Question 1

According to Adam Smith

Accepted Answer

A)  government intervention in markets is not desirable because an invisible hand leads decisions made in pursuit of self-interest to unintentionally promote the social interest. 
B)  politicians are well-equipped to regulate corporations and intervene in markets to improve market outcomes. 
C)  when big corporations pursue their self-interest of maximum profit, they will inevitably conflict with social interest. 
D)  in a market transaction buyers can either get what they want for less than they would be willing to pay or sellers can earn a profit, but both buyers and sellers can't gain simultaneously. 
A)  government intervention in markets is not desirable because an invisible hand leads decisions made in pursuit of self-interest to unintentionally promote the social interest. 
B)  politicians are well-equipped to regulate corporations and intervene in markets to improve market outcomes. 
C)  when big corporations pursue their self-interest of maximum profit, they will inevitably conflict with social interest. 
D)  in a market transaction buyers can either get what they want for less than they would be willing to pay or sellers can earn a profit, but both buyers and sellers can't gain simultaneously.

Question 2

If variables x and y move up and down together, they are

Accepted Answer

A)  positively related. 
B)  negative related. 
C)  unrelated. 
D)  trend related. 
A)  positively related. 
B)  negative related. 
C)  unrelated. 
D)  trend related.

Question 3

A scatter diagram with the price of vacations to Mexico on the vertical axis and the price of vacations to California on the horizontal axis shows a positive relationship. If the price of vacations to Mexico were placed on the horizontal axis, and the price of vacations to California on the vertical axis, the relationship would be

Accepted Answer

A)  negative relationship, also called a direct relationship. 
B)  negative relationship, also called an inverse relationship. 
C)  positive relationship, also called a direct relationship. 
D)  positive relationship, also called an inverse relationship. 
A)  negative relationship, also called a direct relationship. 
B)  negative relationship, also called an inverse relationship. 
C)  positive relationship, also called a direct relationship. 
D)  positive relationship, also called an inverse relationship.

Question 4

-In the above figure, the slope across the arc between a and b is

Accepted Answer

A)  2/5. 
B)  1. 
C)  3/2. 
D)  5/2. 
A)  2/5. 
B)  1. 
C)  3/2. 
D)  5/2.

Question 5

The value of the x-coordinate of a point in a graph is the length of a line from the point to the

Accepted Answer

A)  origin. 
B)  scalar. 
C)  x-axis. 
D)  y-axis. 
A)  origin. 
B)  scalar. 
C)  x-axis. 
D)  y-axis.

Question 6

Which of the following college majors experience a higher mid-career salary than economics?

Accepted Answer

A)  Finance 
B)  Business 
C)  Statistics 
D)  Chemical Engineering 
A)  Finance 
B)  Business 
C)  Statistics 
D)  Chemical Engineering

Question 7

What is opportunity cost?

Accepted Answer

Opportunity cost is the highest-valued a

Question 8

The vertical axis of a graph shows only positive values.

Accepted Answer

A) True 
 B)False

Question 9

Economics can be defined as the social science that explains the

Accepted Answer

A)  choices made by politicians. 
B)  choices we make when we trade in markets. 
C)  choices that we make as we cope with scarcity. 
D)  choices made by households. 
A)  choices made by politicians. 
B)  choices we make when we trade in markets. 
C)  choices that we make as we cope with scarcity. 
D)  choices made by households.

Question 10

In New State, the bottling law requires that people get a refund of five cents when they return an empty bottle or can. Why does the state pay people to return bottles? In your answer, be sure to mention the role played by incentives.

Accepted Answer

Policy makers know that people making ch

Question 11

-The above table gives data on two variables. If these data were graphed, their relationship would

Accepted Answer

A)  be a straight line. 
B)  be a curved line. 
C)  show a negative relationship. 
D)  nonexistent. 
A)  be a straight line. 
B)  be a curved line. 
C)  show a negative relationship. 
D)  nonexistent.

Question 12

From 8 P.M. to 10 P.M., Susan can attend a movie, study, or talk with friends. Suppose that Susan decides to go to the movie but thinks that, if she hadn't, she would otherwise have talked with friends. The opportunity cost of attending the movie is

Accepted Answer

A)  talking with friends and studying. 
B)  studying. 
C)  talking with friends. 
D)  two hours of time. 
A)  talking with friends and studying. 
B)  studying. 
C)  talking with friends. 
D)  two hours of time.

Question 13

-The table above shows how the number of books Katie buys each year depends on her income.
a) What kind of relationship exists between Katie's income and the number of books she purchases?
b) Plot the relationship between Katie's income and the number of books she purchases in the above figure. Measure income along the vertical axis and the number of books along the horizontal axis. Be sure to label the axes.
c) What is the slope of the relationship between $50,000 and $70,000 of income?
d) What is the slope of the relationship between $90,000 and $110,000 of income?
e) Comment on the similarity or dissimilarity of your answers to parts (c) and (d).

Accepted Answer

a) There is a positive relationship. Whe

Question 14

The opportunity cost of any action is

Accepted Answer

A)  all the possible alternatives given up. 
B)  the highest-valued alternative given up. 
C)  the benefit from the action minus the cost of the action. 
D)  the dollars the action cost. 
A)  all the possible alternatives given up. 
B)  the highest-valued alternative given up. 
C)  the benefit from the action minus the cost of the action. 
D)  the dollars the action cost.

Question 15

Which of the following is NOT an investment in human capital?

Accepted Answer

A)  A business student takes a seminar in using a laptop computer. 
B)  A student purchases a laptop computer. 
C)  A computer science student learns how to repair a laptop computer. 
D)  A computer science student takes a course on programming a laptop computer. 
A)  A business student takes a seminar in using a laptop computer. 
B)  A student purchases a laptop computer. 
C)  A computer science student learns how to repair a laptop computer. 
D)  A computer science student takes a course on programming a laptop computer.

Question 16

Which of the following is NOT part of the first big economic question?

Accepted Answer

A)  What goods and services are produced? 
B)  How are goods and services produced? 
C)  For whom are goods and services produced? 
D)  Why do incentives affect only marginal costs? 
A)  What goods and services are produced? 
B)  How are goods and services produced? 
C)  For whom are goods and services produced? 
D)  Why do incentives affect only marginal costs?

Question 17

Scarcity is

Accepted Answer

A)  our inability to satisfy all our wants. 
B)  a situation that exists during economic recessions but not during economic booms. 
C)  eliminated by choices. 
D)  an economic problem only for poor people. 
A)  our inability to satisfy all our wants. 
B)  a situation that exists during economic recessions but not during economic booms. 
C)  eliminated by choices. 
D)  an economic problem only for poor people.

Question 18

Normative economic statements

Accepted Answer

A)  describe what ought to be. 
B)  describe what is rather than what ought to be. 
C)  describe the process of economic policy-making. 
D)  deal with economic hypotheses that are not well-established laws. 
A)  describe what ought to be. 
B)  describe what is rather than what ought to be. 
C)  describe the process of economic policy-making. 
D)  deal with economic hypotheses that are not well-established laws.

Question 19

Suppose that for a curve, as the variable measured on the x-axis increases, the variable measured on the y-axis decreases. The curve has a ________ slope.

Accepted Answer

A)  tangent 
B)  positive 
C)  negative 
D)  hypothetical 
A)  tangent 
B)  positive 
C)  negative 
D)  hypothetical

Question 20

The slope of a straight line is

Accepted Answer

A)  always equal to zero. 
B)  calculated as y/x at any point. 
C)  constant. 
D)  always greater than zero. 
A)  always equal to zero. 
B)  calculated as y/x at any point. 
C)  constant. 
D)  always greater than zero.

According to Adam Smith

If variables x and y move up and down together, they are

-In the above figure, the slope across the arc between a and b is

The value of the x-coordinate of a point in a graph is the length of a line from the point to the

Which of the following college majors experience a higher mid-career salary than economics?

What is opportunity cost?

The vertical axis of a graph shows only positive values.

Economics can be defined as the social science that explains the

In New State, the bottling law requires that people get a refund of five cents when they return an empty bottle or can. Why does the state pay people to return bottles? In your answer, be sure to mention the role played by incentives.

-The above table gives data on two variables. If these data were graphed, their relationship would

From 8 P.M. to 10 P.M., Susan can attend a movie, study, or talk with friends. Suppose that Susan decides to go to the movie but thinks that, if she hadn't, she would otherwise have talked with friends. The opportunity cost of attending the movie is

The opportunity cost of any action is

Which of the following is NOT an investment in human capital?

Which of the following is NOT part of the first big economic question?

Scarcity is

Normative economic statements

Suppose that for a curve, as the variable measured on the x-axis increases, the variable measured on the y-axis decreases. The curve has a ________ slope.

The slope of a straight line is

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

According to Adam Smith

If variables x and y move up and down together, they are

-In the above figure, the slope across the arc between a and b is

The value of the x-coordinate of a point in a graph is the length of a line from the point to the

Which of the following college majors experience a higher mid-career salary than economics?

What is opportunity cost?

The vertical axis of a graph shows only positive values.

Economics can be defined as the social science that explains the

In New State, the bottling law requires that people get a refund of five cents when they return an empty bottle or can. Why does the state pay people to return bottles? In your answer, be sure to mention the role played by incentives.

-The above table gives data on two variables. If these data were graphed, their relationship would

From 8 P.M. to 10 P.M., Susan can attend a movie, study, or talk with friends. Suppose that Susan decides to go to the movie but thinks that, if she hadn't, she would otherwise have talked with friends. The opportunity cost of attending the movie is

The opportunity cost of any action is

Which of the following is NOT an investment in human capital?

Which of the following is NOT part of the first big economic question?

Scarcity is

Normative economic statements

Suppose that for a curve, as the variable measured on the x-axis increases, the variable measured on the y-axis decreases. The curve has a ________ slope.

The slope of a straight line is

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