Question 1

The study of the choices made by individuals is part of 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 2

When graphed, variables that are unrelated are shown by either a horizontal or a vertical line.

Accepted Answer

A) True 
 B)False

Question 3

In part, microeconomics is concerned with

Accepted Answer

A)  how a business firm decides upon the amount it produces and the price it sets. 
B)  changes in the economy's total output of goods and services over long periods of time. 
C)  factors that explain changes in the unemployment rate over time. 
D)  the Federal Reserve's policy decisions. 
A)  how a business firm decides upon the amount it produces and the price it sets. 
B)  changes in the economy's total output of goods and services over long periods of time. 
C)  factors that explain changes in the unemployment rate over time. 
D)  the Federal Reserve's policy decisions.

Question 4

According to economists

Accepted Answer

A)  market capitalism is the best system available and some government intervention and regulation can either help or harm the social interest. 
B)  market capitalism is the best system available and any government intervention and regulation will inevitably harm the social interest. 
C)  centrally planned socialism is the best system available since governments generally make decisions that are in social interest. 
D)  centrally planned socialism and pure market capitalism are equally capable of promoting social interest, but a mixed economy is an undesirable compromise between the two that will harm social interest. 
A)  market capitalism is the best system available and some government intervention and regulation can either help or harm the social interest. 
B)  market capitalism is the best system available and any government intervention and regulation will inevitably harm the social interest. 
C)  centrally planned socialism is the best system available since governments generally make decisions that are in social interest. 
D)  centrally planned socialism and pure market capitalism are equally capable of promoting social interest, but a mixed economy is an undesirable compromise between the two that will harm social interest.

Question 5

The term used to emphasize that making choices in the face of scarcity involves a cost is

Accepted Answer

A)  substitution cost. 
B)  opportunity cost. 
C)  utility cost. 
D)  accounting cost. 
A)  substitution cost. 
B)  opportunity cost. 
C)  utility cost. 
D)  accounting cost.

Question 6

Suppose we are considering the relationship between two variables y and x. y is measured on the y-axis and x is measured on the x-axis, and the relationship between then is a straight line. Suppose that the slope of the line is equal to 1. This slope means that

Accepted Answer

A)  a change in x is associated with a bigger change in y. 
B)  a change in x is associated with a smaller change in y. 
C)  a change in x is associated with no change in y. 
D)  a change in x is associated with an equal change in y. 
A)  a change in x is associated with a bigger change in y. 
B)  a change in x is associated with a smaller change in y. 
C)  a change in x is associated with no change in y. 
D)  a change in x is associated with an equal change in y.

Question 7

In a graph, a line has a negative slope if

Accepted Answer

A)  the line is vertical. 
B)  the line is horizontal. 
C)  the line rises from right to left. 
D)  the line rises from left to right. 
A)  the line is vertical. 
B)  the line is horizontal. 
C)  the line rises from right to left. 
D)  the line rises from left to right.

Question 8

Joy is training to become a chef. The skills she is obtaining from her training and education will increase Joy's

Accepted Answer

A)  human capital. 
B)  physical capital. 
C)  entrepreneurship. 
D)  None of the above answers are correct. 
A)  human capital. 
B)  physical capital. 
C)  entrepreneurship. 
D)  None of the above answers are correct.

Question 9

On a graph showing the relationship between x and y, the ceteris paribus condition implies that

Accepted Answer

A)  no other variables are related to x and y. 
B)  the value of x is held constant. 
C)  the value of y is held constant. 
D)  other variables not shown are held constant. 
A)  no other variables are related to x and y. 
B)  the value of x is held constant. 
C)  the value of y is held constant. 
D)  other variables not shown are held constant.

Question 10

The value of the y-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 11

If the change in the y-axis variable is 6 and the change in the x-axis variable is 5, the slope of this line is 6/5.

Accepted Answer

A) True 
 B)False

Question 12

Suppose Company A's profits increase by $10 million and nobody is made worse off. The CEO of Company A keeps all $10 million for herself. This situation

Accepted Answer

A)  is definitely efficient. 
B)  is definitely not in the self-interest of Company A. 
C)  is definitely not in the social interest. 
D)  is definitely fair. 
A)  is definitely efficient. 
B)  is definitely not in the self-interest of Company A. 
C)  is definitely not in the social interest. 
D)  is definitely fair.

Question 13

What is the difference between a positive and a negative relationship?

Accepted Answer

Two variables are positively related whe

Question 14

If the quantity of wood purchased decreases when the price of wood rises, a graph representing these variables would have

Accepted Answer

A)  time on the vertical axis. 
B)  the slope on the vertical axis. 
C)  a negative slope. 
D)  a positive slope. 
A)  time on the vertical axis. 
B)  the slope on the vertical axis. 
C)  a negative slope. 
D)  a positive slope.

Question 15

A normative statement is

Accepted Answer

A)  about what ought to be. 
B)  about what is. 
C)  always true. 
D)  one that is based on an economic experiment. 
A)  about what ought to be. 
B)  about what is. 
C)  always true. 
D)  one that is based on an economic experiment.

Question 16

-In the above figure, the slope across the arc between c and d is

Accepted Answer

A)  1/6. 
B)  12/11. 
C)  3. 
D)  4. 
A)  1/6. 
B)  12/11. 
C)  3. 
D)  4.

Question 17

The marginal benefit is the

Accepted Answer

A)  additional gain from one more unit of an activity. 
B)  additional cost from one more unit of an activity. 
C)  loss of the highest-valued alternative. 
D)  additional gain from one more unit of an activity minus the additional cost from one more unit of the activity. 
A)  additional gain from one more unit of an activity. 
B)  additional cost from one more unit of an activity. 
C)  loss of the highest-valued alternative. 
D)  additional gain from one more unit of an activity minus the additional cost from one more unit of the activity.

Question 18

Scarcity can be eliminated through

Accepted Answer

A)  the use of market mechanisms. 
B)  exploration that helps us find new resources. 
C)  wise use of our resources. 
D)  None of the above because scarcity cannot be eliminated. 
A)  the use of market mechanisms. 
B)  exploration that helps us find new resources. 
C)  wise use of our resources. 
D)  None of the above because scarcity cannot be eliminated.

Question 19

A scatter diagram with the price of peanut butter on the vertical axis and the price of jelly on the horizontal axis shows a negative relationship. If the price of jelly was placed on the vertical axis and the price of peanut butter was placed on the horizontal axis, the relationship would be a

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 20

-In the above figure, when the interest rate is 8 percent and household income is $40,000, household consumption is

Accepted Answer

A)  $0. 
B)  $20,000. 
C)  $35.000. 
D)  $60,000. 
A)  $0. 
B)  $20,000. 
C)  $35.000. 
D)  $60,000.

The study of the choices made by individuals is part of the definition of

When graphed, variables that are unrelated are shown by either a horizontal or a vertical line.

In part, microeconomics is concerned with

According to economists

The term used to emphasize that making choices in the face of scarcity involves a cost is

Suppose we are considering the relationship between two variables y and x. y is measured on the y-axis and x is measured on the x-axis, and the relationship between then is a straight line. Suppose that the slope of the line is equal to 1. This slope means that

In a graph, a line has a negative slope if

Joy is training to become a chef. The skills she is obtaining from her training and education will increase Joy's

On a graph showing the relationship between x and y, the ceteris paribus condition implies that

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

If the change in the y-axis variable is 6 and the change in the x-axis variable is 5, the slope of this line is 6/5.

Suppose Company A's profits increase by $10 million and nobody is made worse off. The CEO of Company A keeps all $10 million for herself. This situation

What is the difference between a positive and a negative relationship?

If the quantity of wood purchased decreases when the price of wood rises, a graph representing these variables would have

A normative statement is

-In the above figure, the slope across the arc between c and d is

The marginal benefit is the

Scarcity can be eliminated through

A scatter diagram with the price of peanut butter on the vertical axis and the price of jelly on the horizontal axis shows a negative relationship. If the price of jelly was placed on the vertical axis and the price of peanut butter was placed on the horizontal axis, the relationship would be a

-In the above figure, when the interest rate is 8 percent and household income is $40,000, household consumption 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

The study of the choices made by individuals is part of the definition of

When graphed, variables that are unrelated are shown by either a horizontal or a vertical line.

In part, microeconomics is concerned with

According to economists

The term used to emphasize that making choices in the face of scarcity involves a cost is

Suppose we are considering the relationship between two variables y and x. y is measured on the y-axis and x is measured on the x-axis, and the relationship between then is a straight line. Suppose that the slope of the line is equal to 1. This slope means that

In a graph, a line has a negative slope if

Joy is training to become a chef. The skills she is obtaining from her training and education will increase Joy's

On a graph showing the relationship between x and y, the ceteris paribus condition implies that

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

If the change in the y-axis variable is 6 and the change in the x-axis variable is 5, the slope of this line is 6/5.

Suppose Company A's profits increase by $10 million and nobody is made worse off. The CEO of Company A keeps all $10 million for herself. This situation

What is the difference between a positive and a negative relationship?

If the quantity of wood purchased decreases when the price of wood rises, a graph representing these variables would have

A normative statement is

-In the above figure, the slope across the arc between c and d is

The marginal benefit is the

Scarcity can be eliminated through

A scatter diagram with the price of peanut butter on the vertical axis and the price of jelly on the horizontal axis shows a negative relationship. If the price of jelly was placed on the vertical axis and the price of peanut butter was placed on the horizontal axis, the relationship would be a

-In the above figure, when the interest rate is 8 percent and household income is $40,000, household consumption 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