Question 1

Which of the following is an example of a normative statement?

Accepted Answer

A)  Car prices should be affordable. 
B)  Fewer people die in larger cars than in smaller cars. 
C)  If wages increase, firms will fire some workers. 
D)  If cars become more expensive, fewer people will buy them. 
E)  Cars emit pollution. 
A)  Car prices should be affordable. 
B)  Fewer people die in larger cars than in smaller cars. 
C)  If wages increase, firms will fire some workers. 
D)  If cars become more expensive, fewer people will buy them. 
E)  Cars emit pollution.

Question 2

What typically happens to benefits as the amount of an activity is increased?

Accepted Answer

A)  Marginal benefit increases. 
B)  Marginal benefit decreases. 
C)  Marginal benefit remains constant. 
D)  The marginal benefit changes only if the marginal cost changes. 
E)  Total benefit remains constant. 
A)  Marginal benefit increases. 
B)  Marginal benefit decreases. 
C)  Marginal benefit remains constant. 
D)  The marginal benefit changes only if the marginal cost changes. 
E)  Total benefit remains constant.

Question 3

Which of the following statements is correct?

Accepted Answer

A)  When a line slopes downwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. 
B)  When a line slopes upwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. 
C)  If two variables are directly related, a graph of the two variables has a negative slope. 
D)  The higher the temperature, the more ice cream people consume. Thus the temperature and ice-cream consumption are inversely related. 
E)  None of the above statements is correct. 
A)  When a line slopes downwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. 
B)  When a line slopes upwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. 
C)  If two variables are directly related, a graph of the two variables has a negative slope. 
D)  The higher the temperature, the more ice cream people consume. Thus the temperature and ice-cream consumption are inversely related. 
E)  None of the above statements is correct.

Question 4

Which of the following statements is a positive statement?

Accepted Answer

A)  Too many people are unemployed. 
B)  Our country must increase military spending. 
C)  There should be a computer in every primary school classroom. 
D)  Online shopping increased by 50 per cent last Christmas season. 
E)  We need to spend less on luxury items for the wealthy, and more on necessities for the less fortunate. 
A)  Too many people are unemployed. 
B)  Our country must increase military spending. 
C)  There should be a computer in every primary school classroom. 
D)  Online shopping increased by 50 per cent last Christmas season. 
E)  We need to spend less on luxury items for the wealthy, and more on necessities for the less fortunate.

Question 5

With y measured on the vertical axis and x measured on the horizontal axis, the slope of a straight line is defined as

Accepted Answer

A)  (change in y)/(change in x). 
B)  y - x. 
C)  x/y. 
D)  (change in x)/(change in y). 
E)  y/x. 
A)  (change in y)/(change in x). 
B)  y - x. 
C)  x/y. 
D)  (change in x)/(change in y). 
E)  y/x.

Question 6

You have data for sales of pizza for each Australian state in 20191. The type of graph to best display these data would be a

Accepted Answer

A)  trend-line diagram. 
B)  scatter diagram. 
C)  time-series graph. 
D)  cross-section graph. 
E)  multi-variable time-series graph. 
A)  trend-line diagram. 
B)  scatter diagram. 
C)  time-series graph. 
D)  cross-section graph. 
E)  multi-variable time-series graph.

Question 7

An opportunity cost is

Accepted Answer

A)  the benefits of the highest-valued alternative forgone. 
B)  another term for all the sunk costs. 
C)  the dollar amount that is paid. 
D)  whatever is paid out and cannot be reduced or reversed. 
E)  anything the decision maker believes costs to be. 
A)  the benefits of the highest-valued alternative forgone. 
B)  another term for all the sunk costs. 
C)  the dollar amount that is paid. 
D)  whatever is paid out and cannot be reduced or reversed. 
E)  anything the decision maker believes costs to be.

Question 8

Mothers Against Drunk Drivers (MADD) campaigned to increase the legal penalties of drunk driving. This successful campaign ________ of drunk driving.

Accepted Answer

A)  increased the marginal benefit 
B)  had no effect on the marginal cost or marginal benefit but did affect the total benefit 
C)  decreased the marginal benefit 
D)  increased the marginal cost 
E)  decreased the marginal cost 
A)  increased the marginal benefit 
B)  had no effect on the marginal cost or marginal benefit but did affect the total benefit 
C)  decreased the marginal benefit 
D)  increased the marginal cost 
E)  decreased the marginal cost

Question 9

Suppose you eat two hamburgers for lunch. The marginal benefit of the first burger is usually ________ of the second burger.

Accepted Answer

A)  equal to the marginal benefit 
B)  equal to the marginal cost and the marginal benefit 
C)  larger than the marginal benefit 
D)  not related to the marginal benefit 
E)  smaller than the marginal benefit 
A)  equal to the marginal benefit 
B)  equal to the marginal cost and the marginal benefit 
C)  larger than the marginal benefit 
D)  not related to the marginal benefit 
E)  smaller than the marginal benefit

Question 10

The Latin term 'ceteris paribus' means

Accepted Answer

A)  'what is true of the whole is not necessarily true of the parts.' 
B)  'obviously true.' 
C)  'after this, therefore because of this.' 
D)  'other things remaining the same.' 
E)  'false unless proven true.' 
A)  'what is true of the whole is not necessarily true of the parts.' 
B)  'obviously true.' 
C)  'after this, therefore because of this.' 
D)  'other things remaining the same.' 
E)  'false unless proven true.'

Question 11

A curve with a positive but decreasing slope represents a relationship where, every time the variable measured along the horizontal axis increases by one unit, the variable measured along the vertical axis

Accepted Answer

A)  does not change by much. 
B)  increases by a constant amount. 
C)  decreases. 
D)  increases by an increasing amount. 
E)  increases by a decreasing amount. 
A)  does not change by much. 
B)  increases by a constant amount. 
C)  decreases. 
D)  increases by an increasing amount. 
E)  increases by a decreasing amount.

Question 12

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

Question 13

A graph of the value of one variable against the value of another variable is known as a:

Accepted Answer

A)  three-dimensional graph. 
B)  scatter diagram. 
C)  time-series graph. 
D)  two-variable graph. 
E)  two-dimensional graph. 
A)  three-dimensional graph. 
B)  scatter diagram. 
C)  time-series graph. 
D)  two-variable graph. 
E)  two-dimensional graph.

Question 14

The question 'should economics majors or sociology majors earn more after they graduate?' is an example of a ________ question.

Accepted Answer

A)  how 
B)  what 
C)  for whom 
D)  why 
E)  where 
A)  how 
B)  what 
C)  for whom 
D)  why 
E)  where

Question 15

The slope of a line equals the change in the variable measured along the

Accepted Answer

A)  x-axis multiplied by the change in the variable measured along the y-axis. 
B)  y-axis minus the change in the variable measured along the x-axis. 
C)  x-axis divided by the change in the variable measured along the y-axis. 
D)  x-axis minus the change in the variable measured along the y-axis. 
E)  y-axis divided by the change in the variable measured along the x-axis. 
A)  x-axis multiplied by the change in the variable measured along the y-axis. 
B)  y-axis minus the change in the variable measured along the x-axis. 
C)  x-axis divided by the change in the variable measured along the y-axis. 
D)  x-axis minus the change in the variable measured along the y-axis. 
E)  y-axis divided by the change in the variable measured along the x-axis.

Question 16

If there is no scarcity,

Accepted Answer

A)  choices are no longer rational. 
B)  the opportunity cost of an action would be greater than its sunk cost. 
C)  all marginal benefits would equal zero. 
D)  an action would have zero opportunity cost. 
E)  the marginal cost of an action is greater than its marginal benefit. 
A)  choices are no longer rational. 
B)  the opportunity cost of an action would be greater than its sunk cost. 
C)  all marginal benefits would equal zero. 
D)  an action would have zero opportunity cost. 
E)  the marginal cost of an action is greater than its marginal benefit.

Question 17

In the figure above, ceteris paribus, an increase in x is associated with

Accepted Answer

A)  an increase in y. 
B)  a random change in z. 
C)  an increase in z. 
D)  no change in either y or z. 
E)  a decrease in y. 
A)  an increase in y. 
B)  a random change in z. 
C)  an increase in z. 
D)  no change in either y or z. 
E)  a decrease in y.

Question 18

The figure above shows the relationship between the price of a dozen roses and the quantity of roses a florist can sell. The slope between points A and B is

Accepted Answer

A)  16. 
B)  2. 
C)  4. 
D)  20. 
E)  non-existent because at point A no roses are sold. 
A)  16. 
B)  2. 
C)  4. 
D)  20. 
E)  non-existent because at point A no roses are sold.

Question 19

Ali decides to attend the one-hour review session for microeconomics instead of working at his job. His job pays him $10 per hour. Ali's opportunity cost of attending the review session is

Accepted Answer

A)  the one-hour review session. 
B)  equal to the benefit he gets from the review session. 
C)  the $10 he could have earned at his job. 
D)  the value of the session minus the $10 he could have earned at his job. 
E)  nothing, because the review session does not cost anything. 
A)  the one-hour review session. 
B)  equal to the benefit he gets from the review session. 
C)  the $10 he could have earned at his job. 
D)  the value of the session minus the $10 he could have earned at his job. 
E)  nothing, because the review session does not cost anything.

Question 20

Australia has a universal health care system called Medicare, so that everyone, regardless of their ability to pay, has some access to health care. Based on this observation, Australia has decided that 'everyone, regardless of their ability to pay' is the answer to what microeconomic question?

Accepted Answer

A)  How will health care be produced? 
B)  Why will we offer health care? 
C)  What type of health care will be produced and in what quantity? 
D)  Must we offer health care? 
E)  For whom will health care be produced? 
A)  How will health care be produced? 
B)  Why will we offer health care? 
C)  What type of health care will be produced and in what quantity? 
D)  Must we offer health care? 
E)  For whom will health care be produced?

Which of the following is an example of a normative statement?

What typically happens to benefits as the amount of an activity is increased?

Which of the following statements is correct?

Which of the following statements is a positive statement?

With y measured on the vertical axis and x measured on the horizontal axis, the slope of a straight line is defined as

You have data for sales of pizza for each Australian state in 20191. The type of graph to best display these data would be a

An opportunity cost is

Mothers Against Drunk Drivers (MADD) campaigned to increase the legal penalties of drunk driving. This successful campaign ________ of drunk driving.

Suppose you eat two hamburgers for lunch. The marginal benefit of the first burger is usually ________ of the second burger.

The Latin term 'ceteris paribus' means

A curve with a positive but decreasing slope represents a relationship where, every time the variable measured along the horizontal axis increases by one unit, the variable measured along the vertical axis

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

A graph of the value of one variable against the value of another variable is known as a:

The question 'should economics majors or sociology majors earn more after they graduate?' is an example of a ________ question.

The slope of a line equals the change in the variable measured along the

If there is no scarcity,

In the figure above, ceteris paribus, an increase in x is associated with

The figure above shows the relationship between the price of a dozen roses and the quantity of roses a florist can sell. The slope between points A and B is

Ali decides to attend the one-hour review session for microeconomics instead of working at his job. His job pays him $10 per hour. Ali's opportunity cost of attending the review session is

Australia has a universal health care system called Medicare, so that everyone, regardless of their ability to pay, has some access to health care. Based on this observation, Australia has decided that 'everyone, regardless of their ability to pay' is the answer to what microeconomic question?

The Australian and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 1: Getting Started

Which of the following is an example of a normative statement?

What typically happens to benefits as the amount of an activity is increased?

Which of the following statements is correct?

Which of the following statements is a positive statement?

With y measured on the vertical axis and x measured on the horizontal axis, the slope of a straight line is defined as

You have data for sales of pizza for each Australian state in 20191. The type of graph to best display these data would be a

An opportunity cost is

Mothers Against Drunk Drivers (MADD) campaigned to increase the legal penalties of drunk driving. This successful campaign ________ of drunk driving.

Suppose you eat two hamburgers for lunch. The marginal benefit of the first burger is usually ________ of the second burger.

The Latin term 'ceteris paribus' means

A curve with a positive but decreasing slope represents a relationship where, every time the variable measured along the horizontal axis increases by one unit, the variable measured along the vertical axis

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

A graph of the value of one variable against the value of another variable is known as a:

The question 'should economics majors or sociology majors earn more after they graduate?' is an example of a ________ question.

The slope of a line equals the change in the variable measured along the

If there is no scarcity,

In the figure above, ceteris paribus, an increase in x is associated with

The figure above shows the relationship between the price of a dozen roses and the quantity of roses a florist can sell. The slope between points A and B is

Ali decides to attend the one-hour review session for microeconomics instead of working at his job. His job pays him $10 per hour. Ali's opportunity cost of attending the review session is

Australia has a universal health care system called Medicare, so that everyone, regardless of their ability to pay, has some access to health care. Based on this observation, Australia has decided that 'everyone, regardless of their ability to pay' is the answer to what microeconomic question?

The Australian and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters