Question 1

Which of the following is NOT a normative economic statement?

Accepted Answer

A) States should reduce the tax on heating fuel oil during the winter. 
B) People over the age of 75 should not be allowed to drive cars. 
C) Teenagers are responsible for most driving fatalities. 
D) We don't spend enough money on anti-smoking campaigns. 
E) The price of gasoline is too high. 
A) States should reduce the tax on heating fuel oil during the winter. 
B) People over the age of 75 should not be allowed to drive cars. 
C) Teenagers are responsible for most driving fatalities. 
D) We don't spend enough money on anti-smoking campaigns. 
E) The price of gasoline is too high.

Question 2

Ali decides to attend the one-hour review session for microeconomics instead of working at his job.His job pays him $10 per hour.Ali's opportunity cost of attending the review session is

Accepted Answer

A) the $10 he could have earned at his job. 
B) the value of the session minus the $10 he could have earned at his job. 
C) nothing, because the review session does not cost anything. 
D) equal to the benefit he gets from the review session. 
E) the one-hour review session. 
A) the $10 he could have earned at his job. 
B) the value of the session minus the $10 he could have earned at his job. 
C) nothing, because the review session does not cost anything. 
D) equal to the benefit he gets from the review session. 
E) the one-hour review session.

Question 3

A positive statement
I∙makes a statement about how the world operates.
Ii∙is a true statement.
Iii∙can be tested against the facts.

Accepted Answer

A) i and ii 
B) i and iii 
C) ii and iii 
D) i, ii and iii 
E) i only 
A) i and ii 
B) i and iii 
C) ii and iii 
D) i, ii and iii 
E) i only

Question 4

Suppose you take a trip during Spring Break.To determine the benefit of taking the trip, you

Accepted Answer

A) calculate the opportunity cost of the trip. 
B) measure what you are willing to give up to take the trip. 
C) determine the sunk cost of taking the trip. 
D) calculate the value of the next best alternative foregone. 
E) must measure what the trip is worth to you and then subtract the cost of the trip. 
A) calculate the opportunity cost of the trip. 
B) measure what you are willing to give up to take the trip. 
C) determine the sunk cost of taking the trip. 
D) calculate the value of the next best alternative foregone. 
E) must measure what the trip is worth to you and then subtract the cost of the trip.

Question 5

Which of the following is a macroeconomic topic?
I∙China increases interest rates to slow its economic growth.
Ii∙Congress lowers tax rates to try and lower the unemployment rate.
Iii∙Nissan decides to produce more electric Leaf models and fewer Altima sedans.

Accepted Answer

A) i and ii 
B) i, ii and iii 
C) iii only 
D) i and iii 
E) ii and iii 
A) i and ii 
B) i, ii and iii 
C) iii only 
D) i and iii 
E) ii and iii

Question 6

Suppose the relationship between a person's age and his or her height is plotted with the age measured along the x-axis and the height measured along the y-axis.Then, the curve showing this relationship is

Accepted Answer

A) a straight line with a positive slope. 
B) positively sloped and becoming less steep. 
C) a straight line with a negative slope. 
D) negatively sloped and becoming less steep. 
E) positively sloped and becoming more steep. 
A) a straight line with a positive slope. 
B) positively sloped and becoming less steep. 
C) a straight line with a negative slope. 
D) negatively sloped and becoming less steep. 
E) positively sloped and becoming more steep.

Question 7

-The figure above shows a

Accepted Answer

A) time-series graph. 
B) scatter diagram. 
C) cross-section graph. 
D) slope. 
E) trend diagram 
A) time-series graph. 
B) scatter diagram. 
C) cross-section graph. 
D) slope. 
E) trend diagram

Question 8

Which of the following statements best describes the study of economics? Economics studies how

Accepted Answer

A) to organize production so that scarcity does not occur. 
B) firms make profits. 
C) we make choices in the face of scarcity. 
D) to create incentives so that scarcity does not exist. 
E) businesses reach decisions. 
A) to organize production so that scarcity does not occur. 
B) firms make profits. 
C) we make choices in the face of scarcity. 
D) to create incentives so that scarcity does not exist. 
E) businesses reach decisions.

Question 9

To graph a relationship among several variables, we hold all but ________ variable(s)constant and use the ________ assumption.

Accepted Answer

A) one; scarcity 
B) two; ceteris paribus 
C) three; scarcity 
D) one; ceteris paribus 
E) one; absence of trend 
A) one; scarcity 
B) two; ceteris paribus 
C) three; scarcity 
D) one; ceteris paribus 
E) one; absence of trend

Question 10

If two variables are unrelated, their graph is

Accepted Answer

A) either a horizontal or a vertical line. 
B) a downward-sloping line. 
C) an upward-sloping line. 
D) a curved line. 
E) None of the above answers is correct because it is not possible to graph unrelated variables. 
A) either a horizontal or a vertical line. 
B) a downward-sloping line. 
C) an upward-sloping line. 
D) a curved line. 
E) None of the above answers is correct because it is not possible to graph unrelated variables.

Question 11

Which of the following BEST describes macroeconomics?

Accepted Answer

A) It analyzes the aggregate effects on the national economy of the choices made by individuals, firms, and governments. 
B) It studies the choices that individuals and businesses make when coping with scarcity. 
C) It examines how the choices that individuals affect governments. 
D) It is not a social science because its predictions cannot be tested. 
E) Proving causation is never a problem for macroeconomics. 
A) It analyzes the aggregate effects on the national economy of the choices made by individuals, firms, and governments. 
B) It studies the choices that individuals and businesses make when coping with scarcity. 
C) It examines how the choices that individuals affect governments. 
D) It is not a social science because its predictions cannot be tested. 
E) Proving causation is never a problem for macroeconomics.

Question 12

Which of the following statements is correct?

Accepted Answer

A) When a line slopes downwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. 
B) When a line slopes upwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. 
C) The higher the temperature, the more ice cream people consume. Thus the temperature and ice cream consumption are inversely related. 
D) If two variables are directly related, a graph of the two variables has a negative slope. 
E) None of the above statements are correct. 
A) When a line slopes downwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. 
B) When a line slopes upwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. 
C) The higher the temperature, the more ice cream people consume. Thus the temperature and ice cream consumption are inversely related. 
D) If two variables are directly related, a graph of the two variables has a negative slope. 
E) None of the above statements are correct.

Question 13

-A cross-section graph

Accepted Answer

A) is divided into different sections. 
B) shows the values of an economic variable for different groups in a population at a point in time. 
C) measures time on the x-axis and the variable in which we are interested on the y-axis. 
D) Both answers A and C are correct. 
E) Both answers A and B are correct. 
A) is divided into different sections. 
B) shows the values of an economic variable for different groups in a population at a point in time. 
C) measures time on the x-axis and the variable in which we are interested on the y-axis. 
D) Both answers A and C are correct. 
E) Both answers A and B are correct.

Question 14

Of the three major economic questions, which of the following is the best example of a "What?" question?

Accepted Answer

A) Should automobiles be produced using workers or robots? 
B) Should higher-income or lower-income people buy SUVs? 
C) Should we make faster microprocessors or pest-resistant corn? 
D) Should migrant workers or domestic workers be used to pick grapes? 
E) What should doctors be paid? 
A) Should automobiles be produced using workers or robots? 
B) Should higher-income or lower-income people buy SUVs? 
C) Should we make faster microprocessors or pest-resistant corn? 
D) Should migrant workers or domestic workers be used to pick grapes? 
E) What should doctors be paid?

Question 15

Whenever one variable increases, another variable decreases.The two variables are

Accepted Answer

A) definitely related through a third variable. 
B) negatively related. 
C) positively related. 
D) unrelated to each other. 
E) related but whether positively or negatively related depends on which variable is plotted on the vertical axis. 
A) definitely related through a third variable. 
B) negatively related. 
C) positively related. 
D) unrelated to each other. 
E) related but whether positively or negatively related depends on which variable is plotted on the vertical axis.

Question 16

People must make choices because

Accepted Answer

A) most people enjoy shopping. 
B) of scarcity. 
C) there are many goods available. 
D) the question "What goods and services are produced?" is not adequately answered. 
E) making choices is in the social interest. 
A) most people enjoy shopping. 
B) of scarcity. 
C) there are many goods available. 
D) the question "What goods and services are produced?" is not adequately answered. 
E) making choices is in the social interest.

Question 17

When Fresh Express Salads decides to mechanically pick all of its lettuce, it directly answers the ________ question.

Accepted Answer

A) what 
B) how 
C) for whom 
D) where 
E) when 
A) what 
B) how 
C) for whom 
D) where 
E) when

Question 18

A graph of two variables is a vertical line.What is the interpretation of this result?

Accepted Answer

When the graph of two variables is a ver

Question 19

-In the above, which figure shows both a positive and a negative relationship between the variables?

Accepted Answer

A) Figure A 
B) Figure B 
C) Figure C 
D) Figure D 
E) Figure A, B, and D 
A) Figure A 
B) Figure B 
C) Figure C 
D) Figure D 
E) Figure A, B, and D

Question 20

Scarcity results from the fact that

Accepted Answer

A) people's wants exceed the resources available to satisfy them. 
B) not all goals are desirable. 
C) we cannot answer the major economic questions. 
D) choices made in self-interest rare not always in the social interest. 
E) the population keeps growing. 
A) people's wants exceed the resources available to satisfy them. 
B) not all goals are desirable. 
C) we cannot answer the major economic questions. 
D) choices made in self-interest rare not always in the social interest. 
E) the population keeps growing.

Which of the following is NOT a normative economic statement?

Ali decides to attend the one-hour review session for microeconomics instead of working at his job.His job pays him $10 per hour.Ali's opportunity cost of attending the review session is

A positive statement I∙makes a statement about how the world operates. Ii∙is a true statement. Iii∙can be tested against the facts.

Suppose you take a trip during Spring Break.To determine the benefit of taking the trip, you

Which of the following is a macroeconomic topic? I∙China increases interest rates to slow its economic growth. Ii∙Congress lowers tax rates to try and lower the unemployment rate. Iii∙Nissan decides to produce more electric Leaf models and fewer Altima sedans.

Suppose the relationship between a person's age and his or her height is plotted with the age measured along the x-axis and the height measured along the y-axis.Then, the curve showing this relationship is

-The figure above shows a

Which of the following statements best describes the study of economics? Economics studies how

To graph a relationship among several variables, we hold all but variable(s)constant and use the assumption.

If two variables are unrelated, their graph is

Which of the following BEST describes macroeconomics?

Which of the following statements is correct?

-A cross-section graph

Of the three major economic questions, which of the following is the best example of a "What?" question?

Whenever one variable increases, another variable decreases.The two variables are

People must make choices because

When Fresh Express Salads decides to mechanically pick all of its lettuce, it directly answers the ________ question.

A graph of two variables is a vertical line.What is the interpretation of this result?

-In the above, which figure shows both a positive and a negative relationship between the variables?

Scarcity results from the fact that

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 1: Getting Started

Which of the following is NOT a normative economic statement?

Ali decides to attend the one-hour review session for microeconomics instead of working at his job.His job pays him $10 per hour.Ali's opportunity cost of attending the review session is

A positive statement I∙makes a statement about how the world operates. Ii∙is a true statement. Iii∙can be tested against the facts.

Suppose you take a trip during Spring Break.To determine the benefit of taking the trip, you

Which of the following is a macroeconomic topic? I∙China increases interest rates to slow its economic growth. Ii∙Congress lowers tax rates to try and lower the unemployment rate. Iii∙Nissan decides to produce more electric Leaf models and fewer Altima sedans.

Suppose the relationship between a person's age and his or her height is plotted with the age measured along the x-axis and the height measured along the y-axis.Then, the curve showing this relationship is

-The figure above shows a

Which of the following statements best describes the study of economics? Economics studies how

To graph a relationship among several variables, we hold all but ________ variable(s)constant and use the ________ assumption.

If two variables are unrelated, their graph is

Which of the following BEST describes macroeconomics?

Which of the following statements is correct?

-A cross-section graph

Of the three major economic questions, which of the following is the best example of a "What?" question?

Whenever one variable increases, another variable decreases.The two variables are

People must make choices because

When Fresh Express Salads decides to mechanically pick all of its lettuce, it directly answers the ________ question.

A graph of two variables is a vertical line.What is the interpretation of this result?

-In the above, which figure shows both a positive and a negative relationship between the variables?

Scarcity results from the fact that

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

To graph a relationship among several variables, we hold all but variable(s)constant and use the assumption.