)  positively related. 
C)  negatively related. 
D)  conversely related.

Question 6

Which of the following is NOT an example of an opportunity cost?

Accepted Answer

A)  By spending Thursday night studying for an economics exam, a student was unable to complete a homework assignment for calculus class. 
B)  Because David used all of his vacation time to paint his house, he was unable to visit the Caribbean last year. 
C)  Because Mary is now being paid a higher wage, she can afford to buy a new car even though she is moving into a bigger apartment. 
D)  By choosing to attend college, Jean was not able to continue working as an electrician; as a result, she gave up more than $85,000 in earnings while she was in college. 
A)  By spending Thursday night studying for an economics exam, a student was unable to complete a homework assignment for calculus class. 
B)  Because David used all of his vacation time to paint his house, he was unable to visit the Caribbean last year. 
C)  Because Mary is now being paid a higher wage, she can afford to buy a new car even though she is moving into a bigger apartment. 
D)  By choosing to attend college, Jean was not able to continue working as an electrician; as a result, she gave up more than $85,000 in earnings while she was in college.

Question 7

Fred and Ann are both given free tickets to see a movie. Both decide to see the same movie. We know that

Accepted Answer

A)  both bear an opportunity cost of seeing the movie because they could have done other things instead of seeing the movie. 
B)  both bear the same opportunity cost of seeing the movie because they are doing the same thing. 
C)  it is not possible to calculate the opportunity cost of seeing the movie because the tickets were free. 
D)  the opportunity cost of seeing the movie is zero because the tickets were free. 
A)  both bear an opportunity cost of seeing the movie because they could have done other things instead of seeing the movie. 
B)  both bear the same opportunity cost of seeing the movie because they are doing the same thing. 
C)  it is not possible to calculate the opportunity cost of seeing the movie because the tickets were free. 
D)  the opportunity cost of seeing the movie is zero because the tickets were free.

Question 8

Fundamental economic problems basically arise from

Accepted Answer

A)  the fact that society has more than it needs. 
B)  turmoil in the stock market. 
C)  the unequal distribution of income. 
D)  our wants exceeding our scarce resources. 
A)  the fact that society has more than it needs. 
B)  turmoil in the stock market. 
C)  the unequal distribution of income. 
D)  our wants exceeding our scarce resources.

Question 9

Factors of production include

Accepted Answer

A)  the economic system. 
B)  land, labor, capital and entrepreneurship. 
C)  labor and capital (not land, which is fixed). 
D)  only capital, land, and labor. 
A)  the economic system. 
B)  land, labor, capital and entrepreneurship. 
C)  labor and capital (not land, which is fixed). 
D)  only capital, land, and labor.

Question 10

-"As interest rates rise, people save more money." A graph displaying this relationship would show

Accepted Answer

A)  an inverse relationship. 
B)  a positive relationship. 
C)  a cross-section graph. 
D)  a positive then a negative relationship. 
A)  an inverse relationship. 
B)  a positive relationship. 
C)  a cross-section graph. 
D)  a positive then a negative relationship.

Question 11

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 12

Scarcity exists because

Accepted Answer

A)  society and people are greedy and wasteful. 
B)  our wants exceed the resources available to satisfy them. 
C)  of the inefficient choices we make. 
D)  poor people need more food and other goods. 
A)  society and people are greedy and wasteful. 
B)  our wants exceed the resources available to satisfy them. 
C)  of the inefficient choices we make. 
D)  poor people need more food and other goods.

Question 13

-The above figure shows the relationship between the Joneses' total consumption and total household income. The figure illustrates that the Joneses' total consumption varies

Accepted Answer

A)  directly with their total household income. 
B)  independently of their total household income. 
C)  inversely with their total household income. 
D)  negatively with their income. 
A)  directly with their total household income. 
B)  independently of their total household income. 
C)  inversely with their total household income. 
D)  negatively with their income.

Question 14

An analyst on a local news channel argues that the recent corporate scandals "demonstrated very clearly that self interest always contradicts social interest." Do you agree or disagree? Substantiate your answer.

