Question 1

The slope of a line with rise of five and run of two is positive.

Accepted Answer

A) True 
 B)False

Question 2

Economic models

Accepted Answer

A) are always based on realistic assumptions. 
B) usually predict perfectly. 
C) can never be tested with real-world data. 
D) are used to describe cause-and-effect relationships. 
E) are too simple to be of much use. 
A) are always based on realistic assumptions. 
B) usually predict perfectly. 
C) can never be tested with real-world data. 
D) are used to describe cause-and-effect relationships. 
E) are too simple to be of much use.

Question 3

The opportunity cost of any good or service is the

Accepted Answer

A) actual dollar cost of doing or making it. 
B) highest price that a seller can get for the item. 
C) value of the next best alternative. 
D) cost associated with a value judgment. 
E) cost of producing the good or service. 
A) actual dollar cost of doing or making it. 
B) highest price that a seller can get for the item. 
C) value of the next best alternative. 
D) cost associated with a value judgment. 
E) cost of producing the good or service.

Question 4

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 5

Explain why an airline may decide to sell an air ticket to a stand-by passenger at less than the full fare if there are empty seats on the airplane?

Accepted Answer

The decision depends on the marginal, or

Question 6

Which person has the highest opportunity cost of obtaining a college degree (assuming that attending college requires giving up his or her current position)?

Accepted Answer

A) Bill, who is unemployed. 
B) Jane, who is an unwed mother and earns $15,000 a year. 
C) Larry, who is a technician in the navy earning $18,000 a year with free food and housing. 
D) Mary, who has a job earning $60,000 a year as a computer programmer. 
E) Unable to determine from the data given. 
A) Bill, who is unemployed. 
B) Jane, who is an unwed mother and earns $15,000 a year. 
C) Larry, who is a technician in the navy earning $18,000 a year with free food and housing. 
D) Mary, who has a job earning $60,000 a year as a computer programmer. 
E) Unable to determine from the data given.

Question 7

Opportunity cost includes

Accepted Answer

A) only the actual amount spent on a choice. 
B) the value of foregone actions but not dollar outlays. 
C) the value of foregone options plus the dollar outlays associated with a choice. 
D) the amount you are paid to select an opportunity. 
A) only the actual amount spent on a choice. 
B) the value of foregone actions but not dollar outlays. 
C) the value of foregone options plus the dollar outlays associated with a choice. 
D) the amount you are paid to select an opportunity.

Question 8

A line that rises from left to right has a positive slope.

Accepted Answer

A) True 
 B)False

Question 9

When residents surrounding an airport complain about noise from aircraft landings and takeoffs, the relevant economic analysis is that of

Accepted Answer

A) externalities. 
B) equality-efficiency trade-off. 
C) comparative advantage. 
D) the cost decrease of the service sector. 
E) the cost disease of personal services. 
A) externalities. 
B) equality-efficiency trade-off. 
C) comparative advantage. 
D) the cost decrease of the service sector. 
E) the cost disease of personal services.

Question 10

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 11

Why do economists abstract, and is it appropriate?

Accepted Answer

Economists (and other scientists)abstrac

Question 12

To analyze policy options, economists are forced to deal with

Accepted Answer

A) ordinary citizens. 
B) elected officials. 
C) rotating statistical values. 
D) events that have not occurred. 
A) ordinary citizens. 
B) elected officials. 
C) rotating statistical values. 
D) events that have not occurred.

Question 13

Economic efficiency and income equality are often conflicting goals in an economy.

Accepted Answer

A) True 
 B)False

Question 14

In the calculation of the cost of going to college, an economist would always include the cost of room and board.

Accepted Answer

A) True 
 B)False

Question 15

A theory is an explanation of the causal mechanism behind observed phenomena.

Accepted Answer

A) True 
 B)False

Question 16

Statistical correlation always implies causation.

Accepted Answer

A) True 
 B)False

Question 17

Greater economic efficiency and income equality can usually both be achieved in an economy simultaneously.

Accepted Answer

A) True 
 B)False

Question 18

A ____ is a graph whose axes show the quantities of two inputs that are used to produce some output.

Accepted Answer

A) production indifference map 
B) two-variable diagram 
C) scalar diagram 
D) time-series graph 
A) production indifference map 
B) two-variable diagram 
C) scalar diagram 
D) time-series graph

Question 19

Which of the following is an example of a fiscal policy initiative?

Accepted Answer

A) Lowering of interest rates 
B) Increase in reserve requirements 
C) Reduction in taxes 
D) Decrease in money supply 
A) Lowering of interest rates 
B) Increase in reserve requirements 
C) Reduction in taxes 
D) Decrease in money supply

Question 20

Abstraction ignores many details in order to focus on the most important elements of a problem.

Accepted Answer

A) True 
 B)False

Exam 1: What Is Economics

The slope of a line with rise of five and run of two is positive.

Economic models

The opportunity cost of any good or service is the

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

Explain why an airline may decide to sell an air ticket to a stand-by passenger at less than the full fare if there are empty seats on the airplane?

Which person has the highest opportunity cost of obtaining a college degree (assuming that attending college requires giving up his or her current position)?

Opportunity cost includes

A line that rises from left to right has a positive slope.

When residents surrounding an airport complain about noise from aircraft landings and takeoffs, the relevant economic analysis is that 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.

Why do economists abstract, and is it appropriate?

To analyze policy options, economists are forced to deal with

Economic efficiency and income equality are often conflicting goals in an economy.

In the calculation of the cost of going to college, an economist would always include the cost of room and board.

A theory is an explanation of the causal mechanism behind observed phenomena.

Statistical correlation always implies causation.

Greater economic efficiency and income equality can usually both be achieved in an economy simultaneously.

A ____ is a graph whose axes show the quantities of two inputs that are used to produce some output.

Which of the following is an example of a fiscal policy initiative?

Abstraction ignores many details in order to focus on the most important elements of a problem.

The Economy: 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

Externalities, Externaliteis, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

International Trade and Comparative Advantage

Contemporary Issues in the Us Economy

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