Question 1

The study of global businesses such as Apple Inc is one major focus of macroeconomic analysis.

Accepted Answer

A) True 
 B)False

Question 2

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities schedule.   The total opportunity cost of one unit(s)of tanks is

Accepted Answer

A) 100 units of autos. 
B) 50 units of autos. 
C) 1,000 units of autos. 
D) 950 units of autos. 
A) 100 units of autos. 
B) 50 units of autos. 
C) 1,000 units of autos. 
D) 950 units of autos.

Question 3

The process by which capital goods are accumulated is known as investment.

Accepted Answer

A) True 
 B)False

Question 4

A linear relationship only refers to one whose graph is either vertical or horizontal.

Accepted Answer

A) True 
 B)False

Question 5

Rosa works at a gelato shop and observes that the number of people buying gelato varies greatly from day to day. For a couple of weeks, she has recorded the number of people at the shop each day, as well as the daily temperature, and has observed a positive relationship between temperature and the number of customers. Based on her observations, Rosa should

Accepted Answer

A) conclude definitively that people buy more gelato when the temperature rises. 
B) determine if there are other relevant factors and attempt to hold these constant before drawing conclusions. 
C) continue to gather data on the number of visitors and daily temperatures, because eventually other relevant variables will not matter. 
D) throw out the data if it does not show a perfect relationship between buying habits and temperature. 
A) conclude definitively that people buy more gelato when the temperature rises. 
B) determine if there are other relevant factors and attempt to hold these constant before drawing conclusions. 
C) continue to gather data on the number of visitors and daily temperatures, because eventually other relevant variables will not matter. 
D) throw out the data if it does not show a perfect relationship between buying habits and temperature.

Question 6

If A is the dependent variable and B is the independent variable, then a change in A results in a change in B.

Accepted Answer

A) True 
 B)False

Question 7

Normative statements are concerned primarily with

Accepted Answer

A) facts and theories. 
B) what ought to be. 
C) what is. 
D) rational choice involving costs and benefits. 
A) facts and theories. 
B) what ought to be. 
C) what is. 
D) rational choice involving costs and benefits.

Question 8

In drawing a particular budget line, money income and the prices of the two products are fixed.

Accepted Answer

A) True 
 B)False

Question 9

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities schedule.   The marginal opportunity cost of the fifth unit of tanks is

Accepted Answer

A) shift the production possibilities curve from PP1 to PP2. 
B) shift the production possibilities curve from PP2 to PP1. 
C) move the economy from A to C along PP1. 
D) move the economy from A, B, or C on PP1 to D. 
A) shift the production possibilities curve from PP1 to PP2. 
B) shift the production possibilities curve from PP2 to PP1. 
C) move the economy from A to C along PP1. 
D) move the economy from A, B, or C on PP1 to D.

Question 10

If economic resources were perfectly adaptable to alternative uses, then there would be constant opportunity costs along the production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 11

Rational individuals may make different choices because their preferences and circumstances differ.

Accepted Answer

A) True 
 B)False

Question 12

The role of an assumption in an economic theory is to

Accepted Answer

A) add realism. 
B) prove the theory. 
C) cover special cases. 
D) simplify the complex reality. 
A) add realism. 
B) prove the theory. 
C) cover special cases. 
D) simplify the complex reality.

Question 13

Another way of saying " ceteris paribus" is

Accepted Answer

A) other things equal. 
B) in general. 
C) in reality. 
D) because of this. 
A) other things equal. 
B) in general. 
C) in reality. 
D) because of this.

Question 14

A nation's production possibilities curve shows the maximum combinations of resources that a nation can use.

Accepted Answer

A) True 
 B)False

Question 15

In the graph for the linear equation S = 15 − 5T, with T on the horizontal axis, the vertical intercept of the graph is −5.

Accepted Answer

A) True 
 B)False

Question 16

The present choice of position on the production possibilities curve will not influence the future location of the curve.

Accepted Answer

A) True 
 B)False

Question 17

Although sleeping in on a work day or school day has an opportunity cost, sleeping late on the weekend does not.

Accepted Answer

A) True 
 B)False

Question 18

Normative statements are expressions of facts.

Accepted Answer

A) True 
 B)False

Question 19

Assume that a consumer purchases only two products and there is a decrease in the consumer's income. The prices of the two products stay constant. The decrease in income will result in

Accepted Answer

A) a shift of the budget line inward to the left. 
B) a shift of the budget line outward to the right. 
C) a decrease in the slope of the budget line. 
D) an increase in the slope of the budget line. 
A) a shift of the budget line inward to the left. 
B) a shift of the budget line outward to the right. 
C) a decrease in the slope of the budget line. 
D) an increase in the slope of the budget line.

Question 20

Macroeconomics explains the behavior of individual households and business firms; microeconomics is concerned with the behavior of aggregates or the economy as a whole.

Accepted Answer

A) True 
 B)False

Exam 1: Limits, Alternatives, and Choices

The study of global businesses such as Apple Inc is one major focus of macroeconomic analysis.

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities schedule. The total opportunity cost of one unit(s)of tanks is

The process by which capital goods are accumulated is known as investment.

A linear relationship only refers to one whose graph is either vertical or horizontal.

If A is the dependent variable and B is the independent variable, then a change in A results in a change in B.

Normative statements are concerned primarily with

In drawing a particular budget line, money income and the prices of the two products are fixed.

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities schedule. The marginal opportunity cost of the fifth unit of tanks is

If economic resources were perfectly adaptable to alternative uses, then there would be constant opportunity costs along the production possibilities curve.

Rational individuals may make different choices because their preferences and circumstances differ.

The role of an assumption in an economic theory is to

Another way of saying " ceteris paribus" is

A nation's production possibilities curve shows the maximum combinations of resources that a nation can use.

In the graph for the linear equation S = 15 − 5T, with T on the horizontal axis, the vertical intercept of the graph is −5.

The present choice of position on the production possibilities curve will not influence the future location of the curve.

Although sleeping in on a work day or school day has an opportunity cost, sleeping late on the weekend does not.

Normative statements are expressions of facts.

Assume that a consumer purchases only two products and there is a decrease in the consumer's income. The prices of the two products stay constant. The decrease in income will result in

Macroeconomics explains the behavior of individual households and business firms; microeconomics is concerned with the behavior of aggregates or the economy as a whole.

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, 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

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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