Question 1

A natural resource, such as fishing territories, is considered an example of

Accepted Answer

A)  both land and labor. 
B)  land, labor, capital and entrepreneurship. 
C)  land only. 
D)  only capital. 
A)  both land and labor. 
B)  land, labor, capital and entrepreneurship. 
C)  land only. 
D)  only capital.

Question 2

-In the above, as the y variable increases

Accepted Answer

A)  the x variable is constant. 
B)  the x variable increases. 
C)  the x variable decreases. 
D)  the x variable at first increases but then decreases. 
A)  the x variable is constant. 
B)  the x variable increases. 
C)  the x variable decreases. 
D)  the x variable at first increases but then decreases.

Question 3

A good economic model

Accepted Answer

A)  describes every aspect of the economic world, with no exception. 
B)  includes all those features of the world that can be described numerically. 
C)  includes only those features of the world that are needed for the purpose at hand. 
D)  should not include more than two variables. 
A)  describes every aspect of the economic world, with no exception. 
B)  includes all those features of the world that can be described numerically. 
C)  includes only those features of the world that are needed for the purpose at hand. 
D)  should not include more than two variables.

Question 4

The opportunity cost of attending college includes the cost of

Accepted Answer

A)  the tuition but not the job at which you would otherwise have worked. 
B)  the highest valued alternative to attending college. 
C)  the highest valued alternative to attending college plus the cost of tuition. 
D)  tuition, books, and the lost wages for the hours spent studying. 
A)  the tuition but not the job at which you would otherwise have worked. 
B)  the highest valued alternative to attending college. 
C)  the highest valued alternative to attending college plus the cost of tuition. 
D)  tuition, books, and the lost wages for the hours spent studying.

Question 5

Marginal benefit is the benefit

Accepted Answer

A)  that your activity provides to someone else. 
B)  of an activity that exceeds its cost. 
C)  that arises from the secondary effects of an activity. 
D)  that arises from an increase in an activity. 
A)  that your activity provides to someone else. 
B)  of an activity that exceeds its cost. 
C)  that arises from the secondary effects of an activity. 
D)  that arises from an increase in an activity.

Question 6

-The above table shows data on two variables. If these data were graphed, the slope of the line would be

Accepted Answer

A)  3/5. 
B)  3. 
C)  5/3. 
D)  impossible to determine from the information given. 
A)  3/5. 
B)  3. 
C)  5/3. 
D)  impossible to determine from the information given.

Question 7

In the figure above, the value on the x-axis increases as we move from

Accepted Answer

A)  point G to point A. 
B)  point C to point A. 
C)  point F to point A. 
D)  point E to point A. 
A)  point G to point A. 
B)  point C to point A. 
C)  point F to point A. 
D)  point E to point A.

Question 8

The value of the y-coordinate of a point in a graph is the length of a line from the point to the

Accepted Answer

A)  origin. 
B)  scalar. 
C)  x-axis. 
D)  y-axis. 
A)  origin. 
B)  scalar. 
C)  x-axis. 
D)  y-axis.

Question 9

Opportunity cost means the

Accepted Answer

A)  accounting cost minus the marginal cost. 
B)  highest-valued alternative forgone. 
C)  accounting cost minus the marginal benefit. 
D)  monetary costs of an activity. 
A)  accounting cost minus the marginal cost. 
B)  highest-valued alternative forgone. 
C)  accounting cost minus the marginal benefit. 
D)  monetary costs of an activity.

Question 10

With y measured on the vertical axis and x measured on the horizontal axis, the slope of a straight line is defined as

Accepted Answer

A)  y/x. 
B)  x/y. 
C)  (change in y)/ (change in x). 
D)  (change in x)/ (change in y). 
A)  y/x. 
B)  x/y. 
C)  (change in y)/ (change in x). 
D)  (change in x)/ (change in y).

Question 11

The statement "Managers with a college education earn $18 an hour while ski instructors who did not complete college earn $10" is

Accepted Answer

A)  a political statement. 
B)  a positive statement. 
C)  a normative statement. 
D)  an ethical statement. 
A)  a political statement. 
B)  a positive statement. 
C)  a normative statement. 
D)  an ethical statement.

Question 12

Suppose Canon Inc. decided to invest 45 billion yen in developing and launching a new model of its digital camera, expecting that it will bring additional sales of 60 billion yen. The company has already invested 38 billion yen when the marketing department suddenly finds out that the introduction of a similar camera by Sony will reduce Canon's expected additional sales to 30 billion yen. The company's management is trying to decide whether to continue investing in the new product or close the project. Canon hires you as an economic consultant. So, think like an economist to help the company's management make their decision:
a) At this point in time, what is Canon's marginal cost of introducing the new product?
b) What is Canon's marginal benefit from introducing the new product?
c) Will you advise Canon to finish the project and introduce the new product? Why or why not? What principles of economic thinking will help you analyze the situation and make the right choice?

Accepted Answer

a) Canon's marginal cost is the addition

Question 13

"As part of the financial crisis bailout plan in 2009, the Federal Reserve bought stakes in banks. This policy will result in an increase in the inflation rate." This is an example of

Accepted Answer

A)  a positive statement. 
B)  a normative statement. 
C)  a microeconomic statement. 
D)  an economic model. 
A)  a positive statement. 
B)  a normative statement. 
C)  a microeconomic statement. 
D)  an economic model.

Question 14

All economic questions are about

Accepted Answer

A)  how to make money. 
B)  what to produce. 
C)  how to cope with scarcity. 
D)  how to satisfy all our wants. 
A)  how to make money. 
B)  what to produce. 
C)  how to cope with scarcity. 
D)  how to satisfy all our wants.

Question 15

Which of the following creates an incentive to increase the amount of an activity?

Accepted Answer

A)  an increase in the marginal cost of the activity and a decrease in the marginal benefit of the activity 
B)  a decrease in the marginal cost of the activity and an increase in the marginal benefit of the activity 
C)  constant marginal cost and constant marginal benefit of the activity 
D)  None of the above create an incentive to increase the amount of an activity. 
A)  an increase in the marginal cost of the activity and a decrease in the marginal benefit of the activity 
B)  a decrease in the marginal cost of the activity and an increase in the marginal benefit of the activity 
C)  constant marginal cost and constant marginal benefit of the activity 
D)  None of the above create an incentive to increase the amount of an activity.

Question 16

-Which of the following CORRECTLY describes the above figure?

Accepted Answer

A)  There is no relationship between x and y. 
B)  There is a positive relationship between x and y. 
C)  There is a negative relationship between x and y. 
D)  None of the above answers are correct. 
A)  There is no relationship between x and y. 
B)  There is a positive relationship between x and y. 
C)  There is a negative relationship between x and y. 
D)  None of the above answers are correct.

Question 17

"OPEC should supply more oil so that the world's economies can grow more rapidly." This is an example of

Accepted Answer

A)  a normative statement. 
B)  a positive statement. 
C)  a decision at the margin. 
D)  OPEC overcoming scarcity. 
A)  a normative statement. 
B)  a positive statement. 
C)  a decision at the margin. 
D)  OPEC overcoming scarcity.

Question 18

The statement "Unemployment should be below 6 percent" is

Accepted Answer

A)  a positive statement. 
B)  a normative statement. 
C)  a prediction. 
D)  an assumption. 
A)  a positive statement. 
B)  a normative statement. 
C)  a prediction. 
D)  an assumption.

Question 19

China's population is over 1.5 billion, while the population of the United States is about 300 million. This fact means that China has much more human capital than the U.S. does. True or false? Explain your answer.

Accepted Answer

False. Population can measure the quanti

Question 20

-In the above, which figure shows a line with a slope of 1.0?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  both Figure A and Figure B 
D)  neither Figure A nor Figure B 
A)  Figure A 
B)  Figure B 
C)  both Figure A and Figure B 
D)  neither Figure A nor Figure B

A natural resource, such as fishing territories, is considered an example of

-In the above, as the y variable increases

A good economic model

The opportunity cost of attending college includes the cost of

Marginal benefit is the benefit

-The above table shows data on two variables. If these data were graphed, the slope of the line would be

In the figure above, the value on the x-axis increases as we move from

The value of the y-coordinate of a point in a graph is the length of a line from the point to the

Opportunity cost means the

With y measured on the vertical axis and x measured on the horizontal axis, the slope of a straight line is defined as

The statement "Managers with a college education earn $18 an hour while ski instructors who did not complete college earn $10" is

"As part of the financial crisis bailout plan in 2009, the Federal Reserve bought stakes in banks. This policy will result in an increase in the inflation rate." This is an example of

All economic questions are about

Which of the following creates an incentive to increase the amount of an activity?

-Which of the following CORRECTLY describes the above figure?

"OPEC should supply more oil so that the world's economies can grow more rapidly." This is an example of

The statement "Unemployment should be below 6 percent" is

China's population is over 1.5 billion, while the population of the United States is about 300 million. This fact means that China has much more human capital than the U.S. does. True or false? Explain your answer.

-In the above, which figure shows a line with a slope of 1.0?

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

A natural resource, such as fishing territories, is considered an example of

-In the above, as the y variable increases

A good economic model

The opportunity cost of attending college includes the cost of

Marginal benefit is the benefit

-The above table shows data on two variables. If these data were graphed, the slope of the line would be

In the figure above, the value on the x-axis increases as we move from

The value of the y-coordinate of a point in a graph is the length of a line from the point to the

Opportunity cost means the

With y measured on the vertical axis and x measured on the horizontal axis, the slope of a straight line is defined as

The statement "Managers with a college education earn $18 an hour while ski instructors who did not complete college earn $10" is

"As part of the financial crisis bailout plan in 2009, the Federal Reserve bought stakes in banks. This policy will result in an increase in the inflation rate." This is an example of

All economic questions are about

Which of the following creates an incentive to increase the amount of an activity?

-Which of the following CORRECTLY describes the above figure?

"OPEC should supply more oil so that the world's economies can grow more rapidly." This is an example of

The statement "Unemployment should be below 6 percent" is

China's population is over 1.5 billion, while the population of the United States is about 300 million. This fact means that China has much more human capital than the U.S. does. True or false? Explain your answer.

-In the above, which figure shows a line with a slope of 1.0?

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