Question 1

Suppose when the price of hybrid automobiles rises,consumers buy fewer hybrid automobiles.This implies that

Accepted Answer

A)  there is a positive relationship between hybrid automobile prices and quantities purchased by consumers. 
B)  there is a negative relationship between hybrid automobile prices and quantities purchased by consumers. 
C)  there is a direct relationship between hybrid automobile prices and quantities purchased by consumers. 
D)  there is a one-to-one relationship between hybrid automobile prices and quantities purchased by consumers. 
A)  there is a positive relationship between hybrid automobile prices and quantities purchased by consumers. 
B)  there is a negative relationship between hybrid automobile prices and quantities purchased by consumers. 
C)  there is a direct relationship between hybrid automobile prices and quantities purchased by consumers. 
D)  there is a one-to-one relationship between hybrid automobile prices and quantities purchased by consumers.

Question 2

Which of the following best describes an assumption economists make about human behavior?

Accepted Answer

A)  They assume that individuals act rationally all the time in all circumstances. 
B)  They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time. 
C)  They assume that people take into account the question of fairness in all decisions they make. 
D)  They assume that individuals act randomly. 
A)  They assume that individuals act rationally all the time in all circumstances. 
B)  They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time. 
C)  They assume that people take into account the question of fairness in all decisions they make. 
D)  They assume that individuals act randomly.

Question 3

Which of the following is counted as "capital" in economics?

Accepted Answer

A)  the money people have 
B)  the machines workers have to work with 
C)  the accumulated skills and training workers have 
D)  the wealth people have 
A)  the money people have 
B)  the machines workers have to work with 
C)  the accumulated skills and training workers have 
D)  the wealth people have

Question 4

Suppose a doctor can earn an additional $10,000 in revenue per year from keeping her office open on Saturdays.What must the additional cost of keeping the office open on Saturdays be to make this decision economically rational?

Accepted Answer

The additional cost of keeping

Question 5

Table 1-1
   
Eva runs a small bakery in the village of Roggerli. She is debating whether she should extend her hours of operation. Eva figures that her sales revenue will depend on the number of hours the bakery is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $12 per hour.
-Refer to Table 1-1.What is Eva's marginal cost if she decides to stay open for two hours instead of one hour?

Accepted Answer

A)  $12 
B)  $24 
C)  $36 
D)  $71 
A)  $12 
B)  $24 
C)  $36 
D)  $71

Question 6

Which of the following statements about positive economic analysis is true ?

Accepted Answer

A)  Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. 
B)  There is much less disagreement among economists over normative economic analysis than over positive economic analysis. 
C)  There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D)  Unlike positive economic analysis, normative economic analysis can be tested. 
A)  Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. 
B)  There is much less disagreement among economists over normative economic analysis than over positive economic analysis. 
C)  There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D)  Unlike positive economic analysis, normative economic analysis can be tested.

Question 7

The term "market" in economics refers to

Accepted Answer

A)  a place where money changes hands. 
B)  a legal institution where exchange can take place. 
C)  a group of buyers and sellers of a product and the arrangement by which they come together to trade. 
D)  an organization which sells goods and services. 
A)  a place where money changes hands. 
B)  a legal institution where exchange can take place. 
C)  a group of buyers and sellers of a product and the arrangement by which they come together to trade. 
D)  an organization which sells goods and services.

Question 8

What is an economic market?

Accepted Answer

An economic market refers to a

Question 9

Figure 1-3
  
-Refer to Figure 1-3.Calculate the area of the trapezoid X.

Accepted Answer

A)  $361 
B)  $450 
C)  $1,020 
D)  $1,140 
A)  $361 
B)  $450 
C)  $1,020 
D)  $1,140

Question 10

What is the difference between physical capital and human capital?

Accepted Answer

Physical capital includes manu

Question 11

Which of the following is correct about the economic decisions consumers,firms,and the government have to make?

Accepted Answer

A)  Governments may face the problem of shortages but not scarcity in making economic decisions. 
B)  Only individuals face scarcity; firms and the government do not. 
C)  Firms and the government face scarcity, individuals only face shortages. 
D)  Each faces the problem of scarcity which necessitates trade-offs in making economic decisions. 
A)  Governments may face the problem of shortages but not scarcity in making economic decisions. 
B)  Only individuals face scarcity; firms and the government do not. 
C)  Firms and the government face scarcity, individuals only face shortages. 
D)  Each faces the problem of scarcity which necessitates trade-offs in making economic decisions.

Question 12

Which of the following statements is true about revenue?

Accepted Answer

A)  Revenue is the total amount received for selling a good or service. 
B)  Revenue is calculated by dividing the price per unit by the number of units sold. 
C)  The terms "revenue" and "profit" can be used interchangeably. 
D)  A firm's revenue will increase as its costs increase. 
A)  Revenue is the total amount received for selling a good or service. 
B)  Revenue is calculated by dividing the price per unit by the number of units sold. 
C)  The terms "revenue" and "profit" can be used interchangeably. 
D)  A firm's revenue will increase as its costs increase.

Question 13

Table 1-1
   
Eva runs a small bakery in the village of Roggerli. She is debating whether she should extend her hours of operation. Eva figures that her sales revenue will depend on the number of hours the bakery is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $12 per hour.
-Refer to Table 1-1.Using marginal analysis,determine how many hours should Eva extend her bakery's hours of operations?

Accepted Answer

A)  2 hours 
B)  3 hours 
C)  4 hours 
D)  5 hours 
E)  6 hours 
A)  2 hours 
B)  3 hours 
C)  4 hours 
D)  5 hours 
E)  6 hours

Question 14

How does the study of microeconomics differ from that of macroeconomics? Give one example each of an issue studied in microeconomics and in macroeconomics.

Accepted Answer

Microeconomics is the study of how house

Question 15

Scarcity refers to the situation in which

Accepted Answer

A)  unlimited wants exceed limited resources. 
B)  unlimited resources exceed limited wants. 
C)  a country's population is larger than its resource base. 
D)  a nation's poverty level increases faster than its population. 
A)  unlimited wants exceed limited resources. 
B)  unlimited resources exceed limited wants. 
C)  a country's population is larger than its resource base. 
D)  a nation's poverty level increases faster than its population.

Question 16

One example of human capital is the amount of savings that you have.

Accepted Answer

A) True 
 B)False

Question 17

In a market economy,________ interact in markets to decide the answers to the fundamental economic questions.

Accepted Answer

A)  state and local governments 
B)  large corporations 
C)  households and firms 
D)  the judicial and legislative branches of the federal government 
A)  state and local governments 
B)  large corporations 
C)  households and firms 
D)  the judicial and legislative branches of the federal government

Question 18

The number of people who have gray hair is very high among residents living in Florida.A student concludes that living in Florida causes hair to turn gray.What is the flaw in this student's reasoning?

Accepted Answer

A)  The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents. 
B)  The student is using an inadequate sample size. 
C)  The student is drawing a false conclusion; he is confusing cause and effect. 
D)  The student has failed to take into account other causes of gray hair. 
A)  The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents. 
B)  The student is using an inadequate sample size. 
C)  The student is drawing a false conclusion; he is confusing cause and effect. 
D)  The student has failed to take into account other causes of gray hair.

Question 19

The branch of economics which studies the behavior of entire economies and policies that affect the economy as a whole is called

Accepted Answer

A)  public economics. 
B)  microeconomics. 
C)  macroeconomics. 
D)  normative economics. 
A)  public economics. 
B)  microeconomics. 
C)  macroeconomics. 
D)  normative economics.

Question 20

Dr.Goldfinger decides to invest in companies which he believes can "improve the productivity and efficiency" of health care services.What would Dr.Goldfinger need to do to try to achieve allocative efficiency?

Accepted Answer

A)  invest in companies that produce goods and services based on consumer preferences 
B)  invest in companies that produce goods and services at the lowest possible cost 
C)  invest in companies that fairly distribute their products and services 
D)  invest in companies that produce up to the point where the marginal cost of the last unit produced is zero. 
A)  invest in companies that produce goods and services based on consumer preferences 
B)  invest in companies that produce goods and services at the lowest possible cost 
C)  invest in companies that fairly distribute their products and services 
D)  invest in companies that produce up to the point where the marginal cost of the last unit produced is zero.

Suppose when the price of hybrid automobiles rises,consumers buy fewer hybrid automobiles.This implies that

Which of the following best describes an assumption economists make about human behavior?

Which of the following is counted as "capital" in economics?

Suppose a doctor can earn an additional $10,000 in revenue per year from keeping her office open on Saturdays.What must the additional cost of keeping the office open on Saturdays be to make this decision economically rational?

Which of the following statements about positive economic analysis is true ?

The term "market" in economics refers to

What is an economic market?

Figure 1-3 -Refer to Figure 1-3.Calculate the area of the trapezoid X.

What is the difference between physical capital and human capital?

Which of the following is correct about the economic decisions consumers,firms,and the government have to make?

Which of the following statements is true about revenue?

How does the study of microeconomics differ from that of macroeconomics? Give one example each of an issue studied in microeconomics and in macroeconomics.

Scarcity refers to the situation in which

One example of human capital is the amount of savings that you have.

In a market economy,________ interact in markets to decide the answers to the fundamental economic questions.

The number of people who have gray hair is very high among residents living in Florida.A student concludes that living in Florida causes hair to turn gray.What is the flaw in this student's reasoning?

The branch of economics which studies the behavior of entire economies and policies that affect the economy as a whole is called

Dr.Goldfinger decides to invest in companies which he believes can "improve the productivity and efficiency" of health care services.What would Dr.Goldfinger need to do to try to achieve allocative efficiency?

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 1: Economics: Foundations and Models

Suppose when the price of hybrid automobiles rises,consumers buy fewer hybrid automobiles.This implies that

Which of the following best describes an assumption economists make about human behavior?

Which of the following is counted as "capital" in economics?

Suppose a doctor can earn an additional $10,000 in revenue per year from keeping her office open on Saturdays.What must the additional cost of keeping the office open on Saturdays be to make this decision economically rational?

Which of the following statements about positive economic analysis is true ?

The term "market" in economics refers to

What is an economic market?

Figure 1-3 -Refer to Figure 1-3.Calculate the area of the trapezoid X.

What is the difference between physical capital and human capital?

Which of the following is correct about the economic decisions consumers,firms,and the government have to make?

Which of the following statements is true about revenue?

How does the study of microeconomics differ from that of macroeconomics? Give one example each of an issue studied in microeconomics and in macroeconomics.

Scarcity refers to the situation in which

One example of human capital is the amount of savings that you have.

In a market economy,________ interact in markets to decide the answers to the fundamental economic questions.

The number of people who have gray hair is very high among residents living in Florida.A student concludes that living in Florida causes hair to turn gray.What is the flaw in this student's reasoning?

The branch of economics which studies the behavior of entire economies and policies that affect the economy as a whole is called

Dr.Goldfinger decides to invest in companies which he believes can "improve the productivity and efficiency" of health care services.What would Dr.Goldfinger need to do to try to achieve allocative efficiency?

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters