Question 1

'The change in the value of the variable measured on the y-axis divided by the change in the value of the variable measured on the x-axis' is the definition of

Accepted Answer

A)  slope. 
B)  a relationship. 
C)  a graph. 
D)  a curve. 
E)  a trend. 
A)  slope. 
B)  a relationship. 
C)  a graph. 
D)  a curve. 
E)  a trend.

Question 2

Matthew has eaten two hamburgers and is considering a third. The marginal benefit in his decision is the pleasure from consuming

Accepted Answer

A)  all three hamburgers. 
B)  just the third hamburger. 
C)  just the second hamburger. 
D)  the third hamburger minus the pleasure from consuming zero hamburgers. 
E)  the two previous hamburgers. 
A)  all three hamburgers. 
B)  just the third hamburger. 
C)  just the second hamburger. 
D)  the third hamburger minus the pleasure from consuming zero hamburgers. 
E)  the two previous hamburgers.

Question 3

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 C and D equals

Accepted Answer

A)  8. 
B)  1. 
C)  2. 
D)  4. 
E)  12. 
A)  8. 
B)  1. 
C)  2. 
D)  4. 
E)  12.

Question 4

On a graph showing the relationship between x and y, the ceteris paribus condition implies that

Accepted Answer

A)  the value of x and the value of y are held constant. 
B)  the value of x is held constant. 
C)  no other variables are related to x and y. 
D)  other variables not shown are held constant. 
E)  the value of y is held constant. 
A)  the value of x and the value of y are held constant. 
B)  the value of x is held constant. 
C)  no other variables are related to x and y. 
D)  other variables not shown are held constant. 
E)  the value of y is held constant.

Question 5

The primary focus of microeconomics is

Accepted Answer

A)  to examine the operation of the entire (aggregate) economy. 
B)  the levels of employment and inflation. 
C)  to examine the behaviour and operation of the individual units or sectors that make up the economy. 
D)  to study how we managed to eliminate scarcity. 
E)  our government's monetary policy. 
A)  to examine the operation of the entire (aggregate) economy. 
B)  the levels of employment and inflation. 
C)  to examine the behaviour and operation of the individual units or sectors that make up the economy. 
D)  to study how we managed to eliminate scarcity. 
E)  our government's monetary policy.

Question 6

Which of the following is NOT a normative economic statement?

Accepted Answer

A)  People over the age of 75 should not be allowed to drive cars. 
B)  Teenagers are responsible for most driving fatalities. 
C)  The price of petrol is too high. 
D)  States should reduce the tax on heating fuel oil during the winter. 
E)  We don't spend enough money on anti-smoking campaigns. 
A)  People over the age of 75 should not be allowed to drive cars. 
B)  Teenagers are responsible for most driving fatalities. 
C)  The price of petrol is too high. 
D)  States should reduce the tax on heating fuel oil during the winter. 
E)  We don't spend enough money on anti-smoking campaigns.

Question 7

A cross-section graph:

Accepted Answer

A)  is divided into different sections. 
B)  measures time on the x-axis and the variable in which we are interested on the y-axis. 
C)  shows the values of an economic variable for different groups in a population at a point in time. 
D)  Both answers A and C are correct. 
E)  Both answers B and C are correct. 
A)  is divided into different sections. 
B)  measures time on the x-axis and the variable in which we are interested on the y-axis. 
C)  shows the values of an economic variable for different groups in a population at a point in time. 
D)  Both answers A and C are correct. 
E)  Both answers B and C are correct.

Question 8

If the quantity of the variable on the y-axis increases by 10 when the quantity of the variable on the x-axis decreases by 2, then the slope of the curve equals

Accepted Answer

A)  10. 
B)  2. 
C)  -5. 
D)  -10. 
E)  None of the above answers is correct. 
A)  10. 
B)  2. 
C)  -5. 
D)  -10. 
E)  None of the above answers is correct.

Question 9

If two variables are positively related, then

Accepted Answer

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

Question 10

Which of the following BEST describes macroeconomics?

Accepted Answer

A)  It is not a social science because its predictions cannot be tested. 
B)  It examines how the choices that individuals make affect governments. 
C)  It analyses the aggregate effects on the national economy of the choices made by individuals, firms and governments. 
D)  Proving causation is never a problem for macroeconomics. 
E)  It studies the choices that individuals and businesses make when coping with scarcity 
A)  It is not a social science because its predictions cannot be tested. 
B)  It examines how the choices that individuals make affect governments. 
C)  It analyses the aggregate effects on the national economy of the choices made by individuals, firms and governments. 
D)  Proving causation is never a problem for macroeconomics. 
E)  It studies the choices that individuals and businesses make when coping with scarcity

Question 11

Which of the following is a microeconomic topic? i. K-Mart's decision to close stores that are not making a profit.
Ii) Bunning's choice to hire more full-time employees because its sales increased.
Iii) Virgin Airlines changes its fares.

Accepted Answer

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

Question 12

A statement that 'all children should receive free health care' is an example of what kind of statement?

Accepted Answer

A)  A natural experiment statement 
B)  A normative statement 
C)  A fair statement 
D)  A positive statement 
E)  A statement on the margin 
A)  A natural experiment statement 
B)  A normative statement 
C)  A fair statement 
D)  A positive statement 
E)  A statement on the margin

Question 13

If the quantity of the variable on the y-axis increases by 3 when the quantity of the variable on the x-axis increases by 4, then the slope of the curve equals

Accepted Answer

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

Question 14

An incentive is

Accepted Answer

A)  the marginal cost of some course of action. 
B)  a constraint that society imposes on those who make self-interested choices. 
C)  the net gain of some course of action. 
D)  an inducement to take a particular action. 
E)  the marginal benefit of some course of action. 
A)  the marginal cost of some course of action. 
B)  a constraint that society imposes on those who make self-interested choices. 
C)  the net gain of some course of action. 
D)  an inducement to take a particular action. 
E)  the marginal benefit of some course of action.

Question 15

The cost of a one-unit increase in an activity is called the

Accepted Answer

A)  margin. 
B)  marginal cost. 
C)  rational cost. 
D)  opportunity benefit. 
E)  marginal benefit. 
A)  margin. 
B)  marginal cost. 
C)  rational cost. 
D)  opportunity benefit. 
E)  marginal benefit.

Question 16

Which of the following is a microeconomic issue?

Accepted Answer

A)  Why has unemployment risen nationwide? 
B)  What is the impact on the quantity of Pepsi purchased if consumers' tastes change in favour of non-carbonated drinks? 
C)  Why has economic growth been rapid in China? 
D)  Why did overall production increase in Australia last year? 
E)  Why is the average income lower in Africa than in Latin America? 
A)  Why has unemployment risen nationwide? 
B)  What is the impact on the quantity of Pepsi purchased if consumers' tastes change in favour of non-carbonated drinks? 
C)  Why has economic growth been rapid in China? 
D)  Why did overall production increase in Australia last year? 
E)  Why is the average income lower in Africa than in Latin America?

Question 17

As a shoe factory adds more workers, shoe production grows, reaches a maximum, and then shrinks. In a diagram that has the number of workers on the horizontal axis and the number of shoes on the vertical axis, the relationship between the number of workers and the number of shoes starts as ________ and then, after the maximum point, is ________.

Accepted Answer

A)  negative; positive 
B)  linear; negative 
C)  positive; non-existent 
D)  positive; linear 
E)  positive; negative 
A)  negative; positive 
B)  linear; negative 
C)  positive; non-existent 
D)  positive; linear 
E)  positive; negative

Question 18

When an electricity distribution company decides to use manpower to bury its lines, it directly answers the ________ question.

Accepted Answer

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

Question 19

Choices that are best for the society as a whole are choices in pursuit of

Accepted Answer

A)  answering the 'how?' question. 
B)  answering the 'for whom?' question. 
C)  self-interest. 
D)  incentives. 
E)  the social interest. 
A)  answering the 'how?' question. 
B)  answering the 'for whom?' question. 
C)  self-interest. 
D)  incentives. 
E)  the social interest.

Question 20

Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of

Accepted Answer

A)  social interest versus self-interest. 
B)  macroeconomics. 
C)  microeconomics. 
D)  scarcity. 
E)  why to produce. 
A)  social interest versus self-interest. 
B)  macroeconomics. 
C)  microeconomics. 
D)  scarcity. 
E)  why to produce.

'The change in the value of the variable measured on the y-axis divided by the change in the value of the variable measured on the x-axis' is the definition of

Matthew has eaten two hamburgers and is considering a third. The marginal benefit in his decision is the pleasure from consuming

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 C and D equals

On a graph showing the relationship between x and y, the ceteris paribus condition implies that

The primary focus of microeconomics is

Which of the following is NOT a normative economic statement?

A cross-section graph:

If the quantity of the variable on the y-axis increases by 10 when the quantity of the variable on the x-axis decreases by 2, then the slope of the curve equals

If two variables are positively related, then

Which of the following BEST describes macroeconomics?

Which of the following is a microeconomic topic? i. K-Mart's decision to close stores that are not making a profit. Ii) Bunning's choice to hire more full-time employees because its sales increased. Iii) Virgin Airlines changes its fares.

A statement that 'all children should receive free health care' is an example of what kind of statement?

If the quantity of the variable on the y-axis increases by 3 when the quantity of the variable on the x-axis increases by 4, then the slope of the curve equals

An incentive is

The cost of a one-unit increase in an activity is called the

Which of the following is a microeconomic issue?

When an electricity distribution company decides to use manpower to bury its lines, it directly answers the ________ question.

Choices that are best for the society as a whole are choices in pursuit of

Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of

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

'The change in the value of the variable measured on the y-axis divided by the change in the value of the variable measured on the x-axis' is the definition of

Matthew has eaten two hamburgers and is considering a third. The marginal benefit in his decision is the pleasure from consuming

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 C and D equals

On a graph showing the relationship between x and y, the ceteris paribus condition implies that

The primary focus of microeconomics is

Which of the following is NOT a normative economic statement?

A cross-section graph:

If the quantity of the variable on the y-axis increases by 10 when the quantity of the variable on the x-axis decreases by 2, then the slope of the curve equals

If two variables are positively related, then

Which of the following BEST describes macroeconomics?

Which of the following is a microeconomic topic? i. K-Mart's decision to close stores that are not making a profit. Ii) Bunning's choice to hire more full-time employees because its sales increased. Iii) Virgin Airlines changes its fares.

A statement that 'all children should receive free health care' is an example of what kind of statement?

If the quantity of the variable on the y-axis increases by 3 when the quantity of the variable on the x-axis increases by 4, then the slope of the curve equals

An incentive is

The cost of a one-unit increase in an activity is called the

Which of the following is a microeconomic issue?

When an electricity distribution company decides to use manpower to bury its lines, it directly answers the ________ question.

Choices that are best for the society as a whole are choices in pursuit of

Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of

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