Question 1

If the marginal cost of an activity exceeds the marginal benefit, then

Accepted Answer

A)  the activity will occur because the high marginal cost means it must be highly valued. 
B)  the forgone alternatives' costs must be increased. 
C)  an alternative action will be selected. 
D)  the person must concentrate on the activity's total benefits.

Question 2

The opportunity cost of any action is

Accepted Answer

A)  all the possible alternatives given up. 
B)  the highest-valued alternative given up. 
C)  the benefit from the action minus the cost of the action. 
D)  the dollars the action cost.

Question 3

-In the above diagram, draw a straight line with a slope of zero.

Accepted Answer

The answer of 
-In the above diagram, draw a straight...

Question 4

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

Accepted Answer

A)  0.90. 
B)  1.5. 
C)  1.11. 
D)  2.

Question 5

The figure above shows that in 1996, unemployment was equal to about ________ and the inflation rate was equal to about ________.

Accepted Answer

A)  7.0 percent; 3.0 percent 
B)  3.0 percent; 5.5 percent 
C)  5.5 percent; 3.0 percent 
D)  6.0 percent; 4.0 percent

Question 6

A linear relationship

Accepted Answer

A)  always has a maximum. 
B)  always has a constant slope. 
C)  always slopes up to the right. 
D)  never has a constant slope.

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 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 8

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 9

-In the above figure, when the interest rate is 8 percent and household income is $40,000, household consumption is

Accepted Answer

A)  $0. 
B)  $20,000. 
C)  $35.000. 
D)  $60,000.

Question 10

-Given the information in the above table, the relationship between x and y is

Accepted Answer

A)  positive, and the curve becomes flatter as x increases. 
B)  positive, and the curve becomes steeper as x increases. 
C)  positive and linear. 
D)  negative and linear.

Question 11

-If we use the numbers in the above table to draw a graph, with the price on the vertical axis and the quantity on the horizontal axis, the line relating price and quantity has a slope of

Accepted Answer

A)  0.8. 
B)  -8.0. 
C)  -1.25. 
D)  8.0.

Question 12

When an economy produces more houses and fewer typewriters, 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 13

You have the choice of going to Hawaii for a week, staying at work for the week, or spending the week skiing. If you decide to go to Hawaii, the opportunity cost is

Accepted Answer

A)  the value of working and skiing. 
B)  the value of working or skiing, depending on which you would have done rather than go to Hawaii. 
C)  working, because you would be giving up a week's pay. 
D)  none of the above if you enjoy the time spent in Hawaii.

Question 14

A student is studying for an exam 2 hours a day and is debating whether to study an extra hour. The student's marginal benefit

Accepted Answer

A)  depends on the grade the student earns on the exam. 
B)  is the benefit the student receives from studying all 3 hours. 
C)  is the benefit the student receives from studying the extra hour. 
D)  is greater than the student's marginal cost.

Question 15

What do economists mean when they discuss "scarcity"?

Accepted Answer

The answer of What do economists mean when they discuss...

Question 16

-In the table above, Y is measured along the y-axis and X along the x-axis. The slope between points c and d is

Accepted Answer

A)  100. 
B)  0. 
C)  0.25. 
D)  -4.

Question 17

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

Accepted Answer

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

Question 18

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 19

If the quantity of wood purchased decreases when the price of wood rises, a graph representing these variables would have

Accepted Answer

A)  time on the vertical axis. 
B)  the slope on the vertical axis. 
C)  a negative slope. 
D)  a positive slope.

Question 20

Suppose that you are spending two hours a day studying economics, and your grade is 85 percent. You want a higher grade and decide to study for an extra hour a day. As a result, your grade rises to 90 percent. Your marginal benefit is the

Accepted Answer

A)  5 point increase in your grade minus the opportunity cost to you of spending the hour studying. 
B)  extra hour per day you spend on studying. 
C)  5 point increase in your grade. 
D)  three hours per day you spend on studying.

Exam 1: What Is Economics