Question 1

Opportunity costs exist because

Accepted Answer

A)  there is a price attached to virtually every good or service 
B)  technology is not fixed in the economy 
C)  people have different tastes and preferences 
D)  limited resources cannot satisfy all of the wants in society 
E)  the production possibilities frontier is bowed in with respect to the origin 
A)  there is a price attached to virtually every good or service 
B)  technology is not fixed in the economy 
C)  people have different tastes and preferences 
D)  limited resources cannot satisfy all of the wants in society 
E)  the production possibilities frontier is bowed in with respect to the origin D

Question 2

Microeconomics

Accepted Answer

A)  addresses scarcity from a global perspective 
B)  examines how individuals,households,and firms make economic decisions 
C)  is purely theoretical and has little value in explaining real-world phenomena 
D)  focuses on what is happening in the economy as a whole 
E)  answers the fundamental economic questions of how,when,where,and why 
A)  addresses scarcity from a global perspective 
B)  examines how individuals,households,and firms make economic decisions 
C)  is purely theoretical and has little value in explaining real-world phenomena 
D)  focuses on what is happening in the economy as a whole 
E)  answers the fundamental economic questions of how,when,where,and why B

Question 3

The opportunity cost of any activity can be measured by the

Accepted Answer

A)  value of the best alternative to that activity 
B)  price (or monetary costs)of the activity 
C)  level of technology 
D)  time needed to select among various alternatives 
E)  fringe benefits associated with the activity 
A)  value of the best alternative to that activity 
B)  price (or monetary costs)of the activity 
C)  level of technology 
D)  time needed to select among various alternatives 
E)  fringe benefits associated with the activity A

Question 4

In one hour,George can fix 4 flat tires or type 200 words.His opportunity cost of fixing a flat tire is

Accepted Answer

A)  200 words 
B)  4 flat tires 
C)  1 word 
D)  50 words 
E)  800 words 
A)  200 words 
B)  4 flat tires 
C)  1 word 
D)  50 words 
E)  800 words

Question 5

The unemployment rate for the economy as a whole is a(n)

Accepted Answer

A)  normative value judgment 
B)  positive value judgment 
C)  microeconomic statistic 
D)  macroeconomic statistic 
E)  example of an economic model 
A)  normative value judgment 
B)  positive value judgment 
C)  microeconomic statistic 
D)  macroeconomic statistic 
E)  example of an economic model

Question 6

The core problem faced by all economic systems is that

Accepted Answer

A)  scarcity forces each of us to make choices 
B)  the government must intervene to allocate scarce resources 
C)  of matching people's wants with their needs 
D)  of allocating unlimited resources 
E)  it needs to maximize each household's material standard of living 
A)  scarcity forces each of us to make choices 
B)  the government must intervene to allocate scarce resources 
C)  of matching people's wants with their needs 
D)  of allocating unlimited resources 
E)  it needs to maximize each household's material standard of living

Question 7

The opportunity cost of a particular activity is the sum of the benefits that could have been received from all foregone activities.

Accepted Answer

A) True 
 B)False

Question 8

An economic model can be described as

Accepted Answer

A)  an abstract representation of reality 
B)  a detailed description of some economic phenomenon 
C)  something that is often more complex than the real-world phenomenon it represents 
D)  a vehicle for making positive economic statements 
E)  a vehicle for making normative economic statements 
A)  an abstract representation of reality 
B)  a detailed description of some economic phenomenon 
C)  something that is often more complex than the real-world phenomenon it represents 
D)  a vehicle for making positive economic statements 
E)  a vehicle for making normative economic statements

Question 9

High-income people will sometimes pay higher prices at convenience stores for goods that are available at discount stores.They do this because

Accepted Answer

A)  they are irrational 
B)  their opportunity cost of time is low 
C)  crowded and understaffed discount stores impose higher time costs 
D)  they like to be seen paying more money 
E)  they do not mind wasting time 
A)  they are irrational 
B)  their opportunity cost of time is low 
C)  crowded and understaffed discount stores impose higher time costs 
D)  they like to be seen paying more money 
E)  they do not mind wasting time

Question 10

Macroeconomic models focus on the behavior of

Accepted Answer

A)  individual households,business firms,and government agencies 
B)  individual nations in the foreign trade sector 
C)  the entire economy 
D)  large industrial sectors,such as manufacturing 
E)  individual business firms and government agencies 
A)  individual households,business firms,and government agencies 
B)  individual nations in the foreign trade sector 
C)  the entire economy 
D)  large industrial sectors,such as manufacturing 
E)  individual business firms and government agencies

Question 11

Assume that Kelly's various possible activities are mutually exclusive.The opportunity cost from choosing one activity equals the

Accepted Answer

A)  summed value of all her alternative activities 
B)  summed value of all her alternative activities minus the value of the chosen activity 
C)  value of the next most valuable alternative activity 
D)  value of the next most valuable alternative activity minus the value of the chosen activity 
E)  summed value of all her alternative activities minus the value of the next most valuable alternative activity 
A)  summed value of all her alternative activities 
B)  summed value of all her alternative activities minus the value of the chosen activity 
C)  value of the next most valuable alternative activity 
D)  value of the next most valuable alternative activity minus the value of the chosen activity 
E)  summed value of all her alternative activities minus the value of the next most valuable alternative activity

Question 12

Normative economics deals with

Accepted Answer

A)  social norms and customs that influence economic behavior 
B)  norms of behavior that can be taken as facts 
C)  statements of fact 
D)  statements about the value of a proposed policy 
E)  government rules and regulations that drag down the economy 
A)  social norms and customs that influence economic behavior 
B)  norms of behavior that can be taken as facts 
C)  statements of fact 
D)  statements about the value of a proposed policy 
E)  government rules and regulations that drag down the economy

Question 13

A statement of opinion about which model best explains the economy is

Accepted Answer

A)  an abstraction 
B)  a positive statement 
C)  a normative statement 
D)  a philosophical conundrum 
E)  empirically verifiable 
A)  an abstraction 
B)  a positive statement 
C)  a normative statement 
D)  a philosophical conundrum 
E)  empirically verifiable

Question 14

$$\begin{array} { | c | c | c | } 
\hline { \text { Figure 1-1 } } \
\hline \begin{array} { c } 
\text { Haurs } \
\text { Studying }
\end{array} & \begin{array} { c } 
\text { Physics } \
\text { Scare }
\end{array} & \begin{array} { c } 
\text { Gedlay } \
\text { Scare }
\end{array} \
\hline [ & 4 [ & 3 [ \
\hline 1 & 50 & 60 \
\hline 2 & 60 & 80 \
\hline 3 & 85 & 90 \
\hline 4 & 90 & 100 \
\hline
\end{array}$$
-Grant has four hours of time to divide between studying for a physics exam and a geology exam.Figure 1-1 shows his estimates of the grades (on a scale of 0 to 100)that he could earn from studying a particular number of hours on each subject.If he plans on spending three hours studying physics,what would be his opportunity cost of an additional hour studying physics?

Accepted Answer

A)  10 points on his geology exam 
B)  20 points on his geology exam 
C)  30 points on his geology exam 
D)  25 points on his physics exam 
E)  85 points on his physics exam 
A)  10 points on his geology exam 
B)  20 points on his geology exam 
C)  30 points on his geology exam 
D)  25 points on his physics exam 
E)  85 points on his physics exam

Question 15

All the problems studied in economics arise from

Accepted Answer

A)  the unequal distribution of income 
B)  overpopulation 
C)  the scarcity of resources 
D)  inappropriate government action 
E)  war 
A)  the unequal distribution of income 
B)  overpopulation 
C)  the scarcity of resources 
D)  inappropriate government action 
E)  war

Question 16

A newspaper headline announces that "more college graduates than ever are in the labor force." This is an example of

Accepted Answer

A)  microeconomic analysis 
B)  an abstraction 
C)  a value judgment 
D)  a positive statement 
E)  macroeconomic analysis 
A)  microeconomic analysis 
B)  an abstraction 
C)  a value judgment 
D)  a positive statement 
E)  macroeconomic analysis

Question 17

The statement "The unemployment rate in the U.S.is 5 percent" is

Accepted Answer

A)  a statement of opinion 
B)  a positive statement that can be falsified 
C)  lacking proper microeconomic foundations 
D)  a statistical anomaly 
E)  a philosophical difference of opinions regarding the nature and significance of statistical inference 
A)  a statement of opinion 
B)  a positive statement that can be falsified 
C)  lacking proper microeconomic foundations 
D)  a statistical anomaly 
E)  a philosophical difference of opinions regarding the nature and significance of statistical inference

Question 18

Kate takes a part-time job and the sacrifice of study time causes her grade point average to fall from 3.5 to 2.9.Assume that the grade point average would have stayed at 3.5 if study time had not been reduced.The opportunity cost of having taken the job is the

Accepted Answer

A)  cost of tuition 
B)  3.5 grade point average 
C)  0.6 decrease in the grade point average 
D)  2.9 grade point average 
E)  money earned from the part-time job 
A)  cost of tuition 
B)  3.5 grade point average 
C)  0.6 decrease in the grade point average 
D)  2.9 grade point average 
E)  money earned from the part-time job

Question 19

Which of the following disciplines is not a social science?

Accepted Answer

A)  psychology 
B)  mathematics 
C)  economics 
D)  political science 
E)  sociology 
A)  psychology 
B)  mathematics 
C)  economics 
D)  political science 
E)  sociology

Question 20

Society's resources include

Accepted Answer

A)  land and labor 
B)  labor and machinery 
C)  land,labor,and capital 
D)  land,capital,and money 
E)  labor,capital,and money 
A)  land and labor 
B)  labor and machinery 
C)  land,labor,and capital 
D)  land,capital,and money 
E)  labor,capital,and money

Opportunity costs exist because

Microeconomics

The opportunity cost of any activity can be measured by the

In one hour,George can fix 4 flat tires or type 200 words.His opportunity cost of fixing a flat tire is

The unemployment rate for the economy as a whole is a(n)

The core problem faced by all economic systems is that

The opportunity cost of a particular activity is the sum of the benefits that could have been received from all foregone activities.

An economic model can be described as

High-income people will sometimes pay higher prices at convenience stores for goods that are available at discount stores.They do this because

Macroeconomic models focus on the behavior of

Assume that Kelly's various possible activities are mutually exclusive.The opportunity cost from choosing one activity equals the

Normative economics deals with

A statement of opinion about which model best explains the economy is

All the problems studied in economics arise from

A newspaper headline announces that "more college graduates than ever are in the labor force." This is an example of

The statement "The unemployment rate in the U.S.is 5 percent" is

Kate takes a part-time job and the sacrifice of study time causes her grade point average to fall from 3.5 to 2.9.Assume that the grade point average would have stayed at 3.5 if study time had not been reduced.The opportunity cost of having taken the job is the

Which of the following disciplines is not a social science?

Society's resources include

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters

Exam 1: What is Economics?

Opportunity costs exist because

Microeconomics

The opportunity cost of any activity can be measured by the

In one hour,George can fix 4 flat tires or type 200 words.His opportunity cost of fixing a flat tire is

The unemployment rate for the economy as a whole is a(n)

The core problem faced by all economic systems is that

The opportunity cost of a particular activity is the sum of the benefits that could have been received from all foregone activities.

An economic model can be described as

High-income people will sometimes pay higher prices at convenience stores for goods that are available at discount stores.They do this because

Macroeconomic models focus on the behavior of

Assume that Kelly's various possible activities are mutually exclusive.The opportunity cost from choosing one activity equals the

Normative economics deals with

A statement of opinion about which model best explains the economy is

All the problems studied in economics arise from

A newspaper headline announces that "more college graduates than ever are in the labor force." This is an example of

The statement "The unemployment rate in the U.S.is 5 percent" is

Kate takes a part-time job and the sacrifice of study time causes her grade point average to fall from 3.5 to 2.9.Assume that the grade point average would have stayed at 3.5 if study time had not been reduced.The opportunity cost of having taken the job is the

Which of the following disciplines is not a social science?

Society's resources include

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters