Exam 1: Limits, Alternatives, and Choices

You observe that when stock prices rise, interest rates soon fall, and therefore conclude that higher stock prices lead to lower interest rates. This would be an example of:

A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule: Refer to the above table. In moving from combination E to F, the opportunity cost of an additional unit of steel is:

Which of the following is another way of saying "marginal benefits of an action"?

One major part of the opportunity costs of one's decision to go to college after high-school graduation is the:

The role of an assumption in an economic theory is to:

The slope of a graph that shows a direct relationship is:

The question below are based on the following four sets of data-pairs: (1) A and B, (2) C and D, (3) E and F, and (4) G and H. In each set, the independent variable is in the left column and the dependent variable is in the right column. The slope of the linear graph that pictures data set 2 above is:

If the opportunity cost of producing extra units of one good (expressed in terms of the amount of another good given up) remains constant, then the shape of the production possibilities curve is:

In analyzing human decision and action, economists assume that:

Consider an economy that is producing inside its production possibilities curve. This economy could move closer towards its production possibilities curve by:

An assumption is usually made in a two-axes (or two-dimensional) graph that, aside from the two variables under study, the influence of all other variables or factors is assumed to be constant.

The question below are based on the following four sets of data-pairs: (1) A and B, (2) C and D, (3) E and F, and (4) G and H. In each set, the independent variable is in the left column and the dependent variable is in the right column. The linear equation for the relationship in data set 1 above is:

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities: Refer to the above table. The total opportunity cost of three units of tanks is:

One basic difference between "labor" and "entrepreneur" is that:

If falling gasoline prices are good for the consumers, then it must be good everyone in the economy.

If two sets of data are inversely related, they will appear on a graph as an upward-sloping line.

From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are too long, they have concluded that the:

A linear relationship only refers to one whose graph is either vertical or horizontal.

A recurring theme in economics is that people:

Which question is an example of a macroeconomic question?