Question 1

Every time you make a __________,you incur a(n)__________.

Accepted Answer

A)  decision; efficient effect 
B)  choice; opportunity cost 
C)  competitive move; price 
D)  decision; mistake 
E)  none of the above 
A)  decision; efficient effect 
B)  choice; opportunity cost 
C)  competitive move; price 
D)  decision; mistake 
E)  none of the above

Question 2

The branch of economics that studies the decisions of individuals and firms is called

Accepted Answer

A)  macroeconomics. 
B)  microeconomics. 
C)  microeconomics and macroeconomics. 
D)  positive economics. 
E)  normative economics. 
A)  macroeconomics. 
B)  microeconomics. 
C)  microeconomics and macroeconomics. 
D)  positive economics. 
E)  normative economics.

Question 3

Which of the following pairs of variables is most likely to be directly related?

Accepted Answer

A)  sales of toothpaste and sales of running shoes 
B)  the price of ice cream and the price of airline tickets 
C)  the number of children in a family and the number of toys the family owns 
D)  the price of ice cream and sales of ice cream 
E)  the outdoor temperature and sales of residential heating systems 
A)  sales of toothpaste and sales of running shoes 
B)  the price of ice cream and the price of airline tickets 
C)  the number of children in a family and the number of toys the family owns 
D)  the price of ice cream and sales of ice cream 
E)  the outdoor temperature and sales of residential heating systems

Question 4

A mandatory seatbelt law ends up raising the number of traffic fatalities if it lowers fatalities per accident from 0.11 to 0.08 while raising the number of accidents per period from 100,000 to any more than

Accepted Answer

A)  108,000. 
B)  111,111. 
C)  137,500. 
D)  110,000. 
A)  108,000. 
B)  111,111. 
C)  137,500. 
D)  110,000.

Question 5

In an interview an economist states,"This problem should be of greater concern to the federal government." We can explicitly put this statement in the category of

Accepted Answer

A)  microeconomics. 
B)  macroeconomics. 
C)  positive economics. 
D)  normative economics. 
A)  microeconomics. 
B)  macroeconomics. 
C)  positive economics. 
D)  normative economics.

Question 6

In economics,a synonym for satisfaction is

Accepted Answer

A)  utility. 
B)  marginal. 
C)  sacrifice. 
D)  normative. 
A)  utility. 
B)  marginal. 
C)  sacrifice. 
D)  normative.

Question 7

If variable X rises as a result of variable Y falling,then X and Y have an inverse relationship.

Accepted Answer

A) True 
 B)False

Question 8

The opportunity cost of attending college is

Accepted Answer

A)  the money one spends on college tuition,books,and so forth. 
B)  the highest valued alternative one forfeits to attend college. 
C)  the least valued alternative one forfeits to attend college. 
D)  equal to the salary one will earn when one graduates from college. 
A)  the money one spends on college tuition,books,and so forth. 
B)  the highest valued alternative one forfeits to attend college. 
C)  the least valued alternative one forfeits to attend college. 
D)  equal to the salary one will earn when one graduates from college.

Question 9

If an economist says "the higher the price of oranges,the fewer oranges individuals will buy,ceteris paribus," this means that

Accepted Answer

A)  individuals don't like high-priced oranges. 
B)  as the price of oranges rises,individuals' preferences change and they no longer like oranges as much as they once did. 
C)  as the price of oranges rises,individuals' preferences do not change,nor does anything else,but individuals buy fewer oranges in response to the higher price of oranges. 
D)  the higher the price of oranges,the fewer oranges individuals will buy,assuming that people have economic motives. 
A)  individuals don't like high-priced oranges. 
B)  as the price of oranges rises,individuals' preferences change and they no longer like oranges as much as they once did. 
C)  as the price of oranges rises,individuals' preferences do not change,nor does anything else,but individuals buy fewer oranges in response to the higher price of oranges. 
D)  the higher the price of oranges,the fewer oranges individuals will buy,assuming that people have economic motives.

Question 10

Scarcity means

Accepted Answer

A)  wants are greater than the limited resources available to satisfy these wants. 
B)  wants are less than the limited resources available to satisfy these wants. 
C)  resources are infinite. 
D)  wants are limited. 
E)  both c and d 
A)  wants are greater than the limited resources available to satisfy these wants. 
B)  wants are less than the limited resources available to satisfy these wants. 
C)  resources are infinite. 
D)  wants are limited. 
E)  both c and d

Question 11

Elite colleges and universities use standardized test scores (such as SAT and ACT scores)and high school grades as

Accepted Answer

A)  a means to raise student utility. 
B)  a means to turn a university education from a "good" to a "bad." 
C)  rationing devices. 
D)  none of the above 
A)  a means to raise student utility. 
B)  a means to turn a university education from a "good" to a "bad." 
C)  rationing devices. 
D)  none of the above

Question 12

The opportunity cost of attending college

Accepted Answer

A)  consists of the tuition costs only. 
B)  consists of the tuition costs plus the costs of room and board and other expenses. 
C)  is zero,if the student receives a scholarship that covers the costs of tuition,room and board,and other expenses. 
D)  varies from person to person. 
E)  both b and c 
A)  consists of the tuition costs only. 
B)  consists of the tuition costs plus the costs of room and board and other expenses. 
C)  is zero,if the student receives a scholarship that covers the costs of tuition,room and board,and other expenses. 
D)  varies from person to person. 
E)  both b and c

Question 13

How are changes in opportunity cost predicted to affect behavior?

Accepted Answer

A)  The lower the opportunity cost of doing X,the less likely X will be done. 
B)  The higher the opportunity cost of doing X,the less likely X will be done. 
C)  The lower the opportunity cost of doing X,the more likely X will be done. 
D)  a and c 
E)  b and c 
A)  The lower the opportunity cost of doing X,the less likely X will be done. 
B)  The higher the opportunity cost of doing X,the less likely X will be done. 
C)  The lower the opportunity cost of doing X,the more likely X will be done. 
D)  a and c 
E)  b and c

Question 14

Opportunity cost is the __________ alternative forfeited when a choice is made.

Accepted Answer

A)  least-valued 
B)  most highly-valued 
C)  most convenient 
D)  most recently considered 
A)  least-valued 
B)  most highly-valued 
C)  most convenient 
D)  most recently considered

Question 15

A mandatory seatbelt law ends up raising the number of traffic fatalities if it lowers fatalities per accident from 0.10 to 0.07 while raising the number of accidents per period from 35,000 to any more than

Accepted Answer

A)  35,000. 
B)  38,500. 
C)  37,450. 
D)  50,000. 
A)  35,000. 
B)  38,500. 
C)  37,450. 
D)  50,000.

Question 16

The slope of a horizontal line is always equal to zero.

Accepted Answer

A) True 
 B)False

Question 17

If scarcity didn't exist,neither would

Accepted Answer

A)  rationing devices. 
B)  competition. 
C)  labor. 
D)  capital. 
E)  a and b 
A)  rationing devices. 
B)  competition. 
C)  labor. 
D)  capital. 
E)  a and b

Question 18

Efficiency is consistent with

Accepted Answer

A)  maximizing net benefits. 
B)  equating marginal benefits and marginal costs. 
C)  maximizing total benefits. 
D)  minimizing total costs. 
E)  a and b 
A)  maximizing net benefits. 
B)  equating marginal benefits and marginal costs. 
C)  maximizing total benefits. 
D)  minimizing total costs. 
E)  a and b

Question 19

Decision making "at the margin" means making a choice based on __________ of a decision.

Accepted Answer

A)  the total benefits 
B)  the total costs 
C)  comparing the total benefits and costs 
D)  comparing the additional benefits and costs 
A)  the total benefits 
B)  the total costs 
C)  comparing the total benefits and costs 
D)  comparing the additional benefits and costs

Question 20

Which of the following statements is false?

Accepted Answer

A)  Microeconomics is the branch of economics that deals with human behavior and choices as they relate to relatively small units-an individual,a firm,an industry,and a single market. 
B)  Macroeconomics is the branch of economics that deals with human behavior and choices as they relate to highly aggregate markets. 
C)  Positive economics attempts to determine what is. 
D)  Normative economics addresses what should be. 
E)  Positive and normative economics both address what should be. 
A)  Microeconomics is the branch of economics that deals with human behavior and choices as they relate to relatively small units-an individual,a firm,an industry,and a single market. 
B)  Macroeconomics is the branch of economics that deals with human behavior and choices as they relate to highly aggregate markets. 
C)  Positive economics attempts to determine what is. 
D)  Normative economics addresses what should be. 
E)  Positive and normative economics both address what should be.

Exam 1: What Economics Is About

Every time you make a __________,you incur a(n)__________.

The branch of economics that studies the decisions of individuals and firms is called

Which of the following pairs of variables is most likely to be directly related?

A mandatory seatbelt law ends up raising the number of traffic fatalities if it lowers fatalities per accident from 0.11 to 0.08 while raising the number of accidents per period from 100,000 to any more than

In an interview an economist states,"This problem should be of greater concern to the federal government." We can explicitly put this statement in the category of

In economics,a synonym for satisfaction is

If variable X rises as a result of variable Y falling,then X and Y have an inverse relationship.

The opportunity cost of attending college is

If an economist says "the higher the price of oranges,the fewer oranges individuals will buy,ceteris paribus," this means that

Scarcity means

Elite colleges and universities use standardized test scores (such as SAT and ACT scores)and high school grades as

The opportunity cost of attending college

How are changes in opportunity cost predicted to affect behavior?

Opportunity cost is the __________ alternative forfeited when a choice is made.

A mandatory seatbelt law ends up raising the number of traffic fatalities if it lowers fatalities per accident from 0.10 to 0.07 while raising the number of accidents per period from 35,000 to any more than

The slope of a horizontal line is always equal to zero.

If scarcity didn't exist,neither would

Efficiency is consistent with

Decision making "at the margin" means making a choice based on __________ of a decision.

Which of the following statements is false?

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

Filters

Every time you make a ,you incur a(n).