Question 1

Define economics and describe its branches of study.

Accepted Answer

Economics is the social science that stu

Question 2

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 3

Two economists can agree that raising the minimum wage creates unemployment yet one might argue that raising the minimum wage is a good policy and the other that it is a bad policy. Why can this difference exist? Be sure to use the terms positive and normative in your answer.

Accepted Answer

Positive statements are statements that

Question 4

In the figure above, an increase in z leads to a

Accepted Answer

A)  movement up along one of the lines showing the relationship between x and y. 
B)  movement down along one of the lines showing the relationship between x and y. 
C)  rightward shift of the line showing the relationship between x and y. 
D)  leftward shift of the line showing the relationship between x and y. 
A)  movement up along one of the lines showing the relationship between x and y. 
B)  movement down along one of the lines showing the relationship between x and y. 
C)  rightward shift of the line showing the relationship between x and y. 
D)  leftward shift of the line showing the relationship between x and y.

Question 5

Entrepreneurs directly do all of the following except

Accepted Answer

A)  create new ideas about what and how to produce. 
B)  make business decisions. 
C)  face risks that arise from making business decisions. 
D)  decide for whom goods and services are produced. 
A)  create new ideas about what and how to produce. 
B)  make business decisions. 
C)  face risks that arise from making business decisions. 
D)  decide for whom goods and services are produced.

Question 6

If variables x and y move up and down together, they are

Accepted Answer

A)  positively related. 
B)  negative related. 
C)  unrelated. 
D)  trend related. 
A)  positively related. 
B)  negative related. 
C)  unrelated. 
D)  trend related.

Question 7

Using the data in the above table, if income is on the x-axis and the amount spent on restaurant meals is on the y-axis, the slope of the straight line graph equals

Accepted Answer

A)  0.2. 
B)  0.4. 
C)  0.5. 
D)  2.5. 
A)  0.2. 
B)  0.4. 
C)  0.5. 
D)  2.5.

Question 8

-In the above figure, the slope at point b

Accepted Answer

A)  lies between 1/3 and 1. 
B)  equals 1. 
C)  lies between 1 and 2. 
D)  exceeds 2. 
A)  lies between 1/3 and 1. 
B)  equals 1. 
C)  lies between 1 and 2. 
D)  exceeds 2.

Question 9

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 10

Your student association is looking for an auditorium to rent for an all-day conference. The university's Performing Arts Center is vacant on that day, so the association wants to rent it. The physical plant manager tells you that the daily rent is $660, which includes $400 to cover part of the cost paid to build the Center, $40 to cover part of its regular maintenance cost, $50 to help pay for the building's insurance, $100 to cover the extra cost of electricity that the university would incur because of the conference, and $70 to pay for additional janitorial services for the conference. You know that no one else wants to rent the Center on that day and you think that the price that the manager charges is too high. But how much should you pay? Use the economic way of thinking to answer this question and to convince the manager to accept your offer:
a)If you rent the Center, what will be the university's marginal cost of renting the center to you?
b)If you rent the Center, what will be the university's marginal benefit of renting the center to you?
c)What amount of rent should you offer? Convince the manager to accept your offer.

Accepted Answer

a)The university's marginal cost is $170

Question 11

Which of the following is a positive statement?

Accepted Answer

A)  An unemployment rate of 9 percent is a national disgrace. 
B)  Unemployment is a more important problem than inflation. 
C)  When the national unemployment rate is 9 percent, the unemployment rate for inner-city youth is often close to 40 percent. 
D)  Unemployment and inflation are equally important problems. 
A)  An unemployment rate of 9 percent is a national disgrace. 
B)  Unemployment is a more important problem than inflation. 
C)  When the national unemployment rate is 9 percent, the unemployment rate for inner-city youth is often close to 40 percent. 
D)  Unemployment and inflation are equally important problems.

Question 12

Which of the following is NOT a factor of production?

Accepted Answer

A)  the water used to cool a nuclear power plant. 
B)  the effort of farmers raising cattle. 
C)  the wages paid to workers. 
D)  the management skill of a small business owner. 
A)  the water used to cool a nuclear power plant. 
B)  the effort of farmers raising cattle. 
C)  the wages paid to workers. 
D)  the management skill of a small business owner.

Question 13

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 14

-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 15

In the above figure, how does the slope of the line between x = 4 and x = 5 compare with the slope between x = 2 and x = 3?

Accepted Answer

A)  The slope is greater between x = 4 and x = 5. 
B)  The slope is greater between x = 2 and x = 3. 
C)  The slope is the same. 
D)  The slope is not comparable. 
A)  The slope is greater between x = 4 and x = 5. 
B)  The slope is greater between x = 2 and x = 3. 
C)  The slope is the same. 
D)  The slope is not comparable.

Question 16

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 17

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 18

What are the two different types of relationships that variables can have? Explain each. What do these relationships look like when they are graphed?

Accepted Answer

Variables can have two relationships: po

Question 19

From 8 to 11 p.m., Sam can either attend a basketball game, a hockey match or the symphony. Suppose that Sam decides to attend the hockey match and thinks to herself that if she did not go to the match she would go to the symphony. Then the opportunity cost of attending the hockey match is

Accepted Answer

A)  going to the symphony and the basketball game. 
B)  going to the symphony. 
C)  going to the basketball game. 
D)  three hours of time. 
A)  going to the symphony and the basketball game. 
B)  going to the symphony. 
C)  going to the basketball game. 
D)  three hours of time.

Question 20

The relationship in the above figure suggests that when the interest rate is 5 percent

Accepted Answer

A)  a decrease in income will be associated with a decrease in expenditures. 
B)  a decrease in income will be associated with an increase in expenditures. 
C)  an increase in income will be associated with a decrease in expenditures. 
D)  there is no relationship between expenditures and income. 
A)  a decrease in income will be associated with a decrease in expenditures. 
B)  a decrease in income will be associated with an increase in expenditures. 
C)  an increase in income will be associated with a decrease in expenditures. 
D)  there is no relationship between expenditures and income.

Define economics and describe its branches of study.

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

Two economists can agree that raising the minimum wage creates unemployment yet one might argue that raising the minimum wage is a good policy and the other that it is a bad policy. Why can this difference exist? Be sure to use the terms positive and normative in your answer.

In the figure above, an increase in z leads to a

Entrepreneurs directly do all of the following except

If variables x and y move up and down together, they are

Using the data in the above table, if income is on the x-axis and the amount spent on restaurant meals is on the y-axis, the slope of the straight line graph equals

-In the above figure, the slope at point b

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

Which of the following is a positive statement?

Which of the following is NOT a factor of production?

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

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

In the above figure, how does the slope of the line between x = 4 and x = 5 compare with the slope between x = 2 and x = 3?

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

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

What are the two different types of relationships that variables can have? Explain each. What do these relationships look like when they are graphed?

From 8 to 11 p.m., Sam can either attend a basketball game, a hockey match or the symphony. Suppose that Sam decides to attend the hockey match and thinks to herself that if she did not go to the match she would go to the symphony. Then the opportunity cost of attending the hockey match is

The relationship in the above figure suggests that when the interest rate is 5 percent

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 1: What Is Economics?

Define economics and describe its branches of study.

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

Two economists can agree that raising the minimum wage creates unemployment yet one might argue that raising the minimum wage is a good policy and the other that it is a bad policy. Why can this difference exist? Be sure to use the terms positive and normative in your answer.

In the figure above, an increase in z leads to a

Entrepreneurs directly do all of the following except

If variables x and y move up and down together, they are

Using the data in the above table, if income is on the x-axis and the amount spent on restaurant meals is on the y-axis, the slope of the straight line graph equals

-In the above figure, the slope at point b

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

Which of the following is a positive statement?

Which of the following is NOT a factor of production?

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

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

In the above figure, how does the slope of the line between x = 4 and x = 5 compare with the slope between x = 2 and x = 3?

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

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

What are the two different types of relationships that variables can have? Explain each. What do these relationships look like when they are graphed?

From 8 to 11 p.m., Sam can either attend a basketball game, a hockey match or the symphony. Suppose that Sam decides to attend the hockey match and thinks to herself that if she did not go to the match she would go to the symphony. Then the opportunity cost of attending the hockey match is

The relationship in the above figure suggests that when the interest rate is 5 percent

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters