Question 1

Payments made to resources include all of the following except

Accepted Answer

A)  interest 
B)  profits 
C)  wages 
D)  welfare 
A)  interest 
B)  profits 
C)  wages 
D)  welfare

Question 2

Table 1.1. U.S. Production Possibilities Curve Data
 $$\begin{array} { l r r r r r r } 
& \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } \
\text { Capital goods } & 5 & 4 & 3 & 2 & 1 & 0 \
\text { Consumer goods } & 0 & 12 & 22 & 30 & 36 & 40
\end{array}$$
-Refer to Table 1.1. As we move from point A to point F, the

Accepted Answer

A)  opportunity cost of consumer goods in terms of capital goods is unchanged 
B)  opportunity cost of consumer goods in terms of capital goods increases 
C)  economy becomes more productive in producing both goods 
D)  economy becomes less productive in producing both goods 
A)  opportunity cost of consumer goods in terms of capital goods is unchanged 
B)  opportunity cost of consumer goods in terms of capital goods increases 
C)  economy becomes more productive in producing both goods 
D)  economy becomes less productive in producing both goods

Question 3

All points along a production possibilities curve depict the

Accepted Answer

A)  maximum satisfaction that households receive from their purchases of goods 
B)  minimum satisfaction that households receive from their purchases of goods 
C)  maximum output that society can produce with given resources and technology 
D)  minimum output that society can produce with given resources and technology 
A)  maximum satisfaction that households receive from their purchases of goods 
B)  minimum satisfaction that households receive from their purchases of goods 
C)  maximum output that society can produce with given resources and technology 
D)  minimum output that society can produce with given resources and technology

Question 4

Suppose we know there is a direct relationship between two variables: the amount of candy given to a group of children and the number of times the children smile. Another way to say this is that there is a(n) _________ relationship between candy and smiles.

Accepted Answer

A)  positive 
B)  negative 
C)  inverse 
D)  opportunity cost 
A)  positive 
B)  negative 
C)  inverse 
D)  opportunity cost

Question 5

The branch of economics that is concerned with the overall performance of the economy is

Accepted Answer

A)  resource economics 
B)  contemporary economics 
C)  macroeconomics 
D)  microeconomics 
A)  resource economics 
B)  contemporary economics 
C)  macroeconomics 
D)  microeconomics

Question 6

Capital goods are available for immediate use by households, while consumer goods are used for producing other goods and services in the future.

Accepted Answer

A) True 
 B)False

Question 7

Figure 1.1 U.S. Production Possibilities Curve
  
-Refer to Figure 1.1. The shape of the production possibilities curve suggests that the United States produces under conditions of

Accepted Answer

A)  zero opportunity cost 
B)  constant opportunity cost 
C)  increasing opportunity cost 
D)  decreasing opportunity cost 
A)  zero opportunity cost 
B)  constant opportunity cost 
C)  increasing opportunity cost 
D)  decreasing opportunity cost

Question 8

What tools do economists use to help understand, explain, and predict economic phenomena in the real world?

Accepted Answer

A)  normative economics 
B)  opportunity cost 
C)  economic systems 
D)  economic models 
A)  normative economics 
B)  opportunity cost 
C)  economic systems 
D)  economic models

Question 9

A question that positive economics would consider is

Accepted Answer

A)  Should the federal minimum wage be increased to help the working poor? 
B)  Does free trade result in job losses for workers in import-competing industries? 
C)  Should all Americans have access to health care? 
D)  Should high school teachers receive an increase in pay? 
A)  Should the federal minimum wage be increased to help the working poor? 
B)  Does free trade result in job losses for workers in import-competing industries? 
C)  Should all Americans have access to health care? 
D)  Should high school teachers receive an increase in pay?

Question 10

Economists believe people can make better choices by looking at the overall situation, rather than by "thinking at the margin."

