Question 1

When an action is chosen, the highest- valued alternative NOT chosen is called the

Accepted Answer

A)  implicit cost. 
B)  opportunity cost. 
C)  explicit cost. 
D)  accounting cost.

Question 2

-The slope of the line shown in the above figure is

Accepted Answer

A)  1 1/3. 
B)  3/4. 
C)  1 3/4. 
D)  2/3.

Question 3

What is a positive statement? Give an example.

Accepted Answer

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

Question 4

The loss of the highest- valued alternative defines the concept of

Accepted Answer

A)  marginal benefit. 
B)  opportunity cost. 
C)  entrepreneurship. 
D)  scarcity.

Question 5

Economics is the study of

Accepted Answer

A)  the distribution of surplus goods to those in need. 
B)  ways to reduce wants to eliminate the problem of scarcity. 
C)  affluence in a morally bankrupt world. 
D)  the choices we make because of scarcity.

Question 6

Suppose that as the price of concert tickets increases, the number of concerts you wish to attend decreases. The curve showing the relationship between these two variables would have

Accepted Answer

A)  a positive slope. 
B)  a negative slope. 
C)  a zero slope. 
D)  NONE OF THE ABOVE IS correct.

Question 7

Today, Julie attended her 12:30 Economics class. If she hadn't gone to class, Julie would have gone out to lunch with friends. She had other options; she could have worked or slept in. Julie's opportunity cost of going to class is the

Accepted Answer

A)  income, pleasure, and sleep she gave up. 
B)  income she gave up. 
C)  lunch she gave up. 
D)  sleep she gave up.

Question 8

Along a straight line, when x equals 90, then y equals 30. When x equals 120, then y equals 40. The slope of the straight line is

Accepted Answer

A)  - 3. 
B)  1/3. 
C)  - 1/3. 
D)  3.

Question 9

-In the above figure, the curve has a slope that is .

Accepted Answer

A)  positive and becoming larger in magnitude 
B)  negative and becoming smaller in magnitude 
C)  negative and becoming larger in magnitude 
D)  positive and becoming smaller in magnitude

Question 10

The question, "Should Taco Bell produce more tacos or more burritos?" is an example of the

Accepted Answer

A)  "how" question. 
B)  "where" question. 
C)  "for whom" question. 
D)  "what" question.

Question 11

The slope of a curve between Y (measured on the vertical axis) and X (measured on the horizontal axis) is

Accepted Answer

A)  zero. 
B)  the percentage change in Y divided by the percentage change in X. 
C)  the change in Y divided by the initial value of X. 
D)  the change in Y divided by the change in X.

Question 12

A school board is studying how test scores vary by socio- economic levels. The data represent information observed in 2007. The most effective way of depicting the data is a

Accepted Answer

A)  trending- line graph. 
B)  cross- section graph. 
C)  one- variable graph. 
D)  time- series graph.

Question 13

In New State, the bottling law requires that people get a refund of five cents when they return an empty bottle or can. Why does the state pay people to return bottles? In your answer, be sure to mention the role played by incentives.

Accepted Answer

The answer of In New State, the bottling law requires...

Question 14

Economics is best defined as the science of choice and how people cope with

Accepted Answer

A)  differences in needs. 
B)  differences in wants. 
C)  different economic systems. 
D)  scarcity.

Question 15

Fred and Ann are both given free tickets to see a movie. Both decide to see the same movie. We know that

Accepted Answer

A)  it is not possible to calculate the opportunity cost of seeing the movie because the tickets were free. 
B)  both bear an opportunity cost of seeing the movie because they could have done other things instead of seeing the movie. 
C)  it is possible to calculate the opportunity cost of seeing the movie and it is zero because the tickets were free. 
D)  both bear the same opportunity cost of seeing the movie because they are doing the same thing.

Question 16

Barack Obama supports raising income taxes paid by the highest- income Americans and John McCain supports maintaining the current income tax structure. The presidential candidates are ans the question.

Accepted Answer

A)  how 
B)  for whom 
C)  microeconomic 
D)  what

Question 17

Macroeconomics is concerned with

Accepted Answer

A)  economy- wide variables. 
B)  government decision making concerning farm price supports. 
C)  individual consumers. 
D)  the effects on Ford Motor of a strike by the United Auto Workers.

Question 18

Which of the following is an example of a microeconomic decision?

Accepted Answer

A)  a small shoe factory deciding how much leather to purchase for the next quarter's production need 
B)  an individual deciding how to allocate the time he or she has for work and leisure 
C)  a multinational company deciding where to relocate its world headquarter 
D)  All of the above answers are correct.

Question 19

Human capital is

Accepted Answer

A)  all capital owned by individuals, but not by corporations or governments. 
B)  the skill and knowledge of workers. 
C)  machinery that meets or exceeds federal safety standards for use by humans. 
D)  all capital owned by individuals or corporations, but not by governments.

Question 20

All economic questions arise because we

Accepted Answer

A)  have an abundance of resources. 
B)  have limited wants that need to be satisfied. 
C)  want more than we can get. 
D)  want more than we need.

Exam 1: What Is Economics