Question 1

-In the figure above, an increase in z leads to a

Accepted Answer

A)  movement up along one of the lines showing the relationship between x and y. 
B)  movement down along one of the lines showing the relationship between x and y. 
C)  rightward shift of the line showing the relationship between x and y. 
D)  trend change in both x and y. 
E)  leftward shift of the line showing the relationship between x and y. 
A)  movement up along one of the lines showing the relationship between x and y. 
B)  movement down along one of the lines showing the relationship between x and y. 
C)  rightward shift of the line showing the relationship between x and y. 
D)  trend change in both x and y. 
E)  leftward shift of the line showing the relationship between x and y.

Question 2

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 3

If the change in y = 10 and the change in x = 3, there is

Accepted Answer

A)  a positive relationship between y and x. 
B)  no relationship between y and x. 
C)  an independent relationship between y and x. 
D)  a +0.33 relationship between the two variables. 
E)  a negative relationship between y and x. 
A)  a positive relationship between y and x. 
B)  no relationship between y and x. 
C)  an independent relationship between y and x. 
D)  a +0.33 relationship between the two variables. 
E)  a negative relationship between y and x.

Question 4

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 5

'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 6

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 7

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 8

Which of the following is a positive statement?

Accepted Answer

A)  Everyone should have some knowledge of economics. 
B)  Social security must be reformed. 
C)  Taxes on petrol should be lower so that petrol is more affordable for the poor. 
D)  If we reduce welfare payments given to the poor, they will find jobs. 
E)  The rich should pay more in taxes. 
A)  Everyone should have some knowledge of economics. 
B)  Social security must be reformed. 
C)  Taxes on petrol should be lower so that petrol is more affordable for the poor. 
D)  If we reduce welfare payments given to the poor, they will find jobs. 
E)  The rich should pay more in taxes.

Question 9

Which of the following statements is true regarding scarcity?

Accepted Answer

A)  An economy experiences scarcity only when the incomes of its citizens decline. 
B)  Scarcity could be overcome if people would make all choices in the social interest. 
C)  Poor people experience scarcity more often than do rich people. 
D)  Scarcity affects poorer countries only. 
E)  All citizens in a wealthy economy experience scarcity. 
A)  An economy experiences scarcity only when the incomes of its citizens decline. 
B)  Scarcity could be overcome if people would make all choices in the social interest. 
C)  Poor people experience scarcity more often than do rich people. 
D)  Scarcity affects poorer countries only. 
E)  All citizens in a wealthy economy experience scarcity.

Question 10

An economist observed that, as more computers are added to a factory, the costs of production initially decline, reach a minimum, and then rise. In a diagram that has costs on the vertical axis and the number of computers on the horizontal axis, the relationship always is

Accepted Answer

A)  negative both before and after the minimum point. 
B)  negative and then positive after the minimum point. 
C)  negative and then linear after the minimum point. 
D)  positive and then negative after the minimum point. 
E)  linear and then positive after the minimum point. 
A)  negative both before and after the minimum point. 
B)  negative and then positive after the minimum point. 
C)  negative and then linear after the minimum point. 
D)  positive and then negative after the minimum point. 
E)  linear and then positive after the minimum point.

Question 11

The marginal benefit of an activity is:
i. the benefit from a one-unit increase in the activity.
ii. the benefit of a small, unimportant activity.
iii. measured by what the person is willing to give up to get one additional unit of the activity.

Accepted Answer

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

Question 12

When Ferrari decides to produce 1,200 '360 Modenas' each year, Ferrari is answering the ________ question.

Accepted Answer

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

Question 13

Which of the following is a positive statement?

Accepted Answer

A)  The class average on this test should be more than 80 per cent. 
B)  A 10 per cent increase in income leads to a 4 per cent increase in the consumption of beef. 
C)  Taxes should be lower because then people get to keep more of what they earn, so they will work more. 
D)  Given their negative impact on productivity, the government should eliminate labour unions. 
E)  My economics class should last for two terms because it is my favourite class. 
A)  The class average on this test should be more than 80 per cent. 
B)  A 10 per cent increase in income leads to a 4 per cent increase in the consumption of beef. 
C)  Taxes should be lower because then people get to keep more of what they earn, so they will work more. 
D)  Given their negative impact on productivity, the government should eliminate labour unions. 
E)  My economics class should last for two terms because it is my favourite class.

Question 14

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 15

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 16

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 17

'As the price of petrol increases, fewer people buy cars that are petrol guzzlers.' A graph showing this relationship would

Accepted Answer

A)  be a vertical line. 
B)  have a direct relationship. 
C)  be a horizontal line. 
D)  have a negative slope. 
E)  have a positive relationship. 
A)  be a vertical line. 
B)  have a direct relationship. 
C)  be a horizontal line. 
D)  have a negative slope. 
E)  have a positive relationship.

Question 18

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 19

-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 20

The graph shows

Accepted Answer

A)  a linear relationship. 
B)  a relationship with a minimum. 
C)  a cross-section relationship. 
D)  a relationship with a maximum. 
E)  no relationship. 
A)  a linear relationship. 
B)  a relationship with a minimum. 
C)  a cross-section relationship. 
D)  a relationship with a maximum. 
E)  no relationship.

-In the figure above, an increase in z leads to a

The Latin term 'ceteris paribus' means

If the change in y = 10 and the change in x = 3, there is

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

'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

If two variables are positively related, then

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

Which of the following is a positive statement?

Which of the following statements is true regarding scarcity?

An economist observed that, as more computers are added to a factory, the costs of production initially decline, reach a minimum, and then rise. In a diagram that has costs on the vertical axis and the number of computers on the horizontal axis, the relationship always is

The marginal benefit of an activity is: i. the benefit from a one-unit increase in the activity. ii. the benefit of a small, unimportant activity. iii. measured by what the person is willing to give up to get one additional unit of the activity.

When Ferrari decides to produce 1,200 '360 Modenas' each year, Ferrari is answering the ________ question.

Which of the following is a positive statement?

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

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

'As the price of petrol increases, fewer people buy cars that are petrol guzzlers.' A graph showing this relationship would

Which of the following is NOT a normative economic statement?

-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

The graph shows

The Australian and Global Economies

The Economic Problem

Demand and Supply

GDP: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Economic Growth

Finance, Saving and Investment

Money, the Price Level and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 1: Getting Started

-In the figure above, an increase in z leads to a

The Latin term 'ceteris paribus' means

If the change in y = 10 and the change in x = 3, there is

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

'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

If two variables are positively related, then

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

Which of the following is a positive statement?

Which of the following statements is true regarding scarcity?

An economist observed that, as more computers are added to a factory, the costs of production initially decline, reach a minimum, and then rise. In a diagram that has costs on the vertical axis and the number of computers on the horizontal axis, the relationship always is

The marginal benefit of an activity is: i. the benefit from a one-unit increase in the activity. ii. the benefit of a small, unimportant activity. iii. measured by what the person is willing to give up to get one additional unit of the activity.

When Ferrari decides to produce 1,200 '360 Modenas' each year, Ferrari is answering the ________ question.

Which of the following is a positive statement?

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

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

'As the price of petrol increases, fewer people buy cars that are petrol guzzlers.' A graph showing this relationship would

Which of the following is NOT a normative economic statement?

-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

The graph shows

The Australian and Global Economies

The Economic Problem

Demand and Supply

GDP: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Economic Growth

Finance, Saving and Investment

Money, the Price Level and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters