Question 1

If movement along a graph causes the value on the vertical axis to rise by 5 units and the value on the horizontal axis to fall by 10 units, the slope of the function is

Accepted Answer

A) 5. 
B) −.5. 
C) −2. 
D) −72. 
A) 5. 
B) −.5. 
C) −2. 
D) −72. B

Question 2

If an airline company has several empty seats on a flight and the full price of an air ticket is $500 and the marginal cost per passenger is $100, then it will be profitable for the airline to

Accepted Answer

A) charge a stand-by passenger no less than the full fare of $500. 
B) charge a stand-by passenger less than $100. 
C) charge a stand-by passenger more than $500. 
D) charge a stand-by passenger more than $100. 
E) fill the seats at the last minute for any price. 
A) charge a stand-by passenger no less than the full fare of $500. 
B) charge a stand-by passenger less than $100. 
C) charge a stand-by passenger more than $500. 
D) charge a stand-by passenger more than $100. 
E) fill the seats at the last minute for any price. D

Question 3

The tangent at point A on a curve has a positive slope.Therefore, the curve has a

Accepted Answer

A) positive slope at all points. 
B) positive slope at point A. 
C) negative slope at all points. 
D) negative slope at point A. 
A) positive slope at all points. 
B) positive slope at point A. 
C) negative slope at all points. 
D) negative slope at point A. B

Question 4

Some college students think that because a college degree greatly increases their earning potential there is no opportunity cost of attending college.How would an economist look at the matter?

Accepted Answer

A) There is no opportunity cost, assuming that future earnings actually increase as expected. 
B) The opportunity cost is much less than it would appear, assuming that earnings increase. 
C) Opportunity cost is a meaningless concept in this situation. 
D) The college students are completely correct in all respects. 
E) There is still an opportunity cost, even if it is justified by higher future earnings. 
A) There is no opportunity cost, assuming that future earnings actually increase as expected. 
B) The opportunity cost is much less than it would appear, assuming that earnings increase. 
C) Opportunity cost is a meaningless concept in this situation. 
D) The college students are completely correct in all respects. 
E) There is still an opportunity cost, even if it is justified by higher future earnings.

Question 5

How would you interpret (1) an upward sloping curve and (2) a zero slope curve in a two variable diagram?

Accepted Answer

(1)
Positive slope, where vari

Question 6

Lower inflation rates are usually correlated with lower unemployment rates.

Accepted Answer

A) True 
 B)False

Question 7

Economists use models in order to

Accepted Answer

A) experiment with alternative circumstances. 
B) make educated guesses about real life events. 
C) predict outcomes under various hypothetical conditions. 
D) increase understanding of how a relationship actually works. 
E) All of the above are correct. 
A) experiment with alternative circumstances. 
B) make educated guesses about real life events. 
C) predict outcomes under various hypothetical conditions. 
D) increase understanding of how a relationship actually works. 
E) All of the above are correct.

Question 8

In Egypt, in 1970, the Aswan Dam was completed.By preventing the annual flood of the Nile (thereby providing millions of acres of arable land) and by providing electricity, the dam was expected to raise the living standard of the Egyptian people-and it has.However, it has also led to a rise in the water table which causes Egypt's limestone structures, including the pyramids, to absorb more salt water and to suffer serious erosion from crystallized salts.Combined with air pollution and traffic vibration, this erosion is turning the pyramids to dust.Economists analyze this type of problem with the concept of

Accepted Answer

A) an externality. 
B) the antiquity problem. 
C) a free-rider problem. 
D) the public good problem. 
E) the trade-off between equity and output. 
A) an externality. 
B) the antiquity problem. 
C) a free-rider problem. 
D) the public good problem. 
E) the trade-off between equity and output.

