Question 1

Which of the following statements about economics is the most accurate?

Accepted Answer

A)  It concerns itself only with monetary decisions. 
B)  It says very little about "everyday life." 
C)  It is a narrowly focused discipline. 
D)  It is a broad-ranging, problem-solving discipline. 
A)  It concerns itself only with monetary decisions. 
B)  It says very little about "everyday life." 
C)  It is a narrowly focused discipline. 
D)  It is a broad-ranging, problem-solving discipline.

Question 2

In a market system, which of the following is a symptom of market failure?

Accepted Answer

A)  competition 
B)  scarcity of resources 
C)  falling prices 
D)  air pollution 
A)  competition 
B)  scarcity of resources 
C)  falling prices 
D)  air pollution

Question 3

Which of the following statements about opportunity costs is the most accurate?

Accepted Answer

A)  They never involve costs paid out-of-pocket. 
B)  They include only explicit costs paid out-of-pocket. 
C)  They always include costs paid out-of-pocket. 
D)  They may or may not involve costs paid out-of-pocket. 
A)  They never involve costs paid out-of-pocket. 
B)  They include only explicit costs paid out-of-pocket. 
C)  They always include costs paid out-of-pocket. 
D)  They may or may not involve costs paid out-of-pocket.

Question 4

Which of the following statements about the opportunity cost of an item is the most accurate?

Accepted Answer

A)  It is the value of all available alternatives you sacrifice to get that item. 
B)  It is always equal to the dollar value of the item. 
C)  It is greater during periods of inflation and lower during periods of deflation. 
D)  It is the highest valued alternative you give up to get that item. 
A)  It is the value of all available alternatives you sacrifice to get that item. 
B)  It is always equal to the dollar value of the item. 
C)  It is greater during periods of inflation and lower during periods of deflation. 
D)  It is the highest valued alternative you give up to get that item.

Question 5

What is included in the opportunity cost of going to college?

Accepted Answer

A)  both tuition and the value of the student's time 
B)  tuition, but not the value of the student's time, which is a cash cost 
C)  tuition, but not the value of the student's time, which is a monetary cost 
D)  neither tuition nor the value of the student's time, since obtaining a college degree makes one's income higher in the future 
A)  both tuition and the value of the student's time 
B)  tuition, but not the value of the student's time, which is a cash cost 
C)  tuition, but not the value of the student's time, which is a monetary cost 
D)  neither tuition nor the value of the student's time, since obtaining a college degree makes one's income higher in the future

Question 6

What do economists mean when they say goods are scarce?

Accepted Answer

A)  Government programs are needed to lift families out of poverty. 
B)  At the current price, consumers are willing to buy more of a good than suppliers are willing to produce. 
C)  Consumers do not have enough money to purchase the goods. 
D)  The desire for goods and services exceeds our ability to produce them with limited resources. 
A)  Government programs are needed to lift families out of poverty. 
B)  At the current price, consumers are willing to buy more of a good than suppliers are willing to produce. 
C)  Consumers do not have enough money to purchase the goods. 
D)  The desire for goods and services exceeds our ability to produce them with limited resources.

Question 7

What is the basis of a good economic theory?

Accepted Answer

A)  It explains economic behaviour and predicts well. 
B)  It rests on assumptions. 
C)  It always provides a highly detailed analysis of an economic sector. 
D)  It can best be expressed mathematically. 
A)  It explains economic behaviour and predicts well. 
B)  It rests on assumptions. 
C)  It always provides a highly detailed analysis of an economic sector. 
D)  It can best be expressed mathematically.

Question 8

TABLE 1-5
  
-Refer to Table 1-5. What does the table demonstrate?

Accepted Answer

A)  More apples are purchased as the price declines. 
B)  Fewer apples are purchased as the price declines. 
C)  More apples are purchased at each and every price. 
D)  Fewer apples are purchased at each and every price. 
A)  More apples are purchased as the price declines. 
B)  Fewer apples are purchased as the price declines. 
C)  More apples are purchased at each and every price. 
D)  Fewer apples are purchased at each and every price.

Question 9

When considering whether or not to consume a second slice of cake, an individual is following marginal thinking if she compares the total cost of consuming both the first and second slices with their total benefit before making a decision.

Accepted Answer

A) True 
 B)False

Question 10

How do price controls undermine the market as a communication device?

Accepted Answer

The imposition of price contro

Question 11

The opportunity cost of a decision is the value of the best forgone alternative.

Accepted Answer

A) True 
 B)False

Question 12

A hypothesis is a normative statement.

Accepted Answer

A) True 
 B)False

Question 13

What is the marginal benefit of a slice of pizza?

Accepted Answer

A)  the price of the slice of pizza 
B)  the total amount that a consumer is willing to pay for a whole pizza, divided by the number of slices 
C)  the maximum amount that a consumer is willing to pay for the slice 
D)  the difference between the value of the slice to the consumer and the price of the slice 
A)  the price of the slice of pizza 
B)  the total amount that a consumer is willing to pay for a whole pizza, divided by the number of slices 
C)  the maximum amount that a consumer is willing to pay for the slice 
D)  the difference between the value of the slice to the consumer and the price of the slice

Question 14

You consider purchasing one more cup of coffee before you go to class. What is this an example of?

Accepted Answer

A)  average thinking 
B)  positive thinking 
C)  marginal thinking 
D)  total thinking 
A)  average thinking 
B)  positive thinking 
C)  marginal thinking 
D)  total thinking

Question 15

TABLE 1-1
  
-Refer to Table 1-1. A student has only a few hours to prepare for two different exams tomorrow morning. The above table shows alternative possible exam outcomes with three alternative uses of the student's time. What is the opportunity cost of scoring an 84 on the history exam rather than a 76?

Accepted Answer

A)  10 points on the economics exam 
B)  8 points on the history exam 
C)  7 points on the economics exam 
D)  12 points on the economics exam 
A)  10 points on the economics exam 
B)  8 points on the history exam 
C)  7 points on the economics exam 
D)  12 points on the economics exam

Question 16

Several political leaders have proposed that parents be granted a substantially larger reduction in their annual personal income taxes for each child that they parent. According to economic thinking, what would be the result of this type of legislation?

Accepted Answer

A)  It would exert no impact on either the cost of raising children or the birth rate since parenting children is a noneconomic activity. 
B)  It would reduce the after-tax cost of raising children and therefore increase the birth rate. 
C)  It would make it more expensive for parents to provide for their children. 
D)  It would reduce the value of children to their parents and therefore lead to a reduction in the birth rate. 
A)  It would exert no impact on either the cost of raising children or the birth rate since parenting children is a noneconomic activity. 
B)  It would reduce the after-tax cost of raising children and therefore increase the birth rate. 
C)  It would make it more expensive for parents to provide for their children. 
D)  It would reduce the value of children to their parents and therefore lead to a reduction in the birth rate.

Question 17

What is the opportunity cost of attending a university basketball game?

Accepted Answer

A)  the sum of the value of all the alternative uses of your time while at the game 
B)  the price of the admission to the game 
C)  the value of the highest alternative use of your time and money sacrificed as a result of attending the game 
D)  zero if your favourite team wins 
A)  the sum of the value of all the alternative uses of your time while at the game 
B)  the price of the admission to the game 
C)  the value of the highest alternative use of your time and money sacrificed as a result of attending the game 
D)  zero if your favourite team wins

Question 18

What is the marginal (dollar) cost of an additional plate of food to a patron at an "All-You-Can-Eat" restaurant?

Accepted Answer

A)  It is equal for all plates of food consumed during the meal. 
B)  It is equal to the price paid for the meal (since there is no such thing as a free lunch). 
C)  It is equal to the price paid for the meal divided by the number of plates of food consumed. 
D)  It is equal to zero. 
A)  It is equal for all plates of food consumed during the meal. 
B)  It is equal to the price paid for the meal (since there is no such thing as a free lunch). 
C)  It is equal to the price paid for the meal divided by the number of plates of food consumed. 
D)  It is equal to zero.

Question 19

Which of the following statements best describes the study of scarcity?

Accepted Answer

A)  using limited resources in order to best satisfy our unlimited desires 
B)  using limited resources in order to promote full employment and price stability 
C)  using unlimited resources in order to promote full employment and price stability 
D)  using unlimited resources in order to best satisfy our unlimited desires 
A)  using limited resources in order to best satisfy our unlimited desires 
B)  using limited resources in order to promote full employment and price stability 
C)  using unlimited resources in order to promote full employment and price stability 
D)  using unlimited resources in order to best satisfy our unlimited desires

Question 20

Which of the following statements about economics is the most accurate?

Accepted Answer

A)  It is concerned with predicting business conditions in the future, not with the current state of the stock market. 
B)  It is a natural science like biology and chemistry. 
C)  It is composed of two main branches known as positive and normative economics. 
D)  It is a science concerned with reaching generalizations about human behaviour, not unlike sociology or psychology. 
A)  It is concerned with predicting business conditions in the future, not with the current state of the stock market. 
B)  It is a natural science like biology and chemistry. 
C)  It is composed of two main branches known as positive and normative economics. 
D)  It is a science concerned with reaching generalizations about human behaviour, not unlike sociology or psychology.

Which of the following statements about economics is the most accurate?

In a market system, which of the following is a symptom of market failure?

Which of the following statements about opportunity costs is the most accurate?

Which of the following statements about the opportunity cost of an item is the most accurate?

What is included in the opportunity cost of going to college?

What do economists mean when they say goods are scarce?

What is the basis of a good economic theory?

TABLE 1-5 -Refer to Table 1-5. What does the table demonstrate?

When considering whether or not to consume a second slice of cake, an individual is following marginal thinking if she compares the total cost of consuming both the first and second slices with their total benefit before making a decision.

How do price controls undermine the market as a communication device?

The opportunity cost of a decision is the value of the best forgone alternative.

A hypothesis is a normative statement.

What is the marginal benefit of a slice of pizza?

You consider purchasing one more cup of coffee before you go to class. What is this an example of?

Several political leaders have proposed that parents be granted a substantially larger reduction in their annual personal income taxes for each child that they parent. According to economic thinking, what would be the result of this type of legislation?

What is the opportunity cost of attending a university basketball game?

What is the marginal (dollar) cost of an additional plate of food to a patron at an "All-You-Can-Eat" restaurant?

Which of the following statements best describes the study of scarcity?

Which of the following statements about economics is the most accurate?

Scarcity, Trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Elasticity

Market Efficiency and Market Failure

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labour Markets and the Distribution of Income

The Environment

Filters

Exam 1: The Role and Method of Economics

Which of the following statements about economics is the most accurate?

In a market system, which of the following is a symptom of market failure?

Which of the following statements about opportunity costs is the most accurate?

Which of the following statements about the opportunity cost of an item is the most accurate?

What is included in the opportunity cost of going to college?

What do economists mean when they say goods are scarce?

What is the basis of a good economic theory?

TABLE 1-5 -Refer to Table 1-5. What does the table demonstrate?

When considering whether or not to consume a second slice of cake, an individual is following marginal thinking if she compares the total cost of consuming both the first and second slices with their total benefit before making a decision.

How do price controls undermine the market as a communication device?

The opportunity cost of a decision is the value of the best forgone alternative.

A hypothesis is a normative statement.

What is the marginal benefit of a slice of pizza?

You consider purchasing one more cup of coffee before you go to class. What is this an example of?

Several political leaders have proposed that parents be granted a substantially larger reduction in their annual personal income taxes for each child that they parent. According to economic thinking, what would be the result of this type of legislation?

What is the opportunity cost of attending a university basketball game?

What is the marginal (dollar) cost of an additional plate of food to a patron at an "All-You-Can-Eat" restaurant?

Which of the following statements best describes the study of scarcity?

Which of the following statements about economics is the most accurate?

Scarcity, Trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Elasticity

Market Efficiency and Market Failure

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labour Markets and the Distribution of Income

The Environment

Filters