Accepted Answer

You should disagree. The recent corporat

Question 15

-In the above figure, the axis breaks are used

Accepted Answer

A)  to create a misleading graph. 
B)  to indicate that there are jumps from the origin, 0, to the first values recorded along the axes. 
C)  to indicate that there are not enough data to be included in the graph. 
D)  to show that there are no data available for the omitted ranges. 
A)  to create a misleading graph. 
B)  to indicate that there are jumps from the origin, 0, to the first values recorded along the axes. 
C)  to indicate that there are not enough data to be included in the graph. 
D)  to show that there are no data available for the omitted ranges.

Question 16

What is a tradeoff? Give an example.

Accepted Answer

A tradeoff occurs when one thing must be

Question 17

-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.

Question 18

-The slope of the line shown in the above figure is

Accepted Answer

A)  -1/3. 
B)  -5. 
C)  -1. 
D)  -3. 
A)  -1/3. 
B)  -5. 
C)  -1. 
D)  -3.

Question 19

In evaluating a relationship between x and y, ceteris paribus means other variables

Accepted Answer

A)  are not relevant to x and y. 
B)  move in opposite directions to x and y. 
C)  are not changing while x and y change. 
D)  move in the same direction as x and y. 
A)  are not relevant to x and y. 
B)  move in opposite directions to x and y. 
C)  are not changing while x and y change. 
D)  move in the same direction as x and y.

Question 20

When an economy produces more houses and fewer typewriters, it is answering the ________ part of one of the two big economic questions.

Accepted Answer

A)  "what" 
B)  "how" 
C)  "where" 
D)  "for whom" 
A)  "what" 
B)  "how" 
C)  "where" 
D)  "for whom"

-As a firm produces more and more DVDs, the average cost of producing each DVD falls. A curve showing the behavior of the average cost of a DVD as more DVDs are produced

Which of the following is NOT a factor of production?

Studying the determination of prices in individual markets is primarily a concern of

If the government raises the tax on cigarettes, what is the effect on people's incentives and choices?

If two variables both increase at the same time or decrease at the same time, they are

Which of the following is NOT an example of an opportunity cost?

Fred and Ann are both given free tickets to see a movie. Both decide to see the same movie. We know that

Fundamental economic problems basically arise from

Factors of production include

-"As interest rates rise, people save more money." A graph displaying this relationship would show

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

Scarcity exists because

-The above figure shows the relationship between the Joneses' total consumption and total household income. The figure illustrates that the Joneses' total consumption varies

An analyst on a local news channel argues that the recent corporate scandals "demonstrated very clearly that self interest always contradicts social interest." Do you agree or disagree? Substantiate your answer.

-In the above figure, the axis breaks are used

What is a tradeoff? Give an example.

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

-The slope of the line shown in the above figure is

In evaluating a relationship between x and y, ceteris paribus means other variables

When an economy produces more houses and fewer typewriters, it is answering the ________ part of one of the two big economic questions.

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

-As a firm produces more and more DVDs, the average cost of producing each DVD falls. A curve showing the behavior of the average cost of a DVD as more DVDs are produced

Which of the following is NOT a factor of production?

Studying the determination of prices in individual markets is primarily a concern of

If the government raises the tax on cigarettes, what is the effect on people's incentives and choices?

If two variables both increase at the same time or decrease at the same time, they are

Which of the following is NOT an example of an opportunity cost?

Fred and Ann are both given free tickets to see a movie. Both decide to see the same movie. We know that

Fundamental economic problems basically arise from

Factors of production include

-"As interest rates rise, people save more money." A graph displaying this relationship would show

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

Scarcity exists because

-The above figure shows the relationship between the Joneses' total consumption and total household income. The figure illustrates that the Joneses' total consumption varies

An analyst on a local news channel argues that the recent corporate scandals "demonstrated very clearly that self interest always contradicts social interest." Do you agree or disagree? Substantiate your answer.

-In the above figure, the axis breaks are used

What is a tradeoff? Give an example.

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

-The slope of the line shown in the above figure is

In evaluating a relationship between x and y, ceteris paribus means other variables

When an economy produces more houses and fewer typewriters, it is answering the ________ part of one of the two big economic questions.

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