Question 1

Which of the following is true of resources?

Accepted Answer

A)  Resources are inputs used to produce goods and services. 
B)  Labor is the mental and physical capacity of workers to produce goods and services. 
C)  Entrepreneurship organizes resources to produce goods and services. 
D)  All of these are true. 
A)  Resources are inputs used to produce goods and services. 
B)  Labor is the mental and physical capacity of workers to produce goods and services. 
C)  Entrepreneurship organizes resources to produce goods and services. 
D)  All of these are true.

Question 2

Ceteris paribus means:

Accepted Answer

A)  an association of variables. 
B)  all other things remain constant. 
C)  a cause and effect relationship. 
D)  considering the influences of other variables. 
A)  an association of variables. 
B)  all other things remain constant. 
C)  a cause and effect relationship. 
D)  considering the influences of other variables.

Question 3

An entrepreneur is a(n):

Accepted Answer

A)  individual who has much education. 
B)  organizer who seeks profitable opportunities and is willing to accept risks. 
C)  business organization that uses inputs to produce output. 
D)  depot or warehouse for commercial products. 
A)  individual who has much education. 
B)  organizer who seeks profitable opportunities and is willing to accept risks. 
C)  business organization that uses inputs to produce output. 
D)  depot or warehouse for commercial products.

Question 4

Which of the following is most likely to represent causality rather than association?

Accepted Answer

A)  In years that fashion dictates wider lapels on men's jackets, the stock market grows by at least 5 percent. 
B)  Interest rates are higher in years ending with a 1 or a 6. 
C)  Unemployment falls when the AFC champion wins the Super Bowl. 
D)  Quantity demanded goes up when price falls because lower prices increase consumer purchasing power, ceteris paribus. 
A)  In years that fashion dictates wider lapels on men's jackets, the stock market grows by at least 5 percent. 
B)  Interest rates are higher in years ending with a 1 or a 6. 
C)  Unemployment falls when the AFC champion wins the Super Bowl. 
D)  Quantity demanded goes up when price falls because lower prices increase consumer purchasing power, ceteris paribus.

Question 5

The sun is an example of:

Accepted Answer

A)  a natural resource. 
B)  capital. 
C)  labor. 
D)  none of these. 
A)  a natural resource. 
B)  capital. 
C)  labor. 
D)  none of these.

Question 6

Direct relationships are illustrated using upward-sloping lines and curves.

Accepted Answer

A) True 
 B)False

Question 7

Exhibit 1A-1 Straight line
​  
-In Exhibit 1A-1, the slope of straight line AB is:

Accepted Answer

A)  positive. 
B)  zero. 
C)  negative. 
D)  variable. 
A)  positive. 
B)  zero. 
C)  negative. 
D)  variable.

Question 8

A normative economic statement can be proven either true or false.

Accepted Answer

A) True 
 B)False

Question 9

Exhibit 1A-3 Straight line  
-In Exhibit 1A-3, as X increases along the horizontal axis, corresponding to points A-B on the line, the Y values decrease. The relationship between the X and Y variables is:

Accepted Answer

A)  direct. 
B)  inverse. 
C)  independent. 
D)  variable. 
A)  direct. 
B)  inverse. 
C)  independent. 
D)  variable.

Question 10

When economists use the term Ceteris paribus, they are indicating that:

Accepted Answer

A)  the relationship between two economic variables cannot be determined. 
B)  the analysis is true for the individual but not for the economy as a whole. 
C)  all other variables except the ones specified are assumed to be constant. 
D)  their conclusions are based on normative economics rather than positive economic analysis. 
A)  the relationship between two economic variables cannot be determined. 
B)  the analysis is true for the individual but not for the economy as a whole. 
C)  all other variables except the ones specified are assumed to be constant. 
D)  their conclusions are based on normative economics rather than positive economic analysis.

Question 11

Which of the following is a macroeconomics topic?

Accepted Answer

A)  Wages of textile workers in the Northeast. 
B)  The cost of producing 10,000 bookcases. 
C)  The economy's annual growth rate. 
D)  National demand for fish. 
E)  Effects of farm subsidies on food prices. 
A)  Wages of textile workers in the Northeast. 
B)  The cost of producing 10,000 bookcases. 
C)  The economy's annual growth rate. 
D)  National demand for fish. 
E)  Effects of farm subsidies on food prices.

Question 12

Exhibit 1A-5 Straight line  
-In Exhibit 1A-5, the slope of straight line CD is:

Accepted Answer

A)  positive. 
B)  zero. 
C)  negative. 
D)  variable. 
A)  positive. 
B)  zero. 
C)  negative. 
D)  variable.

Question 13

The perpetual problem in economics is:

Accepted Answer

A)  our inability to work together effectively. 
B)  our inability to satisfy everyone's wants with the available resources. 
C)  a recognition of continual class differences. 
D)  our inability to utilize resources efficiently. 
E)  likely to be solved in resource-rich countries. 
A)  our inability to work together effectively. 
B)  our inability to satisfy everyone's wants with the available resources. 
C)  a recognition of continual class differences. 
D)  our inability to utilize resources efficiently. 
E)  likely to be solved in resource-rich countries.

Question 14

Policies to lower the price level of goods in the nation are a concern of:

Accepted Answer

A)  macroeconomics. 
B)  microeconomics. 
C)  both microeconomics and macroeconomics. 
D)  political science. 
A)  macroeconomics. 
B)  microeconomics. 
C)  both microeconomics and macroeconomics. 
D)  political science.

Question 15

Positive economics is a method of inquiry that attempts to explain the observable, and is limited to verifiable statements, while normative economics suggests a course of action that we should take based on a particular set of values and preferences.

Accepted Answer

A) True 
 B)False

Question 16

An economic model is useful only if it:

Accepted Answer

A)  contains no positive statements. 
B)  captures all the complexities of reality. 
C)  yields accurate predictions. 
D)  has both macro- and microeconomic applications. 
A)  contains no positive statements. 
B)  captures all the complexities of reality. 
C)  yields accurate predictions. 
D)  has both macro- and microeconomic applications.

Question 17

The slope of a line parallel to the horizontal axis is:

Accepted Answer

A)  1. 
B)  0. 
C)  infinite. 
D)  undefined. 
A)  1. 
B)  0. 
C)  infinite. 
D)  undefined.

Question 18

What is the difference between positive and normative economics? How can knowledge of positive economics be useful in normative economics?

Accepted Answer

Positive economics deals with "what is"

Question 19

Exhibit 1A-5 Straight line  
-In Exhibit 1A-5, as X increases along the horizontal axis, corresponding to points C-D on the line, the Y values decrease. The relationship between the X and Y variables is:

Accepted Answer

A)  direct. 
B)  inverse. 
C)  independent. 
D)  variable. 
A)  direct. 
B)  inverse. 
C)  independent. 
D)  variable.

Question 20

A positive economic statement:

Accepted Answer

A)  contains personal and social value judgments. 
B)  is always a mathematical expression. 
C)  should never be used by an economist. 
D)  is proper provided the advocator is clear the position rests on personal assessment. 
E)  is an unbiased report of the facts of the economy. 
A)  contains personal and social value judgments. 
B)  is always a mathematical expression. 
C)  should never be used by an economist. 
D)  is proper provided the advocator is clear the position rests on personal assessment. 
E)  is an unbiased report of the facts of the economy.

Which of the following is true of resources?

Ceteris paribus means:

An entrepreneur is a(n):

Which of the following is most likely to represent causality rather than association?

The sun is an example of:

Direct relationships are illustrated using upward-sloping lines and curves.

Exhibit 1A-1 Straight line -In Exhibit 1A-1, the slope of straight line AB is:

A normative economic statement can be proven either true or false.

Exhibit 1A-3 Straight line -In Exhibit 1A-3, as X increases along the horizontal axis, corresponding to points A-B on the line, the Y values decrease. The relationship between the X and Y variables is:

When economists use the term Ceteris paribus, they are indicating that:

Which of the following is a macroeconomics topic?

Exhibit 1A-5 Straight line -In Exhibit 1A-5, the slope of straight line CD is:

The perpetual problem in economics is:

Policies to lower the price level of goods in the nation are a concern of:

Positive economics is a method of inquiry that attempts to explain the observable, and is limited to verifiable statements, while normative economics suggests a course of action that we should take based on a particular set of values and preferences.

An economic model is useful only if it:

The slope of a line parallel to the horizontal axis is:

What is the difference between positive and normative economics? How can knowledge of positive economics be useful in normative economics?

Exhibit 1A-5 Straight line -In Exhibit 1A-5, as X increases along the horizontal axis, corresponding to points C-D on the line, the Y values decrease. The relationship between the X and Y variables is:

A positive economic statement:

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 1: Introducing the Economic Way of Thinking

Which of the following is true of resources?

Ceteris paribus means:

An entrepreneur is a(n):

Which of the following is most likely to represent causality rather than association?

The sun is an example of:

Direct relationships are illustrated using upward-sloping lines and curves.

Exhibit 1A-1 Straight line ​ -In Exhibit 1A-1, the slope of straight line AB is:

A normative economic statement can be proven either true or false.

Exhibit 1A-3 Straight line -In Exhibit 1A-3, as X increases along the horizontal axis, corresponding to points A-B on the line, the Y values decrease. The relationship between the X and Y variables is:

When economists use the term Ceteris paribus, they are indicating that:

Which of the following is a macroeconomics topic?

Exhibit 1A-5 Straight line -In Exhibit 1A-5, the slope of straight line CD is:

The perpetual problem in economics is:

Policies to lower the price level of goods in the nation are a concern of:

Positive economics is a method of inquiry that attempts to explain the observable, and is limited to verifiable statements, while normative economics suggests a course of action that we should take based on a particular set of values and preferences.

An economic model is useful only if it:

The slope of a line parallel to the horizontal axis is:

What is the difference between positive and normative economics? How can knowledge of positive economics be useful in normative economics?

Exhibit 1A-5 Straight line -In Exhibit 1A-5, as X increases along the horizontal axis, corresponding to points C-D on the line, the Y values decrease. The relationship between the X and Y variables is:

A positive economic statement:

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exhibit 1A-1 Straight line -In Exhibit 1A-1, the slope of straight line AB is: