Question 1

Which of the following economic decisions is not a part of the study of microeconomics?

Accepted Answer

A) A consumer's decision regarding how much of a good to purchase 
B) A worker's decision concerning which job to take 
C) A business firm's decision regarding how many machines to purchase 
D) The government's decision regarding the use of monetary or fiscal policy to control increasing prices 
A) A consumer's decision regarding how much of a good to purchase 
B) A worker's decision concerning which job to take 
C) A business firm's decision regarding how many machines to purchase 
D) The government's decision regarding the use of monetary or fiscal policy to control increasing prices

Question 2

In which of the following cases will the production possibility frontier depict an increasing opportunity cost of producing one good relative to another?

Accepted Answer

A) The PPF becoming more linear 
B) The PPF becoming more convex to the origin 
C) The PPF becoming more concave to the origin 
D) The PPF curve becoming flatter 
A) The PPF becoming more linear 
B) The PPF becoming more convex to the origin 
C) The PPF becoming more concave to the origin 
D) The PPF curve becoming flatter

Question 3

If a production possibility frontier (PPF)is drawn concave to the origin,with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement upward along the PPF reflects:

Accepted Answer

A) an increasing opportunity cost of producing T-shirts. 
B) an increasing opportunity cost of producing shoes. 
C) constant opportunity cost of producing T-shirts. 
D) constant opportunity cost of producing shoes. 
A) an increasing opportunity cost of producing T-shirts. 
B) an increasing opportunity cost of producing shoes. 
C) constant opportunity cost of producing T-shirts. 
D) constant opportunity cost of producing shoes.

Question 4

Which of the following best describes the difference between micro and macroeconomics?

Accepted Answer

A) Macroeconomics deals with bigger,more important issues,while microeconomics deals with the smaller,less significant details. 
B) Macroeconomics studies the actions of large firms while microeconomics studies the behavior of small firms and individuals. 
C) Macroeconomics is the study of aggregate factors while microeconomics is the study of individuals and individual firms. 
D) Macroeconomics studies long-run behavior (one-year or more)while microeconomics studies short-run or immediate behavior. 
A) Macroeconomics deals with bigger,more important issues,while microeconomics deals with the smaller,less significant details. 
B) Macroeconomics studies the actions of large firms while microeconomics studies the behavior of small firms and individuals. 
C) Macroeconomics is the study of aggregate factors while microeconomics is the study of individuals and individual firms. 
D) Macroeconomics studies long-run behavior (one-year or more)while microeconomics studies short-run or immediate behavior.

Question 5

The annual income of a worker in the construction sector increased by 30 percent between 2010 and 2011.Does this necessarily imply that the worker's purchasing power had increased? Explain your answer.

Accepted Answer

An increase in annual income will improv

Question 6

Which of the following is true of sunk costs?

Accepted Answer

A) It is a type of opportunity cost. 
B) It is a type of implicit cost. 
C) It should be ignored when making decisions. 
D) It includes annual costs like payroll,insurance expenses,etc. 
A) It is a type of opportunity cost. 
B) It is a type of implicit cost. 
C) It should be ignored when making decisions. 
D) It includes annual costs like payroll,insurance expenses,etc.

Question 7

Using a real life example explain why price is an important element affecting consumer choice.

Accepted Answer

Consumers have limited income to satisfy

Question 8

Along a concave production possibility frontier,the per-unit opportunity cost of increasing output typically:

Accepted Answer

A) increasing because specializing in the production of just one good is irrational. 
B) decreasing because resources are difficult to move from one sector to another. 
C) increasing because some resources are better-suited to producing one good than to the other. 
D) decreasing because resource productivity increases naturally over time. 
A) increasing because specializing in the production of just one good is irrational. 
B) decreasing because resources are difficult to move from one sector to another. 
C) increasing because some resources are better-suited to producing one good than to the other. 
D) decreasing because resource productivity increases naturally over time.

Question 9

If a production possibility frontier is drawn concave to the origin with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement upward along the PPF reflects:

Accepted Answer

A) an increasing opportunity cost of T-shirts. 
B) an increasing opportunity cost of both shoes and T-shirts. 
C) a decreasing opportunity cost of T-shirts. 
D) a decreasing opportunity cost of both shoes and T-shirts. 
A) an increasing opportunity cost of T-shirts. 
B) an increasing opportunity cost of both shoes and T-shirts. 
C) a decreasing opportunity cost of T-shirts. 
D) a decreasing opportunity cost of both shoes and T-shirts.

Question 10

The downward slope of the production possibility frontier indicates that:

Accepted Answer

A) resources are scarce. 
B) individual decisions are based on self-interested behavior. 
C) individual decisions are rational. 
D) resources increase over time. 
A) resources are scarce. 
B) individual decisions are based on self-interested behavior. 
C) individual decisions are rational. 
D) resources increase over time.

Question 11

Write down a normative statement and a positive statement with reference to the minimum wage and then explain each.

Accepted Answer

'Higher minimum wages lead to limited em

Question 12

Which of the following is a positive statement?

Accepted Answer

A) The minimum wage should be raised to $7.50. 
B) If the military draft were re-instituted,military salaries would probably fall. 
C) Customers should not be required to show ID to buy alcohol. 
D) Immigration laws are bad for the economy. 
A) The minimum wage should be raised to $7.50. 
B) If the military draft were re-instituted,military salaries would probably fall. 
C) Customers should not be required to show ID to buy alcohol. 
D) Immigration laws are bad for the economy.

Question 13

The explicit cost of production equals:

Accepted Answer

A) opportunity cost minus sunk cost. 
B) implicit cost minus sunk cost. 
C) economic cost minus opportunity cost. 
D) opportunity cost minus implicit cost. 
A) opportunity cost minus sunk cost. 
B) implicit cost minus sunk cost. 
C) economic cost minus opportunity cost. 
D) opportunity cost minus implicit cost.

Question 14

Microeconomics is also known as price theory because:

Accepted Answer

A) everything has a price. 
B) prices have important effects on individual and firm decisions. 
C) prices are the only determinant of economic outcomes. 
D) prices change constantly. 
A) everything has a price. 
B) prices have important effects on individual and firm decisions. 
C) prices are the only determinant of economic outcomes. 
D) prices change constantly.

Question 15

The _____ is the absolute price of a good or service that has been adjusted for the changing value of money.

Accepted Answer

A) market price 
B) choke price 
C) nominal price 
D) real price 
A) market price 
B) choke price 
C) nominal price 
D) real price

Question 16

Which of the following is not an assumption usually made about markets and market participants?

Accepted Answer

A) Collective welfare maximization 
B) Self-interested behavior 
C) Scarce resources 
D) Rational behavior 
A) Collective welfare maximization 
B) Self-interested behavior 
C) Scarce resources 
D) Rational behavior

Question 17

"Goal-oriented behavior" can best be described as:

Accepted Answer

A) market participants using complete information to achieve objective ends. 
B) market participants using available information to achieve their personal aims. 
C) market participants trying to maximize social welfare. 
D) all market participants maximizing their efficiency to improve aggregate income. 
A) market participants using complete information to achieve objective ends. 
B) market participants using available information to achieve their personal aims. 
C) market participants trying to maximize social welfare. 
D) all market participants maximizing their efficiency to improve aggregate income.

Question 18

Opportunity cost is calculated as:

Accepted Answer

A) sunk cost plus implicit cost. 
B) explicit cost plus economic cost. 
C) implicit cost plus explicit cost. 
D) explicit cost plus sunk cost. 
A) sunk cost plus implicit cost. 
B) explicit cost plus economic cost. 
C) implicit cost plus explicit cost. 
D) explicit cost plus sunk cost.

Question 19

When analyzing events across time,economists measure consumer behavior based on:

Accepted Answer

A) nominal prices. 
B) real prices. 
C) complete information about buyer preferences. 
D) current income. 
A) nominal prices. 
B) real prices. 
C) complete information about buyer preferences. 
D) current income.

Question 20

-Consider the production possibility frontier of an economy in Figure 1-1.Which of the following point(s)will be considered inefficient?

Accepted Answer

A) A and E 
B) A,B,and C 
C) B and C 
D) D 
A) A and E 
B) A,B,and C 
C) B and C 
D) D

Which of the following economic decisions is not a part of the study of microeconomics?

In which of the following cases will the production possibility frontier depict an increasing opportunity cost of producing one good relative to another?

If a production possibility frontier (PPF)is drawn concave to the origin,with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement upward along the PPF reflects:

Which of the following best describes the difference between micro and macroeconomics?

The annual income of a worker in the construction sector increased by 30 percent between 2010 and 2011.Does this necessarily imply that the worker's purchasing power had increased? Explain your answer.

Which of the following is true of sunk costs?

Using a real life example explain why price is an important element affecting consumer choice.

Along a concave production possibility frontier,the per-unit opportunity cost of increasing output typically:

If a production possibility frontier is drawn concave to the origin with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement upward along the PPF reflects:

The downward slope of the production possibility frontier indicates that:

Write down a normative statement and a positive statement with reference to the minimum wage and then explain each.

Which of the following is a positive statement?

The explicit cost of production equals:

Microeconomics is also known as price theory because:

The _____ is the absolute price of a good or service that has been adjusted for the changing value of money.

Which of the following is not an assumption usually made about markets and market participants?

"Goal-oriented behavior" can best be described as:

Opportunity cost is calculated as:

When analyzing events across time,economists measure consumer behavior based on:

-Consider the production possibility frontier of an economy in Figure 1-1.Which of the following point(s)will be considered inefficient?

An Introduction to Microeconomics

Supply and Demand

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters

Exam 3: The Theory of Consumer Choice

Which of the following economic decisions is not a part of the study of microeconomics?

In which of the following cases will the production possibility frontier depict an increasing opportunity cost of producing one good relative to another?

If a production possibility frontier (PPF)is drawn concave to the origin,with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement upward along the PPF reflects:

Which of the following best describes the difference between micro and macroeconomics?

The annual income of a worker in the construction sector increased by 30 percent between 2010 and 2011.Does this necessarily imply that the worker's purchasing power had increased? Explain your answer.

Which of the following is true of sunk costs?

Using a real life example explain why price is an important element affecting consumer choice.

Along a concave production possibility frontier,the per-unit opportunity cost of increasing output typically:

If a production possibility frontier is drawn concave to the origin with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement upward along the PPF reflects:

The downward slope of the production possibility frontier indicates that:

Write down a normative statement and a positive statement with reference to the minimum wage and then explain each.

Which of the following is a positive statement?

The explicit cost of production equals:

Microeconomics is also known as price theory because:

The _____ is the absolute price of a good or service that has been adjusted for the changing value of money.

Which of the following is not an assumption usually made about markets and market participants?

"Goal-oriented behavior" can best be described as:

Opportunity cost is calculated as:

When analyzing events across time,economists measure consumer behavior based on:

-Consider the production possibility frontier of an economy in Figure 1-1.Which of the following point(s)will be considered inefficient?

An Introduction to Microeconomics

Supply and Demand

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters