Question 1

In order to determine whether to major in economics,a rational individual compares the ________ of the decision.

Accepted Answer

A)  marginal benefit and marginal cost 
B)  opportunity cost and the sunk cost 
C)  positive benefits and normative costs 
D)  normative benefits and positive costs 
E)  self-interest and social-interest 
A)  marginal benefit and marginal cost 
B)  opportunity cost and the sunk cost 
C)  positive benefits and normative costs 
D)  normative benefits and positive costs 
E)  self-interest and social-interest

Question 2

If Jessie studies economics for two hours instead of going to the movies with her friends,then

Accepted Answer

A)  the benefit of studying is the missed movie. 
B)  the opportunity cost of studying is the missed movie. 
C)  Jesse definitely is making a rational choice. 
D)  Jessie is ignoring a sunk cost. 
E)  Jessie is not responding to any incentives. 
A)  the benefit of studying is the missed movie. 
B)  the opportunity cost of studying is the missed movie. 
C)  Jesse definitely is making a rational choice. 
D)  Jessie is ignoring a sunk cost. 
E)  Jessie is not responding to any incentives.

Question 3

For spring break,Melanie will either stay home or go to Daytona Beach.At home,Melanie pays $10 per day for food and earns $90 a day at her job.At Daytona Beach,Melanie will stay with friends and so has no lodging cost.She will pay $20 per day for food.In terms of dollars,Melanie's opportunity cost per day of going to Daytona Beach is how much?

Accepted Answer

Melanie's opportunity cost of

Question 4

Amy can study for an hour or spend that hour sleeping or going out for dinner.If she decides to study for the hour,the opportunity cost of the hour spent studying is

Accepted Answer

A)  definitely going to sleep. 
B)  studying since this is the choice she opted for. 
C)  sleeping or going out for dinner, whichever she would have preferred the most. 
D)  sleeping and going out for dinner. 
E)  definitely going out to dinner because she must eat at some time. 
A)  definitely going to sleep. 
B)  studying since this is the choice she opted for. 
C)  sleeping or going out for dinner, whichever she would have preferred the most. 
D)  sleeping and going out for dinner. 
E)  definitely going out to dinner because she must eat at some time.

Question 5

When Ferrari decides to produce 1,200 360 Modenas each year,Ferrari is answering the ________ question.

Accepted Answer

A)  for whom 
B)  how 
C)  what 
D)  why 
E)  scarcity 
A)  for whom 
B)  how 
C)  what 
D)  why 
E)  scarcity

Question 6

Correlation means

Accepted Answer

A)  holding everything else constant. 
B)  after this, therefore because of this. 
C)  the values of two variables move in a predictable and related way. 
D)  making statements about how the world should be. 
E)  the same as causation. 
A)  holding everything else constant. 
B)  after this, therefore because of this. 
C)  the values of two variables move in a predictable and related way. 
D)  making statements about how the world should be. 
E)  the same as causation.

Question 7

Which of the following statements is correct?

Accepted Answer

A)  When a line slopes downwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. 
B)  When a line slopes upwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. 
C)  The higher the temperature, the more ice cream people consume. Thus the temperature and ice cream consumption are inversely related. 
D)  If two variables are directly related, a graph of the two variables has a negative slope. 
E)  None of the above statements is correct. 
A)  When a line slopes downwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. 
B)  When a line slopes upwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. 
C)  The higher the temperature, the more ice cream people consume. Thus the temperature and ice cream consumption are inversely related. 
D)  If two variables are directly related, a graph of the two variables has a negative slope. 
E)  None of the above statements is correct.

Question 8

What is the difference between microeconomics and macroeconomics?

Accepted Answer

Microeconomics studies the decisions of

Question 9

Which of the following statements is a normative statement?

Accepted Answer

A)  Inflation has been at an all-time low this year. 
B)  The minimum wage should be increased to $8.50 per hour. 
C)  Unemployment this month has increased by less than 0.5 percentage point.. 
D)  Additional spending on education has not produced any rise in test scores. 
E)  Pepsi is less expensive than Coke this week. 
A)  Inflation has been at an all-time low this year. 
B)  The minimum wage should be increased to $8.50 per hour. 
C)  Unemployment this month has increased by less than 0.5 percentage point.. 
D)  Additional spending on education has not produced any rise in test scores. 
E)  Pepsi is less expensive than Coke this week.

Question 10

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

Accepted Answer

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

Question 11

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

Accepted Answer

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

Question 12

-What does the slope of the curved line at point A shown in the above figure equal?

Accepted Answer

The slope of a curved line equals the sl

Question 13

The decision to go to graduate school is a rational one for a college student if the

Accepted Answer

A)  cost is not too great. 
B)  marginal cost exceeds the marginal benefit of graduate school. 
C)  marginal benefit of graduate school exceeds the marginal cost. 
D)  opportunity cost of graduate school equals zero. 
E)  student carefully compared the social benefits of this decision. 
A)  cost is not too great. 
B)  marginal cost exceeds the marginal benefit of graduate school. 
C)  marginal benefit of graduate school exceeds the marginal cost. 
D)  opportunity cost of graduate school equals zero. 
E)  student carefully compared the social benefits of this decision.

Question 14

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

Question 15

A time-series graph measures

Accepted Answer

A)  the value of one variable against the value of another variable. 
B)  the value of an economic variable for different groups in a population at a point in time. 
C)  time on the x-axis and the variable or variables in which we are interested on the y-axis. 
D)  time on the y-axis and the variable or variables in which we are interested on the x-axis. 
E)  time on both the x-axis and y-axis and the variable or variables in which we are interested in the rest of the figure. 
A)  the value of one variable against the value of another variable. 
B)  the value of an economic variable for different groups in a population at a point in time. 
C)  time on the x-axis and the variable or variables in which we are interested on the y-axis. 
D)  time on the y-axis and the variable or variables in which we are interested on the x-axis. 
E)  time on both the x-axis and y-axis and the variable or variables in which we are interested in the rest of the figure.

Question 16

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

Accepted Answer

A)  Voter ID laws should be strictly enforced in all states. 
B)  Illegal immigration is the biggest threat to national security that we face today. 
C)  Medicare recipients should only be allowed to visit a doctor for non-emergency reasons on Mondays, Wednesdays, and Fridays. 
D)  The death penalty is a strong deterrent to violent criminal activity. 
E)  The Affordable Care Act should be repealed. 
A)  Voter ID laws should be strictly enforced in all states. 
B)  Illegal immigration is the biggest threat to national security that we face today. 
C)  Medicare recipients should only be allowed to visit a doctor for non-emergency reasons on Mondays, Wednesdays, and Fridays. 
D)  The death penalty is a strong deterrent to violent criminal activity. 
E)  The Affordable Care Act should be repealed.

Question 17

An independent relationship between two variables is shown in a graph by

Accepted Answer

A)  an upward-sloping line. 
B)  a horizontal or a vertical line. 
C)  a downward-sloping line. 
D)  a steeply sloped line. 
E)  any straight line curve. 
A)  an upward-sloping line. 
B)  a horizontal or a vertical line. 
C)  a downward-sloping line. 
D)  a steeply sloped line. 
E)  any straight line curve.

Question 18

The benefit from a good or service that you purchase is measured by

Accepted Answer

A)  the dollar amount that is paid for the good or service. 
B)  the dollar amount you can get by selling the good or service. 
C)  what you are willing to give up to obtain the good or service. 
D)  how strong the incentives were that lead to buying the good or service. 
E)  None of the above answers is correct because there is no way to measure the benefit you receive from purchasing a good or service. 
A)  the dollar amount that is paid for the good or service. 
B)  the dollar amount you can get by selling the good or service. 
C)  what you are willing to give up to obtain the good or service. 
D)  how strong the incentives were that lead to buying the good or service. 
E)  None of the above answers is correct because there is no way to measure the benefit you receive from purchasing a good or service.

Question 19

What is NOT true about rational choice?

Accepted Answer

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

Question 20

What is the difference between positive and normative statements?

Accepted Answer

Positive statements tell what is and nor

In order to determine whether to major in economics,a rational individual compares the ________ of the decision.

If Jessie studies economics for two hours instead of going to the movies with her friends,then

Amy can study for an hour or spend that hour sleeping or going out for dinner.If she decides to study for the hour,the opportunity cost of the hour spent studying is

When Ferrari decides to produce 1,200 360 Modenas each year,Ferrari is answering the ________ question.

Correlation means

Which of the following statements is correct?

What is the difference between microeconomics and macroeconomics?

Which of the following statements is a normative statement?

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

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

-What does the slope of the curved line at point A shown in the above figure equal?

The decision to go to graduate school is a rational one for a college student if the

Proponents of cuts in 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

A time-series graph measures

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

An independent relationship between two variables is shown in a graph by

The benefit from a good or service that you purchase is measured by

What is NOT true about rational choice?

What is the difference between positive and normative statements?

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 1: Getting Started

In order to determine whether to major in economics,a rational individual compares the ________ of the decision.

If Jessie studies economics for two hours instead of going to the movies with her friends,then

Amy can study for an hour or spend that hour sleeping or going out for dinner.If she decides to study for the hour,the opportunity cost of the hour spent studying is

When Ferrari decides to produce 1,200 360 Modenas each year,Ferrari is answering the ________ question.

Correlation means

Which of the following statements is correct?

What is the difference between microeconomics and macroeconomics?

Which of the following statements is a normative statement?

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

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

-What does the slope of the curved line at point A shown in the above figure equal?

The decision to go to graduate school is a rational one for a college student if the

Proponents of cuts in 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

A time-series graph measures

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

An independent relationship between two variables is shown in a graph by

The benefit from a good or service that you purchase is measured by

What is NOT true about rational choice?

What is the difference between positive and normative statements?

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters