Question 1

The dramatic increase in the standard of living since the Industrial Revolution

Accepted Answer

A) means that societies and individuals face no constraints. 
B) has not meant unlimited abundance for societies or persons. 
C) means that "opportunity cost" is a meaningless concept. 
D) has reduced the choices open to persons. 
E) has made economics less useful to persons. 
A) means that societies and individuals face no constraints. 
B) has not meant unlimited abundance for societies or persons. 
C) means that "opportunity cost" is a meaningless concept. 
D) has reduced the choices open to persons. 
E) has made economics less useful to persons.

Question 2

In economics, abstraction from reality is necessary because of the complexity of the real world.

Accepted Answer

A) True 
 B)False

Question 3

Government controls over market prices are often enacted to benefit a specific group.

Accepted Answer

A) True 
 B)False

Question 4

A student was heard to remark, "Even though I am certain to fail this course, I cannot withdraw from it since it is too late to get back my tuition." Use one or more "Ideas for Beyond the Final Exam" to analyze this reasoning.

Accepted Answer

The student is failing to use marginal a

Question 5

One problem with the European Union's choice regarding equality versus efficiency is that it may inadvertently shrink the size of its "economic pie."

Accepted Answer

A) True 
 B)False

Question 6

A horizontal line has a slope of

Accepted Answer

A) one. 
B) zero. 
C) infinity. 
D) undefined. 
A) one. 
B) zero. 
C) infinity. 
D) undefined.

Question 7

Opportunity cost is the highest possible price you can receive when you sell an object.

Accepted Answer

A) True 
 B)False

Question 8

Lower inflation rates are usually correlated with lower unemployment rates.

Accepted Answer

A) True 
 B)False

Question 9

Regarding economic models, which of the following statements is NOT true?

Accepted Answer

A) An economic model is a simplified representation of a theory or part of a theory. 
B) An economic model can provide clear answers for policy makers. 
C) An economic model can clarify an important economic problem. 
D) An economic model can show three-variable diagrams. 
A) An economic model is a simplified representation of a theory or part of a theory. 
B) An economic model can provide clear answers for policy makers. 
C) An economic model can clarify an important economic problem. 
D) An economic model can show three-variable diagrams.

Question 10

Government controls over market prices frequently "backfire."

Accepted Answer

A) True 
 B)False

Question 11

The growth rate of productivity is the most important determinant of material well-being in the short run.

Accepted Answer

A) True 
 B)False

Question 12

The US Navy determines that the navigation system on its submarines, which use low-frequency radio waves, is reducing the population of humpback whales.The is an example of

Accepted Answer

A) marginal thinking. 
B) comparative advantage. 
C) the market mechanism. 
D) the Phillips curve. 
E) an externality. 
A) marginal thinking. 
B) comparative advantage. 
C) the market mechanism. 
D) the Phillips curve. 
E) an externality.

Question 13

As a student, one of the costs of sleeping in rather than going to class is likely to be a lower grade in the class.

Accepted Answer

A) True 
 B)False

Question 14

Abstract economic theory can be used by academicians but not by politicians or business people.

Accepted Answer

A) True 
 B)False

Question 15

A music venue discovers that its concerts consistently have empty seats in the back rows of the facility.If the venue owner uses marginal analysis to evaluate this situation, he should

Accepted Answer

A) raise the price of seats in the front rows. 
B) remove the last few rows. 
C) lower the ticket price for the seats on the back rows. 
D) cancel concerts that are not sellouts. 
E) book acts that are less expensive. 
A) raise the price of seats in the front rows. 
B) remove the last few rows. 
C) lower the ticket price for the seats on the back rows. 
D) cancel concerts that are not sellouts. 
E) book acts that are less expensive.

Question 16

Suppose that interdiction efforts have stemmed the flow of illegal drugs into the United States.If there is no change in demand, this leads to higher prices for these substances.The result is an increase in crime as users attempt to maintain their now more expensive habits.Economists would call this effect

Accepted Answer

A) the illusion of rationality. 
B) an externality. 
C) the cost disease of personal services. 
D) inflation. 
E) unemployment. 
A) the illusion of rationality. 
B) an externality. 
C) the cost disease of personal services. 
D) inflation. 
E) unemployment.

Question 17

Opportunity cost can best be defined as the

Accepted Answer

A) value of what must be given up in order to acquire an item. 
B) money cost to the buyer to acquire a good or service. 
C) total value of all the other items that otherwise could be acquired. 
D) cost to the seller to produce an item. 
E) time cost to obtain the money to buy an item. 
A) value of what must be given up in order to acquire an item. 
B) money cost to the buyer to acquire a good or service. 
C) total value of all the other items that otherwise could be acquired. 
D) cost to the seller to produce an item. 
E) time cost to obtain the money to buy an item.

Question 18

How is a production indifference map helpful?

Accepted Answer

A production indifference map is a graph

Question 19

A theory is a deliberate simplification or abstraction of factual relationships.

Accepted Answer

A) True 
 B)False

Question 20

The steepness of a curve is partially determined by the units of measurement.

Accepted Answer

A) True 
 B)False

Exam 1: What Is Economics

The dramatic increase in the standard of living since the Industrial Revolution

In economics, abstraction from reality is necessary because of the complexity of the real world.

Government controls over market prices are often enacted to benefit a specific group.

A student was heard to remark, "Even though I am certain to fail this course, I cannot withdraw from it since it is too late to get back my tuition." Use one or more "Ideas for Beyond the Final Exam" to analyze this reasoning.

One problem with the European Union's choice regarding equality versus efficiency is that it may inadvertently shrink the size of its "economic pie."

A horizontal line has a slope of

Opportunity cost is the highest possible price you can receive when you sell an object.

Lower inflation rates are usually correlated with lower unemployment rates.

Regarding economic models, which of the following statements is NOT true?

Government controls over market prices frequently "backfire."

The growth rate of productivity is the most important determinant of material well-being in the short run.

The US Navy determines that the navigation system on its submarines, which use low-frequency radio waves, is reducing the population of humpback whales.The is an example of

As a student, one of the costs of sleeping in rather than going to class is likely to be a lower grade in the class.

Abstract economic theory can be used by academicians but not by politicians or business people.

A music venue discovers that its concerts consistently have empty seats in the back rows of the facility.If the venue owner uses marginal analysis to evaluate this situation, he should

Opportunity cost can best be defined as the

How is a production indifference map helpful?

A theory is a deliberate simplification or abstraction of factual relationships.

The steepness of a curve is partially determined by the units of measurement.

The Economony: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Useconomy

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