Question 1

Which of the following statements about opportunity costs is the most accurate?

Accepted Answer

A) They never involve costs paid out-of-pocket. 
B) They include only explicit costs paid out-of-pocket. 
C) They always include costs paid out-of-pocket. 
D) They may or may not involve costs paid out-of-pocket. 
A) They never involve costs paid out-of-pocket. 
B) They include only explicit costs paid out-of-pocket. 
C) They always include costs paid out-of-pocket. 
D) They may or may not involve costs paid out-of-pocket.

Question 2

"Government should do all it can to slow the process of global warming." Is this a positive or normative statement? Explain your answer.

Accepted Answer

This is a normative statement.

Question 3

Microeconomics explores the allocation of scarce resources from the perspective of small economic units such as consumers and firms.

Accepted Answer

A) True 
 B)False

Question 4

The United Nations asks you to help it understand the causes of income disparities around the world.You develop the following two hypotheses.Test each hypothesis against the given facts,identify which fits the facts better,and offer a theory based on your observation.
I.Countries with high populations have lower incomes because the large supply of labour drives down the wage rate.
II.Countries with high literacy rates have higher incomes because labour is more productive.

Accepted Answer

This data supports hypothesis II better

Question 5

What is the term for the branch of economics that focuses on outcomes in highly aggregated markets,such as the markets for labour or consumer products?

Accepted Answer

A) normative economics 
B) macroeconomics 
C) Marxian economics 
D) positive economics 
A) normative economics 
B) macroeconomics 
C) Marxian economics 
D) positive economics

Question 6

In markets,how is information about the relative value of resources communicated?

Accepted Answer

A) through unions 
B) through planning committees 
C) through prices 
D) through government agencies 
A) through unions 
B) through planning committees 
C) through prices 
D) through government agencies

Question 7

What is the difference between a positive economic statement and a normative one?

Accepted Answer

A) Positive economic statements are descriptive in nature, while normative economic statements are quantitative. 
B) Positive economic statements are used to explain economic behaviour, while normative economic statements are used to predict economic behaviour. 
C) Positive economic statements are descriptive in nature, while normative economic statements involve value judgments. 
D) Positive economic statements involve value judgments, while normative economic statements are descriptive in nature. 
A) Positive economic statements are descriptive in nature, while normative economic statements are quantitative. 
B) Positive economic statements are used to explain economic behaviour, while normative economic statements are used to predict economic behaviour. 
C) Positive economic statements are descriptive in nature, while normative economic statements involve value judgments. 
D) Positive economic statements involve value judgments, while normative economic statements are descriptive in nature.

Question 8

Which of the following is NOT a factor of production?

Accepted Answer

A) entrepreneurship 
B) private property rights 
C) land 
D) capital 
A) entrepreneurship 
B) private property rights 
C) land 
D) capital

Question 9

Jamie and Danny both attend the same college and incur the same expenses for tuition,books,and school supplies.Jamie gave up a lucrative modeling job in Paris to attend school full time and Danny gave up a part-time job as a sales clerk in a department store.Which of the following statements about opportunity cost is the most accurate?

Accepted Answer

A) The opportunity cost of attending college is likely greater for Danny than for Jamie. 
B) The opportunity cost is miniscule for both since college graduates are paid much higher than high school graduates on average. 
C) The opportunity cost of attending college is the same for both since they are enrolled at the same academic institution. 
D) The opportunity cost of attending college is likely greater for Jamie than for Danny. 
A) The opportunity cost of attending college is likely greater for Danny than for Jamie. 
B) The opportunity cost is miniscule for both since college graduates are paid much higher than high school graduates on average. 
C) The opportunity cost of attending college is the same for both since they are enrolled at the same academic institution. 
D) The opportunity cost of attending college is likely greater for Jamie than for Danny.

Question 10

If people follow the rule of rational choice,on what basis will they make their decisions?

Accepted Answer

A) earning the most money 
B) yielding the largest net gain 
C) equating the total benefit of those options to their total cost 
D) promoting the common good 
A) earning the most money 
B) yielding the largest net gain 
C) equating the total benefit of those options to their total cost 
D) promoting the common good

Question 11

What is the term for the branch of economics that focuses on the conduct of affairs within narrowly defined units,such as households or business firms?

Accepted Answer

A) macroeconomics 
B) applied economics 
C) socioeconomics 
D) microeconomics 
A) macroeconomics 
B) applied economics 
C) socioeconomics 
D) microeconomics

Question 12

What is the term for the branch of economics that studies the aggregate decisions of all households and all firms?

Accepted Answer

A) normative economics 
B) microeconomics 
C) positive economics 
D) macroeconomics 
A) normative economics 
B) microeconomics 
C) positive economics 
D) macroeconomics

Question 13

According to the rule of rational choice,under what circumstances will you engage in more of an activity?

Accepted Answer

A) when the additional cost incurred as a result of the activity exceeds the additional benefit received 
B) when the opportunity cost of your time is very low 
C) when the total benefit from that activity exceeds the total cost of the activity 
D) when the additional benefit received as a result of the activity exceeds the additional cost incurred 
A) when the additional cost incurred as a result of the activity exceeds the additional benefit received 
B) when the opportunity cost of your time is very low 
C) when the total benefit from that activity exceeds the total cost of the activity 
D) when the additional benefit received as a result of the activity exceeds the additional cost incurred

Question 14

TABLE 1-2
  
-Refer to Table 1-2.If the marginal cost of a weekend vacation at the local resort is constant and equal to $350,how many weekends at the local resort is Roberto likely to enjoy?

Accepted Answer

A) 2 
B) 3 
C) 4 
D) 5 
A) 2 
B) 3 
C) 4 
D) 5

Question 15

Which of the following statements about scarcity is the most accurate?

Accepted Answer

A) It is a problem in both communist and socialist countries, but not in market economies. 
B) It will never be eradicated because humans develop new wants as productive capabilities improve. 
C) It is a problem only in communist countries. 
D) It does not exist in wealthy countries. 
A) It is a problem in both communist and socialist countries, but not in market economies. 
B) It will never be eradicated because humans develop new wants as productive capabilities improve. 
C) It is a problem only in communist countries. 
D) It does not exist in wealthy countries.

Question 16

What is the central concern of economics?

Accepted Answer

A) how to regulate the supply of money 
B) how to reduce the wants of individuals, businesses, and government 
C) how to find more resources to satisfy everyone's wants 
D) how to make the best use of scarce resources to satisfy our unlimited wants 
A) how to regulate the supply of money 
B) how to reduce the wants of individuals, businesses, and government 
C) how to find more resources to satisfy everyone's wants 
D) how to make the best use of scarce resources to satisfy our unlimited wants

Question 17

The price of a ticket to the latest concert is $80.According to an economist,under what circumstances will you purchase a ticket?

Accepted Answer

A) when you place a lower valuation on seeing the concert than $80 but are extremely bored 
B) when your marginal benefit of going to the concert is positive 
C) when your expected marginal benefit from viewing the concert exceeds $80 
D) when your expected marginal cost from viewing the concert exceeds $80 
A) when you place a lower valuation on seeing the concert than $80 but are extremely bored 
B) when your marginal benefit of going to the concert is positive 
C) when your expected marginal benefit from viewing the concert exceeds $80 
D) when your expected marginal cost from viewing the concert exceeds $80

Question 18

According to most economists,what is the fundamental economic problem?

Accepted Answer

A) unemployment 
B) government intervention into markets 
C) poverty 
D) scarcity 
A) unemployment 
B) government intervention into markets 
C) poverty 
D) scarcity

Question 19

The marginal cost of a vacation in Jamaica is $3500.According to the rule of rational choice,if the marginal benefit to Colby of a vacation in Jamaica is $3000,what will he do?

Accepted Answer

A) Colby will experience a net gain of $500 if he vacations in Jamaica. 
B) Colby will choose not to vacation in Jamaica at this time. 
C) Colby will borrow $500 and vacation in Jamaica. 
D) Colby will experience a net gain of $3000 if he vacations in Jamaica. 
A) Colby will experience a net gain of $500 if he vacations in Jamaica. 
B) Colby will choose not to vacation in Jamaica at this time. 
C) Colby will borrow $500 and vacation in Jamaica. 
D) Colby will experience a net gain of $3000 if he vacations in Jamaica.

Question 20

A scientist is trying to test a theory about the relationship between people's consumption of alcohol and their longevity.Which of the following variables would the scientist NOT hold constant?

Accepted Answer

A) the past histories of heart and lung disease 
B) the amount of dietary fat that people in the experimental group consumed 
C) the amount of alcohol that people in the experimental group consumed 
D) the amount of cigarettes that people in the experimental group smoked 
A) the past histories of heart and lung disease 
B) the amount of dietary fat that people in the experimental group consumed 
C) the amount of alcohol that people in the experimental group consumed 
D) the amount of cigarettes that people in the experimental group smoked

Which of the following statements about opportunity costs is the most accurate?

"Government should do all it can to slow the process of global warming." Is this a positive or normative statement? Explain your answer.

Microeconomics explores the allocation of scarce resources from the perspective of small economic units such as consumers and firms.

What is the term for the branch of economics that focuses on outcomes in highly aggregated markets,such as the markets for labour or consumer products?

In markets,how is information about the relative value of resources communicated?

What is the difference between a positive economic statement and a normative one?

Which of the following is NOT a factor of production?

If people follow the rule of rational choice,on what basis will they make their decisions?

What is the term for the branch of economics that focuses on the conduct of affairs within narrowly defined units,such as households or business firms?

What is the term for the branch of economics that studies the aggregate decisions of all households and all firms?

According to the rule of rational choice,under what circumstances will you engage in more of an activity?

TABLE 1-2 -Refer to Table 1-2.If the marginal cost of a weekend vacation at the local resort is constant and equal to $350,how many weekends at the local resort is Roberto likely to enjoy?

Which of the following statements about scarcity is the most accurate?

What is the central concern of economics?

The price of a ticket to the latest concert is $80.According to an economist,under what circumstances will you purchase a ticket?

According to most economists,what is the fundamental economic problem?

The marginal cost of a vacation in Jamaica is $3500.According to the rule of rational choice,if the marginal benefit to Colby of a vacation in Jamaica is $3000,what will he do?

A scientist is trying to test a theory about the relationship between people's consumption of alcohol and their longevity.Which of the following variables would the scientist NOT hold constant?

Scarcity, trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters

Exam 1: The Role and Method of Economics

Which of the following statements about opportunity costs is the most accurate?

"Government should do all it can to slow the process of global warming." Is this a positive or normative statement? Explain your answer.

Microeconomics explores the allocation of scarce resources from the perspective of small economic units such as consumers and firms.

What is the term for the branch of economics that focuses on outcomes in highly aggregated markets,such as the markets for labour or consumer products?

In markets,how is information about the relative value of resources communicated?

What is the difference between a positive economic statement and a normative one?

Which of the following is NOT a factor of production?

If people follow the rule of rational choice,on what basis will they make their decisions?

What is the term for the branch of economics that focuses on the conduct of affairs within narrowly defined units,such as households or business firms?

What is the term for the branch of economics that studies the aggregate decisions of all households and all firms?

According to the rule of rational choice,under what circumstances will you engage in more of an activity?

TABLE 1-2 -Refer to Table 1-2.If the marginal cost of a weekend vacation at the local resort is constant and equal to $350,how many weekends at the local resort is Roberto likely to enjoy?

Which of the following statements about scarcity is the most accurate?

What is the central concern of economics?

The price of a ticket to the latest concert is $80.According to an economist,under what circumstances will you purchase a ticket?

According to most economists,what is the fundamental economic problem?

The marginal cost of a vacation in Jamaica is $3500.According to the rule of rational choice,if the marginal benefit to Colby of a vacation in Jamaica is $3000,what will he do?

A scientist is trying to test a theory about the relationship between people's consumption of alcohol and their longevity.Which of the following variables would the scientist NOT hold constant?

Scarcity, trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters