Question 1

Scarcity is a problem:

Accepted Answer

A)  measured by the amount of goods available. 
B)  of the poor, but not the rich. 
C)  because human wants are unlimited while resources are limited. 
D)  only in industrialized economies. 
A)  measured by the amount of goods available. 
B)  of the poor, but not the rich. 
C)  because human wants are unlimited while resources are limited. 
D)  only in industrialized economies.

Question 2

Exhibit 1A-8  Straight line relationship   According to the Exhibit 1A-8, the relationship between the price and quantity purchased of pizza is:

Accepted Answer

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

Question 3

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

Accepted Answer

A)  positive. 
B)  zero. 
C)  negative. 
D)  variable. 
A)  positive. 
B)  zero. 
C)  negative. 
D)  variable.

Question 4

The silly clothes worn by a circus clown are an example of:

Accepted Answer

A)  a natural resource. 
B)  capital goods. 
C)  labor. 
D)  entrepreneurship. 
A)  a natural resource. 
B)  capital goods. 
C)  labor. 
D)  entrepreneurship.

Question 5

The television network newscaster reports that the national inflation rate the past year equaled 4 percent. This report would be of particular interest to a ____.

Accepted Answer

A)  microeconomist. 
B)  normative economist. 
C)  macroeconomist. 
D)  Ceteris paribus . 
E)  social science economist. 
A)  microeconomist. 
B)  normative economist. 
C)  macroeconomist. 
D)  Ceteris paribus . 
E)  social science economist.

Question 6

An inverse relationship exists when:

Accepted Answer

A)  there is no association between two variables. 
B)  one variable increases and there is no change in the other variable. 
C)  one variable increases and the other variable increases. 
D)  one variable increases and the other variable decreases. 
A)  there is no association between two variables. 
B)  one variable increases and there is no change in the other variable. 
C)  one variable increases and the other variable increases. 
D)  one variable increases and the other variable decreases.

Question 7

A change in a third variable not on either axis of a graph is illustrated with a:

Accepted Answer

A)  horizontal or vertical line. 
B)  movement along a curve. 
C)  shift of a curve. 
D)  point of intersection. 
A)  horizontal or vertical line. 
B)  movement along a curve. 
C)  shift of a curve. 
D)  point of intersection.

Question 8

Money is one of our nation's resources (factors or means of production).

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a statement of positive economics?

Accepted Answer

A)  Too much government spending is the biggest problem facing the U.S. economy. 
B)  Creating jobs is the most serious problem facing the U.S. economy. 
C)  Raising taxes provides additional revenue that should be used to finance health care. 
D)  If taxes are over 50 percent of national income, job creation falls. 
A)  Too much government spending is the biggest problem facing the U.S. economy. 
B)  Creating jobs is the most serious problem facing the U.S. economy. 
C)  Raising taxes provides additional revenue that should be used to finance health care. 
D)  If taxes are over 50 percent of national income, job creation falls.

Question 10

Which of the following statements is correct?

Accepted Answer

A)  Slope is the ratio of the vertical change (the rise or fall) to the horizontal change (the run). 
B)  A direct relationship is one in which two variables change in the same direction. 
C)  An inverse relationship is one in which two variables change in opposite directions. 
D)  An independent relationship is one in which two variables are unrelated. 
E)  All of the above. 
A)  Slope is the ratio of the vertical change (the rise or fall) to the horizontal change (the run). 
B)  A direct relationship is one in which two variables change in the same direction. 
C)  An inverse relationship is one in which two variables change in opposite directions. 
D)  An independent relationship is one in which two variables are unrelated. 
E)  All of the above.

Question 11

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

Accepted Answer

A)  Salaries of college professors. 
B)  Computer prices. 
C)  Unemployment in the nation. 
D)  Silver prices. 
A)  Salaries of college professors. 
B)  Computer prices. 
C)  Unemployment in the nation. 
D)  Silver prices.

Question 12

Microeconomics only looks at the behavior of one consumer or one firm in a market, while macroeconomics looks at the behavior of an entire industry or group of consumers.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of a positive economic statement?

Accepted Answer

A)  The economy's real output increased at about 3 percent last year and the unemployment rate decreased. 
B)  A central bank should not print too much money because inflation could result. 
C)  Congress should stabilize the social security system by raising taxes now. 
D)  The government farm products surplus should be distributed to the needy. 
A)  The economy's real output increased at about 3 percent last year and the unemployment rate decreased. 
B)  A central bank should not print too much money because inflation could result. 
C)  Congress should stabilize the social security system by raising taxes now. 
D)  The government farm products surplus should be distributed to the needy.

Question 14

Exhibit 1A-6  Straight line   In Exhibit 1A-6, the slope of the straight line A-D is:

Accepted Answer

A)  0. 
B)  1. 
C)  1/2. 
D)  − 1. 
A)  0. 
B)  1. 
C)  1/2. 
D)  − 1.

Question 15

The perpetual problem in economics is:

Accepted Answer

A)  our inability to work together effectively. 
B)  our inability to satisfy everyone's wants with the available resources. 
C)  a recognition of continual class differences. 
D)  our inability to utilize resources efficiently. 
E)  likely to be solved in resource-rich countries. 
A)  our inability to work together effectively. 
B)  our inability to satisfy everyone's wants with the available resources. 
C)  a recognition of continual class differences. 
D)  our inability to utilize resources efficiently. 
E)  likely to be solved in resource-rich countries.

Question 16

Which of the following would an economist classify as capital?

Accepted Answer

A)  100 shares of Microsoft stock. 
B)  $50 bill. 
C)  credit card. 
D)  lawyer's personal computer. 
A)  100 shares of Microsoft stock. 
B)  $50 bill. 
C)  credit card. 
D)  lawyer's personal computer.

Question 17

Economics is the study of people making choices faced with the problem of unlimited wants and limited resources.

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 1A-2  Straight line   In Exhibit 1A-2, as X increases along the horizontal axis, corresponding to points C-D on the line, the Y values increase. The relationship between the X and Y variables is:

Accepted Answer

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

Question 19

Which of the following is a statement of positive economics?

Accepted Answer

A)  Government control of rent is a fair way to help poor people afford housing. 
B)  Government control of rent keeps landlords from charging too much rent. 
C)  Government control of rent decreases the number of new apartments constructed. 
D)  Government control of rent is an injustice. 
A)  Government control of rent is a fair way to help poor people afford housing. 
B)  Government control of rent keeps landlords from charging too much rent. 
C)  Government control of rent decreases the number of new apartments constructed. 
D)  Government control of rent is an injustice.

Question 20

Exhibit 1A-1  Straight line   Straight line AB in Exhibit 1A-1 shows that:

Accepted Answer

A)  increasing values for X will decrease the values of Y. 
B)  decreasing values for X will increase the values of Y. 
C)  there is a direct relationship between X and Y. 
D)  all of the above. 
A)  increasing values for X will decrease the values of Y. 
B)  decreasing values for X will increase the values of Y. 
C)  there is a direct relationship between X and Y. 
D)  all of the above.

Exam 1: Introducing the Economic Way of Thinking

Scarcity is a problem:

Exhibit 1A-8 Straight line relationship According to the Exhibit 1A-8, the relationship between the price and quantity purchased of pizza is:

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

The silly clothes worn by a circus clown are an example of:

The television network newscaster reports that the national inflation rate the past year equaled 4 percent. This report would be of particular interest to a ____.

An inverse relationship exists when:

A change in a third variable not on either axis of a graph is illustrated with a:

Money is one of our nation's resources (factors or means of production).

Which of the following is a statement of positive economics?

Which of the following statements is correct?

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

Microeconomics only looks at the behavior of one consumer or one firm in a market, while macroeconomics looks at the behavior of an entire industry or group of consumers.

Which of the following is an example of a positive economic statement?

Exhibit 1A-6 Straight line In Exhibit 1A-6, the slope of the straight line A-D is:

The perpetual problem in economics is:

Which of the following would an economist classify as capital?

Economics is the study of people making choices faced with the problem of unlimited wants and limited resources.

Exhibit 1A-2 Straight line In Exhibit 1A-2, as X increases along the horizontal axis, corresponding to points C-D on the line, the Y values increase. The relationship between the X and Y variables is:

Which of the following is a statement of positive economics?

Exhibit 1A-1 Straight line Straight line AB in Exhibit 1A-1 shows that:

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

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