Question 1

"The rich should pay higher income tax rates than the poor" is an example of a

Accepted Answer

A)  normative statement. 
B)  positive statement. 
C)  descriptive statement. 
D)  theoretical statement. 
A)  normative statement. 
B)  positive statement. 
C)  descriptive statement. 
D)  theoretical statement.

Question 2

"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 3

Human resources that perform the functions of organizing, managing, and assembling the other resources are called

Accepted Answer

A)  physical capital. 
B)  venture capital. 
C)  entrepreneurship. 
D)  productive capital. 
A)  physical capital. 
B)  venture capital. 
C)  entrepreneurship. 
D)  productive capital.

Question 4

Which of the following questions is a topic that would be studied by microeconomics?

Accepted Answer

A)  Why did production and the number of jobs shrink in 2009? 
B)  Will the current budget deficit affect the well-being of the next generation? 
C)  How will a lower price of digital cameras affect the quantity of cameras sold? 
D)  What is the current unemployment rate in the United States? 
A)  Why did production and the number of jobs shrink in 2009? 
B)  Will the current budget deficit affect the well-being of the next generation? 
C)  How will a lower price of digital cameras affect the quantity of cameras sold? 
D)  What is the current unemployment rate in the United States?

Question 5

-In the table above, y is measured along the y-axis and x along the x-axis. The slope of the relationship between x = 0 and x = 2 is

Accepted Answer

A)  -6. 
B)  2. 
C)  3. 
D)  6. 
A)  -6. 
B)  2. 
C)  3. 
D)  6.

Question 6

-In the above figure, if the interest rate is negatively related to household expenditures for any given level of household income, an increase in the interest rate will

Accepted Answer

A)  shift the line vertically upward. 
B)  shift the line vertically downward. 
C)  make the line negatively sloped. 
D)  cause no change in the line's position. 
A)  shift the line vertically upward. 
B)  shift the line vertically downward. 
C)  make the line negatively sloped. 
D)  cause no change in the line's position.

Question 7

-Using the above figure, the origin is at which point?

Accepted Answer

A)  point a 
B)  point b 
C)  point c 
D)  None of the points in the figure is the origin. 
A)  point a 
B)  point b 
C)  point c 
D)  None of the points in the figure is the origin.

Question 8

A cost due to an increase in activity is called

Accepted Answer

A)  an incentive loss. 
B)  a marginal cost. 
C)  a negative marginal benefit. 
D)  the total cost. 
A)  an incentive loss. 
B)  a marginal cost. 
C)  a negative marginal benefit. 
D)  the total cost.

Question 9

-Which of the following CORRECTLY describes the above figure? I) There is no relationship between the price of an avocado and a student's grade in economics.
II) The value of variable measured on the y-axis is constant as the variable measured on the x-axis increases.
III) As a student's grade in economics increases, the price of an avocado increases.

Accepted Answer

A)  I 
B)  I and II 
C)  II and III 
D)  I, II, and III 
A)  I 
B)  I and II 
C)  II and III 
D)  I, II, and III

Question 10

-In the above figure, the x-coordinate of point b is

Accepted Answer

A)  1. 
B)  2. 
C)  3. 
D)  14. 
A)  1. 
B)  2. 
C)  3. 
D)  14.

Question 11

From 8 to 11 p.m., Sam can either attend a basketball game, a hockey match or the symphony. Suppose that Sam decides to attend the hockey match and thinks to herself that if she did not go to the match she would go to the symphony. Then the opportunity cost of attending the hockey match is

Accepted Answer

A)  going to the symphony and the basketball game. 
B)  going to the symphony. 
C)  going to the basketball game. 
D)  three hours of time. 
A)  going to the symphony and the basketball game. 
B)  going to the symphony. 
C)  going to the basketball game. 
D)  three hours of time.

Question 12

The opportunity cost of attending college includes the cost of

Accepted Answer

A)  the tuition but not the job at which you would otherwise have worked. 
B)  the highest valued alternative to attending college. 
C)  the highest valued alternative to attending college plus the cost of tuition. 
D)  tuition, books, and the lost wages for the hours spent studying. 
A)  the tuition but not the job at which you would otherwise have worked. 
B)  the highest valued alternative to attending college. 
C)  the highest valued alternative to attending college plus the cost of tuition. 
D)  tuition, books, and the lost wages for the hours spent studying.

Question 13

The analysis of the behavior of individual decision-making units is the definition of

Accepted Answer

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

Question 14

What is a normative statement? Give an example.

Accepted Answer

A normative statement is a statement abo

Question 15

Scarcity is a situation in which

Accepted Answer

A)  some people are poor and others are rich. 
B)  something is being wasted. 
C)  we are unable to satisfy all our wants. 
D)  long lines form at gas stations. 
A)  some people are poor and others are rich. 
B)  something is being wasted. 
C)  we are unable to satisfy all our wants. 
D)  long lines form at gas stations.

Question 16

-In the above figure, while moving along the line showing the relationship between household income and expenditure

Accepted Answer

A)  household expenditures are held constant. 
B)  household income is held constant. 
C)  the interest rate is held constant. 
D)  no variable is held constant. 
A)  household expenditures are held constant. 
B)  household income is held constant. 
C)  the interest rate is held constant. 
D)  no variable is held constant.

Question 17

Suppose that you are spending two hours a day studying economics, and your grade is 85 percent. You want a higher grade and decide to study for an extra hour a day. As a result, your grade rises to 90 percent. Your marginal benefit is the

Accepted Answer

A)  5 point increase in your grade minus the opportunity cost to you of spending the hour studying. 
B)  extra hour per day you spend on studying. 
C)  5 point increase in your grade. 
D)  three hours per day you spend on studying. 
A)  5 point increase in your grade minus the opportunity cost to you of spending the hour studying. 
B)  extra hour per day you spend on studying. 
C)  5 point increase in your grade. 
D)  three hours per day you spend on studying.

Question 18

Whenever one variable increases, another variable decreases. The two variables are

Accepted Answer

A)  definitely related through a third variable. 
B)  negatively related. 
C)  positively related. 
D)  unrelated to each other. 
A)  definitely related through a third variable. 
B)  negatively related. 
C)  positively related. 
D)  unrelated to each other.

Question 19

The fact that wants cannot be fully satisfied with available resources reflects the definition of

Accepted Answer

A)  the what tradeoff. 
B)  scarcity. 
C)  the big tradeoff. 
D)  for whom to produce. 
A)  the what tradeoff. 
B)  scarcity. 
C)  the big tradeoff. 
D)  for whom to produce.

Question 20

A graph measures y on the vertical axis and x on the horizontal. The curve on the graph is a vertical line. From this fact we know that

Accepted Answer

A)  the value of x does not change when the value of y changes. 
B)  the value of y is constant. 
C)  the ratio of x to y is constant. 
D)  the ratio of y to x is constant. 
A)  the value of x does not change when the value of y changes. 
B)  the value of y is constant. 
C)  the ratio of x to y is constant. 
D)  the ratio of y to x is constant.

"The rich should pay higher income tax rates than the poor" is an example of a

"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.

Human resources that perform the functions of organizing, managing, and assembling the other resources are called

Which of the following questions is a topic that would be studied by microeconomics?

-In the table above, y is measured along the y-axis and x along the x-axis. The slope of the relationship between x = 0 and x = 2 is

-In the above figure, if the interest rate is negatively related to household expenditures for any given level of household income, an increase in the interest rate will

-Using the above figure, the origin is at which point?

A cost due to an increase in activity is called

-In the above figure, the x-coordinate of point b is

From 8 to 11 p.m., Sam can either attend a basketball game, a hockey match or the symphony. Suppose that Sam decides to attend the hockey match and thinks to herself that if she did not go to the match she would go to the symphony. Then the opportunity cost of attending the hockey match is

The opportunity cost of attending college includes the cost of

The analysis of the behavior of individual decision-making units is the definition of

What is a normative statement? Give an example.

Scarcity is a situation in which

-In the above figure, while moving along the line showing the relationship between household income and expenditure

Suppose that you are spending two hours a day studying economics, and your grade is 85 percent. You want a higher grade and decide to study for an extra hour a day. As a result, your grade rises to 90 percent. Your marginal benefit is the

Whenever one variable increases, another variable decreases. The two variables are

The fact that wants cannot be fully satisfied with available resources reflects the definition of

A graph measures y on the vertical axis and x on the horizontal. The curve on the graph is a vertical line. From this fact we know that

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

"The rich should pay higher income tax rates than the poor" is an example of a

"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.

Human resources that perform the functions of organizing, managing, and assembling the other resources are called

Which of the following questions is a topic that would be studied by microeconomics?

-In the table above, y is measured along the y-axis and x along the x-axis. The slope of the relationship between x = 0 and x = 2 is

-In the above figure, if the interest rate is negatively related to household expenditures for any given level of household income, an increase in the interest rate will

-Using the above figure, the origin is at which point?

A cost due to an increase in activity is called

-In the above figure, the x-coordinate of point b is

From 8 to 11 p.m., Sam can either attend a basketball game, a hockey match or the symphony. Suppose that Sam decides to attend the hockey match and thinks to herself that if she did not go to the match she would go to the symphony. Then the opportunity cost of attending the hockey match is

The opportunity cost of attending college includes the cost of

The analysis of the behavior of individual decision-making units is the definition of

What is a normative statement? Give an example.

Scarcity is a situation in which

-In the above figure, while moving along the line showing the relationship between household income and expenditure

Suppose that you are spending two hours a day studying economics, and your grade is 85 percent. You want a higher grade and decide to study for an extra hour a day. As a result, your grade rises to 90 percent. Your marginal benefit is the

Whenever one variable increases, another variable decreases. The two variables are

The fact that wants cannot be fully satisfied with available resources reflects the definition of

A graph measures y on the vertical axis and x on the horizontal. The curve on the graph is a vertical line. From this fact we know that

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