Question 1

In which of the following cases is the slope of a line positive?

Accepted Answer

A)  As x increases, y increases. 
B)  As x increases, y decreases. 
C)  As x increases, y remains the same. 
D)  As x increases, y equals a positive number. 
A)  As x increases, y increases. 
B)  As x increases, y decreases. 
C)  As x increases, y remains the same. 
D)  As x increases, y equals a positive number.

Question 2

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

Accepted Answer

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

Question 3

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 4

Assume that the quantity consumed of pizza is dependent on three factors: the price of a pizza, the income of pizza purchasers, and consumers' taste for pizza. When graphing the relationship between the price of a pizza and the quantity of pizza consumed

Accepted Answer

A)  the price of a pizza and the income of pizza consumers are the only variables that are allowed to change. 
B)  the price of pizza and quantity consumed of pizza are the only variables that are allowed to change. 
C)  consumers' taste for pizza and the income of pizza purchasers are the only variables that are allowed to change. 
D)  None of the above answers are correct. 
A)  the price of a pizza and the income of pizza consumers are the only variables that are allowed to change. 
B)  the price of pizza and quantity consumed of pizza are the only variables that are allowed to change. 
C)  consumers' taste for pizza and the income of pizza purchasers are the only variables that are allowed to change. 
D)  None of the above answers are correct.

Question 5

"Government should act to reduce poverty levels."

Accepted Answer

A)  This statement is a normative statement. 
B)  This statement is a positive statement. 
C)  This statement is an example of the fallacy of composition. 
D)  This statement is an example of the post hoc fallacy. 
A)  This statement is a normative statement. 
B)  This statement is a positive statement. 
C)  This statement is an example of the fallacy of composition. 
D)  This statement is an example of the post hoc fallacy.

Question 6

-In the above figure, the axis break in the x-axis

Accepted Answer

A)  reflects the fact that for the years covered in the figure, the unemployment rate was never less than 3 percent. 
B)  shows that there is no relationship between inflation and unemployment. 
C)  misleadingly shows that inflation has changed very little even though the unemployment rate has increased a great deal. 
D)  implies that for the years covered in the figure, the inflation rate was always greater than 1 percent. 
A)  reflects the fact that for the years covered in the figure, the unemployment rate was never less than 3 percent. 
B)  shows that there is no relationship between inflation and unemployment. 
C)  misleadingly shows that inflation has changed very little even though the unemployment rate has increased a great deal. 
D)  implies that for the years covered in the figure, the inflation rate was always greater than 1 percent.

Question 7

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

Accepted Answer

A)  the value of x never changes. 
B)  the value of y does not depend on the value of x. 
C)  the ratio of x to y is constant. 
D)  the slope of the line is not defined because y never changes. 
A)  the value of x never changes. 
B)  the value of y does not depend on the value of x. 
C)  the ratio of x to y is constant. 
D)  the slope of the line is not defined because y never changes.

Question 8

Scarcity applies to both the rich and the poor.

Accepted Answer

A) True 
 B)False

Question 9

-The slope of the line in the above figure is

Accepted Answer

A)  -4. 
B)  -2.5. 
C)  -1.0. 
D)  1.0. 
A)  -4. 
B)  -2.5. 
C)  -1.0. 
D)  1.0.

Question 10

-Given the information in the above table, the relationship between x and y is

Accepted Answer

A)  positive, and the curve becomes flatter as x increases. 
B)  positive, and the curve becomes steeper as x increases. 
C)  positive and linear. 
D)  negative and linear. 
A)  positive, and the curve becomes flatter as x increases. 
B)  positive, and the curve becomes steeper as x increases. 
C)  positive and linear. 
D)  negative and linear.

Question 11

-In the above figure, the relationship between the tax rate and tax revenue is positive and becoming less steep between tax rates of

Accepted Answer

A)  0 percent and 30 percent. 
B)  30 percent and 100 percent. 
C)  0 percent and 100 percent. 
D)  None of the above answers are correct. 
A)  0 percent and 30 percent. 
B)  30 percent and 100 percent. 
C)  0 percent and 100 percent. 
D)  None of the above answers are correct.

Question 12

If Taco Bell decides to produce more tacos and fewer burritos, Taco Bell is answering the ________ part of one of the two big economic questions.

Accepted Answer

A)  "what" 
B)  "why" 
C)  "when" 
D)  "scarcity" 
A)  "what" 
B)  "why" 
C)  "when" 
D)  "scarcity"

Question 13

Marginal benefit is the benefit

Accepted Answer

A)  that your activity provides to someone else. 
B)  of an activity that exceeds its cost. 
C)  that arises from the secondary effects of an activity. 
D)  that arises from an increase in an activity. 
A)  that your activity provides to someone else. 
B)  of an activity that exceeds its cost. 
C)  that arises from the secondary effects of an activity. 
D)  that arises from an increase in an activity.

Question 14

Samantha goes to college to become an engineer. This is an example of an

Accepted Answer

A)  investment in physical capital. 
B)  investment in human capital. 
C)  increase in entrepreneurship. 
D)  increase in labor. 
A)  investment in physical capital. 
B)  investment in human capital. 
C)  increase in entrepreneurship. 
D)  increase in labor.

Question 15

The horizontal axis in a graph

Accepted Answer

A)  measures time in a scatter diagram. 
B)  measures the quality of a variable. 
C)  is named the y-axis. 
D)  is named the x-axis. 
A)  measures time in a scatter diagram. 
B)  measures the quality of a variable. 
C)  is named the y-axis. 
D)  is named the x-axis.

Question 16

What are the two different types of relationships that variables can have? Explain each. What do these relationships look like when they are graphed?

Accepted Answer

Variables can have two relationships: po

Question 17

In economics, positive statements are about

Accepted Answer

A)  the way things ought to be. 
B)  the way things are. 
C)  macroeconomics, not microeconomics. 
D)  microeconomics, not macroeconomics. 
A)  the way things ought to be. 
B)  the way things are. 
C)  macroeconomics, not microeconomics. 
D)  microeconomics, not macroeconomics.

Question 18

The graph of two variables, x and y, is a horizontal line. This result indicates that x and y are

Accepted Answer

A)  positively related. 
B)  negatively related. 
C)  not related. 
D)  falsely related. 
A)  positively related. 
B)  negatively related. 
C)  not related. 
D)  falsely related.

Question 19

The study of the decisions of individual units in the economy is known as

Accepted Answer

A)  macroeconomics. 
B)  microeconomics. 
C)  the study of incentives. 
D)  ceteris paribus study. 
A)  macroeconomics. 
B)  microeconomics. 
C)  the study of incentives. 
D)  ceteris paribus study.

Question 20

Suppose Canon Inc. decided to invest 45 billion yen in developing and launching a new model of its digital camera, expecting that it will bring additional sales of 60 billion yen. The company has already invested 38 billion yen when the marketing department suddenly finds out that the introduction of a similar camera by Sony will reduce Canon's expected additional sales to 30 billion yen. The company's management is trying to decide whether to continue investing in the new product or close the project. Canon hires you as an economic consultant. So, think like an economist to help the company's management make their decision:
a) At this point in time, what is Canon's marginal cost of introducing the new product?
b) What is Canon's marginal benefit from introducing the new product?
c) Will you advise Canon to finish the project and introduce the new product? Why or why not? What principles of economic thinking will help you analyze the situation and make the right choice?

Accepted Answer

a) Canon's marginal cost is the addition

In which of the following cases is the slope of a line positive?

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

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

Assume that the quantity consumed of pizza is dependent on three factors: the price of a pizza, the income of pizza purchasers, and consumers' taste for pizza. When graphing the relationship between the price of a pizza and the quantity of pizza consumed

"Government should act to reduce poverty levels."

-In the above figure, the axis break in the x-axis

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

Scarcity applies to both the rich and the poor.

-The slope of the line in the above figure is

-Given the information in the above table, the relationship between x and y is

-In the above figure, the relationship between the tax rate and tax revenue is positive and becoming less steep between tax rates of

If Taco Bell decides to produce more tacos and fewer burritos, Taco Bell is answering the ________ part of one of the two big economic questions.

Marginal benefit is the benefit

Samantha goes to college to become an engineer. This is an example of an

The horizontal axis in a graph

What are the two different types of relationships that variables can have? Explain each. What do these relationships look like when they are graphed?

In economics, positive statements are about

The graph of two variables, x and y, is a horizontal line. This result indicates that x and y are

The study of the decisions of individual units in the economy is known as

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

In which of the following cases is the slope of a line positive?

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

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

Assume that the quantity consumed of pizza is dependent on three factors: the price of a pizza, the income of pizza purchasers, and consumers' taste for pizza. When graphing the relationship between the price of a pizza and the quantity of pizza consumed

"Government should act to reduce poverty levels."

-In the above figure, the axis break in the x-axis

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

Scarcity applies to both the rich and the poor.

-The slope of the line in the above figure is

-Given the information in the above table, the relationship between x and y is

-In the above figure, the relationship between the tax rate and tax revenue is positive and becoming less steep between tax rates of

If Taco Bell decides to produce more tacos and fewer burritos, Taco Bell is answering the ________ part of one of the two big economic questions.

Marginal benefit is the benefit

Samantha goes to college to become an engineer. This is an example of an

The horizontal axis in a graph

What are the two different types of relationships that variables can have? Explain each. What do these relationships look like when they are graphed?

In economics, positive statements are about

The graph of two variables, x and y, is a horizontal line. This result indicates that x and y are

The study of the decisions of individual units in the economy is known as

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