Question 1

Economic models

Accepted Answer

A)  are essentially different from those used in other sciences. 
B)  always use graphs. 
C)  simplify reality. 
D)  include all relevant facts. 
A)  are essentially different from those used in other sciences. 
B)  always use graphs. 
C)  simplify reality. 
D)  include all relevant facts.

Question 2

-The vertical axis of a graph shows only positive values.

Accepted Answer

A) True 
 B)False

Question 3

-The relationship between income and consumption illustrated in the figure above is

Accepted Answer

A)  positive and linear. 
B)  positive and nonlinear. 
C)  negative and linear. 
D)  negative and nonlinear. 
A)  positive and linear. 
B)  positive and nonlinear. 
C)  negative and linear. 
D)  negative and nonlinear.

Question 4

Which of the following questions is a topic that would be studied by microeconomics?

Accepted Answer

A)  Why did production and the number of jobs shrink in 2009? 
B)  Will the current budget deficit affect the well-being of the next generation? 
C)  How will a lower price of digital cameras affect the quantity of cameras sold? 
D)  What is the current unemployment rate in the United States? 
A)  Why did production and the number of jobs shrink in 2009? 
B)  Will the current budget deficit affect the well-being of the next generation? 
C)  How will a lower price of digital cameras affect the quantity of cameras sold? 
D)  What is the current unemployment rate in the United States?

Question 5

As a curve approaches a maximum point, the slope will

Accepted Answer

A)  be positive, then negative after the maximum point. 
B)  be negative, then positive after the maximum point. 
C)  remain constant on either side of the maximum point. 
D)  increase before and after the maximum point. 
A)  be positive, then negative after the maximum point. 
B)  be negative, then positive after the maximum point. 
C)  remain constant on either side of the maximum point. 
D)  increase before and after the maximum point.

Question 6

In economics we learn that

Accepted Answer

A)  tradeoffs allow us to have more of everything we value. 
B)  tradeoffs allow us to avoid the problem of opportunity cost. 
C)  opportunity costs are all of the possible alternatives given up when we make a choice. 
D)  None of the above answers is correct. 
A)  tradeoffs allow us to have more of everything we value. 
B)  tradeoffs allow us to avoid the problem of opportunity cost. 
C)  opportunity costs are all of the possible alternatives given up when we make a choice. 
D)  None of the above answers is correct.

Question 7

On a graph showing the relationship between x and y, the ceteris paribus condition implies that

Accepted Answer

A)  no other variables are related to x and y. 
B)  the value of x is held constant. 
C)  the value of y is held constant. 
D)  other variables not shown are held constant. 
A)  no other variables are related to x and y. 
B)  the value of x is held constant. 
C)  the value of y is held constant. 
D)  other variables not shown are held constant.

Question 8

Mark Zuckerberg believes everyone in the world should have Internet access.

Accepted Answer

A)  This is a positive statement and is not in the social interest if the marginal benefit of Internet access exceeds the marginal cost. 
B)  This is a positive statement and is not in the social interest if the marginal cost of Internet access exceeds the marginal benefit. 
C)  This is a normative statement and is not in the social interest if the marginal benefit of Internet access exceeds the marginal cost. 
D)  This is a normative statement and is not in the social interest if the marginal cost of Internet access exceeds the marginal benefit. 
A)  This is a positive statement and is not in the social interest if the marginal benefit of Internet access exceeds the marginal cost. 
B)  This is a positive statement and is not in the social interest if the marginal cost of Internet access exceeds the marginal benefit. 
C)  This is a normative statement and is not in the social interest if the marginal benefit of Internet access exceeds the marginal cost. 
D)  This is a normative statement and is not in the social interest if the marginal cost of Internet access exceeds the marginal benefit.

Question 9

Scarcity exists because

Accepted Answer

A)  society and people are greedy and wasteful. 
B)  our wants exceed the resources available to satisfy them. 
C)  of the inefficient choices we make. 
D)  poor people need more food and other goods. 
A)  society and people are greedy and wasteful. 
B)  our wants exceed the resources available to satisfy them. 
C)  of the inefficient choices we make. 
D)  poor people need more food and other goods.

Question 10

-In the above figure, the relationship between the tax rate and tax revenue is positive and becoming less steep between tax rates of

Accepted Answer

A)  0 percent and 30 percent. 
B)  30 percent and 100 percent. 
C)  0 percent and 100 percent. 
D)  None of the above answers are correct. 
A)  0 percent and 30 percent. 
B)  30 percent and 100 percent. 
C)  0 percent and 100 percent. 
D)  None of the above answers are correct.

Question 11

The term "direct relationship" means the same as

Accepted Answer

A)  correlation. 
B)  trend. 
C)  positive relationship. 
D)  negative relationship. 
A)  correlation. 
B)  trend. 
C)  positive relationship. 
D)  negative relationship.

Question 12

Suppose you plan to go to school this summer. The cost of tuition and textbooks is $1,400 and housing, board, and entertainment will cost you $500. If you didn't go to school, you'd live in your parents' house for free, but your other living expenses would be about the same. Also, if you didn't go to school you'd work full time and could earn $8,000. You can still work part time while attending the summer school, but you will earn only $3,000.
a) What will the summer school cost you in terms of money explicitly paid?
b) What are the opportunity costs of going to summer school that you don't pay explicitly? Explain.
c) What is your total opportunity costs of going to school this summer? Explain your answer.

Accepted Answer

a) You explicitly pay the cost of tuitio

Question 13

Your employer has asked you to start working overtime and has offered to pay $18 per hour for every hour you work beyond forty hours a week. The wage rate for each of the first forty hours will continue to be the usual $15 per hour. In terms of dollars, what is the marginal benefit of working each hour of overtime?

