Exam 1: Limits, Alternatives, and Choices

A person observes that consumer prices often fall when a nation experiences economic growth. The person then concludes that falling consumer prices leads to economic growth. This would be an example of:

Suppose that a consumer purchases just two goods, X and Y. The slope of the budget line would indicate the:

Increasing the share of your income that you save is good for you. Therefore it would be good for the whole economy if everyone saved more. This exemplifies the:

A nation's production possibilities curve shows the maximum combinations of resources that a nation can use.

Economics is a social science that studies how individuals, institutions, and society may:

Economic analysis is primarily concerned with marginal changes from the status quo, as a result of a certain action or decision.

If two variables are directly related, the relationship will have a graph that:

If a linear relation is described by the equation was C = 35 - 5D, then the vertical intercept of the graph (where C is on the vertical axis) is:

A society can consume a combination of goods outside its production possibilities if there is:

Refer to the above graph. Which point in the graph would allow a simultaneous increase in the production of both investment and consumer goods?

Which of the following statements is an explanation for the law of increasing opportunity costs?

If a nation is initially on its production possibilities curve, then it can increase its production of one good only by:

The post hoc, ergo propter hoc fallacy consists of:

In the graph for the linear equation S = 15 - 5T, with T on the horizontal axis, the vertical intercept of the graph is -5.

Another way of saying "ceteris paribus" is:

In graphing a relationship between two variables, economists always follow the mathematical convention. Thus, if price is the independent variable then it is measured on the horizontal axis.

When a state government chooses to build more roads, the resources used are no longer available for public education programs. This dilemma illustrates the concept of:

Which of the following is considered a firm's "factor of production"?

Economic models do not reflect the full complexity of reality, but instead are based on:

What does "there is no such thing as a free lunch" mean in economics?