Question 1

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Accepted Answer

A)  2 1/2 Russian tea cakes 
B)  2/5 of a Russian tea cake 
C)  $2.50 
D)  $1.00 
A)  2 1/2 Russian tea cakes 
B)  2/5 of a Russian tea cake 
C)  $2.50 
D)  $1.00

Question 2

The Stogie Shop,a cigar store in the mall,sells hand-rolled cigars for $10.00 and machine-made cigars for $2.50 each.What is the opportunity cost of buying a hand-rolled cigar?

Accepted Answer

A)  4 machine-made cigars 
B)  one-quarter of a machine-made cigar 
C)  $10.00 
D)  $2.50 
A)  4 machine-made cigars 
B)  one-quarter of a machine-made cigar 
C)  $10.00 
D)  $2.50

Question 3

Microeconomics is the study of

Accepted Answer

A)  how households and firms make choices. 
B)  the economy as a whole. 
C)  the global economy. 
D)  topics such as unemployment, inflation, and economic growth. 
A)  how households and firms make choices. 
B)  the economy as a whole. 
C)  the global economy. 
D)  topics such as unemployment, inflation, and economic growth.

Question 4

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 5

Ford assembles some cars in Mexico because the lower wages the company pays to Mexican workers and the lower prices it pays for auto parts in Mexico reduces Ford's costs.This is an example of Ford reacting to which of the three key economic ideas?

Accepted Answer

A)  People are rational. 
B)  People respond to economic incentives. 
C)  Optimal decisions are made at the margin. 
D)  Firms attempt to maximize revenues. 
A)  People are rational. 
B)  People respond to economic incentives. 
C)  Optimal decisions are made at the margin. 
D)  Firms attempt to maximize revenues.

Question 6

What is an economic model?

Accepted Answer

An economic model is a simplif

Question 7

Explain why economics is considered a social science.

Accepted Answer

Economics is a social science

Question 8

List the four main factors of production.

Accepted Answer

The four main factors of produ

Question 9

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

Accepted Answer

A)  $270 
B)  $720 
C)  $810 
D)  $2,520 
A)  $270 
B)  $720 
C)  $810 
D)  $2,520

Question 10

When production reflects consumer preferences,________ occurs.

Accepted Answer

A)  allocative efficiency 
B)  productive efficiency 
C)  equity 
D)  efficient central planning 
A)  allocative efficiency 
B)  productive efficiency 
C)  equity 
D)  efficient central planning

Question 11

Suppose a town can earn an additional $10,000 per year in revenue if it installs a red-light camera at its busiest intersection.At what additional cost would installing this camera not be considered economically rational?

Accepted Answer

If the additional cost of the

Question 12

Trade-offs force society to make choices when answering what three fundamental questions?

Accepted Answer

A)  What will be the prices of goods and services; how will these goods and services be produced; and who will receive them? 
B)  What goods and services to produce; how will these goods and services be produced; and who receives them? 
C)  Who gets jobs; what wages do workers earn; and who owns what property? 
D)  How much will be saved; what will be produced; and how can these goods and services be fairly distributed? 
A)  What will be the prices of goods and services; how will these goods and services be produced; and who will receive them? 
B)  What goods and services to produce; how will these goods and services be produced; and who receives them? 
C)  Who gets jobs; what wages do workers earn; and who owns what property? 
D)  How much will be saved; what will be produced; and how can these goods and services be fairly distributed?

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

In the market for factors of production,households earn income by supplying factors of production to firms.

Accepted Answer

A) True 
 B)False

Question 15

An "omitted variable" is

Accepted Answer

A)  a variable which is purposely omitted from an economic analysis. 
B)  a variable which is inadvertently omitted from an economic analysis. 
C)  a variable that has no impact on other variables in an economic analysis. 
D)  a variable that affects other variables and its omission from economic analysis can lead to false conclusions about cause and effect. 
A)  a variable which is purposely omitted from an economic analysis. 
B)  a variable which is inadvertently omitted from an economic analysis. 
C)  a variable that has no impact on other variables in an economic analysis. 
D)  a variable that affects other variables and its omission from economic analysis can lead to false conclusions about cause and effect.

Question 16

Trinh quits his $80,000-a-year job to become a full-time volunteer at a museum.What is the opportunity cost of his decision?

Accepted Answer

A)  0 since he will no longer be earning a salary 
B)  depends on the "going rate" of museum employees 
C)  at least $80,000 
D)  the value he attributes to the joy of working at a museum 
A)  0 since he will no longer be earning a salary 
B)  depends on the "going rate" of museum employees 
C)  at least $80,000 
D)  the value he attributes to the joy of working at a museum

Question 17

If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8,the slope of this line is

Accepted Answer

A)  negative 8 divided by 4. 
B)  seven tenths. 
C)  negative one half. 
D)  one -and one half. 
A)  negative 8 divided by 4. 
B)  seven tenths. 
C)  negative one half. 
D)  one -and one half.

Question 18

Damian shares a small food truck with his sister.His share of the expenses is $500 per month.He has decided to get his own,newer food truck which he will not have to share with anyone.His expenses for the newer truck are $1,400 per month.Damian is as rational as any other person.As an economics major,you rightly conclude that

Accepted Answer

A)  Damian cannot afford the newer truck and will have to go back to sharing a truck with his sister. 
B)  Damian figures that the additional benefit of having his own truck (as opposed to sharing) is at least $900. 
C)  Damian figures that the additional benefit of having his own truck (as opposed to sharing) is at least $1,400. 
D)  the cost of having one's own truck outweighs the benefits. 
A)  Damian cannot afford the newer truck and will have to go back to sharing a truck with his sister. 
B)  Damian figures that the additional benefit of having his own truck (as opposed to sharing) is at least $900. 
C)  Damian figures that the additional benefit of having his own truck (as opposed to sharing) is at least $1,400. 
D)  the cost of having one's own truck outweighs the benefits.

Question 19

Making optimal decisions "at the margin" requires

Accepted Answer

A)  making decisions according to one's whims and fancies. 
B)  making consistently irrational decisions. 
C)  weighing the costs and benefits of a decision before deciding if it should be pursued. 
D)  making borderline decisions. 
A)  making decisions according to one's whims and fancies. 
B)  making consistently irrational decisions. 
C)  weighing the costs and benefits of a decision before deciding if it should be pursued. 
D)  making borderline decisions.

Question 20

Individuals can use economic principles to improve their decision-making process.

Accepted Answer

A) True 
 B)False

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

The Stogie Shop,a cigar store in the mall,sells hand-rolled cigars for $10.00 and machine-made cigars for $2.50 each.What is the opportunity cost of buying a hand-rolled cigar?

Microeconomics is the study of

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?

Ford assembles some cars in Mexico because the lower wages the company pays to Mexican workers and the lower prices it pays for auto parts in Mexico reduces Ford's costs.This is an example of Ford reacting to which of the three key economic ideas?

What is an economic model?

Explain why economics is considered a social science.

List the four main factors of production.

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

When production reflects consumer preferences,________ occurs.

Suppose a town can earn an additional $10,000 per year in revenue if it installs a red-light camera at its busiest intersection.At what additional cost would installing this camera not be considered economically rational?

Trade-offs force society to make choices when answering what three fundamental questions?

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

In the market for factors of production,households earn income by supplying factors of production to firms.

An "omitted variable" is

Trinh quits his $80,000-a-year job to become a full-time volunteer at a museum.What is the opportunity cost of his decision?

If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8,the slope of this line is

Making optimal decisions "at the margin" requires

Individuals can use economic principles to improve their decision-making process.

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters

Exam 1: Economics: Foundations and Models

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

The Stogie Shop,a cigar store in the mall,sells hand-rolled cigars for $10.00 and machine-made cigars for $2.50 each.What is the opportunity cost of buying a hand-rolled cigar?

Microeconomics is the study of

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?

Ford assembles some cars in Mexico because the lower wages the company pays to Mexican workers and the lower prices it pays for auto parts in Mexico reduces Ford's costs.This is an example of Ford reacting to which of the three key economic ideas?

What is an economic model?

Explain why economics is considered a social science.

List the four main factors of production.

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

When production reflects consumer preferences,________ occurs.

Suppose a town can earn an additional $10,000 per year in revenue if it installs a red-light camera at its busiest intersection.At what additional cost would installing this camera not be considered economically rational?

Trade-offs force society to make choices when answering what three fundamental questions?

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

In the market for factors of production,households earn income by supplying factors of production to firms.

An "omitted variable" is

Trinh quits his $80,000-a-year job to become a full-time volunteer at a museum.What is the opportunity cost of his decision?

If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8,the slope of this line is

Making optimal decisions "at the margin" requires

Individuals can use economic principles to improve their decision-making process.

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters