Question 1

Society as a whole faces opportunity costs because

Accepted Answer

A) there is not enough money to go around 
B) politicians are greedy 
C) workers shirk their responsibilities and management is unable to compensate for this 
D) resources are abundant 
E) resources are scarce 
A) there is not enough money to go around 
B) politicians are greedy 
C) workers shirk their responsibilities and management is unable to compensate for this 
D) resources are abundant 
E) resources are scarce

Question 2

Macroeconomic models focus on the behavior of

Accepted Answer

A) individual households,business firms,and government agencies 
B) individual nations in the foreign trade sector 
C) the entire economy 
D) large industrial sectors,such as manufacturing 
E) individual business firms and government agencies 
A) individual households,business firms,and government agencies 
B) individual nations in the foreign trade sector 
C) the entire economy 
D) large industrial sectors,such as manufacturing 
E) individual business firms and government agencies

Question 3

"The Consumer Price Index increased by 4.2 percent in the first quarter of this year." What type of statement is this?

Accepted Answer

A) normative 
B) negative 
C) positive 
D) subjective 
E) biased 
A) normative 
B) negative 
C) positive 
D) subjective 
E) biased

Question 4

Suppose that the following headlines appeared in a newspaper.Which would most clearly represent a macroeconomic issue?

Accepted Answer

A) "Central Bank Raises Interest Rates" 
B) "Auto Dealership to Cut Prices" 
C) "Fanny's Freeze Dried Prunes to Lay Off 50 Workers" 
D) "United Workers Union to Strike April 15" 
E) "Brazilian Coffee Bean Crop Falls by 10 Percent" 
A) "Central Bank Raises Interest Rates" 
B) "Auto Dealership to Cut Prices" 
C) "Fanny's Freeze Dried Prunes to Lay Off 50 Workers" 
D) "United Workers Union to Strike April 15" 
E) "Brazilian Coffee Bean Crop Falls by 10 Percent"

Question 5

Microeconomics

Accepted Answer

A) addresses scarcity from a global perspective 
B) examines how individuals,households,and firms make economic decisions 
C) is purely theoretical and has little value in explaining real-world phenomena 
D) focuses on what is happening in the economy as a whole 
E) answers the fundamental economic questions of how,when,where,and why 
A) addresses scarcity from a global perspective 
B) examines how individuals,households,and firms make economic decisions 
C) is purely theoretical and has little value in explaining real-world phenomena 
D) focuses on what is happening in the economy as a whole 
E) answers the fundamental economic questions of how,when,where,and why

Question 6

The statement that "IBM's stock closed at $85" is

Accepted Answer

A) a normative statement 
B) a positive statement 
C) a macroeconomic observation 
D) financial manipulation 
E) a sign that the market may be undervalued 
A) a normative statement 
B) a positive statement 
C) a macroeconomic observation 
D) financial manipulation 
E) a sign that the market may be undervalued

Question 7

High-income people will sometimes pay higher prices at convenience stores for goods that are available at discount stores.They do this because

Accepted Answer

A) they are irrational 
B) their opportunity cost of time is low 
C) crowded and understaffed discount stores impose higher time costs 
D) they like to be seen paying more money 
E) they do not mind wasting time 
A) they are irrational 
B) their opportunity cost of time is low 
C) crowded and understaffed discount stores impose higher time costs 
D) they like to be seen paying more money 
E) they do not mind wasting time

Question 8

Individuals face opportunity costs because

Accepted Answer

A) the minimum wage is too low 
B) technology is improving too quickly 
C) time and funds are scarce 
D) government cutbacks are widespread,except possibly among society's most affluent households 
E) welfare gives individuals an incentive to stay at home 
A) the minimum wage is too low 
B) technology is improving too quickly 
C) time and funds are scarce 
D) government cutbacks are widespread,except possibly among society's most affluent households 
E) welfare gives individuals an incentive to stay at home

Question 9

Assume that Kelly's various possible activities are mutually exclusive.The opportunity cost from choosing one activity equals the

Accepted Answer

A) summed value of all her alternative activities 
B) summed value of all her alternative activities minus the value of the chosen activity 
C) value of the next most valuable alternative activity 
D) value of the next most valuable alternative activity minus the value of the chosen activity 
E) summed value of all her alternative activities minus the value of the next most valuable alternative activity 
A) summed value of all her alternative activities 
B) summed value of all her alternative activities minus the value of the chosen activity 
C) value of the next most valuable alternative activity 
D) value of the next most valuable alternative activity minus the value of the chosen activity 
E) summed value of all her alternative activities minus the value of the next most valuable alternative activity

Question 10

The study of how consumers and producers interact in individual markets is

Accepted Answer

A) macroeconomics 
B) labor economics 
C) microeconomics 
D) econometrics 
E) development economics 
A) macroeconomics 
B) labor economics 
C) microeconomics 
D) econometrics 
E) development economics

Question 11

An entrepreneur is best described as

Accepted Answer

A) someone that is hired to work in a firm 
B) someone who creates human capital 
C) someone with the ability to combine other resources in a productive enterprise 
D) anyone who owns productive enterprise 
E) anyone who produces long-lived physical capital 
A) someone that is hired to work in a firm 
B) someone who creates human capital 
C) someone with the ability to combine other resources in a productive enterprise 
D) anyone who owns productive enterprise 
E) anyone who produces long-lived physical capital

Question 12

Macroeconomics is the study of

Accepted Answer

A) how the price of gasoline is determined 
B) large objects 
C) the economic behavior of individual decision makers 
D) the behavior of the economy as a whole 
E) the economic behavior of individual firms 
A) how the price of gasoline is determined 
B) large objects 
C) the economic behavior of individual decision makers 
D) the behavior of the economy as a whole 
E) the economic behavior of individual firms

Question 13

Due to society's overall scarcity of resources,

Accepted Answer

A) only households are constrained by income 
B) only government agencies are constrained by limited budgets 
C) only business firms are constrained by the cost of buying their inputs 
D) households,business firms and government agencies all face constraints 
E) households and business firms face constraints,but government agencies do not 
A) only households are constrained by income 
B) only government agencies are constrained by limited budgets 
C) only business firms are constrained by the cost of buying their inputs 
D) households,business firms and government agencies all face constraints 
E) households and business firms face constraints,but government agencies do not

Question 14

If two economists completely agree about the magnitude of employment effects of a proposed change in government policy,but disagree about whether the change is a good idea.The difference in opinion

Accepted Answer

A) must be normative in nature 
B) is both positive and normative in nature 
C) is more likely to be normative than positive 
D) is more likely to be positive than normative 
E) would be neither positive nor normative in nature 
A) must be normative in nature 
B) is both positive and normative in nature 
C) is more likely to be normative than positive 
D) is more likely to be positive than normative 
E) would be neither positive nor normative in nature

Question 15

The opportunity cost of any action is

Accepted Answer

A) irrelevant to economic theory 
B) limited to the out-of-pocket cost incurred 
C) the sunk cost plus the markup on materials and labor 
D) what we gain in the process of consumption 
E) what is sacrificed to pursue that action 
A) irrelevant to economic theory 
B) limited to the out-of-pocket cost incurred 
C) the sunk cost plus the markup on materials and labor 
D) what we gain in the process of consumption 
E) what is sacrificed to pursue that action

Question 16

An economic model

Accepted Answer

A) uses equations to understand normative economic phenomena 
B) often omits crucial elements 
C) simplifies reality in order to focus on crucial elements 
D) tries to make simple concepts more complex 
E) cannot be proven wrong 
A) uses equations to understand normative economic phenomena 
B) often omits crucial elements 
C) simplifies reality in order to focus on crucial elements 
D) tries to make simple concepts more complex 
E) cannot be proven wrong

Question 17

People and organizations have to make choices about how to allocate time and money because

Accepted Answer

A) government requires it 
B) corporations control our lives 
C) time and money are both scarce 
D) religious values conflict with economics 
E) there are unlimited resources 
A) government requires it 
B) corporations control our lives 
C) time and money are both scarce 
D) religious values conflict with economics 
E) there are unlimited resources

Question 18

The basic problem addressed in economics is

Accepted Answer

A) scarce resources and unlimited wants 
B) scarce wants and unlimited resources 
C) cost minimization 
D) how to manage a financial portfolio 
E) unlimited time and unlimited potential 
A) scarce resources and unlimited wants 
B) scarce wants and unlimited resources 
C) cost minimization 
D) how to manage a financial portfolio 
E) unlimited time and unlimited potential

Question 19

Because of economic scarcity

Accepted Answer

A) there are not enough jobs for everyone 
B) people are afraid to become entrepreneurs 
C) the government interferes in the economy 
D) businesses cannot obtain the resources they need 
E) people and organizations have to allocate resources carefully 
A) there are not enough jobs for everyone 
B) people are afraid to become entrepreneurs 
C) the government interferes in the economy 
D) businesses cannot obtain the resources they need 
E) people and organizations have to allocate resources carefully

Question 20

In every economic system,scarcity imposes limitations on

Accepted Answer

A) households,business firms,governments,and the nation as a whole 
B) households and business firms,but not the governments 
C) local and state governments,but not the federal government 
D) households and governments,but not business firms 
E) business firms,governments,and the nation as a whole 
A) households,business firms,governments,and the nation as a whole 
B) households and business firms,but not the governments 
C) local and state governments,but not the federal government 
D) households and governments,but not business firms 
E) business firms,governments,and the nation as a whole

Society as a whole faces opportunity costs because

Macroeconomic models focus on the behavior of

"The Consumer Price Index increased by 4.2 percent in the first quarter of this year." What type of statement is this?

Suppose that the following headlines appeared in a newspaper.Which would most clearly represent a macroeconomic issue?

Microeconomics

The statement that "IBM's stock closed at $85" is

High-income people will sometimes pay higher prices at convenience stores for goods that are available at discount stores.They do this because

Individuals face opportunity costs because

Assume that Kelly's various possible activities are mutually exclusive.The opportunity cost from choosing one activity equals the

The study of how consumers and producers interact in individual markets is

An entrepreneur is best described as

Macroeconomics is the study of

Due to society's overall scarcity of resources,

If two economists completely agree about the magnitude of employment effects of a proposed change in government policy,but disagree about whether the change is a good idea.The difference in opinion

The opportunity cost of any action is

An economic model

People and organizations have to make choices about how to allocate time and money because

The basic problem addressed in economics is

Because of economic scarcity

In every economic system,scarcity imposes limitations on

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 1: What Is Economics

Society as a whole faces opportunity costs because

Macroeconomic models focus on the behavior of

"The Consumer Price Index increased by 4.2 percent in the first quarter of this year." What type of statement is this?

Suppose that the following headlines appeared in a newspaper.Which would most clearly represent a macroeconomic issue?

Microeconomics

The statement that "IBM's stock closed at $85" is

High-income people will sometimes pay higher prices at convenience stores for goods that are available at discount stores.They do this because

Individuals face opportunity costs because

Assume that Kelly's various possible activities are mutually exclusive.The opportunity cost from choosing one activity equals the

The study of how consumers and producers interact in individual markets is

An entrepreneur is best described as

Macroeconomics is the study of

Due to society's overall scarcity of resources,

If two economists completely agree about the magnitude of employment effects of a proposed change in government policy,but disagree about whether the change is a good idea.The difference in opinion

The opportunity cost of any action is

An economic model

People and organizations have to make choices about how to allocate time and money because

The basic problem addressed in economics is

Because of economic scarcity

In every economic system,scarcity imposes limitations on

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters