Question 1

Which of the following is an example of a microeconomic decision?

Accepted Answer

A)  an individual deciding how to allocate the time he or she has for work and leisure 
B)  a small shoe factory deciding how much leather to purchase for the next quarter's production need 
C)  a multinational company deciding where to relocate its world headquarter 
D)  All of the above answers are correct. 
A)  an individual deciding how to allocate the time he or she has for work and leisure 
B)  a small shoe factory deciding how much leather to purchase for the next quarter's production need 
C)  a multinational company deciding where to relocate its world headquarter 
D)  All of the above answers are correct.

Question 2

Which of the following is a positive statement?

Accepted Answer

A)  Our planet is warming because of an increased carbon dioxide buildup in the atmosphere. 
B)  A minimum wage of $7.50 per hour is a shame for a rich country like the United States. 
C)  Both these statements are positive. 
D)  Neither of these statements is positive. 
A)  Our planet is warming because of an increased carbon dioxide buildup in the atmosphere. 
B)  A minimum wage of $7.50 per hour is a shame for a rich country like the United States. 
C)  Both these statements are positive. 
D)  Neither of these statements is positive.

Question 3

-In the above figure, while drawing the line showing the relationship between the price of a pound of peanuts and the quantity sold, the

Accepted Answer

A)  price of a pound of pecans is held constant. 
B)  price of a pound of peanuts is held constant. 
C)  quantity of peanuts that farmers supply is constant. 
D)  Both answers A and B are true. 
A)  price of a pound of pecans is held constant. 
B)  price of a pound of peanuts is held constant. 
C)  quantity of peanuts that farmers supply is constant. 
D)  Both answers A and B are true.

Question 4

A student is studying for an exam 2 hours a day and is debating whether to study an extra hour. The student's marginal benefit

Accepted Answer

A)  depends on the grade the student earns on the exam. 
B)  is the benefit the student receives from studying all 3 hours. 
C)  is the benefit the student receives from studying the extra hour. 
D)  is greater than the student's marginal cost. 
A)  depends on the grade the student earns on the exam. 
B)  is the benefit the student receives from studying all 3 hours. 
C)  is the benefit the student receives from studying the extra hour. 
D)  is greater than the student's marginal cost.

Question 5

-The above figure shows how many pounds of peanuts farmers are willing to sell at different prices per pound of peanuts. If the price of a pound of peanuts is $1 and the price of a pound of pecans is $2, peanut farmers are willing to sell

Accepted Answer

A)  no peanuts. 
B)  1000 pounds of peanuts. 
C)  2000 pounds of peanuts. 
D)  4000 pounds of peanuts. 
A)  no peanuts. 
B)  1000 pounds of peanuts. 
C)  2000 pounds of peanuts. 
D)  4000 pounds of peanuts.

Question 6

When Susan makes the statement, "The government should spend less money to take care of national parks," she is

Accepted Answer

A)  making a normative statement. 
B)  making a positive statement. 
C)  testing an economic model. 
D)  not dealing with scarcity. 
A)  making a normative statement. 
B)  making a positive statement. 
C)  testing an economic model. 
D)  not dealing with scarcity.

Question 7

Keeping in mind economists' definition of factors of production, which of the following is NOT a factor of production?

Accepted Answer

A)  money 
B)  low-skilled labor 
C)  coal 
D)  an engineer 
A)  money 
B)  low-skilled labor 
C)  coal 
D)  an engineer

Question 8

Along a curved line, the slope at the maximum

Accepted Answer

A)  is greater than zero. 
B)  is zero. 
C)  is less than zero. 
D)  may be greater than, less than, or equal to zero. 
A)  is greater than zero. 
B)  is zero. 
C)  is less than zero. 
D)  may be greater than, less than, or equal to zero.

Question 9

Below is a student's answer to the question "What is microeconomics?" If you were the instructor, how would you correct the student's answer?
"Microeconomics is the study of how government influences the choices made by individuals and businesses and of the performance of the whole national economy."

Accepted Answer

The answer is partially correct. Microec

Question 10

Opportunity cost is best defined as

Accepted Answer

A)  how much money is paid for something. 
B)  how much money is paid for something, taking inflation into account. 
C)  the highest-valued alternative that is given up to get something. 
D)  all the alternatives that are given up to get something. 
A)  how much money is paid for something. 
B)  how much money is paid for something, taking inflation into account. 
C)  the highest-valued alternative that is given up to get something. 
D)  all the alternatives that are given up to get something.

Question 11

-The above figure reveals

Accepted Answer

A)  no relationship between household income and average household expenditure on automobiles. 
B)  that as household income increases the average household expenditure on automobiles decreases. 
C)  that as household income increases the average household expenditure on automobiles increases. 
D)  all of the above are possible. 
A)  no relationship between household income and average household expenditure on automobiles. 
B)  that as household income increases the average household expenditure on automobiles decreases. 
C)  that as household income increases the average household expenditure on automobiles increases. 
D)  all of the above are possible.

Question 12

In economics, the term "land" means

Accepted Answer

A)  only land that is used in agricultural production. 
B)  land, mineral resources, and nature's other bounties. 
C)  land that is devoted to economic pursuits. 
D)  land used for agricultural and urban purposes. 
A)  only land that is used in agricultural production. 
B)  land, mineral resources, and nature's other bounties. 
C)  land that is devoted to economic pursuits. 
D)  land used for agricultural and urban purposes.

Question 13

-The slope of the line in the above figure is

Accepted Answer

A)  -1/2. 
B)  -3. 
C)  -4. 
D)  -1/3. 
A)  -1/2. 
B)  -3. 
C)  -4. 
D)  -1/3.

Question 14

Which of the following is a positive statement?

Accepted Answer

A)  Taxes should be lower because then people get to keep more of what they earn. 
B)  My economics class should last for two terms because it is my favorite class. 
C)  A 10 percent increase in income leads to a 4 percent increase in the consumption of beef. 
D)  Given their negative impact on productivity, the government should eliminate labor unions. 
A)  Taxes should be lower because then people get to keep more of what they earn. 
B)  My economics class should last for two terms because it is my favorite class. 
C)  A 10 percent increase in income leads to a 4 percent increase in the consumption of beef. 
D)  Given their negative impact on productivity, the government should eliminate labor unions.

Question 15

"As part of the financial crisis bailout plan in 2009, the Federal Reserve bought stakes in banks. This policy will result in an increase in the inflation rate." This is an example of

Accepted Answer

A)  a positive statement. 
B)  a normative statement. 
C)  a microeconomic statement. 
D)  an economic model. 
A)  a positive statement. 
B)  a normative statement. 
C)  a microeconomic statement. 
D)  an economic model.

Question 16

The statement "The unemployment rate for teens is higher than that for adults" is

Accepted Answer

A)  a political statement. 
B)  a positive statement. 
C)  a normative statement. 
D)  an ethical statement. 
A)  a political statement. 
B)  a positive statement. 
C)  a normative statement. 
D)  an ethical statement.

Question 17

Why do economists say that even very rich people face scarcity?

Accepted Answer

A person faces scarcity whenever his or

Question 18

Explain what entrepreneurship is and why it is considered a factor of production.

Accepted Answer

Entrepreneurship is the resource (the pe

Question 19

-In the above figure, using the slope across an arc, the slope of the curve between points a and c is

Accepted Answer

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

Question 20

Normative statements are statements about

Accepted Answer

A)  prices. 
B)  quantities. 
C)  what is. 
D)  what ought to be. 
A)  prices. 
B)  quantities. 
C)  what is. 
D)  what ought to be.

Which of the following is an example of a microeconomic decision?

Which of the following is a positive statement?

-In the above figure, while drawing the line showing the relationship between the price of a pound of peanuts and the quantity sold, the

A student is studying for an exam 2 hours a day and is debating whether to study an extra hour. The student's marginal benefit

-The above figure shows how many pounds of peanuts farmers are willing to sell at different prices per pound of peanuts. If the price of a pound of peanuts is $1 and the price of a pound of pecans is $2, peanut farmers are willing to sell

When Susan makes the statement, "The government should spend less money to take care of national parks," she is

Keeping in mind economists' definition of factors of production, which of the following is NOT a factor of production?

Along a curved line, the slope at the maximum

Opportunity cost is best defined as

-The above figure reveals

In economics, the term "land" means

-The slope of the line in the above figure is

Which of the following is a positive statement?

"As part of the financial crisis bailout plan in 2009, the Federal Reserve bought stakes in banks. This policy will result in an increase in the inflation rate." This is an example of

The statement "The unemployment rate for teens is higher than that for adults" is

Why do economists say that even very rich people face scarcity?

Explain what entrepreneurship is and why it is considered a factor of production.

-In the above figure, using the slope across an arc, the slope of the curve between points a and c is

Normative statements are statements about

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

Which of the following is an example of a microeconomic decision?

Which of the following is a positive statement?

-In the above figure, while drawing the line showing the relationship between the price of a pound of peanuts and the quantity sold, the

A student is studying for an exam 2 hours a day and is debating whether to study an extra hour. The student's marginal benefit

-The above figure shows how many pounds of peanuts farmers are willing to sell at different prices per pound of peanuts. If the price of a pound of peanuts is $1 and the price of a pound of pecans is $2, peanut farmers are willing to sell

When Susan makes the statement, "The government should spend less money to take care of national parks," she is

Keeping in mind economists' definition of factors of production, which of the following is NOT a factor of production?

Along a curved line, the slope at the maximum

Opportunity cost is best defined as

-The above figure reveals

In economics, the term "land" means

-The slope of the line in the above figure is

Which of the following is a positive statement?

"As part of the financial crisis bailout plan in 2009, the Federal Reserve bought stakes in banks. This policy will result in an increase in the inflation rate." This is an example of

The statement "The unemployment rate for teens is higher than that for adults" is

Why do economists say that even very rich people face scarcity?

Explain what entrepreneurship is and why it is considered a factor of production.

-In the above figure, using the slope across an arc, the slope of the curve between points a and c is

Normative statements are statements about

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