Question 1

Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of

Accepted Answer

A) scarcity. 
B) why to produce. 
C) macroeconomics. 
D) microeconomics. 
E) social interest versus self-interest. 
A) scarcity. 
B) why to produce. 
C) macroeconomics. 
D) microeconomics. 
E) social interest versus self-interest.

Question 2

What is a positive statement? Give an example.

Accepted Answer

A positive statement addresses

Question 3

The question of "How are goods and services produced?" most closely addresses which of the following issues?

Accepted Answer

A) Should Ford build SUVs or luxury cars? 
B) Should Ford use expensive industrial robots or inexpensive Mexican autoworkers to produce SUVs? 
C) Should contractors building residential housing or shopping malls? 
D) Is income distributed fairly in the United States? 
E) Why are Christmas trees popular only in December? 
A) Should Ford build SUVs or luxury cars? 
B) Should Ford use expensive industrial robots or inexpensive Mexican autoworkers to produce SUVs? 
C) Should contractors building residential housing or shopping malls? 
D) Is income distributed fairly in the United States? 
E) Why are Christmas trees popular only in December?

Question 4

A curve with a positive but decreasing slope represents a relationship where, every time the variable measured along the horizontal axis increases by one unit, the variable measured along the vertical axis

Accepted Answer

A) increases by a constant amount. 
B) increases by an increasing amount. 
C) increases by a decreasing amount. 
D) decreases. 
E) does not change by much. 
A) increases by a constant amount. 
B) increases by an increasing amount. 
C) increases by a decreasing amount. 
D) decreases. 
E) does not change by much.

Question 5

If the quantity of the variable on the y-axis increases by 3 when the quantity of the variable on the x-axis increases by 4, then the slope of the curve equals

Accepted Answer

A) 3. 
B) 4. 
C) 3/4. 
D) 4/3. 
E) 1. 
A) 3. 
B) 4. 
C) 3/4. 
D) 4/3. 
E) 1.

Question 6

A graph shows the price of a pound of cucumbers on the vertical axis and the quantity of new cars sold by Honda on the horizontal axis.The price of a pound of cucumbers remains constant as the quantity of new cars sold increases.The graph of these data is a

Accepted Answer

A) horizontal line. 
B) vertical line. 
C) curve with a maximum. 
D) positively sloped line. 
E) negatively sloped line. 
A) horizontal line. 
B) vertical line. 
C) curve with a maximum. 
D) positively sloped line. 
E) negatively sloped line.

Question 7

A statement that "All children should receive free health care" is an example of what kind of statement?

Accepted Answer

A) a fair statement 
B) a natural experiment statement 
C) a normative statement 
D) a positive statement 
E) a statement on the margin 
A) a fair statement 
B) a natural experiment statement 
C) a normative statement 
D) a positive statement 
E) a statement on the margin

Question 8

The question "Should economics majors or sociology majors earn more after they graduate?" is an example of a ________ question.

Accepted Answer

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

Question 9

A rational choice is one that

Accepted Answer

A) always turns out for the best for the decision maker. 
B) creates no costs for the decision maker. 
C) must be made with perfect information. 
D) uses the available resources to most effectively satisfy the wants of the person making the choice. 
E) is made in the social interest rather than the self-interest. 
A) always turns out for the best for the decision maker. 
B) creates no costs for the decision maker. 
C) must be made with perfect information. 
D) uses the available resources to most effectively satisfy the wants of the person making the choice. 
E) is made in the social interest rather than the self-interest.

Question 10

-In the above figure, which of the figures show(s)a relationships between x and y with a positive slope?

Accepted Answer

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

Question 11

The benefit of an activity is

Accepted Answer

A) purely objective and measured in dollars. 
B) the gain or pleasure that it brings. 
C) the value of its opportunity cost. 
D) measured by what must be given up to get one more unit of the activity. 
E) not measurable on the margin. 
A) purely objective and measured in dollars. 
B) the gain or pleasure that it brings. 
C) the value of its opportunity cost. 
D) measured by what must be given up to get one more unit of the activity. 
E) not measurable on the margin.

Question 12

-What does the slope of the line shown in the above figure equal?

Accepted Answer

The slope equals the change in

Question 13

Mothers Against Drunk Drivers (MADD)campaigned to increase the legal penalties of drunk driving.This successful campaign ________ of drunk driving.

Accepted Answer

A) increased the marginal benefit 
B) decreased the marginal benefit 
C) increased the marginal cost 
D) decreased the marginal cost 
E) had no effect on the marginal cost or marginal benefit but did affect the total benefit 
A) increased the marginal benefit 
B) decreased the marginal benefit 
C) increased the marginal cost 
D) decreased the marginal cost 
E) had no effect on the marginal cost or marginal benefit but did affect the total benefit

Question 14

What typically happens to benefits as the amount of an activity is increased?

Accepted Answer

A) Total benefits remain constant. 
B) Marginal benefit increases. 
C) Marginal benefit remains constant. 
D) Marginal benefit decreases. 
E) The marginal benefit changes only if the marginal cost changes. 
A) Total benefits remain constant. 
B) Marginal benefit increases. 
C) Marginal benefit remains constant. 
D) Marginal benefit decreases. 
E) The marginal benefit changes only if the marginal cost changes.

Question 15

Going skiing will cost Adam $80 a day.He also loses $40 per day in wages because he has to take time off from work.Adam still decides to go skiing.

