Question 1

The question of 'What goods and services get produced?' most closely relates to which of the following issues?

Accepted Answer

A)  The distribution of goods and services in the economy. 
B)  Building a missile defence system, or putting a computer in every primary school classroom. 
C)  Producing goods and services in the least costly manner. 
D)  Obtaining specialised training to increase one's income. 
E)  Taxing high-income workers to give payments to poor households 
A)  The distribution of goods and services in the economy. 
B)  Building a missile defence system, or putting a computer in every primary school classroom. 
C)  Producing goods and services in the least costly manner. 
D)  Obtaining specialised training to increase one's income. 
E)  Taxing high-income workers to give payments to poor households

Question 2

Ali decides to attend the one-hour review session for microeconomics instead of working at his job. His job pays him $10 per hour. Ali's opportunity cost of attending the review session is

Accepted Answer

A)  the one-hour review session. 
B)  equal to the benefit he gets from the review session. 
C)  the $10 he could have earned at his job. 
D)  the value of the session minus the $10 he could have earned at his job. 
E)  nothing, because the review session does not cost anything. 
A)  the one-hour review session. 
B)  equal to the benefit he gets from the review session. 
C)  the $10 he could have earned at his job. 
D)  the value of the session minus the $10 he could have earned at his job. 
E)  nothing, because the review session does not cost anything.

Question 3

A steep slope in a time-series graph means the variable is

Accepted Answer

A)  rising or falling quickly. 
B)  rising or falling slowly. 
C)  very close to its trend point. 
D)  falling. 
E)  high. 
A)  rising or falling quickly. 
B)  rising or falling slowly. 
C)  very close to its trend point. 
D)  falling. 
E)  high.

Question 4

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 5

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.

Question 6

The ________ of something is the gain or pleasure that it brings.

Accepted Answer

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

Question 7

Proponents of cuts to income tax rates argue that when income tax rates are cut, workers have an incentive to increase their work hours. This argument is based on the assumption that

Accepted Answer

A)  the opportunity cost of working is negative. 
B)  the marginal cost of each additional work hour is not important to most workers. 
C)  workers are irrational. 
D)  workers make decisions based on the marginal benefit of each hour worked compared to the marginal cost of work. 
E)  workers make decisions based on the social interest. 
A)  the opportunity cost of working is negative. 
B)  the marginal cost of each additional work hour is not important to most workers. 
C)  workers are irrational. 
D)  workers make decisions based on the marginal benefit of each hour worked compared to the marginal cost of work. 
E)  workers make decisions based on the social interest.

Question 8

Which of the following is a macroeconomic topic?
i. China increases interest rates to slow its economic growth.
ii. Parliament lowers tax rates to try to lower the unemployment rate.
iii. Nissan decides to produce more electric Leaf models and fewer Altima sedans.

Accepted Answer

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

Question 9

-The above figure shows the relationship between the price of a slice of pizza and how many slices of pizza Ricardo buys in a week. Between points A and B, the slope of the line equals

Accepted Answer

A)  -4. 
B)  -2 
C)  -3. 
D)  -1. 
E)  -5. 
A)  -4. 
B)  -2 
C)  -3. 
D)  -1. 
E)  -5.

Question 10

The graph shows a:

Accepted Answer

A)  positive relationship that becomes steeper. 
B)  negative relationship that becomes steeper. 
C)  negative trend between the total cost of a cake and the output of cakes. 
D)  negative relationship that become less steep. 
E)  positive relationship that becomes less steep. 
A)  positive relationship that becomes steeper. 
B)  negative relationship that becomes steeper. 
C)  negative trend between the total cost of a cake and the output of cakes. 
D)  negative relationship that become less steep. 
E)  positive relationship that becomes less steep.

Question 11

The vertical axis in a graph

Accepted Answer

A)  is named the y-axis. 
B)  has no origin. 
C)  is named the x-axis. 
D)  measures time only in a time-series graph. 
E)  measures time in a cross-section and time-series graph. 
A)  is named the y-axis. 
B)  has no origin. 
C)  is named the x-axis. 
D)  measures time only in a time-series graph. 
E)  measures time in a cross-section and time-series graph.

Question 12

The slope of a line equals the change in the variable measured along the

Accepted Answer

A)  x-axis multiplied by the change in the variable measured along the y-axis. 
B)  y-axis minus the change in the variable measured along the x-axis. 
C)  x-axis divided by the change in the variable measured along the y-axis. 
D)  x-axis minus the change in the variable measured along the y-axis. 
E)  y-axis divided by the change in the variable measured along the x-axis. 
A)  x-axis multiplied by the change in the variable measured along the y-axis. 
B)  y-axis minus the change in the variable measured along the x-axis. 
C)  x-axis divided by the change in the variable measured along the y-axis. 
D)  x-axis minus the change in the variable measured along the y-axis. 
E)  y-axis divided by the change in the variable measured along the x-axis.

Question 13

What is NOT true about rational choice?

Accepted Answer

A)  It is the same for all individuals. 
B)  It can result in different decisions for different individuals. 
C)  It is a choice that uses the available resources to best achieve the objective of the person making the choice. 
D)  It might turn out not to have been the best choice after the event. 
E)  It involves comparing costs and benefits 
A)  It is the same for all individuals. 
B)  It can result in different decisions for different individuals. 
C)  It is a choice that uses the available resources to best achieve the objective of the person making the choice. 
D)  It might turn out not to have been the best choice after the event. 
E)  It involves comparing costs and benefits

Question 14

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 15

In the diagram above, which figure(s) show(s) a direct relationship between the variables?

Accepted Answer

A)  Only D 
B)  Only B 
C)  Both B and C 
D)  Both A and C 
E)  Only A 
A)  Only D 
B)  Only B 
C)  Both B and C 
D)  Both A and C 
E)  Only A

Question 16

-In the above figure, while drawing the line showing the relationship between the price of a kilogram of peanuts and the quantity sold, the

Accepted Answer

A)  the quantity of peanuts that farmers supply does not change. 
B)  price of a kilogram of pecans does not change. 
C)  price of a kilogram of peanuts does not change. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct. 
A)  the quantity of peanuts that farmers supply does not change. 
B)  price of a kilogram of pecans does not change. 
C)  price of a kilogram of peanuts does not change. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct.

Question 17

Going skiing will cost Adam $80 a day. He also loses $40 per day in wages because he has to take time off from work. Yet, Adam still decides to go skiing.

Accepted Answer

A)  He loses a total of $120 per day, so his decision is irrational. 
B)  Adam is definitely making a decision that is in the social interest. 
C)  Adam's lost $40 per day in wages is not an opportunity cost and so did not affect his decision. 
D)  His decision is rational if Adam's marginal benefit of spending a day skiing is greater than his marginal cost. 
E)  The $80 price of skiing is not an opportunity cost and so did not affect Adam's decision. 
A)  He loses a total of $120 per day, so his decision is irrational. 
B)  Adam is definitely making a decision that is in the social interest. 
C)  Adam's lost $40 per day in wages is not an opportunity cost and so did not affect his decision. 
D)  His decision is rational if Adam's marginal benefit of spending a day skiing is greater than his marginal cost. 
E)  The $80 price of skiing is not an opportunity cost and so did not affect Adam's decision.

Question 18

We are investigating the relationship among three variables. We have graphed two of them. Suppose that the variable that is not measured on the x-axis or the y-axis changes. Then, there is

Accepted Answer

A)  an omitted variable. 
B)  a violation of the absence of trend assumption. 
C)  a shift in the plotted curve. 
D)  a movement along the plotted curve. 
E)  no impact on the plotted curve because the variable is not measured on either of the axes. 
A)  an omitted variable. 
B)  a violation of the absence of trend assumption. 
C)  a shift in the plotted curve. 
D)  a movement along the plotted curve. 
E)  no impact on the plotted curve because the variable is not measured on either of the axes.

The question of 'What goods and services get produced?' most closely relates to which of the following issues?

Ali decides to attend the one-hour review session for microeconomics instead of working at his job. His job pays him $10 per hour. Ali's opportunity cost of attending the review session is

A steep slope in a time-series graph means the variable is

Which of the following is a microeconomic issue?

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

The ________ of something is the gain or pleasure that it brings.

Proponents of cuts to income tax rates argue that when income tax rates are cut, workers have an incentive to increase their work hours. This argument is based on the assumption that

Which of the following is a macroeconomic topic? i. China increases interest rates to slow its economic growth. ii. Parliament lowers tax rates to try to lower the unemployment rate. iii. Nissan decides to produce more electric Leaf models and fewer Altima sedans.

-The above figure shows the relationship between the price of a slice of pizza and how many slices of pizza Ricardo buys in a week. Between points A and B, the slope of the line equals

The graph shows a:

The vertical axis in a graph

The slope of a line equals the change in the variable measured along the

What is NOT true about rational choice?

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

In the diagram above, which figure(s) show(s) a direct relationship between the variables?

-In the above figure, while drawing the line showing the relationship between the price of a kilogram of peanuts and the quantity sold, the

Going skiing will cost Adam $80 a day. He also loses $40 per day in wages because he has to take time off from work. Yet, Adam still decides to go skiing.

We are investigating the relationship among three variables. We have graphed two of them. Suppose that the variable that is not measured on the x-axis or the y-axis changes. Then, there is

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

The question of 'What goods and services get produced?' most closely relates to which of the following issues?

Ali decides to attend the one-hour review session for microeconomics instead of working at his job. His job pays him $10 per hour. Ali's opportunity cost of attending the review session is

A steep slope in a time-series graph means the variable is

Which of the following is a microeconomic issue?

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

The ________ of something is the gain or pleasure that it brings.

Proponents of cuts to income tax rates argue that when income tax rates are cut, workers have an incentive to increase their work hours. This argument is based on the assumption that

Which of the following is a macroeconomic topic? i. China increases interest rates to slow its economic growth. ii. Parliament lowers tax rates to try to lower the unemployment rate. iii. Nissan decides to produce more electric Leaf models and fewer Altima sedans.

-The above figure shows the relationship between the price of a slice of pizza and how many slices of pizza Ricardo buys in a week. Between points A and B, the slope of the line equals

The graph shows a:

The vertical axis in a graph

The slope of a line equals the change in the variable measured along the

What is NOT true about rational choice?

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

In the diagram above, which figure(s) show(s) a direct relationship between the variables?

-In the above figure, while drawing the line showing the relationship between the price of a kilogram of peanuts and the quantity sold, the

Going skiing will cost Adam $80 a day. He also loses $40 per day in wages because he has to take time off from work. Yet, Adam still decides to go skiing.

We are investigating the relationship among three variables. We have graphed two of them. Suppose that the variable that is not measured on the x-axis or the y-axis changes. Then, there is

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