Accepted Answer

A) True 
 B)False

Question 11

The opportunity cost of placing your savings in a bank account is the

Accepted Answer

A)  transaction cost that you incur when withdrawing funds from your account 
B)  decrease in your satisfaction that results from consuming fewer goods now 
C)  anticipated higher inflation rates in the future 
D)  interest that you receive on your savings account 
A)  transaction cost that you incur when withdrawing funds from your account 
B)  decrease in your satisfaction that results from consuming fewer goods now 
C)  anticipated higher inflation rates in the future 
D)  interest that you receive on your savings account

Question 12

Economics is first and foremost the study of

Accepted Answer

A)  choice under conditions of scarcity 
B)  how incomes are divided among the factors of production 
C)  the allocation of household incomes among various stocks and bonds 
D)  government ownership of economic resources 
A)  choice under conditions of scarcity 
B)  how incomes are divided among the factors of production 
C)  the allocation of household incomes among various stocks and bonds 
D)  government ownership of economic resources

Question 13

Which of the following is not an assumption that underlies an economy's production possibilities curve?

Accepted Answer

A)  fixed income 
B)  fixed resources 
C)  unchanged technology 
D)  fully employed resources 
A)  fixed income 
B)  fixed resources 
C)  unchanged technology 
D)  fully employed resources

Question 14

Figure 1.1 U.S. Production Possibilities Curve
  
-Refer to Figure 1.1. If the economy is located at point E,

Accepted Answer

A)  the economy is operating at maximum capacity 
B)  economic growth has occurred in the economy 
C)  there must be unemployment in the economy 
D)  the quality of the economy's resources has deteriorated 
A)  the economy is operating at maximum capacity 
B)  economic growth has occurred in the economy 
C)  there must be unemployment in the economy 
D)  the quality of the economy's resources has deteriorated

Question 15

Microeconomics includes all of the following questions except

Accepted Answer

A)  How would a tax on movie tickets affect purchases by teenagers? 
B)  How would a ban on immigrant workers affect U.S. orange growers? 
C)  Will an increase in the federal minimum wage help the working poor? 
D)  Why do economies experience unemployment and inflation? 
A)  How would a tax on movie tickets affect purchases by teenagers? 
B)  How would a ban on immigrant workers affect U.S. orange growers? 
C)  Will an increase in the federal minimum wage help the working poor? 
D)  Why do economies experience unemployment and inflation?

Question 16

If the U.S. is operating at a point on the production possibilities curve itself, we can say the U.S. is achieving economic efficiency.

Accepted Answer

A) True 
 B)False

Question 17

Figure 1.1 U.S. Production Possibilities Curve
  
-Refer to Figure 1.1. Which of the following could allow the economy to move from point B to point F over time?

Accepted Answer

A)  a reduction in the unemployment rate 
B)  a decrease in the productivity of labor 
C)  an increase in sodas consumed 
D)  an advance in technology 
A)  a reduction in the unemployment rate 
B)  a decrease in the productivity of labor 
C)  an increase in sodas consumed 
D)  an advance in technology

Question 18

Capacity utilization rates in the U.S.

Accepted Answer

A)  are usually around 100 percent for all industries 
B)  vary across manufacturing, mining, and utilities industries 
C)  were much lower in 2006 than in the previous 30 years 
D)  cannot be calculated due to insufficient data 
A)  are usually around 100 percent for all industries 
B)  vary across manufacturing, mining, and utilities industries 
C)  were much lower in 2006 than in the previous 30 years 
D)  cannot be calculated due to insufficient data

Question 19

A rational person does not act unless the action

Accepted Answer

A)  yields marginal benefits that are greater than marginal costs 
B)  yields marginal costs that are greater than marginal benefits 
C)  results in taxes for the person 
D)  results in losses for the person 
A)  yields marginal benefits that are greater than marginal costs 
B)  yields marginal costs that are greater than marginal benefits 
C)  results in taxes for the person 
D)  results in losses for the person

Question 20

Table 1.1. U.S. Production Possibilities Curve Data
 $$\begin{array} { l r r r r r r } 
& \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } \
\text { Capital goods } & 5 & 4 & 3 & 2 & 1 & 0 \
\text { Consumer goods } & 0 & 12 & 22 & 30 & 36 & 40
\end{array}$$
-Refer to Table 1.1. The economy would move from producing 3 capital goods and 20 consumer goods to 3 capital goods and 22 consumer goods if there was an

