Question 1

You notice that when interest rates increases, new residential housing prices tend to decrease. This observation indicates that

Accepted Answer

A)  there must be false causality between interest rates and housing prices. 
B)  higher interest rates must cause low housing prices. 
C)  a scatter diagram between interest rates and housing prices will show a negative relationship. 
D)  a scatter diagram between interest rates and housing prices will show a direct relationship. 
A)  there must be false causality between interest rates and housing prices. 
B)  higher interest rates must cause low housing prices. 
C)  a scatter diagram between interest rates and housing prices will show a negative relationship. 
D)  a scatter diagram between interest rates and housing prices will show a direct relationship.

Question 2

When a California farmer decides to harvest lettuce using machines instead of by migrant workers, the farmer is answering the ________ part of one of the two big economic questions.

Accepted Answer

A)  "how" 
B)  "for whom" 
C)  "scarcity" 
D)  "what" 
A)  "how" 
B)  "for whom" 
C)  "scarcity" 
D)  "what"

Question 3

What is the difference between positive and normative statements?

Accepted Answer

Positive statements tell what is and nor

Question 4

Studying the effects choices have on the individual markets within the economy is part of

Accepted Answer

A)  scarcity. 
B)  microeconomics. 
C)  macroeconomics. 
D)  incentives. 
A)  scarcity. 
B)  microeconomics. 
C)  macroeconomics. 
D)  incentives.

Question 5

-Based on the information in the table above, what is the relationship between x and y?

Accepted Answer

A)  direct 
B)  inverse 
C)  positive 
D)  No relationship exists between x and y. 
A)  direct 
B)  inverse 
C)  positive 
D)  No relationship exists between x and y.

Question 6

Entrepreneurs do all of the following EXCEPT

Accepted Answer

A)  organize labor, land, and capital. 
B)  come up with new ideas about what and how to produce. 
C)  bear risk from business decisions. 
D)  own all the other resources used in the production process. 
A)  organize labor, land, and capital. 
B)  come up with new ideas about what and how to produce. 
C)  bear risk from business decisions. 
D)  own all the other resources used in the production process.

Question 7

The branch of economics that deals with the analysis of the whole economy is called

Accepted Answer

A)  macroeconomics. 
B)  marginal analysis. 
C)  microeconomics. 
D)  metroanalysis. 
A)  macroeconomics. 
B)  marginal analysis. 
C)  microeconomics. 
D)  metroanalysis.

Question 8

Which of the following is a positive statement?

Accepted Answer

A)  People buy more of a good or service when its price falls. 
B)  The distribution of income is fair. 
C)  The government ought to provide health care to everyone. 
D)  Corporations should be more socially responsible. 
A)  People buy more of a good or service when its price falls. 
B)  The distribution of income is fair. 
C)  The government ought to provide health care to everyone. 
D)  Corporations should be more socially responsible.

Question 9

Using the above figure, which of the following is TRUE?

Accepted Answer

A)  Axis 1 is typically called the y-axis. 
B)  Axis 1 is also known as the origin. 
C)  Axis 2 is typically called the x-axis. 
D)  Point b is known as the origin. 
A)  Axis 1 is typically called the y-axis. 
B)  Axis 1 is also known as the origin. 
C)  Axis 2 is typically called the x-axis. 
D)  Point b is known as the origin.

Question 10

"Ceteris paribus" refers to the idea that if more than two variables are graphed, only one variable must be held constant.

Accepted Answer

A) True 
 B)False

Question 11

-Graphing the data in the above table with the number of workers on the horizontal axis and the average cost on the vertical axis, the graph would show

Accepted Answer

A)  first a negative and then a positive relationship. 
B)  a horizontal line. 
C)  no relationship. 
D)  a linear relationship. 
A)  first a negative and then a positive relationship. 
B)  a horizontal line. 
C)  no relationship. 
D)  a linear relationship.

Question 12

-In the above figure, if the tax rate is increased from 20 percent to 30 percent, tax revenue

Accepted Answer

A)  decreases. 
B)  is constant. 
C)  increases. 
D)  may increase or decrease. 
A)  decreases. 
B)  is constant. 
C)  increases. 
D)  may increase or decrease.

Question 13

In evaluating a relationship between x and y, ceteris paribus means other variables

Accepted Answer

A)  are not relevant to x and y. 
B)  move in opposite directions to x and y. 
C)  are not changing while x and y change. 
D)  move in the same direction as x and y. 
A)  are not relevant to x and y. 
B)  move in opposite directions to x and y. 
C)  are not changing while x and y change. 
D)  move in the same direction as x and y.

Question 14

The statement that "peach ice cream is better than chocolate ice cream"

Accepted Answer

A)  can be tested using the scientific approach. 
B)  is a normative statement. 
C)  is a positive statement. 
D)  provides a basis for predicting which type of ice cream will exhibit the most sales. 
A)  can be tested using the scientific approach. 
B)  is a normative statement. 
C)  is a positive statement. 
D)  provides a basis for predicting which type of ice cream will exhibit the most sales.

Question 15

-The slope of the line in the above figure is

Accepted Answer

A)  -1/2. 
B)  -3. 
C)  -4. 
D)  -1/3. 
A)  -1/2. 
B)  -3. 
C)  -4. 
D)  -1/3.

Question 16

As a firm expands its output, cost per unit of output (average cost) decreases and then increases. Average cost and output have

Accepted Answer

A)  a relationship with a minimum. 
B)  a relationship with a maximum. 
C)  no relationship. 
D)  a linear positive relationship. 
A)  a relationship with a minimum. 
B)  a relationship with a maximum. 
C)  no relationship. 
D)  a linear positive relationship.

Question 17

The slope of a line is the change in the y-axis variable divided by the change in the x-axis variable.

Accepted Answer

A) True 
 B)False

Question 18

People must make choices because

Accepted Answer

A)  most people enjoy shopping. 
B)  of scarcity. 
C)  there are many goods available. 
D)  None of the above answers is correct. 
A)  most people enjoy shopping. 
B)  of scarcity. 
C)  there are many goods available. 
D)  None of the above answers is correct.

Question 19

When the president of the Bank of America addresses Congress regarding lending standards in that industry, he is discussing

Accepted Answer

A)  a macroeconomic topic. 
B)  a microeconomic topic. 
C)  incentives. 
D)  the big tradeoff. 
A)  a macroeconomic topic. 
B)  a microeconomic topic. 
C)  incentives. 
D)  the big tradeoff.

Question 20

A scatter diagram plots the value of one economic variable against time.

Accepted Answer

A) True 
 B)False

You notice that when interest rates increases, new residential housing prices tend to decrease. This observation indicates that

When a California farmer decides to harvest lettuce using machines instead of by migrant workers, the farmer is answering the ________ part of one of the two big economic questions.

What is the difference between positive and normative statements?

Studying the effects choices have on the individual markets within the economy is part of

-Based on the information in the table above, what is the relationship between x and y?

Entrepreneurs do all of the following EXCEPT

The branch of economics that deals with the analysis of the whole economy is called

Which of the following is a positive statement?

Using the above figure, which of the following is TRUE?

"Ceteris paribus" refers to the idea that if more than two variables are graphed, only one variable must be held constant.

-Graphing the data in the above table with the number of workers on the horizontal axis and the average cost on the vertical axis, the graph would show

-In the above figure, if the tax rate is increased from 20 percent to 30 percent, tax revenue

In evaluating a relationship between x and y, ceteris paribus means other variables

The statement that "peach ice cream is better than chocolate ice cream"

-The slope of the line in the above figure is

As a firm expands its output, cost per unit of output (average cost) decreases and then increases. Average cost and output have

The slope of a line is the change in the y-axis variable divided by the change in the x-axis variable.

People must make choices because

When the president of the Bank of America addresses Congress regarding lending standards in that industry, he is discussing

A scatter diagram plots the value of one economic variable against time.

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

You notice that when interest rates increases, new residential housing prices tend to decrease. This observation indicates that

When a California farmer decides to harvest lettuce using machines instead of by migrant workers, the farmer is answering the ________ part of one of the two big economic questions.

What is the difference between positive and normative statements?

Studying the effects choices have on the individual markets within the economy is part of

-Based on the information in the table above, what is the relationship between x and y?

Entrepreneurs do all of the following EXCEPT

The branch of economics that deals with the analysis of the whole economy is called

Which of the following is a positive statement?

Using the above figure, which of the following is TRUE?

"Ceteris paribus" refers to the idea that if more than two variables are graphed, only one variable must be held constant.

-Graphing the data in the above table with the number of workers on the horizontal axis and the average cost on the vertical axis, the graph would show

-In the above figure, if the tax rate is increased from 20 percent to 30 percent, tax revenue

In evaluating a relationship between x and y, ceteris paribus means other variables

The statement that "peach ice cream is better than chocolate ice cream"

-The slope of the line in the above figure is

As a firm expands its output, cost per unit of output (average cost) decreases and then increases. Average cost and output have

The slope of a line is the change in the y-axis variable divided by the change in the x-axis variable.

People must make choices because

When the president of the Bank of America addresses Congress regarding lending standards in that industry, he is discussing

A scatter diagram plots the value of one economic variable against time.

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