Accepted Answer

A)  zero 
B)  $3.00 
C)  $15.00 
D)  $18.00 
A)  zero 
B)  $3.00 
C)  $15.00 
D)  $18.00

Question 14

Economics can be defined as the social science that explains the ________.

Accepted Answer

A)  choices made by politicians 
B)  choices we make when we trade in markets 
C)  choices that we make as we cope with scarcity 
D)  choices made by households 
A)  choices made by politicians 
B)  choices we make when we trade in markets 
C)  choices that we make as we cope with scarcity 
D)  choices made by households

Question 15

You decide to take a vacation and the trip costs you $2,000. While you are on vacation, you do not go to work where you could have earned $750. In terms of dollars, the opportunity cost of the vacation is

Accepted Answer

A)  $2,000. 
B)  $750. 
C)  $2,750. 
D)  $1,250 
A)  $2,000. 
B)  $750. 
C)  $2,750. 
D)  $1,250

Question 16

Suppose that for the past two months, you have studied economics one hour a day. You now decide to study economics two hours a day. For the past two months

Accepted Answer

A)  your marginal cost of studying economics for an hour must have exceeded its marginal benefit. 
B)  the marginal cost of studying economics must have fallen. 
C)  your marginal benefit from studying economics an hour must have been greater than its marginal cost. 
D)  the opportunity cost of studying economics must have risen. 
A)  your marginal cost of studying economics for an hour must have exceeded its marginal benefit. 
B)  the marginal cost of studying economics must have fallen. 
C)  your marginal benefit from studying economics an hour must have been greater than its marginal cost. 
D)  the opportunity cost of studying economics must have risen.

Question 17

Which of the following is a macroeconomic decision or concept?

Accepted Answer

A)  the price of oil 
B)  how many television sets to produce 
C)  the unemployment rate for the entire economy 
D)  the unemployment rate for each firm 
A)  the price of oil 
B)  how many television sets to produce 
C)  the unemployment rate for the entire economy 
D)  the unemployment rate for each firm

Question 18

-In the above figure, a negative relationship is demonstrated in which of the graphs?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 19

-A graph has a point that is either a maximum or a minimum. To the left of the point, the slope of relationship is positive. To the right of the point, the slope is negative. Is the point a maximum point or a minimum point? Be sure to draw a figure that supports your answer.

Accepted Answer

@#IMG-DLM& The point is a maximum point. Examine t

Question 20

Which of the following is a normative statement?

Accepted Answer

A)  Next year's inflation rate will be under 4 percent. 
B)  Consumers will buy more gasoline over the Christmas holiday even if the price of gas is 10 cents higher than it was during the Thanksgiving holiday. 
C)  The government's cuts in welfare spending impose an unfair hardship on the poor. 
D)  The current butter surplus is the result of federal policies. 
A)  Next year's inflation rate will be under 4 percent. 
B)  Consumers will buy more gasoline over the Christmas holiday even if the price of gas is 10 cents higher than it was during the Thanksgiving holiday. 
C)  The government's cuts in welfare spending impose an unfair hardship on the poor. 
D)  The current butter surplus is the result of federal policies.

Economic models

-The vertical axis of a graph shows only positive values.

-The relationship between income and consumption illustrated in the figure above is

Which of the following questions is a topic that would be studied by microeconomics?

As a curve approaches a maximum point, the slope will

In economics we learn that

On a graph showing the relationship between x and y, the ceteris paribus condition implies that

Mark Zuckerberg believes everyone in the world should have Internet access.

Scarcity exists because

-In the above figure, the relationship between the tax rate and tax revenue is positive and becoming less steep between tax rates of

The term "direct relationship" means the same as

Economics can be defined as the social science that explains the ________.

You decide to take a vacation and the trip costs you $2,000. While you are on vacation, you do not go to work where you could have earned $750. In terms of dollars, the opportunity cost of the vacation is

Suppose that for the past two months, you have studied economics one hour a day. You now decide to study economics two hours a day. For the past two months

Which of the following is a macroeconomic decision or concept?

-In the above figure, a negative relationship is demonstrated in which of the graphs?

-A graph has a point that is either a maximum or a minimum. To the left of the point, the slope of relationship is positive. To the right of the point, the slope is negative. Is the point a maximum point or a minimum point? Be sure to draw a figure that supports your answer.

Which of the following is a normative statement?

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 1: What Is Economics

Economic models

-The vertical axis of a graph shows only positive values.

-The relationship between income and consumption illustrated in the figure above is

Which of the following questions is a topic that would be studied by microeconomics?

As a curve approaches a maximum point, the slope will

In economics we learn that

On a graph showing the relationship between x and y, the ceteris paribus condition implies that

Mark Zuckerberg believes everyone in the world should have Internet access.

Scarcity exists because

-In the above figure, the relationship between the tax rate and tax revenue is positive and becoming less steep between tax rates of

The term "direct relationship" means the same as

Economics can be defined as the social science that explains the ________.

You decide to take a vacation and the trip costs you $2,000. While you are on vacation, you do not go to work where you could have earned $750. In terms of dollars, the opportunity cost of the vacation is

Suppose that for the past two months, you have studied economics one hour a day. You now decide to study economics two hours a day. For the past two months

Which of the following is a macroeconomic decision or concept?

-In the above figure, a negative relationship is demonstrated in which of the graphs?

-A graph has a point that is either a maximum or a minimum. To the left of the point, the slope of relationship is positive. To the right of the point, the slope is negative. Is the point a maximum point or a minimum point? Be sure to draw a figure that supports your answer.

Which of the following is a normative statement?

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters