Question 1

From 8 P.M. to 10 P.M., Susan can attend a movie, study, or talk with friends. Suppose that Susan decides to go to the movie but thinks that, if she hadn't, she would otherwise have talked with friends. The opportunity cost of attending the movie is

Accepted Answer

A)  talking with friends and studying. 
B)  studying. 
C)  talking with friends. 
D)  two hours of time.

Question 2

Scarcity is a situation in which

Accepted Answer

A)  people cannot satisfy all their wants. 
B)  most people can get only bare necessities. 
C)  people can satisfy all their wants. 
D)  some people can get all they want and some cannot.

Question 3

Which of the following is a normative statement?

Accepted Answer

A)  Low rents will restrict the supply of housing. 
B)  Low rents are good because they make apartments more affordable. 
C)  Housing costs are rising. 
D)  Owners of apartment buildings are free to charge whatever rent they want.

Question 4

If variables x and y move up and down together, they are

Accepted Answer

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

Question 5

Overtime worked by a JCPenney associate is considered ________ and earns ________.

Accepted Answer

A)  labor; wages 
B)  entrepreneurship; profit 
C)  human capital; interest 
D)  labor; profit

Question 6

Which of the following statements are CORRECT? I. The "highest-valued alternative given up to get something" is the opportunity cost.
II) Wealthy economies don't experience opportunity costs.
III) Scarcity creates opportunity costs.

Accepted Answer

A)  I only 
B)  I and II 
C)  I and III 
D)  I, II, and III

Question 7

Opportunity cost is defined as the

Accepted Answer

A)  total value of all the alternatives given up. 
B)  highest-valued alternative given up. 
C)  cost of not doing all of the things you would like to do. 
D)  lowest-valued alternative given up.

Question 8

You notice that when the inflation rate increases, the interest rate tends to increase. This observation indicates that

Accepted Answer

A)  there might be false causality between inflation and the interest rate. 
B)  higher inflation rates must cause a higher interest rate. 
C)  a scatter diagram of the inflation rate and the interest rate will show a positive relationship. 
D)  the variables have an inverse relationship.

Question 9

-In the above figure, the axis breaks are used

Accepted Answer

A)  to create a misleading graph. 
B)  to indicate that there are jumps from the origin, 0, to the first values recorded along the axes. 
C)  to indicate that there are not enough data to be included in the graph. 
D)  to show that there are no data available for the omitted ranges.

Question 10

Which of the following is NOT a factor of production?

Accepted Answer

A)  the water used to cool a nuclear power plant. 
B)  the effort of farmers raising cattle. 
C)  the wages paid to workers. 
D)  the management skill of a small business owner.

Question 11

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 12

Which of the following statements is CORRECT?

Accepted Answer

A)  The United States produces more goods than services. 
B)  The United States produces more services than goods. 
C)  The United States produces more agricultural goods than manufactured goods. 
D)  The United States produces an equal amount of goods and services.

Question 13

What is a tradeoff? Give an example.

Accepted Answer

The answer of What is a tradeoff? Give an example....

Question 14

-In the above figure, 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 15

If the change in the y-axis variable is 6 and the change in the x-axis variable is 5, the slope of this line is 6/5.

Accepted Answer

A) True 
 B)False

Question 16

The term human capital refers to

Accepted Answer

A)  labor resources used to make capital equipment. 
B)  buildings and machinery. 
C)  people's knowledge and skill. 
D)  entrepreneurship and risk-taking.

Question 17

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

Accepted Answer

A)  -1 3/8. 
B)  -1 2/3. 
C)  5/8. 
D)  -0.625.

Question 18

In economics, positive statements are about

Accepted Answer

A)  the way things ought to be. 
B)  the way things are. 
C)  macroeconomics, not microeconomics. 
D)  microeconomics, not macroeconomics.

Question 19

Which of the following is CORRECT? Factors of production are

Accepted Answer

A)  land, labor, the price system, and capital. 
B)  the inputs used to produce goods and services. 
C)  the fundamental source of abundance. 
D)  only land and labor.

Question 20

-Which of the following CORRECTLY describes the above figure? I) There is no relationship between the price of an avocado and a student's grade in economics.
II) The value of variable measured on the y-axis is constant as the variable measured on the x-axis increases.
III) As a student's grade in economics increases, the price of an avocado increases.

Accepted Answer

A)  I 
B)  I and II 
C)  II and III 
D)  I, II, and III

Exam 1: What Is Economics