Question 1

Entrepreneurs can delegate every one of the following tasks to labor except:

Accepted Answer

A)  hiring and training new employees. 
B)  assuming business risk and uncertainty. 
C)  supervision of the production process. 
D)  researching ideas for new products. 
E)  marketing the goods and services produced. 
A)  hiring and training new employees. 
B)  assuming business risk and uncertainty. 
C)  supervision of the production process. 
D)  researching ideas for new products. 
E)  marketing the goods and services produced. B

Question 2

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. B

Question 3

A sub-discipline of economics that looks at the economy as a whole is:

Accepted Answer

A)  macroeconomics. 
B)  microeconomics. 
C)  positive economics. 
D)  normative economics. 
E)  impossible to model. 
A)  macroeconomics. 
B)  microeconomics. 
C)  positive economics. 
D)  normative economics. 
E)  impossible to model. A

Question 4

Which of the following is not an example of a factor of production?

Accepted Answer

A)  A forest. 
B)  A computer program. 
C)  A labor leader. 
D)  Dollars. 
A)  A forest. 
B)  A computer program. 
C)  A labor leader. 
D)  Dollars.

Question 5

Financial capital by itself is not a factor of production; instead it is only a paper claim on economic capital.

Accepted Answer

A) True 
 B)False

Question 6

Exhibit 1A-6  Straight line   In Exhibit 1A-6, as X increases along the horizontal axis, corresponding to points A-D on the line, the Y values remain unchanged at 20 units. The relationship between the X and Y variables is:

Accepted Answer

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

Question 7

The statement "The income tax is unfair to those who work hard to earn their incomes" is an example of positive economic analysis.

Accepted Answer

A) True 
 B)False

Question 8

Labor resources:

Accepted Answer

A)  include only physical activities. 
B)  are only counted as a resource if used in the production of other resources. 
C)  include only skilled labor. 
D)  include both physical and mental activities. 
E)  include human effort involved in the production of goods, but not services. 
A)  include only physical activities. 
B)  are only counted as a resource if used in the production of other resources. 
C)  include only skilled labor. 
D)  include both physical and mental activities. 
E)  include human effort involved in the production of goods, but not services.

Question 9

W hich of the following are factors of production? ​

Accepted Answer

A)  ​The outputs generated by the production process transforming land, labor, and capital in to goods and services. 
B)  ​Restricted to the land resources such as natural resources that are unimproved by human economic activity. 
C)  ​Land (natural resources), labor (human capital, entrepreneurship), and capital (constructed inputs such as factories). 
D)  ​Just labor and capital in industrialized countries, where natural resources are no longer used to produce goods and services. 
A)  ​The outputs generated by the production process transforming land, labor, and capital in to goods and services. 
B)  ​Restricted to the land resources such as natural resources that are unimproved by human economic activity. 
C)  ​Land (natural resources), labor (human capital, entrepreneurship), and capital (constructed inputs such as factories). 
D)  ​Just labor and capital in industrialized countries, where natural resources are no longer used to produce goods and services.

Question 10

The branch of economics that focuses on economywide variables like inflation and unemployment is called:

Accepted Answer

A)  macroeconomics. 
B)  microeconomics. 
C)  free-market economics. 
D)  aggregate economics. 
A)  macroeconomics. 
B)  microeconomics. 
C)  free-market economics. 
D)  aggregate economics.

Question 11

The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year. The head of a local labor union states that wage gains have not kept pace with the 3 percent rate of inflation. The Secretary's statement is a(n) ____ economic statement, and the labor head's statement is a(n) ____ economic statement.

Accepted Answer

A)  normative; normative 
B)  normative; positive 
C)  positive, normative 
D)  positive, positive 
E)  proper; improper 
A)  normative; normative 
B)  normative; positive 
C)  positive, normative 
D)  positive, positive 
E)  proper; improper

Question 12

A shift in a curve represents a change in:

Accepted Answer

A)  the variable on the horizontal axis. 
B)  the variable on the vertical axis. 
C)  a third variable that is not on either axis. 
D)  any variable that is relevant to the relationship being graphed. 
A)  the variable on the horizontal axis. 
B)  the variable on the vertical axis. 
C)  a third variable that is not on either axis. 
D)  any variable that is relevant to the relationship being graphed.

Question 13

Which one of the following is a positive economic statement?

Accepted Answer

A)  An increase in the minimum wage will reduce employment for teenagers. 
B)  The minimum wage should be increased. 
C)  Social justice will be served by increasing the minimum wage. 
D)  Thoughtful people oppose an increase in the minimum wage. 
A)  An increase in the minimum wage will reduce employment for teenagers. 
B)  The minimum wage should be increased. 
C)  Social justice will be served by increasing the minimum wage. 
D)  Thoughtful people oppose an increase in the minimum wage.

Question 14

Scarcity:

Accepted Answer

A)  is a problem only in the poorer countries of the world. 
B)  can be solved by rapid advances in technology. 
C)  is a problem that exists in every economy. 
D)  is not a problem for the very rich. 
A)  is a problem only in the poorer countries of the world. 
B)  can be solved by rapid advances in technology. 
C)  is a problem that exists in every economy. 
D)  is not a problem for the very rich.

Question 15

Which of the following is used to illustrate an independent relationship between two variables?

Accepted Answer

A)  An upward-sloping curve 
B)  A downward-sloping curve 
C)  A hill-shaped curve 
D)  A horizontal or vertical line 
A)  An upward-sloping curve 
B)  A downward-sloping curve 
C)  A hill-shaped curve 
D)  A horizontal or vertical line

Question 16

The branch of economics that focuses on decision making for the economy as a whole is called:

Accepted Answer

A)  normative economics. 
B)  macroeconomics. 
C)  microeconomics. 
D)  consumer economics. 
A)  normative economics. 
B)  macroeconomics. 
C)  microeconomics. 
D)  consumer economics.

Question 17

Which of the following is included in the study of macroeconomics?

Accepted Answer

A)  Wage rate of college students. 
B)  Prices of automobiles. 
C)  Unemployment in the nation. 
D)  Price of silver and gold. 
A)  Wage rate of college students. 
B)  Prices of automobiles. 
C)  Unemployment in the nation. 
D)  Price of silver and gold.

Question 18

Exhibit 1A-6  Straight line   Straight line A-D in Exhibit 1A-6 shows that:

Accepted Answer

A)  increasing value for X will increase the value of Y. 
B)  increasing value for X will decrease the value of Y. 
C)  increasing values for X does not affect the value of Y. 
D)  all of the above. 
A)  increasing value for X will increase the value of Y. 
B)  increasing value for X will decrease the value of Y. 
C)  increasing values for X does not affect the value of Y. 
D)  all of the above.

Question 19

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

Accepted Answer

A)  5. 
B)  1. 
C)  − 1. 
D)  − 5. 
A)  5. 
B)  1. 
C)  − 1. 
D)  − 5.

Question 20

Economists believe that scarcity forces everyone to:

Accepted Answer

A)  satisfy all their wants. 
B)  abandon consumer sovereignty. 
C)  lie about their wants. 
D)  create unlimited resources. 
E)  make choices. 
A)  satisfy all their wants. 
B)  abandon consumer sovereignty. 
C)  lie about their wants. 
D)  create unlimited resources. 
E)  make choices.

Exam 1: Introducing the Economic Way of Thinking

Entrepreneurs can delegate every one of the following tasks to labor except:

An entrepreneur is a(n):

A sub-discipline of economics that looks at the economy as a whole is:

Which of the following is not an example of a factor of production?

Financial capital by itself is not a factor of production; instead it is only a paper claim on economic capital.

Exhibit 1A-6 Straight line In Exhibit 1A-6, as X increases along the horizontal axis, corresponding to points A-D on the line, the Y values remain unchanged at 20 units. The relationship between the X and Y variables is:

The statement "The income tax is unfair to those who work hard to earn their incomes" is an example of positive economic analysis.

Labor resources:

W hich of the following are factors of production? ​

The branch of economics that focuses on economywide variables like inflation and unemployment is called:

A shift in a curve represents a change in:

Which one of the following is a positive economic statement?

Scarcity:

Which of the following is used to illustrate an independent relationship between two variables?

The branch of economics that focuses on decision making for the economy as a whole is called:

Which of the following is included in the study of macroeconomics?

Exhibit 1A-6 Straight line Straight line A-D in Exhibit 1A-6 shows that:

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

Economists believe that scarcity forces everyone to:

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters

W hich of the following are factors of production?