Question 1

Which of the following is another way of saying "marginal benefits of an action"?

Accepted Answer

A) benefits given up, once the action is taken 
B) unintended gains from taking the action 
C) benefits accruing to others as a result of one's action 
D) extra benefits resulting from the action 
A) benefits given up, once the action is taken 
B) unintended gains from taking the action 
C) benefits accruing to others as a result of one's action 
D) extra benefits resulting from the action

Question 2

(Consider This) The economic perspective used in customer decision making at fast-food restaurants is reflected in

Accepted Answer

A) customers selecting the shortest line. 
B) decisions for which marginal costs exceed marginal benefits. 
C) all customer lines tending to be of different lengths. 
D) irrational purchasing of high-fat-content food. 
A) customers selecting the shortest line. 
B) decisions for which marginal costs exceed marginal benefits. 
C) all customer lines tending to be of different lengths. 
D) irrational purchasing of high-fat-content food.

Question 3

Which pitfall to sound economic reasoning is reflected in a person's view that "pharmaceutical and oil companies are price-gouging the consumers"?

Accepted Answer

A) faulty definition 
B) post hoc fallacy 
C) loaded terminology 
D) confusing correlation and causation 
A) faulty definition 
B) post hoc fallacy 
C) loaded terminology 
D) confusing correlation and causation

Question 4

The fundamental economic problem faced by a society is that productive resources are so varied and versatile that it is hard to decide what to do with them.

Accepted Answer

A) True 
 B)False

Question 5

Given: the intercept for a straight line is 12.If the value of the independent variable is 3, then the value of the dependent variable would be 18.The slope of this line is

Accepted Answer

A) 1. 
B) 2. 
C) 3. 
D) 4. 
A) 1. 
B) 2. 
C) 3. 
D) 4.

Question 6

Which of the following is the best synonym for "marginal" in economics?

Accepted Answer

A) scarce 
B) additional 
C) basic 
D) minor 
A) scarce 
B) additional 
C) basic 
D) minor

Question 7

In deciding whether to study for an economics quiz or go to a concert, one is confronted by the idea(s) of

Accepted Answer

A) scarcity and opportunity costs. 
B) money and real capital. 
C) complementary economic goals. 
D) full production. 
A) scarcity and opportunity costs. 
B) money and real capital. 
C) complementary economic goals. 
D) full production.

Question 8

A point outside (to the right of) the production possibilities curve of a nation

Accepted Answer

A) is not attainable for this nation. 
B) is easily attainable for this nation. 
C) implies that there are unemployed resources in this nation. 
D) implies that this nation is using its resources fully. 
A) is not attainable for this nation. 
B) is easily attainable for this nation. 
C) implies that there are unemployed resources in this nation. 
D) implies that this nation is using its resources fully.

Question 9

The process by which economists test hypotheses against facts to develop theories, principles, and models is called

Accepted Answer

A) the economic perspective. 
B) the scientific method. 
C) policy economics. 
D) microeconomics. 
A) the economic perspective. 
B) the scientific method. 
C) policy economics. 
D) microeconomics.

Question 10

The statement in a newspaper that "consumer prices rose last month by 1 percent, and if this trend continues, the annual rate of inflation will be 12 percent for the year" is an example of

Accepted Answer

A) a normative economic statement. 
B) a positive economic statement. 
C) microeconomic analysis. 
D) rational self-interest. 
A) a normative economic statement. 
B) a positive economic statement. 
C) microeconomic analysis. 
D) rational self-interest.

Question 11

The basic truth that underlies the study of economics is the fact that we all face

Accepted Answer

A) death. 
B) taxes. 
C) risk. 
D) scarcity. 
A) death. 
B) taxes. 
C) risk. 
D) scarcity.

Question 12

The study of economics is not useful for consumers, because economic analysis focuses only on businesses and the economy.

Accepted Answer

A) True 
 B)False

Question 13

A point inside the production possibilities curve is , while a point outside the curve is .

Accepted Answer

A) attainable; unattainable 
B) unattainable; attainable 
C) below the maximum possible; the maximum possible 
D) the maximum possible; below the maximum possible 
A) attainable; unattainable 
B) unattainable; attainable 
C) below the maximum possible; the maximum possible 
D) the maximum possible; below the maximum possible

Question 14

Economic growth may be represented by

Accepted Answer

A) a movement from one end of the production possibilities curve to the other. 
B) an upward-sloping production possibilities curve. 
C) a movement from a point inside to a point on the production possibilities curve. 
D) a rightward shift of the production possibilities curve. 
A) a movement from one end of the production possibilities curve to the other. 
B) an upward-sloping production possibilities curve. 
C) a movement from a point inside to a point on the production possibilities curve. 
D) a rightward shift of the production possibilities curve.

Question 15

Because of increasing opportunity costs, the production possibilities curve

Accepted Answer

A) is bowed out from (or concave to) the origin. 
B) can be either downward- or upward-sloping. 
C) at first rises, then falls eventually. 
D) is a straight downward-sloping line. 
A) is bowed out from (or concave to) the origin. 
B) can be either downward- or upward-sloping. 
C) at first rises, then falls eventually. 
D) is a straight downward-sloping line.

Question 16

Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas.The price of an apple is $1.50 and the price of a banana is $0.75.This means that, in order to buy two bananas, this consumer must forgo

Accepted Answer

A) 1 apple. 
B) 1.5 apples. 
C) 0.5 apple. 
D) 0.75 apple. 
A) 1 apple. 
B) 1.5 apples. 
C) 0.5 apple. 
D) 0.75 apple.

Question 17

Which of the following exemplifies a microeconomic question?

Accepted Answer

A) What is the current national rate of unemployment? 
B) Is the economy experiencing a decline in the rate of inflation? 
C) Will a new type of electronic reader or tablet increase the number of buyers? 
D) Is the aggregate output in the economy greater this year than last year? 
A) What is the current national rate of unemployment? 
B) Is the economy experiencing a decline in the rate of inflation? 
C) Will a new type of electronic reader or tablet increase the number of buyers? 
D) Is the aggregate output in the economy greater this year than last year?

Question 18

Money is not an economic resource because

Accepted Answer

A) money, as such, does not produce anything. 
B) idle money balances do not earn interest income. 
C) it is not scarce. 
D) money is not a free gift of nature. 
A) money, as such, does not produce anything. 
B) idle money balances do not earn interest income. 
C) it is not scarce. 
D) money is not a free gift of nature.

Question 19

A typical concave (bowed out from the origin) production possibilities curve implies

Accepted Answer

A) that economic resources are unlimited. 
B) that society must choose among various attainable combinations of goods. 
C) decreasing opportunity costs. 
D) that society is using a market system to allocate resources. 
A) that economic resources are unlimited. 
B) that society must choose among various attainable combinations of goods. 
C) decreasing opportunity costs. 
D) that society is using a market system to allocate resources.

Question 20

When economists talk about the capital resources in the economy, they are referring to the amount of money circulating in the economy.

Accepted Answer

A) True 
 B)False

Exam 1: Limits, Alternatives, and Choices

Which of the following is another way of saying "marginal benefits of an action"?

(Consider This) The economic perspective used in customer decision making at fast-food restaurants is reflected in

Which pitfall to sound economic reasoning is reflected in a person's view that "pharmaceutical and oil companies are price-gouging the consumers"?

The fundamental economic problem faced by a society is that productive resources are so varied and versatile that it is hard to decide what to do with them.

Given: the intercept for a straight line is 12.If the value of the independent variable is 3, then the value of the dependent variable would be 18.The slope of this line is

Which of the following is the best synonym for "marginal" in economics?

In deciding whether to study for an economics quiz or go to a concert, one is confronted by the idea(s) of

A point outside (to the right of) the production possibilities curve of a nation

The process by which economists test hypotheses against facts to develop theories, principles, and models is called

The statement in a newspaper that "consumer prices rose last month by 1 percent, and if this trend continues, the annual rate of inflation will be 12 percent for the year" is an example of

The basic truth that underlies the study of economics is the fact that we all face

The study of economics is not useful for consumers, because economic analysis focuses only on businesses and the economy.

A point inside the production possibilities curve is , while a point outside the curve is .

Economic growth may be represented by

Because of increasing opportunity costs, the production possibilities curve

Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas.The price of an apple is $1.50 and the price of a banana is $0.75.This means that, in order to buy two bananas, this consumer must forgo

Which of the following exemplifies a microeconomic question?

Money is not an economic resource because

A typical concave (bowed out from the origin) production possibilities curve implies

When economists talk about the capital resources in the economy, they are referring to the amount of money circulating in the economy.

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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