Question 1

Factors of production include all of the following EXCEPT

Accepted Answer

A)  machines made in past years. 
B)  money. 
C)  entrepreneurship. 
D)  a wheat field that is not irrigated.

Question 2

"When OPEC increases the supply of oil to the market, the price of gasoline falls." This is an example of

Accepted Answer

A)  a normative statement. 
B)  the failure of opportunity cost to determine prices. 
C)  a positive statement. 
D)  a macroeconomic statement.

Question 3

The term "opportunity cost" points out that

Accepted Answer

A)  there may be such a thing as a free lunch. 
B)  not all individuals will make the most of life's opportunities because some will fail to achieve their goals. 
C)  executives do not always recognize opportunities for profit as quickly as they should. 
D)  any decision regarding the use of a resource involves a costly choice.

Question 4

-The above figure plots income and consumption in a nation. In 2007

Accepted Answer

A)  consumption was equal to $25,000 and income was equal to $28,000. 
B)  consumption was equal to $28,000 and income was equal to $25,000. 
C)  consumption was equal to $25,000 and income was equal to $25,000. 
D)  consumption was equal to $27,000 and income was equal to $31,000.

Question 5

A scatter diagram will be most useful

Accepted Answer

A)  in discerning a possible relationship between height and weight for individuals. 
B)  in resolving a dispute over two normative assertions. 
C)  in predicting next year's rate of unemployment. 
D)  All of the above are correct.

Question 6

When China builds a dam using few machines and a great deal of labor, it is answering the ________ part of one of the two big economic questions.

Accepted Answer

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

Question 7

The vertical axis in a graph

Accepted Answer

A)  is named the y-axis. 
B)  is named the x-axis. 
C)  is not used in a scatter diagram. 
D)  has no origin.

Question 8

-Graph the data in the table above in the figure. Label the axes.
a) Is the relationship between X and Y positive or negative?
b) What is the slope when X = 4?
c) What is the slope when X = 8?

Accepted Answer

The answer of  
 
-Graph the data in the...

Question 9

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

Accepted Answer

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

Question 10

The statement "An increase in the price of gasoline will lead to a decrease in the amount purchased" is

Accepted Answer

A)  a political statement. 
B)  a positive statement. 
C)  a normative statement. 
D)  a scientific statement.

Question 11

-Using the data in the above table

Accepted Answer

A)  the variables quantity and price are positively related. 
B)  the variables quantity and price are negatively related. 
C)  the variables quantity and price are neither positively nor negatively related. 
D)  an increase in price is likely to cause an increase in quantity.

Question 12

Which of the following creates an incentive to increase the amount of an activity?

Accepted Answer

A)  an increase in the marginal cost of the activity and a decrease in the marginal benefit of the activity 
B)  a decrease in the marginal cost of the activity and an increase in the marginal benefit of the activity 
C)  constant marginal cost and constant marginal benefit of the activity 
D)  None of the above create an incentive to increase the amount of an activity.

Question 13

Misty has the option of purchasing one of three products: Brand A, Brand B, or Brand C. Each costs ten dollars. If she decides that Brand A meets her needs best, then the opportunity cost of this decision is

Accepted Answer

A)  Brand B plus Brand C. 
B)  twenty dollars. 
C)  Brand A. 
D)  Brand B or Brand C, depending on which is considered the highest-value alternative forgone.

Question 14

-In the above, a positive relationship between price and quantity is shown in

Accepted Answer

A)  Figure A. 
B)  Figure B. 
C)  both Figure A and Figure B. 
D)  neither Figure A nor Figure B.

Question 15

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 from working she gave up. 
B)  lunch she gave up. 
C)  sleep she gave up. 
D)  income from working, lunch, and sleep she gave up.

Question 16

If variable x always increases when variable y decreases, x and y are said to be

Accepted Answer

A)  positively related. 
B)  negatively related. 
C)  unrelated. 
D)  trend related.

Question 17

What is the difference between microeconomics and macroeconomics?

Accepted Answer

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

Question 18

One economist says that raising taxes on gas would be in the social interest. What does this economist mean?

Accepted Answer

A)  Higher taxes on gas would benefit society as a whole. 
B)  Raising taxes on gas would benefit most of the people. 
C)  Higher taxes on gas would benefit everyone. 
D)  Both answers A and C are correct.

Question 19

The slope of a line is the change in the y-axis variable divided by the change in the x-axis variable.

Accepted Answer

A) True 
 B)False

Question 20

Your student association is looking for an auditorium to rent for an all-day conference. The university's Performing Arts Center is vacant on that day, so the association wants to rent it. The physical plant manager tells you that the daily rent is $660, which includes $400 to cover part of the cost paid to build the Center, $40 to cover part of its regular maintenance cost, $50 to help pay for the building's insurance, $100 to cover the extra cost of electricity that the university would incur because of the conference, and $70 to pay for additional janitorial services for the conference. You know that no one else wants to rent the Center on that day and you think that the price that the manager charges is too high. But how much should you pay? Use the economic way of thinking to answer this question and to convince the manager to accept your offer:
a) If you rent the Center, what will be the university's marginal cost of renting the center to you?
b) If you rent the Center, what will be the university's marginal benefit of renting the center to you?
c) What amount of rent should you offer? Convince the manager to accept your offer.

Accepted Answer

The answer of Your student association is looking for an...

Exam 1: What Is Economics