Question 1

Suppose that for a curve, as the variable measured on the x-axis increases, the variable measured on the y-axis decreases. The curve has a ________ slope.

Accepted Answer

A)  tangent 
B)  positive 
C)  negative 
D)  hypothetical

Question 2

-In the above table, the relationship between x and y is ________ and, with y measured on the vertical axis, the slope between y = 5 and y = 8 is equal to ________.

Accepted Answer

A)  negative; 8 
B)  negative; 6 
C)  positive; 5 
D)  positive; 3

Question 3

On Saturday morning, you rank your choices for activities in the following order: go to the library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the library. Your opportunity cost is

Accepted Answer

A)  working out at the gym, having breakfast with friends, and sleeping late. 
B)  working out at the gym. 
C)  zero because you do not have to pay money to use the library. 
D)  not clear because not enough information is given.

Question 4

An economic system in which the government decides what, how, and for whom to produce, directs workers to jobs, and owns all the land and capital is

Accepted Answer

A)  centrally planned socialism. 
B)  market capitalism. 
C)  mixed economy. 
D)  supported by economists as the best system available.

Question 5

What is the difference between microeconomics and macroeconomics?

Accepted Answer

The answer of What is the difference between microeconomics and...

Question 6

-You notice that when interest rates increases, new residential housing prices tend to decrease. This observation indicates that

Accepted Answer

A)  there must be false causality between interest rates and housing prices. 
B)  higher interest rates must cause low housing prices. 
C)  a scatter diagram between interest rates and housing prices will show a negative relationship. 
D)  a scatter diagram between interest rates and housing prices will show a direct relationship.

Question 7

China's population is over 1.5 billion, while the population of the United States is about 300 million. This fact means that China has much more human capital than the U.S. does. True or false? Explain your answer.

Accepted Answer

A) True 
 B)False

Question 8

-The above table gives data on two variables. If these data were graphed, the slope of the line would be

Accepted Answer

A)  1. 
B)  -2. 
C)  2. 
D)  -4.

Question 9

If Taco Bell decides to produce more tacos and fewer burritos, Taco Bell is answering the ________ part of one of the two big economic questions.

Accepted Answer

A)  "what" 
B)  "why" 
C)  "when" 
D)  "scarcity"

Question 10

Which of the following is NOT a factor of production?

Accepted Answer

A)  mineral resources 
B)  a university professor 
C)  an apartment building 
D)  100 shares of Microsoft stock

Question 11

What is a normative statement? Give an example.

Accepted Answer

The answer of What is a normative statement? Give an...

Question 12

"As part of the financial crisis bailout plan in 2009, the Federal Reserve bought stakes in banks. This policy will result in an increase in the inflation rate." This is an example of

Accepted Answer

A)  a positive statement. 
B)  a normative statement. 
C)  a microeconomic statement. 
D)  an economic model.

Question 13

The United States produces more services than goods.

Accepted Answer

A) True 
 B)False

Question 14

On the horizontal axis of a graph, generally

Accepted Answer

A)  values increase from left to right. 
B)  values increase from right to left. 
C)  values can be positive and/or negative. 
D)  Both answers A and C are correct.

Question 15

Scarcity requires that people must

Accepted Answer

A)  cooperate. 
B)  compete. 
C)  trade. 
D)  make choices.

Question 16

What does the slope of a straight line equal? How is the slope of a curved line calculated at a point on the curve?

Accepted Answer

The answer of What does the slope of a straight...

Question 17

-In the above figure, the slope across the arc between c and d is

Accepted Answer

A)  1/6. 
B)  12/11. 
C)  3. 
D)  4.

Question 18

An inducement to take a particular action is called

Accepted Answer

A)  the marginal benefit. 
B)  the marginal cost. 
C)  opportunity cost. 
D)  an incentive.

Question 19

Which of the following is a macroeconomic decision or concept?

Accepted Answer

A)  the price of oil 
B)  how many television sets to produce 
C)  the unemployment rate for the entire economy 
D)  the unemployment rate for each firm

Question 20

Making a choice at the margin means ________.

Accepted Answer

A)  letting someone else choose for you 
B)  waiting until the last minute to make a choice 
C)  deciding to do a little bit more or a little bit less of an activity 
D)  making a choice by comparing the total benefit and the total cost

Exam 1: What Is Economics