Question 1

Demonstrating how an economic variable changes from one year to the next is best illustrated by a

Accepted Answer

A)  scatter diagram. 
B)  time-series graph. 
C)  linear graph. 
D)  cross-section graph. 
E)  Venn diagram.

Question 2

-In the figure above,the relationship between the x variable and the y variable

Accepted Answer

A)  is positive. 
B)  is negative. 
C)  starts by being positive and then becomes negative. 
D)  starts by being negative and then becomes positive. 
E)  is non-existent because the two variables are unrelated.

Question 3

Shaniq can spend the next hour studying for a finance test,hiking along the Oregon coast,watching reruns of Lost on television,or napping.If she decides to study,what is the opportunity cost of her choice: hiking,watching television,or napping?

Accepted Answer

The answer of Shaniq can spend the next hour studying...

Question 4

If two variables are positively related,then

Accepted Answer

A)  one variable causes the other. 
B)  an increase in one variable is accompanied by a decrease in the other. 
C)  an increase in one variable is accompanied by an increase in the other. 
D)  they change together, but not necessarily in the same direction. 
E)  neither variable can be positively related to any other variable.

Question 5

Which of the following is true?
i.A rational choice is made on the margin.
ii.Microeconomics is the study of the national economy while macroeconomics is the study of the global economy.
iii.Economists try to understand how the economic world works by testing normative statements.

Accepted Answer

A)  only i 
B)  i and iii 
C)  only ii 
D)  only iii 
E)  i and ii

Question 6

In making your decision whether to take a trip during spring break,you compare all the other activities you could undertake.As a result,you

Accepted Answer

A)  are making a choice on the margin. 
B)  limit the cost and the benefits you can gain. 
C)  are not making a rational choice. 
D)  do not face an opportunity cost. 
E)  must have made a choice in the social interest.

Question 7

Scarcity means we must

Accepted Answer

A)  consume less. 
B)  produce less. 
C)  make choices. 
D)  earn more. 
E)  work more.

Question 8

If a small change in the x variable results in a large change in the y variable,the curve will be

Accepted Answer

A)  positively sloped. 
B)  negatively sloped. 
C)  steep. 
D)  flat. 
E)  trended.

Question 9

Suppose that,instead of taking this test,you could either have worked and earned income or partied and had a pleasurable time.Your opportunity cost of taking the test is the

Accepted Answer

A)  forgone work. 
B)  forgone party. 
C)  forgone working and partying. 
D)  forgone working or partying, depending on which was your next best choice. 
E)  test because you are taking it.

Question 10

"As the price of gasoline increases,fewer people buy cars that are gas guzzlers." A graph showing this relationship would

Accepted Answer

A)  have a negative slope. 
B)  have a positive relationship. 
C)  have a direct relationship. 
D)  be a horizontal line. 
E)  be a vertical line.

Question 11

Will,Bill,and Phil decide to study an extra hour for an exam.Instead of studying,they could have gone out to eat,played football,or watched TV.Which of the following statements is correct?

Accepted Answer

A)  The benefit the three students receive must be the same because they all make the same choice. 
B)  The students made a rational choice as long as they face no scarcity. 
C)  The students could each have different opportunity costs. 
D)  The marginal cost of the decision is the same if they make the same score on the exam. 
E)  Going out to eat, playing football, and watching TV are all called sunk costs.

Question 12

A graph shows the average SAT scores for males and females in 2012.The kind of graph used to show these data would be a

Accepted Answer

A)  scatter diagram. 
B)  time-series graph. 
C)  cross-section graph. 
D)  time-stationary graph. 
E)  trend figure.

Question 13

-The figure above shows the price of a DVD player from 1996 to 2000.
a.What type of graph is illustrated above?
b.What is the trend in the price of a DVD player?

Accepted Answer

The answer of 
-The figure above shows the price of...

Question 14

When economists use the term "correlation," they are referring to

Accepted Answer

A)  cause and effect relationships between variables. 
B)  how two variables move together in a predictable way. 
C)  positive economics. 
D)  normative economics. 
E)  economic policy.

Question 15

Which of the following is a normative statement?

Accepted Answer

A)  Flood victims should pay for their own rebuilding. 
B)  When the price of kiwi fruit increases, fewer people eat kiwi fruit. 
C)  An increase in the supply of computers has caused computer prices to fall. 
D)  Recessions lead to increases in the unemployment rate. 
E)  Hurricanes strike mainly Florida and North Carolina.

Question 16

-In the above figure,the diagram shows

Accepted Answer

A)  a downward trend in x. 
B)  an upward trend in x. 
C)  a scatter diagram. 
D)  a two-variable scatter diagram. 
E)  a cross-section graph between x and time.

Question 17

Which of the following scenarios describes an action that is not rational from an economic point of view?

Accepted Answer

A)  After drinking one martini (shaken, not stirred), James buys and drinks a second martini even though the marginal benefit of the second martini is lower than the marginal benefit of the first. 
B)  Eric buys a replacement ticket to the basketball game after he realizes that he accidentally left his original ticket at home. 
C)  Emily chooses to attend a social event on Tuesday night instead of studying even though she has an important exam on Wednesday morning. 
D)  US Airways sells a last minute ticket to Don for $50 even though its average cost per passenger is $250. 
E)  None of the above

Question 18

Which economic question depends on the incomes that people earn and the prices they pay for goods and services?

Accepted Answer

A)  What? 
B)  How? 
C)  For whom? 
D)  Why? 
E)  Where?

Question 19

Ceteris paribus when graphing a relationship refers to

Accepted Answer

A)  letting all the variables change at once. 
B)  changing the origin of the graph. 
C)  holding constant all but two variables. 
D)  rescaling the coordinates. 
E)  swapping the axes so that the x-axis is the vertical axis and the y-axis is the horizontal axis.

Question 20

What is the reason that all economic issues and problems occur?

Accepted Answer

A)  All nations use some form of money to buy and sell goods and services. 
B)  Humans are always wasteful and inefficient in production and consumption. 
C)  Powerful governments are able to control production and consumption. 
D)  Human wants exceed the resources available to satisfy them. 
E)  People seek only their own self-interest.

Exam 1: Getting Started