Accepted Answer

A)  increase in the productivity of labor 
B)  advance in technology 
C)  increase in the labor force 
D)  elimination of unemployment 
A)  increase in the productivity of labor 
B)  advance in technology 
C)  increase in the labor force 
D)  elimination of unemployment

Payments made to resources include all of the following except

Table 1.1. U.S. Production Possibilities Curve Data A B C D E F Capital goods 5 4 3 2 1 0 Consumer goods 0 12 22 30 36 40 -Refer to Table 1.1. As we move from point A to point F, the

All points along a production possibilities curve depict the

Suppose we know there is a direct relationship between two variables: the amount of candy given to a group of children and the number of times the children smile. Another way to say this is that there is a(n) _________ relationship between candy and smiles.

The branch of economics that is concerned with the overall performance of the economy is

Capital goods are available for immediate use by households, while consumer goods are used for producing other goods and services in the future.

Figure 1.1 U.S. Production Possibilities Curve -Refer to Figure 1.1. The shape of the production possibilities curve suggests that the United States produces under conditions of

What tools do economists use to help understand, explain, and predict economic phenomena in the real world?

A question that positive economics would consider is

Economists believe people can make better choices by looking at the overall situation, rather than by "thinking at the margin."

The opportunity cost of placing your savings in a bank account is the

Economics is first and foremost the study of

Which of the following is not an assumption that underlies an economy's production possibilities curve?

Figure 1.1 U.S. Production Possibilities Curve -Refer to Figure 1.1. If the economy is located at point E,

Microeconomics includes all of the following questions except

If the U.S. is operating at a point on the production possibilities curve itself, we can say the U.S. is achieving economic efficiency.

Figure 1.1 U.S. Production Possibilities Curve -Refer to Figure 1.1. Which of the following could allow the economy to move from point B to point F over time?

Capacity utilization rates in the U.S.

A rational person does not act unless the action

Table 1.1. U.S. Production Possibilities Curve Data A B C D E F Capital goods 5 4 3 2 1 0 Consumer goods 0 12 22 30 36 40 -Refer to Table 1.1. The economy would move from producing 3 capital goods and 20 consumer goods to 3 capital goods and 22 consumer goods if there was an

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

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Exam 1: Scarcity and Choice

Payments made to resources include all of the following except

Table 1.1. U.S. Production Possibilities Curve Data A B C D E F Capital goods 5 4 3 2 1 0 Consumer goods 0 12 22 30 36 40 -Refer to Table 1.1. As we move from point A to point F, the

All points along a production possibilities curve depict the

Suppose we know there is a direct relationship between two variables: the amount of candy given to a group of children and the number of times the children smile. Another way to say this is that there is a(n) _________ relationship between candy and smiles.

The branch of economics that is concerned with the overall performance of the economy is

Capital goods are available for immediate use by households, while consumer goods are used for producing other goods and services in the future.

Figure 1.1 U.S. Production Possibilities Curve -Refer to Figure 1.1. The shape of the production possibilities curve suggests that the United States produces under conditions of

What tools do economists use to help understand, explain, and predict economic phenomena in the real world?

A question that positive economics would consider is

Economists believe people can make better choices by looking at the overall situation, rather than by "thinking at the margin."

The opportunity cost of placing your savings in a bank account is the

Economics is first and foremost the study of

Which of the following is not an assumption that underlies an economy's production possibilities curve?

Figure 1.1 U.S. Production Possibilities Curve -Refer to Figure 1.1. If the economy is located at point E,

Microeconomics includes all of the following questions except

If the U.S. is operating at a point on the production possibilities curve itself, we can say the U.S. is achieving economic efficiency.

Figure 1.1 U.S. Production Possibilities Curve -Refer to Figure 1.1. Which of the following could allow the economy to move from point B to point F over time?

Capacity utilization rates in the U.S.

A rational person does not act unless the action

Table 1.1. U.S. Production Possibilities Curve Data A B C D E F Capital goods 5 4 3 2 1 0 Consumer goods 0 12 22 30 36 40 -Refer to Table 1.1. The economy would move from producing 3 capital goods and 20 consumer goods to 3 capital goods and 22 consumer goods if there was an

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

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