Question 1

The money we pay for a good or service

Accepted Answer

A) generally exceeds its opportunity cost. 
B) generally equals its opportunity cost. 
C) has no part in determining its opportunity cost. 
D) generally equals two-thirds of its opportunity cost. 
E) generally is only part of its opportunity cost. 
A) generally exceeds its opportunity cost. 
B) generally equals its opportunity cost. 
C) has no part in determining its opportunity cost. 
D) generally equals two-thirds of its opportunity cost. 
E) generally is only part of its opportunity cost.

Question 2

Opportunity costs exist because

Accepted Answer

A) there is a price attached to virtually every good or service 
B) technology is not fixed in the economy 
C) people have different tastes and preferences 
D) limited resources cannot satisfy all of the wants in society 
E) the production possibilities frontier is bowed in with respect to the origin 
A) there is a price attached to virtually every good or service 
B) technology is not fixed in the economy 
C) people have different tastes and preferences 
D) limited resources cannot satisfy all of the wants in society 
E) the production possibilities frontier is bowed in with respect to the origin

Question 3

When economists disagree about whether legislation is a good idea,even when they agree about its impacts,the disagreements are usually over

Accepted Answer

A) normative issues 
B) positive issues 
C) the mathematical calculations in an economic model 
D) whether microeconomics or macroeconomics is more important 
E) whether economic theory is useful in explaining the behavior of actors in the economy 
A) normative issues 
B) positive issues 
C) the mathematical calculations in an economic model 
D) whether microeconomics or macroeconomics is more important 
E) whether economic theory is useful in explaining the behavior of actors in the economy

Question 4

An economist claims that "the evidence suggests that high rates of inflation are associated with slow long-term economic growth." This is an example of

Accepted Answer

A) positive economics 
B) normative economics 
C) negative economics 
D) a simplifying assumption 
E) microeconomic analysis 
A) positive economics 
B) normative economics 
C) negative economics 
D) a simplifying assumption 
E) microeconomic analysis

Question 5

The opportunity cost of a particular economic activity

Accepted Answer

A) is the same for each individual considering the activity 
B) can differ among different individuals considering the activity 
C) excludes the monetary cost of the activity 
D) equals the money cost of the activity minus its time cost 
E) has the same time cost for each individual considering the activity 
A) is the same for each individual considering the activity 
B) can differ among different individuals considering the activity 
C) excludes the monetary cost of the activity 
D) equals the money cost of the activity minus its time cost 
E) has the same time cost for each individual considering the activity

Question 6

Kate takes a part-time job and the sacrifice of study time causes her grade point average to fall from 3.5 to 2.9.Assume that the grade point average would have stayed at 3.5 if study time had not been reduced.The opportunity cost of having taken the job is the

Accepted Answer

A) cost of tuition 
B) 3.5 grade point average 
C) 0.6 decrease in the grade point average 
D) 2.9 grade point average 
E) money earned from the part-time job 
A) cost of tuition 
B) 3.5 grade point average 
C) 0.6 decrease in the grade point average 
D) 2.9 grade point average 
E) money earned from the part-time job

Question 7

The knowledge that students gain while in college is referred to by economists as human capital.

Accepted Answer

A) True 
 B)False

Question 8

A particular music store,Discs-R-Us,sells over 3,000 different compact disks.Pat's opportunity cost of choosing to purchase a compact disk by Pearl Jam

Accepted Answer

A) is zero if he does not like any other compact disk 
B) is how much he would have enjoyed his second-favorite compact disk 
C) depends on the compact disks not sold by the store 
D) is negative 
E) is how much he would have enjoyed a compact disk by Vanilla Ice 
A) is zero if he does not like any other compact disk 
B) is how much he would have enjoyed his second-favorite compact disk 
C) depends on the compact disks not sold by the store 
D) is negative 
E) is how much he would have enjoyed a compact disk by Vanilla Ice

Question 9

Opportunity costs arise because of resource scarcity.

Accepted Answer

A) True 
 B)False

Question 10

If the president of Chile commented that "the crime rate in Chile is currently too high," this would be an example of a normative statement.

Accepted Answer

A) True 
 B)False

Question 11

Society has to establish priorities among its goals because of

Accepted Answer

A) lazy politicians 
B) manipulative politicians 
C) uneducated voters 
D) a scarcity of resources 
E) too many bosses and not enough workers 
A) lazy politicians 
B) manipulative politicians 
C) uneducated voters 
D) a scarcity of resources 
E) too many bosses and not enough workers

Question 12

Macroeconomics studies the determination of

Accepted Answer

A) total output,total employment,the general price level,and the general level of interest rates 
B) total output and the general level of interest rates only 
C) total employment and the general level of prices only 
D) the interaction of individual economic actors in specific markets and industries 
E) the levels of employment and prices in specific markets and industries 
A) total output,total employment,the general price level,and the general level of interest rates 
B) total output and the general level of interest rates only 
C) total employment and the general level of prices only 
D) the interaction of individual economic actors in specific markets and industries 
E) the levels of employment and prices in specific markets and industries

Question 13

The opportunity cost of a particular activity is the sum of the benefits that could have been received from all foregone activities.

Accepted Answer

A) True 
 B)False

Question 14

Microeconomic topics include the overall unemployment rate in the United States and the rate of inflation.

Accepted Answer

A) True 
 B)False

Question 15

The statement "The unemployment rate in the U.S.is 5 percent" is

Accepted Answer

A) a statement of opinion 
B) a positive statement that can be falsified 
C) lacking proper microeconomic foundations 
D) a statistical anomaly 
E) a philosophical difference of opinions regarding the nature and significance of statistical inference 
A) a statement of opinion 
B) a positive statement that can be falsified 
C) lacking proper microeconomic foundations 
D) a statistical anomaly 
E) a philosophical difference of opinions regarding the nature and significance of statistical inference

Question 16

The price that a firm's only competitor charges would be a

Accepted Answer

A) topic in microeconomics 
B) topic in finance 
C) macroeconomic topic 
D) topic in public finance 
E) normative issue 
A) topic in microeconomics 
B) topic in finance 
C) macroeconomic topic 
D) topic in public finance 
E) normative issue

Question 17

A professional basketball players' union negotiates a contract that dramatically increases all players' salaries.How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?

Accepted Answer

A) It would not affect the opportunity cost of playing basketball or of broadcasting. 
B) It would increase the opportunity cost of continuing to play professional basketball. 
C) It would cause the production possibilities frontier to become convex. 
D) It would increase the opportunity cost of becoming a broadcaster. 
E) It should have no bearing on the player's decision from an economic standpoint. 
A) It would not affect the opportunity cost of playing basketball or of broadcasting. 
B) It would increase the opportunity cost of continuing to play professional basketball. 
C) It would cause the production possibilities frontier to become convex. 
D) It would increase the opportunity cost of becoming a broadcaster. 
E) It should have no bearing on the player's decision from an economic standpoint.

Question 18

Which of the following is a normative statement?

Accepted Answer

A) Fifteen percent of Americans go without health insurance in a year. 
B) The Consumer Price Index rose three-tenths of one percent in May. 
C) An increase in the minimum wage will increase teenage unemployment. 
D) Americans would be better served by single-payer health care system. 
E) The French trade deficit reached an all-time high last year. 
A) Fifteen percent of Americans go without health insurance in a year. 
B) The Consumer Price Index rose three-tenths of one percent in May. 
C) An increase in the minimum wage will increase teenage unemployment. 
D) Americans would be better served by single-payer health care system. 
E) The French trade deficit reached an all-time high last year.

Question 19

The ultimate purpose of an economic model is to

Accepted Answer

A) explain reality as completely as possible 
B) establish assumptions that closely resemble reality 
C) help us understand economic behavior 
D) determine what each decision maker wants to maximize 
E) guide government policy decisions 
A) explain reality as completely as possible 
B) establish assumptions that closely resemble reality 
C) help us understand economic behavior 
D) determine what each decision maker wants to maximize 
E) guide government policy decisions

Question 20

Which of the following would be strictly a microeconomic topic?

Accepted Answer

A) a general rise in interest rates 
B) a drop in inflation 
C) an increase in total production in the United States 
D) a drop in the nation's unemployment rate 
E) an increase in the price of the Ford Taurus 
A) a general rise in interest rates 
B) a drop in inflation 
C) an increase in total production in the United States 
D) a drop in the nation's unemployment rate 
E) an increase in the price of the Ford Taurus

The money we pay for a good or service

Opportunity costs exist because

When economists disagree about whether legislation is a good idea,even when they agree about its impacts,the disagreements are usually over

An economist claims that "the evidence suggests that high rates of inflation are associated with slow long-term economic growth." This is an example of

The opportunity cost of a particular economic activity

Kate takes a part-time job and the sacrifice of study time causes her grade point average to fall from 3.5 to 2.9.Assume that the grade point average would have stayed at 3.5 if study time had not been reduced.The opportunity cost of having taken the job is the

The knowledge that students gain while in college is referred to by economists as human capital.

A particular music store,Discs-R-Us,sells over 3,000 different compact disks.Pat's opportunity cost of choosing to purchase a compact disk by Pearl Jam

Opportunity costs arise because of resource scarcity.

If the president of Chile commented that "the crime rate in Chile is currently too high," this would be an example of a normative statement.

Society has to establish priorities among its goals because of

Macroeconomics studies the determination of

The opportunity cost of a particular activity is the sum of the benefits that could have been received from all foregone activities.

Microeconomic topics include the overall unemployment rate in the United States and the rate of inflation.

The statement "The unemployment rate in the U.S.is 5 percent" is

The price that a firm's only competitor charges would be a

A professional basketball players' union negotiates a contract that dramatically increases all players' salaries.How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?

Which of the following is a normative statement?

The ultimate purpose of an economic model is to

Which of the following would be strictly a microeconomic topic?

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

The money we pay for a good or service

Opportunity costs exist because

When economists disagree about whether legislation is a good idea,even when they agree about its impacts,the disagreements are usually over

An economist claims that "the evidence suggests that high rates of inflation are associated with slow long-term economic growth." This is an example of

The opportunity cost of a particular economic activity

Kate takes a part-time job and the sacrifice of study time causes her grade point average to fall from 3.5 to 2.9.Assume that the grade point average would have stayed at 3.5 if study time had not been reduced.The opportunity cost of having taken the job is the

The knowledge that students gain while in college is referred to by economists as human capital.

A particular music store,Discs-R-Us,sells over 3,000 different compact disks.Pat's opportunity cost of choosing to purchase a compact disk by Pearl Jam

Opportunity costs arise because of resource scarcity.

If the president of Chile commented that "the crime rate in Chile is currently too high," this would be an example of a normative statement.

Society has to establish priorities among its goals because of

Macroeconomics studies the determination of

The opportunity cost of a particular activity is the sum of the benefits that could have been received from all foregone activities.

Microeconomic topics include the overall unemployment rate in the United States and the rate of inflation.

The statement "The unemployment rate in the U.S.is 5 percent" is

The price that a firm's only competitor charges would be a

A professional basketball players' union negotiates a contract that dramatically increases all players' salaries.How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?

Which of the following is a normative statement?

The ultimate purpose of an economic model is to

Which of the following would be strictly a microeconomic topic?

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