Question 1

Statements about what ought to be are called

Accepted Answer

A)  positive statements. 
B)  normative statements. 
C)  assumptions. 
D)  implications. 
A)  positive statements. 
B)  normative statements. 
C)  assumptions. 
D)  implications.

Question 2

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 3

What does the slope of a straight line equal? How is the slope of a curved line calculated at a point on the curve?

Accepted Answer

The slope of a straight line is calculat

Question 4

Factors of production include all of the following EXCEPT ________.

Accepted Answer

A)  machines made in past years. 
B)  money 
C)  entrepreneurship 
D)  a wheat field that is not irrigated 
A)  machines made in past years. 
B)  money 
C)  entrepreneurship 
D)  a wheat field that is not irrigated

Question 5

An incentive

Accepted Answer

A)  could be a reward but could not be a penalty. 
B)  could be a penalty but could not be a reward. 
C)  could be either a reward or a penalty. 
D)  is the opposite of a tradeoff. 
A)  could be a reward but could not be a penalty. 
B)  could be a penalty but could not be a reward. 
C)  could be either a reward or a penalty. 
D)  is the opposite of a tradeoff.

Question 6

Marginal cost is the

Accepted Answer

A)  cost of an increase in an activity. 
B)  total cost of an activity. 
C)  cost of an activity minus the benefits of the activity. 
D)  cost of all forgone alternatives. 
A)  cost of an increase in an activity. 
B)  total cost of an activity. 
C)  cost of an activity minus the benefits of the activity. 
D)  cost of all forgone alternatives.

Question 7

Jane is deciding whether to go to school for 8 weeks this summer. The cost of tuition and textbooks is $1,700 and housing and other expenses will cost her $600. If she does not go to school, she will live in her parents' house for free and they will cover her food and other expenses for her. Also, if Jane does not go to summer school she could work fulltime. But the best job she can get pays only $600 per week, and Jane would only agree to give up her free time for no less than $750 per week. However, if she goes to summer school, she'll have to spend ?40 hours a week attending classes and studying.
a)What will the summer school cost Jane in terms of money spent?
b)What are the opportunity costs of going to summer school that Jane does not pay explicitly? Explain.
c)What is Jane's total opportunity cost of going to school this summer? Explain your answer.
d)Suppose that if Jane does not go to summer school, she will eventually take the classes anyway. What is Jane's marginal benefit of going to summer school?
e)Suppose Jane decides to go to school in the summer. Explain her decision using the concepts of marginal cost and marginal benefit.

Accepted Answer

a)Jane explicitly pays the cost of tuiti

Question 8

In the above figure, using the slope across an arc, the slope of the curve between points a and c is

Accepted Answer

A)  -3/5. 
B)  3/5. 
C)  5/3. 
D)  -5/3. 
A)  -3/5. 
B)  3/5. 
C)  5/3. 
D)  -5/3.

Question 9

When the government chooses to use resources to build a dam, these sources are no longer available to build a highway. This choice illustrates the concept of

Accepted Answer

A)  a market mechanism. 
B)  macroeconomics. 
C)  opportunity cost. 
D)  a fallacy of composition. 
A)  a market mechanism. 
B)  macroeconomics. 
C)  opportunity cost. 
D)  a fallacy of composition.

Question 10

-The table above shows how the number of books Katie buys each year depends on her income.
a)What kind of relationship exists between Katie's income and the number of books she purchases?
b)Plot the relationship between Katie's income and the number of books she purchases in the above figure. Measure income along the vertical axis and the number of books along the horizontal axis. Be sure to label the axes.
c)What is the slope of the relationship between $50,000 and $70,000 of income?
d)What is the slope of the relationship between $90,000 and $110,000 of income?
e)Comment on the similarity or dissimilarity of your answers to parts (c)and (d).

Accepted Answer

a)There is a positive relationship. When

Question 11

-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 12

Why do economists use graphs?

Accepted Answer

Graphs help economists, and others, to v

Question 13

A cost due to an increase in activity is called

Accepted Answer

A)  an incentive loss. 
B)  a marginal cost. 
C)  a negative marginal benefit. 
D)  the total cost. 
A)  an incentive loss. 
B)  a marginal cost. 
C)  a negative marginal benefit. 
D)  the total cost.

Question 14

Which of the following is a microeconomic topic?

Accepted Answer

A)  how a trade agreement between the United States and Mexico affects both nations' unemployment rates 
B)  comparing inflation rates across countries 
C)  how rent ceilings impact the supply of apartments 
D)  how a tax rate increase will impact total production 
A)  how a trade agreement between the United States and Mexico affects both nations' unemployment rates 
B)  comparing inflation rates across countries 
C)  how rent ceilings impact the supply of apartments 
D)  how a tax rate increase will impact total production

Question 15

An inducement to take a particular action is called

Accepted Answer

A)  the marginal benefit. 
B)  the marginal cost. 
C)  opportunity cost. 
D)  an incentive. 
A)  the marginal benefit. 
B)  the marginal cost. 
C)  opportunity cost. 
D)  an incentive.

Question 16

Positive and normative statements differ in that

Accepted Answer

A)  positive statements can be tested, whereas normative statements cannot. 
B)  normative statements can be tested, whereas positive statements cannot. 
C)  normative statements depict "what is" and positive statements depict "what ought to be." 
D)  normative statements never use the word "should." 
A)  positive statements can be tested, whereas normative statements cannot. 
B)  normative statements can be tested, whereas positive statements cannot. 
C)  normative statements depict "what is" and positive statements depict "what ought to be." 
D)  normative statements never use the word "should."

Question 17

In the figure above, suppose the price of a pound of pecans is negatively related to the quantity of peanuts that farmers are willing to supply. If the price of pecans increases

Accepted Answer

A)  the curve will shift rightward. 
B)  the curve will shift leftward. 
C)  there is a movement along the curve. 
D)  the curve will be unaffected. 
A)  the curve will shift rightward. 
B)  the curve will shift leftward. 
C)  there is a movement along the curve. 
D)  the curve will be unaffected.

Question 18

A student is studying for an exam 2 hours a day and is debating whether to study an extra hour. The student's marginal benefit

Accepted Answer

A)  depends on the grade the student earns on the exam. 
B)  is the benefit the student receives from studying all 3 hours. 
C)  is the benefit the student receives from studying the extra hour. 
D)  is greater than the student's marginal cost. 
A)  depends on the grade the student earns on the exam. 
B)  is the benefit the student receives from studying all 3 hours. 
C)  is the benefit the student receives from studying the extra hour. 
D)  is greater than the student's marginal cost.

Question 19

Which of the following is a positive statement?

Accepted Answer

A)  The United States should fight inflation even if it raises unemployment. 
B)  What to do with Social Security is the most important economic issue today. 
C)  A 5 percent increase in income leads to a 3 percent increase in the consumption of orange juice. 
D)  Because they decrease productivity, labor unions should be eliminated. 
A)  The United States should fight inflation even if it raises unemployment. 
B)  What to do with Social Security is the most important economic issue today. 
C)  A 5 percent increase in income leads to a 3 percent increase in the consumption of orange juice. 
D)  Because they decrease productivity, labor unions should be eliminated.

Question 20

-In the above figure, the axis break in the x-axis

Accepted Answer

A)  reflects the fact that for the years covered in the figure, the unemployment rate was never less than 3 percent. 
B)  shows that there is no relationship between inflation and unemployment. 
C)  misleadingly shows that inflation has changed very little even though the unemployment rate has increased a great deal. 
D)  implies that for the years covered in the figure, the inflation rate was always greater than 1 percent. 
A)  reflects the fact that for the years covered in the figure, the unemployment rate was never less than 3 percent. 
B)  shows that there is no relationship between inflation and unemployment. 
C)  misleadingly shows that inflation has changed very little even though the unemployment rate has increased a great deal. 
D)  implies that for the years covered in the figure, the inflation rate was always greater than 1 percent.

Statements about what ought to be are called

Which of the following is a positive statement?

What does the slope of a straight line equal? How is the slope of a curved line calculated at a point on the curve?

Factors of production include all of the following EXCEPT ________.

An incentive

Marginal cost is the

In the above figure, using the slope across an arc, the slope of the curve between points a and c is

When the government chooses to use resources to build a dam, these sources are no longer available to build a highway. This choice illustrates the concept of

-In the above, as the y variable increases

Why do economists use graphs?

A cost due to an increase in activity is called

Which of the following is a microeconomic topic?

An inducement to take a particular action is called

Positive and normative statements differ in that

In the figure above, suppose the price of a pound of pecans is negatively related to the quantity of peanuts that farmers are willing to supply. If the price of pecans increases

A student is studying for an exam 2 hours a day and is debating whether to study an extra hour. The student's marginal benefit

Which of the following is a positive statement?

-In the above figure, the axis break in the x-axis

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?

Statements about what ought to be are called

Which of the following is a positive statement?

What does the slope of a straight line equal? How is the slope of a curved line calculated at a point on the curve?

Factors of production include all of the following EXCEPT ________.

An incentive

Marginal cost is the

In the above figure, using the slope across an arc, the slope of the curve between points a and c is

When the government chooses to use resources to build a dam, these sources are no longer available to build a highway. This choice illustrates the concept of

-In the above, as the y variable increases

Why do economists use graphs?

A cost due to an increase in activity is called

Which of the following is a microeconomic topic?

An inducement to take a particular action is called

Positive and normative statements differ in that

In the figure above, suppose the price of a pound of pecans is negatively related to the quantity of peanuts that farmers are willing to supply. If the price of pecans increases

A student is studying for an exam 2 hours a day and is debating whether to study an extra hour. The student's marginal benefit

Which of the following is a positive statement?

-In the above figure, the axis break in the x-axis

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