Question 9

In 1980, in order to stimulate agricultural production, Fidel Castro allowed Cuban farmers to sell their goods directly to consumers and keep whatever profit they made.Some farmers were earning $50,000 per year, compared with the average worker income of $2,400.The workers resented this.Castro denounced the farmers as "capitalist gangsters" and closed the free markets.Cuban cash income declined five percent and fresh vegetables were in short supply.This illustrates the economic concept of the

Accepted Answer

A) law of comparative advantage. 
B) equality-efficiency trade-off. 
C) cost disease of the service sector. 
D) unemployment-inflation trade-off. 
E) All of the above are correct. 
A) law of comparative advantage. 
B) equality-efficiency trade-off. 
C) cost disease of the service sector. 
D) unemployment-inflation trade-off. 
E) All of the above are correct.

Question 10

In 1971, a bank worker could process 265 checks in 1 hour.Currently, computers with built-in reader-sorter processing capacity have pushed that number above 100,000 checks per hour.Economists describe this type of activity as

Accepted Answer

A) exploitation of labor. 
B) an increase in labor productivity. 
C) speed-up. 
D) comparative advantage. 
E) mutual gains from voluntary trade. 
A) exploitation of labor. 
B) an increase in labor productivity. 
C) speed-up. 
D) comparative advantage. 
E) mutual gains from voluntary trade.

Question 11

Tools used by economists include

Accepted Answer

A) historical study. 
B) mathematical reasoning. 
C) statistical inference. 
D) All of the above are correct. 
A) historical study. 
B) mathematical reasoning. 
C) statistical inference. 
D) All of the above are correct.

Question 12

Economists are often required to make unrealistic assumptions concerning the problems they are investigating.

Accepted Answer

A) True 
 B)False

Question 13

In the United States, the fact that the gap between the rich and the poor has been increasing is often justified by economists on the grounds that greater

Accepted Answer

A) efficiency can never be achieved without greater inequality. 
B) inequality does not create any problems. 
C) inequality is a desirable end in itself. 
D) inequality is an undesirable consequence of greater efficiency. 
E) efficiency should be achieved at any cost. 
A) efficiency can never be achieved without greater inequality. 
B) inequality does not create any problems. 
C) inequality is a desirable end in itself. 
D) inequality is an undesirable consequence of greater efficiency. 
E) efficiency should be achieved at any cost.

Question 14

Consider the following information regarding a person's decision to go to college: college tuition is $20,000 per year, room and board is $10,000 per year, and books and materials are $2,000 per year.Suppose that instead of going to college this person could have earned $18,000 working in a store.An economist would calculate the cost of going to college as

Accepted Answer

A) $20,000. 
B) $30,000. 
C) $32,000. 
D) $50,000. 
E) $18,000. 
A) $20,000. 
B) $30,000. 
C) $32,000. 
D) $50,000. 
E) $18,000.

Question 15

Value judgments are based on people's tastes, preferences, and ethical opinions.

Accepted Answer

A) True 
 B)False

Question 16

When residents surrounding an airport complain about noise from aircraft landings and takeoffs, the relevant economic analysis is that of

Accepted Answer

A) externalities. 
B) equality-efficiency trade-off. 
C) comparative advantage. 
D) the cost decrease of the service sector. 
E) the cost disease of personal services. 
A) externalities. 
B) equality-efficiency trade-off. 
C) comparative advantage. 
D) the cost decrease of the service sector. 
E) the cost disease of personal services.

Question 17

A line that rises from left to right has a positive slope.

Accepted Answer

A) True 
 B)False

Question 18

A ____ is a graph whose axes show the quantities of two inputs that are used to produce some output.

Accepted Answer

A) production indifference map 
B) two-variable diagram 
C) scalar diagram 
D) time-series graph 
A) production indifference map 
B) two-variable diagram 
C) scalar diagram 
D) time-series graph

Question 19

One of the consequences of preventing wages from falling in the European Union has been growing unemployment.

Accepted Answer

A) True 
 B)False

Question 20

Economic theory

Accepted Answer

A) is a deliberate simplification of factual relationships. 
B) seeks to disprove a hypothesis. 
C) is based mainly on assumptions. 
D) seeks to prove political ideals. 
A) is a deliberate simplification of factual relationships. 
B) seeks to disprove a hypothesis. 
C) is based mainly on assumptions. 
D) seeks to prove political ideals.

If movement along a graph causes the value on the vertical axis to rise by 5 units and the value on the horizontal axis to fall by 10 units, the slope of the function is

If an airline company has several empty seats on a flight and the full price of an air ticket is $500 and the marginal cost per passenger is $100, then it will be profitable for the airline to

The tangent at point A on a curve has a positive slope.Therefore, the curve has a

Some college students think that because a college degree greatly increases their earning potential there is no opportunity cost of attending college.How would an economist look at the matter?

How would you interpret (1) an upward sloping curve and (2) a zero slope curve in a two variable diagram?

Lower inflation rates are usually correlated with lower unemployment rates.

Economists use models in order to

In 1971, a bank worker could process 265 checks in 1 hour.Currently, computers with built-in reader-sorter processing capacity have pushed that number above 100,000 checks per hour.Economists describe this type of activity as

Tools used by economists include

Economists are often required to make unrealistic assumptions concerning the problems they are investigating.

In the United States, the fact that the gap between the rich and the poor has been increasing is often justified by economists on the grounds that greater

Value judgments are based on people's tastes, preferences, and ethical opinions.

When residents surrounding an airport complain about noise from aircraft landings and takeoffs, the relevant economic analysis is that of

A line that rises from left to right has a positive slope.

A ____ is a graph whose axes show the quantities of two inputs that are used to produce some output.

One of the consequences of preventing wages from falling in the European Union has been growing unemployment.

Economic theory

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand an Initial Look

Consumer Choice Individual and Market Demand

Demand and Elasticity

Production Inputs and Cost Building Blocks for Supply Analysis

Output Price and Profit the Importance of Marginal Analysis

Securities Business Finance and the Economy the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power Regulation and Antitrust

The Case for Free Markets the Price System

The Shortcomings of Free Markets

Externalities the Environment and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship the Human Inputs

Poverty Inequality and Discrimination

Is Us Economic Leadership Threatened

International Trade and Comparative Advantage

Filters

Exam 1: What Is Economics

If movement along a graph causes the value on the vertical axis to rise by 5 units and the value on the horizontal axis to fall by 10 units, the slope of the function is

If an airline company has several empty seats on a flight and the full price of an air ticket is $500 and the marginal cost per passenger is $100, then it will be profitable for the airline to

The tangent at point A on a curve has a positive slope.Therefore, the curve has a

Some college students think that because a college degree greatly increases their earning potential there is no opportunity cost of attending college.How would an economist look at the matter?

How would you interpret (1) an upward sloping curve and (2) a zero slope curve in a two variable diagram?

Lower inflation rates are usually correlated with lower unemployment rates.

Economists use models in order to

In 1971, a bank worker could process 265 checks in 1 hour.Currently, computers with built-in reader-sorter processing capacity have pushed that number above 100,000 checks per hour.Economists describe this type of activity as

Tools used by economists include

Economists are often required to make unrealistic assumptions concerning the problems they are investigating.

In the United States, the fact that the gap between the rich and the poor has been increasing is often justified by economists on the grounds that greater

Value judgments are based on people's tastes, preferences, and ethical opinions.

When residents surrounding an airport complain about noise from aircraft landings and takeoffs, the relevant economic analysis is that of

A line that rises from left to right has a positive slope.

A ____ is a graph whose axes show the quantities of two inputs that are used to produce some output.

One of the consequences of preventing wages from falling in the European Union has been growing unemployment.

Economic theory

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand an Initial Look

Consumer Choice Individual and Market Demand

Demand and Elasticity

Production Inputs and Cost Building Blocks for Supply Analysis

Output Price and Profit the Importance of Marginal Analysis

Securities Business Finance and the Economy the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power Regulation and Antitrust

The Case for Free Markets the Price System

The Shortcomings of Free Markets

Externalities the Environment and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship the Human Inputs

Poverty Inequality and Discrimination

Is Us Economic Leadership Threatened

International Trade and Comparative Advantage

Filters