Question 1

What is scarcity,and why is it a fundamental concept in economics?

Accepted Answer

Scarcity refers to a situation in which

Question 2

Which of the following is an example of an economic trade-off that a firm has to make?

Accepted Answer

A) whether it is cheaper to produce with more machines or with more workers 
B) deciding why consumers want its products 
C) whether or not consumers will buy its products 
D) deciding what profit margin it desires for its products 
A) whether it is cheaper to produce with more machines or with more workers 
B) deciding why consumers want its products 
C) whether or not consumers will buy its products 
D) deciding what profit margin it desires for its products

Question 3

The revenue received from the sale of an additional unit of a product

Accepted Answer

A) is a marginal benefit to the firm. 
B) is called profit. 
C) is called gross sales. 
D) is called a net gain. 
A) is a marginal benefit to the firm. 
B) is called profit. 
C) is called gross sales. 
D) is called a net gain.

Question 4

Who receives the goods and services produced in the United States depends largely on

Accepted Answer

A) how income is distributed. 
B) how the goods and services are produced. 
C) what goods and services are produced. 
D) government redistribution. 
A) how income is distributed. 
B) how the goods and services are produced. 
C) what goods and services are produced. 
D) government redistribution.

Question 5

Zane's Vanes is a service that restores old weather vanes.Zane has just spent $125 purchasing a 1920s era weather vane which he expects to restore and sell for $500 once the work is completed.After having spent $125,Zane realizes that he will need to spend an additional $200 on materials to complete the restoration.Alternatively,he can sell the weather vane without restoring it for $200.What should he do?

Accepted Answer

A) He should sell the weather vane now to make the most profit. 
B) It does not matter what he does; he is going to take a loss on the project. 
C) He should finish the restoration and then sell the weather vane. 
D) He should sell the weather vane back to the party he purchased it from and cut his losses. 
A) He should sell the weather vane now to make the most profit. 
B) It does not matter what he does; he is going to take a loss on the project. 
C) He should finish the restoration and then sell the weather vane. 
D) He should sell the weather vane back to the party he purchased it from and cut his losses.

Question 6

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal cost.

Accepted Answer

A) True 
 B)False

Question 7

Consider the following economic agents: a.the government
B.consumers
C.producers
Who,in a modern mixed economy,decides what goods and services will be produced with the scarce resources available in that economy?

Accepted Answer

A) the government 
B) producers 
C) consumers 
D) consumers and producers 
E) the government,consumers and producers 
A) the government 
B) producers 
C) consumers 
D) consumers and producers 
E) the government,consumers and producers

Question 8

Consumers and make all economic decisions in a mixed economy.

Accepted Answer

A) True 
 B)False

Question 9

You explain to your friend Haslina,who runs a catering service called "Meals in a Zip," about an economic theory which asserts that consumers will purchase less of a product at higher prices than they will at lower prices.She contends that the theory is incorrect because over the past two years she has raised the price of her catered meals and yet has seen a brisk increase in sales.How would you respond to Haslina?

Accepted Answer

A) Haslina is right; she has evidence to back her claim.The theory must be erroneous. 
B) I will explain to her that she is making the error of reverse causality: it is the increase in demand that has enabled her to raise her prices. 
C) I will explain to her that there are some omitted variables that have contributed to an increase in her sales such as changes in income. 
D) Haslina is making the mistake of assuming that correlation implies causation. 
A) Haslina is right; she has evidence to back her claim.The theory must be erroneous. 
B) I will explain to her that she is making the error of reverse causality: it is the increase in demand that has enabled her to raise her prices. 
C) I will explain to her that there are some omitted variables that have contributed to an increase in her sales such as changes in income. 
D) Haslina is making the mistake of assuming that correlation implies causation.

Question 10

If the price of pineapple juice was $4.50 a gallon and it is now $5.75 a gallon,what is the percentage change in price?

Accepted Answer

A) 7.8 percent 
B) 12.5 percent 
C) 27.7 percent 
D) 57.5 percent 
A) 7.8 percent 
B) 12.5 percent 
C) 27.7 percent 
D) 57.5 percent

Question 11

If a graph has a line that shows the quantity of flat-screen televisions sold in the last five years,it is known as

Accepted Answer

A) a pie chart. 
B) a time-series graph. 
C) a demand curve for outsourcing. 
D) a supply curve of outsourcing. 
A) a pie chart. 
B) a time-series graph. 
C) a demand curve for outsourcing. 
D) a supply curve of outsourcing.

Question 12

What is the difference between economic efficiency and equity?

Accepted Answer

Economic efficiency is concerned with ma

Question 13

The processes used to produce goods and services describes

Accepted Answer

A) innovation. 
B) entrepreneurship. 
C) technology. 
D) capital. 
A) innovation. 
B) entrepreneurship. 
C) technology. 
D) capital.

Question 14

Optimal decisions are made at the point where marginal benefit is maximized.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a normative economic statement?

Accepted Answer

A) Rising global demand for diesel and heating oil has led to increases in the price of crude oil. 
B) With falling home prices and rising mortgage interest rates,the amount of foreclosures has increased. 
C) The federal government is considering raising the gasoline tax to promote the use of public transportation. 
D) Fashion designers should be allowed to copyright designs to promote innovation. 
A) Rising global demand for diesel and heating oil has led to increases in the price of crude oil. 
B) With falling home prices and rising mortgage interest rates,the amount of foreclosures has increased. 
C) The federal government is considering raising the gasoline tax to promote the use of public transportation. 
D) Fashion designers should be allowed to copyright designs to promote innovation.

Question 16

All economic questions arise from the fact that resources are scarce.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is a positive economic statement?

Accepted Answer

A) People should use public transportation more often. 
B) The government should ban diesel engines in automobiles. 
C) Due to a decrease in state funding,university tuition has risen. 
D) Foreign citizens should not be allowed to work without a work visa. 
A) People should use public transportation more often. 
B) The government should ban diesel engines in automobiles. 
C) Due to a decrease in state funding,university tuition has risen. 
D) Foreign citizens should not be allowed to work without a work visa.

Question 18

Which of the following is an example of a "how much" decision?

Accepted Answer

A) The Pleasantville movie theatre is open only in the evenings.The theatre's manager is debating whether to add daily matinee shows. 
B) The Zhous have demolished their old home and are debating whether to build a ranch-style house or a Craftsman home. 
C) You're planning to hold a graduation party and must decide between having your party catered or having a pot-luck. 
D) Chelsea has withdrawn from the swim team to take up a full-time job. 
A) The Pleasantville movie theatre is open only in the evenings.The theatre's manager is debating whether to add daily matinee shows. 
B) The Zhous have demolished their old home and are debating whether to build a ranch-style house or a Craftsman home. 
C) You're planning to hold a graduation party and must decide between having your party catered or having a pot-luck. 
D) Chelsea has withdrawn from the swim team to take up a full-time job.

Question 19

Figure 1-3  
-Refer to Figure 1-3.Calculate the area of the trapezoid X.

Accepted Answer

A) $361 
B) $450 
C) $1,020 
D) $1,140 
A) $361 
B) $450 
C) $1,020 
D) $1,140

Question 20

Figure 1-1  
-Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2008 and 2010.

Accepted Answer

A) 23.8% 
B) 40% 
C) 42.9% 
D) 73.3% 
A) 23.8% 
B) 40% 
C) 42.9% 
D) 73.3%

What is scarcity,and why is it a fundamental concept in economics?

Which of the following is an example of an economic trade-off that a firm has to make?

The revenue received from the sale of an additional unit of a product

Who receives the goods and services produced in the United States depends largely on

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal cost.

Consider the following economic agents: a.the government B.consumers C.producers Who,in a modern mixed economy,decides what goods and services will be produced with the scarce resources available in that economy?

Consumers and make all economic decisions in a mixed economy.

If the price of pineapple juice was $4.50 a gallon and it is now $5.75 a gallon,what is the percentage change in price?

If a graph has a line that shows the quantity of flat-screen televisions sold in the last five years,it is known as

What is the difference between economic efficiency and equity?

The processes used to produce goods and services describes

Optimal decisions are made at the point where marginal benefit is maximized.

Which of the following is a normative economic statement?

All economic questions arise from the fact that resources are scarce.

Which of the following is a positive economic statement?

Which of the following is an example of a "how much" decision?

Figure 1-3 -Refer to Figure 1-3.Calculate the area of the trapezoid X.

Figure 1-1 -Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2008 and 2010.

Trade-Offs,comparative Advantage,and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 1: Economics: Foundations and Models

What is scarcity,and why is it a fundamental concept in economics?

Which of the following is an example of an economic trade-off that a firm has to make?

The revenue received from the sale of an additional unit of a product

Who receives the goods and services produced in the United States depends largely on

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal cost.

Consider the following economic agents: a.the government B.consumers C.producers Who,in a modern mixed economy,decides what goods and services will be produced with the scarce resources available in that economy?

Consumers and make all economic decisions in a mixed economy.

If the price of pineapple juice was $4.50 a gallon and it is now $5.75 a gallon,what is the percentage change in price?

If a graph has a line that shows the quantity of flat-screen televisions sold in the last five years,it is known as

What is the difference between economic efficiency and equity?

The processes used to produce goods and services describes

Optimal decisions are made at the point where marginal benefit is maximized.

Which of the following is a normative economic statement?

All economic questions arise from the fact that resources are scarce.

Which of the following is a positive economic statement?

Which of the following is an example of a "how much" decision?

Figure 1-3 -Refer to Figure 1-3.Calculate the area of the trapezoid X.

Figure 1-1 -Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2008 and 2010.

Trade-Offs,comparative Advantage,and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters