Question 1

Economists sometimes refer to the resource category land as natural resources.

Accepted Answer

A) True 
 B)False

Question 2

Let X be the number of hours you spend studying for an exam on Wednesday afternoon and Y be your chances of winning the Wednesday night state lottery.What kind of a relationship do you most likely expect between X and Y?

Accepted Answer

A)  direct 
B)  inverse 
C)  linear 
D)  45-degree line 
E)  independent 
A)  direct 
B)  inverse 
C)  linear 
D)  45-degree line 
E)  independent

Question 3

Which of the following statements uses the term ceteris paribus correctly?

Accepted Answer

A)  In economics,there are numerous theories,ceteris paribus. 
B)  New York City is a major American city,ceteris paribus. 
C)  The price of pineapples is low in Hawaii,ceteris paribus. 
D)  The more ice cream you eat,the more weight you will gain,ceteris paribus. 
E)  none of the above 
A)  In economics,there are numerous theories,ceteris paribus. 
B)  New York City is a major American city,ceteris paribus. 
C)  The price of pineapples is low in Hawaii,ceteris paribus. 
D)  The more ice cream you eat,the more weight you will gain,ceteris paribus. 
E)  none of the above

Question 4

If people want more cars than there are cars available,then it must be true that

Accepted Answer

A)  cars are scarce. 
B)  there is a surplus of cars. 
C)  there is a decreased supply of cars. 
D)  none of the above 
A)  cars are scarce. 
B)  there is a surplus of cars. 
C)  there is a decreased supply of cars. 
D)  none of the above

Question 5

In most societies,dollar price acts as the main rationing device.If dollar price weren't the main rationing device,would there still be a need for some rationing device to take its place?

Accepted Answer

A)  No,because with dollar price there would be no scarcity,although shortages would still exist. 
B)  Yes,because there is a need for a rationing device as long as scarcity exists. 
C)  Yes,because there is a need for a rationing device as long as the world's population is so large. 
D)  No,because dollar price creates scarcity and without money price scarcity wouldn't exist. 
E)  none of the above 
A)  No,because with dollar price there would be no scarcity,although shortages would still exist. 
B)  Yes,because there is a need for a rationing device as long as scarcity exists. 
C)  Yes,because there is a need for a rationing device as long as the world's population is so large. 
D)  No,because dollar price creates scarcity and without money price scarcity wouldn't exist. 
E)  none of the above

Question 6

The author of the textbook defines economics as the

Accepted Answer

A)  science of efficiency. 
B)  science of scarcity. 
C)  study of markets. 
D)  study of human activity. 
A)  science of efficiency. 
B)  science of scarcity. 
C)  study of markets. 
D)  study of human activity.

Question 7

-Refer to Exhibit 1-3.According to the data provided in this table,what is the approximate slope of the line between points A and B,if these data were graphed with X on the horizontal axis and Y on the vertical axis?

Accepted Answer

A)  -0.29 
B)  -3.50 
C)  0.29 
D)  3.50 
E)  none of the above 
A)  -0.29 
B)  -3.50 
C)  0.29 
D)  3.50 
E)  none of the above

Question 8

A characteristic of a 45-degree line is that

Accepted Answer

A)  any point on the line is equidistant from the two axes. 
B)  it bisects a right angle. 
C)  the slope of the line is 1. 
D)  a and c 
E)  a,b,and c 
A)  any point on the line is equidistant from the two axes. 
B)  it bisects a right angle. 
C)  the slope of the line is 1. 
D)  a and c 
E)  a,b,and c

Question 9

In a two-variable diagram,there is a straight line which is parallel to the horizontal axis.The slope of this line is

Accepted Answer

A)  infinite. 
B)  indicative of an inverse relationship between two variables. 
C)  indicative of a direct relationship between two variables. 
D)  zero. 
E)  b and d 
A)  infinite. 
B)  indicative of an inverse relationship between two variables. 
C)  indicative of a direct relationship between two variables. 
D)  zero. 
E)  b and d

Question 10

In economics,a synonym for utility is

Accepted Answer

A)  usefulness. 
B)  satisfaction. 
C)  sacrifice. 
D)  a service. 
A)  usefulness. 
B)  satisfaction. 
C)  sacrifice. 
D)  a service.

Question 11

In all cases,normative economics deals with

Accepted Answer

A)  what is. 
B)  what should be. 
C)  relatively small units in the economy. 
D)  the entire economy. 
A)  what is. 
B)  what should be. 
C)  relatively small units in the economy. 
D)  the entire economy.

Question 12

The physical and mental talents people bring to production processes comprise the resource called

Accepted Answer

A)  entrepreneurship. 
B)  natural resources. 
C)  capital. 
D)  labor. 
A)  entrepreneurship. 
B)  natural resources. 
C)  capital. 
D)  labor.

Question 13

If variable X rises as result of variable Y falling,then X and Y are

Accepted Answer

A)  directly related. 
B)  inversely related. 
C)  independent. 
D)  positively related. 
A)  directly related. 
B)  inversely related. 
C)  independent. 
D)  positively related.

Question 14

Here are three things you could do if you do not attend your economics class: watch television with some friends (you value this at $25),read a good book (you value this at $17),or go to work (you could earn $20 during the economics class).The opportunity cost of going to your economics class is

Accepted Answer

A)  $20,because this is the only alternative of the three where you would actually receive a monetary payment. 
B)  $17,because this is the lowest valued alternative forfeited. 
C)  $25,because this is the highest valued alternative forfeited. 
D)  $62,because this is the total dollar sum of the three forfeited alternatives. 
A)  $20,because this is the only alternative of the three where you would actually receive a monetary payment. 
B)  $17,because this is the lowest valued alternative forfeited. 
C)  $25,because this is the highest valued alternative forfeited. 
D)  $62,because this is the total dollar sum of the three forfeited alternatives.

Question 15

-Refer to Exhibit 1-1.If the student whose study habits are illustrated here is currently studying for the 2nd hour she should

Accepted Answer

A)  cut back on the number of hours she is studying because the marginal benefit of studying for the 2nd hour is less than the marginal cost of doing so. 
B)  cut back on the number of hours she is studying because the marginal benefit of studying for the 2nd hour is greater than the marginal cost of doing so. 
C)  increase the number of hours she is studying because the marginal benefit of studying for the 2nd hour is less than the marginal cost of doing so. 
D)  increase the number of hours she is studying because the marginal benefit of studying for the 3rd ,4th,and 5th hours is greater than the marginal cost for each of these hours. 
A)  cut back on the number of hours she is studying because the marginal benefit of studying for the 2nd hour is less than the marginal cost of doing so. 
B)  cut back on the number of hours she is studying because the marginal benefit of studying for the 2nd hour is greater than the marginal cost of doing so. 
C)  increase the number of hours she is studying because the marginal benefit of studying for the 2nd hour is less than the marginal cost of doing so. 
D)  increase the number of hours she is studying because the marginal benefit of studying for the 3rd ,4th,and 5th hours is greater than the marginal cost for each of these hours.

Question 16

When economists speak of scarcity,they are referring to the

Accepted Answer

A)  condition in which society is not employing all its resources in an efficient way. 
B)  condition in which people's wants outstrip the limited resources available to satisfy those wants. 
C)  economic condition that exists in only very poor countries of the world. 
D)  condition in which society produces too many frivolous goods and not enough socially desirable goods. 
A)  condition in which society is not employing all its resources in an efficient way. 
B)  condition in which people's wants outstrip the limited resources available to satisfy those wants. 
C)  economic condition that exists in only very poor countries of the world. 
D)  condition in which society produces too many frivolous goods and not enough socially desirable goods.

Question 17

At the optimal or efficient level of an activity,the activity's marginal benefit must

Accepted Answer

A)  be zero. 
B)  be greater than zero. 
C)  equal the marginal cost of the activity. 
D)  exceed the marginal cost of the activity. 
A)  be zero. 
B)  be greater than zero. 
C)  equal the marginal cost of the activity. 
D)  exceed the marginal cost of the activity.

Question 18

The question of how a tax change might impact U.S.economic output is most closely associated with the study of

Accepted Answer

A)  microeconomics. 
B)  managerial economics. 
C)  macroeconomics. 
D)  consumer economics. 
A)  microeconomics. 
B)  managerial economics. 
C)  macroeconomics. 
D)  consumer economics.

Question 19

If it is discovered that using drugs enhances a person's chance of contracting a fatal disease,the cost of using drugs

Accepted Answer

A)  increases. 
B)  decreases. 
C)  is not affected. 
D)  is irrelevant,since they are illegal anyway. 
A)  increases. 
B)  decreases. 
C)  is not affected. 
D)  is irrelevant,since they are illegal anyway.

Question 20

Which of the following is least likely to be an effect of scarcity?

Accepted Answer

A)  rationing device 
B)  choice 
C)  opportunity cost 
D)  dollar price 
E)  utility 
A)  rationing device 
B)  choice 
C)  opportunity cost 
D)  dollar price 
E)  utility

Exam 1: What Economics Is About

Economists sometimes refer to the resource category land as natural resources.

Let X be the number of hours you spend studying for an exam on Wednesday afternoon and Y be your chances of winning the Wednesday night state lottery.What kind of a relationship do you most likely expect between X and Y?

Which of the following statements uses the term ceteris paribus correctly?

If people want more cars than there are cars available,then it must be true that

In most societies,dollar price acts as the main rationing device.If dollar price weren't the main rationing device,would there still be a need for some rationing device to take its place?

The author of the textbook defines economics as the

-Refer to Exhibit 1-3.According to the data provided in this table,what is the approximate slope of the line between points A and B,if these data were graphed with X on the horizontal axis and Y on the vertical axis?

A characteristic of a 45-degree line is that

In a two-variable diagram,there is a straight line which is parallel to the horizontal axis.The slope of this line is

In economics,a synonym for utility is

In all cases,normative economics deals with

The physical and mental talents people bring to production processes comprise the resource called

If variable X rises as result of variable Y falling,then X and Y are

Here are three things you could do if you do not attend your economics class: watch television with some friends (you value this at $25),read a good book (you value this at $17),or go to work (you could earn $20 during the economics class).The opportunity cost of going to your economics class is

-Refer to Exhibit 1-1.If the student whose study habits are illustrated here is currently studying for the 2nd hour she should

When economists speak of scarcity,they are referring to the

At the optimal or efficient level of an activity,the activity's marginal benefit must

The question of how a tax change might impact U.S.economic output is most closely associated with the study of

If it is discovered that using drugs enhances a person's chance of contracting a fatal disease,the cost of using drugs

Which of the following is least likely to be an effect of scarcity?

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

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