Question 1

Which of the following is the best example of land?

Accepted Answer

A) The ethanol refined from corn. 
B) A factory that produces new goods and services. 
C) The water used to make a soft drink. 
D) A barber's chair. 
A) The ethanol refined from corn. 
B) A factory that produces new goods and services. 
C) The water used to make a soft drink. 
D) A barber's chair.

Question 2

When the relationship between two variables changes,

Accepted Answer

A) There is movement from one point on the curve to another point on the curve. 
B) The curve becomes linear. 
C) The entire curve shifts. 
D) All of the choices are correct. 
A) There is movement from one point on the curve to another point on the curve. 
B) The curve becomes linear. 
C) The entire curve shifts. 
D) All of the choices are correct.

Question 3

Greater regulation to correct the imbalances in the economy,as well government intervention to maintain full employment,was associated primarily with the work of

Accepted Answer

A) John Maynard Keynes. 
B) Adam Smith. 
C) Karl Marx. 
D) Ronald Reagan. 
A) John Maynard Keynes. 
B) Adam Smith. 
C) Karl Marx. 
D) Ronald Reagan.

Question 4

The Latin phrase ceteris paribus refers to holding other variables constant.

Accepted Answer

A) True 
 B)False

Question 5

A point on a nation's production possibilities curve represents

Accepted Answer

A) An undesirable combination of goods and services. 
B) Combinations of production that are unattainable,given current technology and resources. 
C) Levels of production that will cause both unemployment and inflation. 
D) The full employment of resources to achieve a particular combination of goods and services. 
A) An undesirable combination of goods and services. 
B) Combinations of production that are unattainable,given current technology and resources. 
C) Levels of production that will cause both unemployment and inflation. 
D) The full employment of resources to achieve a particular combination of goods and services.

Question 6

Table 1.3 shows the hypothetical trade-off between different combinations of brushes and combs that might be produced in a year with the limited capacity for Country X,ceteris paribus.Complete the table by calculating the required opportunity costs for brushes and combs.   
-On the basis of your calculations in Table 1.3,what is gained from producing at point L rather than point K?

Accepted Answer

A) 17 combs. 
B) 10 combs. 
C) 1 brush. 
D) 7 brushes. 
A) 17 combs. 
B) 10 combs. 
C) 1 brush. 
D) 7 brushes.

Question 7

To calculate the slope of a line,find the vertical distance between two points and divide it by the horizontal distance between the same two points.

Accepted Answer

A) True 
 B)False

Question 8

If the United States decides to convert automobile factories to tank production,as it did during World War II,but finds that some auto manufacturing facilities are not well suited to tank production,then

Accepted Answer

A) The production possibilities curve between tanks and automobiles will appear as a straight line. 
B) The production possibilities curve between tanks and automobiles will shift outward. 
C) Decreasing opportunity costs will occur with greater automobile production. 
D) Increasing opportunity costs will occur with greater tank production. 
A) The production possibilities curve between tanks and automobiles will appear as a straight line. 
B) The production possibilities curve between tanks and automobiles will shift outward. 
C) Decreasing opportunity costs will occur with greater automobile production. 
D) Increasing opportunity costs will occur with greater tank production.

Question 9

Which economist argued that free markets unleashed the "animal spirits" of entrepreneurs,propelling innovation,technology,and growth?

Accepted Answer

A) Lord Kelvin. 
B) Kenneth Olsen. 
C) Irving Fisher. 
D) John Maynard Keynes. 
A) Lord Kelvin. 
B) Kenneth Olsen. 
C) Irving Fisher. 
D) John Maynard Keynes.

Question 10

Use the following figure to answer the questions: Figure 1.6
 
-If the opportunity cost of producing cars was zero at all levels of production,the production possibilities curve would be best be represented by a

Accepted Answer

A) Vertical line. 
B) 45-degree line starting at the origin. 
C) Horizontal line. 
D)  Circle. 
A) Vertical line. 
B) 45-degree line starting at the origin. 
C) Horizontal line. 
D)  Circle.

Question 11

Government failure occurs when government intervention fails to improve economic outcomes or makes them worse.

Accepted Answer

A) True 
 B)False

Question 12

In a market economy,the people who receive the goods and services that are produced are those who

Accepted Answer

A) Need the goods and services the most. 
B) Have the most political power. 
C) Want the goods and services the most. 
D) Are willing to pay the highest price. 
A) Need the goods and services the most. 
B) Have the most political power. 
C) Want the goods and services the most. 
D) Are willing to pay the highest price.

Question 13

The invisible hand refers to

Accepted Answer

A) Intervention in the economy by the government bureaucrats we do not see and over whom we have no control. 
B) Undiscovered natural resources. 
C) The allocation of resources by market forces. 
D) The person who has the responsibility to coordinate all the markets in a market economy. 
A) Intervention in the economy by the government bureaucrats we do not see and over whom we have no control. 
B) Undiscovered natural resources. 
C) The allocation of resources by market forces. 
D) The person who has the responsibility to coordinate all the markets in a market economy.

Question 14

Use the following figure to answer questions: Figure 1.3  
-In Figure 1.3,a shift of the production possibilities curve from PP1 to PP2 could be caused by

Accepted Answer

A) A decrease in the quantity of raw materials available. 
B) A decline in the production skills of workers. 
C) The use of improved production technology. 
D) All of the choices are correct. 
A) A decrease in the quantity of raw materials available. 
B) A decline in the production skills of workers. 
C) The use of improved production technology. 
D) All of the choices are correct.

Question 15

Microeconomics is concerned with individual performance as well as the economy as a whole.

Accepted Answer

A) True 
 B)False

Question 16

A city's decision to limit smoking in public areas is an example of

Accepted Answer

A) The invisible hand at work. 
B) The market mechanism at work. 
C) Market success. 
D) Government intervention. 
A) The invisible hand at work. 
B) The market mechanism at work. 
C) Market success. 
D) Government intervention.

Question 17

Figure 1.8 suggests that

Accepted Answer

A) The law of increasing opportunity cost does not apply. 
B) Resources can be perfectly adapted between study time and grade point average. 
C) The relationship between study time and grade point average is first linear,then nonlinear. 
D) The relationship between study time and grade point average is constant. 
A) The law of increasing opportunity cost does not apply. 
B) Resources can be perfectly adapted between study time and grade point average. 
C) The relationship between study time and grade point average is first linear,then nonlinear. 
D) The relationship between study time and grade point average is constant.

Question 18

Which of the following correctly characterizes the shape of a constant opportunity cost production possibilities curve?

Accepted Answer

A) A straight line indicating that the law of increasing opportunity costs applies. 
B) A straight line when there is constant opportunity costs. 
C) A line that curves outward when resources are perfectly adaptable in the production of different goods. 
D) A line that curves inward when resources are perfectly adaptable in the production of different goods. 
A) A straight line indicating that the law of increasing opportunity costs applies. 
B) A straight line when there is constant opportunity costs. 
C) A line that curves outward when resources are perfectly adaptable in the production of different goods. 
D) A line that curves inward when resources are perfectly adaptable in the production of different goods.

Question 19

A consequence of the economic problem of scarcity is that

Accepted Answer

A) Choices have to be made about how resources are used. 
B) There is never too much of any good or service produced. 
C) The production of goods and services must be controlled by the government. 
D) The production possibilities curve is bowed outward. 
A) Choices have to be made about how resources are used. 
B) There is never too much of any good or service produced. 
C) The production of goods and services must be controlled by the government. 
D) The production possibilities curve is bowed outward.

Question 20

Economics can be defined as the study of

Accepted Answer

A) For whom resources are allocated to increase efficiency. 
B) How society spends the income of individuals. 
C) How scarce resources are allocated on a macro level to best meet society's goals or on a micro level to best meet an individual's or firm's goals. 
D) None of the choices are correct. 
A) For whom resources are allocated to increase efficiency. 
B) How society spends the income of individuals. 
C) How scarce resources are allocated on a macro level to best meet society's goals or on a micro level to best meet an individual's or firm's goals. 
D) None of the choices are correct.

Exam 1: Economics: the Core Issues Appendix: Using Graphs

Which of the following is the best example of land?

When the relationship between two variables changes,

Greater regulation to correct the imbalances in the economy,as well government intervention to maintain full employment,was associated primarily with the work of

The Latin phrase ceteris paribus refers to holding other variables constant.

A point on a nation's production possibilities curve represents

To calculate the slope of a line,find the vertical distance between two points and divide it by the horizontal distance between the same two points.

If the United States decides to convert automobile factories to tank production,as it did during World War II,but finds that some auto manufacturing facilities are not well suited to tank production,then

Which economist argued that free markets unleashed the "animal spirits" of entrepreneurs,propelling innovation,technology,and growth?

Use the following figure to answer the questions: Figure 1.6 -If the opportunity cost of producing cars was zero at all levels of production,the production possibilities curve would be best be represented by a

Government failure occurs when government intervention fails to improve economic outcomes or makes them worse.

In a market economy,the people who receive the goods and services that are produced are those who

The invisible hand refers to

Use the following figure to answer questions: Figure 1.3 -In Figure 1.3,a shift of the production possibilities curve from PP1 to PP2 could be caused by

Microeconomics is concerned with individual performance as well as the economy as a whole.

A city's decision to limit smoking in public areas is an example of

Figure 1.8 suggests that

Which of the following correctly characterizes the shape of a constant opportunity cost production possibilities curve?

A consequence of the economic problem of scarcity is that

Economics can be defined as the study of

The Us Economy: a Global View

Supply and Demand

The Role of Government

National Income Accounting

Unemployment

Inflation

The Business Cycle

Aggregate Demand Appendix: the Keynesian Cross

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice Appendix: Indifference Curves

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty Glossary Index Reference Tables

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