Accepted Answer

A) His decision is rational if Adam's marginal benefit of spending a day skiing is greater than his marginal cost. 
B) The $80 price of skiing is not an opportunity cost and so did not affect Adam's decision. 
C) He loses a total of $120 per day, so his decision is irrational. 
D) Adam's lost $40 per day in wages is not an opportunity cost and so did not affect his decision. 
E) Adam is definitely making a decision that is in the social interest. 
A) His decision is rational if Adam's marginal benefit of spending a day skiing is greater than his marginal cost. 
B) The $80 price of skiing is not an opportunity cost and so did not affect Adam's decision. 
C) He loses a total of $120 per day, so his decision is irrational. 
D) Adam's lost $40 per day in wages is not an opportunity cost and so did not affect his decision. 
E) Adam is definitely making a decision that is in the social interest.

Question 16

-In the diagram above, which figure(s)show(s)an inverse relationship between the variables?

Accepted Answer

A) both B and C 
B) only B 
C) both A and C 
D) only D 
E) only C 
A) both B and C 
B) only B 
C) both A and C 
D) only D 
E) only C

Question 17

John decides to leave college early and play professional sports.Which of the following economic principles does John use?
i. personal economic policies
ii. marginal cost versus marginal benefit analysis
iii. normative versus positive economics

Accepted Answer

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

Question 18

-Which type of economic graph reveals trends in data?

Accepted Answer

A) cross-section graph 
B) time-series graph 
C) scatter diagram 
D) Answers A and C are correct. 
E) Answers A, B, and C are all correct. 
A) cross-section graph 
B) time-series graph 
C) scatter diagram 
D) Answers A and C are correct. 
E) Answers A, B, and C are all correct.

Question 19

-In the above, which figure(s)show a relationship between the variables that is always negative?

Accepted Answer

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

Question 20

The decision to go to graduate school is a rational one for a college student if the

Accepted Answer

A) cost is not too great. 
B) marginal cost exceeds the marginal benefit of graduate school. 
C) marginal benefit of graduate school exceeds the marginal cost. 
D) opportunity cost of graduate school equals zero. 
E) student carefully compared the social benefits of this decision. 
A) cost is not too great. 
B) marginal cost exceeds the marginal benefit of graduate school. 
C) marginal benefit of graduate school exceeds the marginal cost. 
D) opportunity cost of graduate school equals zero. 
E) student carefully compared the social benefits of this decision.

Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of

What is a positive statement? Give an example.

The question of "How are goods and services produced?" most closely addresses which of the following issues?

A curve with a positive but decreasing slope represents a relationship where, every time the variable measured along the horizontal axis increases by one unit, the variable measured along the vertical axis

If the quantity of the variable on the y-axis increases by 3 when the quantity of the variable on the x-axis increases by 4, then the slope of the curve equals

A graph shows the price of a pound of cucumbers on the vertical axis and the quantity of new cars sold by Honda on the horizontal axis.The price of a pound of cucumbers remains constant as the quantity of new cars sold increases.The graph of these data is a

A statement that "All children should receive free health care" is an example of what kind of statement?

The question "Should economics majors or sociology majors earn more after they graduate?" is an example of a ________ question.

A rational choice is one that

-In the above figure, which of the figures show(s)a relationships between x and y with a positive slope?

The benefit of an activity is

-What does the slope of the line shown in the above figure equal?

Mothers Against Drunk Drivers (MADD)campaigned to increase the legal penalties of drunk driving.This successful campaign ________ of drunk driving.

What typically happens to benefits as the amount of an activity is increased?

Going skiing will cost Adam $80 a day.He also loses $40 per day in wages because he has to take time off from work.Adam still decides to go skiing.

-In the diagram above, which figure(s)show(s)an inverse relationship between the variables?

John decides to leave college early and play professional sports.Which of the following economic principles does John use? i. personal economic policies ii. marginal cost versus marginal benefit analysis iii. normative versus positive economics

-Which type of economic graph reveals trends in data?

-In the above, which figure(s)show a relationship between the variables that is always negative?

The decision to go to graduate school is a rational one for a college student if the

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

Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of

What is a positive statement? Give an example.

The question of "How are goods and services produced?" most closely addresses which of the following issues?

A curve with a positive but decreasing slope represents a relationship where, every time the variable measured along the horizontal axis increases by one unit, the variable measured along the vertical axis

If the quantity of the variable on the y-axis increases by 3 when the quantity of the variable on the x-axis increases by 4, then the slope of the curve equals

A graph shows the price of a pound of cucumbers on the vertical axis and the quantity of new cars sold by Honda on the horizontal axis.The price of a pound of cucumbers remains constant as the quantity of new cars sold increases.The graph of these data is a

A statement that "All children should receive free health care" is an example of what kind of statement?

The question "Should economics majors or sociology majors earn more after they graduate?" is an example of a ________ question.

A rational choice is one that

-In the above figure, which of the figures show(s)a relationships between x and y with a positive slope?

The benefit of an activity is

-What does the slope of the line shown in the above figure equal?

Mothers Against Drunk Drivers (MADD)campaigned to increase the legal penalties of drunk driving.This successful campaign ________ of drunk driving.

What typically happens to benefits as the amount of an activity is increased?

Going skiing will cost Adam $80 a day.He also loses $40 per day in wages because he has to take time off from work.Adam still decides to go skiing.

-In the diagram above, which figure(s)show(s)an inverse relationship between the variables?

John decides to leave college early and play professional sports.Which of the following economic principles does John use? i. personal economic policies ii. marginal cost versus marginal benefit analysis iii. normative versus positive economics

-Which type of economic graph reveals trends in data?

-In the above, which figure(s)show a relationship between the variables that is always negative?

The decision to go to graduate school is a rational one for a college student if the

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