Question 1

The question of "How are goods and services produced?" most closely addresses which of the following issues?

Accepted Answer

A)  Should Ford build SUVs or luxury cars? 
B)  Should Ford use expensive industrial robots or inexpensive Mexican autoworkers to produce SUVs? 
C)  Should contractors build residential housing or shopping malls? 
D)  Is income distributed fairly in the United States? 
E)  Why are Christmas trees popular only in December? 
A)  Should Ford build SUVs or luxury cars? 
B)  Should Ford use expensive industrial robots or inexpensive Mexican autoworkers to produce SUVs? 
C)  Should contractors build residential housing or shopping malls? 
D)  Is income distributed fairly in the United States? 
E)  Why are Christmas trees popular only in December?

Question 2

Choices that are best for the society as a whole are choices in pursuit of

Accepted Answer

A)  answering the "how" question. 
B)  the social interest. 
C)  self-interest. 
D)  incentives. 
E)  answering the "for whom" question. 
A)  answering the "how" question. 
B)  the social interest. 
C)  self-interest. 
D)  incentives. 
E)  answering the "for whom" question.

Question 3

Congress and the President passed a national health care policy.This is an example of

Accepted Answer

A)  the government using economic tools to make policy decisions. 
B)  answering the "how" question. 
C)  increasing the marginal cost of health care. 
D)  increasing the marginal benefit of health care. 
E)  normative versus positive economics. 
A)  the government using economic tools to make policy decisions. 
B)  answering the "how" question. 
C)  increasing the marginal cost of health care. 
D)  increasing the marginal benefit of health care. 
E)  normative versus positive economics.

Question 4

Ali decides to attend the one-hour review session for microeconomics instead of working at his job.His job pays him $10 per hour.Ali's opportunity cost of attending the review session is

Accepted Answer

A)  the $10 he could have earned at his job. 
B)  the value of the session minus the $10 he could have earned at his job. 
C)  nothing, because the review session does not cost anything. 
D)  equal to the benefit he gets from the review session. 
E)  the one-hour review session. 
A)  the $10 he could have earned at his job. 
B)  the value of the session minus the $10 he could have earned at his job. 
C)  nothing, because the review session does not cost anything. 
D)  equal to the benefit he gets from the review session. 
E)  the one-hour review session.

Question 5

Whenever people's incomes increase,they buy more guitars.Hence a scatter diagram shows that the relationship between income and guitars purchased is

Accepted Answer

A)  a positive relationship. 
B)  a linear relationship. 
C)  a negative relationship. 
D)  some sort of relationship, but whether it is positive or negative depends on whether income is plotted on the vertical or horizontal axis. 
E)  a U-shaped relationship. 
A)  a positive relationship. 
B)  a linear relationship. 
C)  a negative relationship. 
D)  some sort of relationship, but whether it is positive or negative depends on whether income is plotted on the vertical or horizontal axis. 
E)  a U-shaped relationship.

Question 6

In a graph,a straight line has a negative slope if the line

Accepted Answer

A)  is vertical. 
B)  is horizontal. 
C)  falls from left to right. 
D)  rises from left to right. 
E)  shows a trend. 
A)  is vertical. 
B)  is horizontal. 
C)  falls from left to right. 
D)  rises from left to right. 
E)  shows a trend.

Question 7

Economics is best defined as the social science that studies

Accepted Answer

A)  how a person can get everything he or she wants. 
B)  the reason money exists. 
C)  the way to eliminate choices in our decisions. 
D)  the choices that societies, and the people and institutions that make up societies, make in dealing with the issue of scarcity. 
E)  how choices made in the social interest must conflict with choices made in the self-interest. 
A)  how a person can get everything he or she wants. 
B)  the reason money exists. 
C)  the way to eliminate choices in our decisions. 
D)  the choices that societies, and the people and institutions that make up societies, make in dealing with the issue of scarcity. 
E)  how choices made in the social interest must conflict with choices made in the self-interest.

Question 8

As part of its proposal to win the 2012 Olympics,London developed a carbon offset plan to reduce the Games' impact on the environment.In 2011,the organizers decided to drop this plan to reduce emissions.We can conclude that

Accepted Answer

A)  the marginal cost of reducing emissions exceeded the marginal benefits of reducing emissions. 
B)  the organizers are not making a rational decision. 
C)  the organizers are ignoring a sunk cost. 
D)  there are no incentives to reduce carbon emissions. 
E)  it is difficult to calculate the cost of reducing emissions. 
A)  the marginal cost of reducing emissions exceeded the marginal benefits of reducing emissions. 
B)  the organizers are not making a rational decision. 
C)  the organizers are ignoring a sunk cost. 
D)  there are no incentives to reduce carbon emissions. 
E)  it is difficult to calculate the cost of reducing emissions.

Question 9

If the change in y = 10 and the change in x = 3,there is

Accepted Answer

A)  a positive relationship between y and x. 
B)  a negative relationship between y and x. 
C)  an independent relationship between y and x. 
D)  no relationship between y and x. 
E)  a +0.33 relationship between the two variables. 
A)  a positive relationship between y and x. 
B)  a negative relationship between y and x. 
C)  an independent relationship between y and x. 
D)  no relationship between y and x. 
E)  a +0.33 relationship between the two variables.

Question 10

Scarcity

Accepted Answer

A)  is the inability to satisfy all our wants. 
B)  leads to higher prices. 
C)  applies only to people living in poverty. 
D)  is not something that affects very rich people. 
E)  used to exist everywhere but has been eliminated in advanced economies. 
A)  is the inability to satisfy all our wants. 
B)  leads to higher prices. 
C)  applies only to people living in poverty. 
D)  is not something that affects very rich people. 
E)  used to exist everywhere but has been eliminated in advanced economies.

Question 11

What is the relationship between wants ,resources ,scarcity,and choices? Discuss the relationship for an individual and for a society.

Accepted Answer

A person faces scarcity whenever his or

Question 12

A positive relationship exists between two variables if

Accepted Answer

A)  one variable has "positively" no effect on the other variable. 
B)  a decrease in one variable is associated with an increase in the other variable. 
C)  a decrease in one variable is associated with a decrease in the other variable. 
D)  an increase in one variable is associated with both a decrease and an increase in the other variable. 
E)  None of the above answers is correct. 
A)  one variable has "positively" no effect on the other variable. 
B)  a decrease in one variable is associated with an increase in the other variable. 
C)  a decrease in one variable is associated with a decrease in the other variable. 
D)  an increase in one variable is associated with both a decrease and an increase in the other variable. 
E)  None of the above answers is correct.

Question 13

The important characteristic of normative statements is that they

Accepted Answer

A)  explain what really exists. 
B)  are based on somebody's values and cannot be tested. 
C)  explain what normally happens in the real world. 
D)  help guide us to what will normally occur if some economic variable changes its value. 
E)  do not use the ceteris paribus assumption. 
A)  explain what really exists. 
B)  are based on somebody's values and cannot be tested. 
C)  explain what normally happens in the real world. 
D)  help guide us to what will normally occur if some economic variable changes its value. 
E)  do not use the ceteris paribus assumption.

Question 14

As a person increases his or her caloric intake,the person's weight increases,ceteris paribus.The relationship between the person's caloric intake and the person's weight is an example of

Accepted Answer

A)  unrelated variables. 
B)  a positive relationship. 
C)  a negative relationship. 
D)  a single point on a graph. 
E)  a trended relationship. 
A)  unrelated variables. 
B)  a positive relationship. 
C)  a negative relationship. 
D)  a single point on a graph. 
E)  a trended relationship.

Question 15

The slope

Accepted Answer

A)  of a straight line is the same regardless of where on the line it is calculated. 
B)  equals the change in the value of the variable measured on the vertical axis divided by the change in the variable measured along the horizontal axis. 
C)  will be small if a large change in the variable measured on the vertical axis is associated with a small change in the variable measured along the horizontal axis. 
D)  Answers A and B are correct. 
E)  Answers A and C are correct. 
A)  of a straight line is the same regardless of where on the line it is calculated. 
B)  equals the change in the value of the variable measured on the vertical axis divided by the change in the variable measured along the horizontal axis. 
C)  will be small if a large change in the variable measured on the vertical axis is associated with a small change in the variable measured along the horizontal axis. 
D)  Answers A and B are correct. 
E)  Answers A and C are correct.

Question 16

Which type of economic graph reveals trends in data?

Accepted Answer

A)  cross-section graph 
B)  time-series graph 
C)  scatter diagram 
D)  Answers A and C are correct. 
E)  Answers A, B, and C are all correct. 
A)  cross-section graph 
B)  time-series graph 
C)  scatter diagram 
D)  Answers A and C are correct. 
E)  Answers A, B, and C are all correct.

Question 17

The benefit of a one-unit increase in an activity

Accepted Answer

A)  is called marginal cost. 
B)  is always greater than the opportunity cost of that activity. 
C)  decreases as you do more of it. 
D)  is measured by what you must give up. 
E)  is called rational-choice benefit. 
A)  is called marginal cost. 
B)  is always greater than the opportunity cost of that activity. 
C)  decreases as you do more of it. 
D)  is measured by what you must give up. 
E)  is called rational-choice benefit.

Question 18

As a shoe factory adds more workers,shoe production grows,reaches a maximum,and then shrinks.In a diagram that has the number of workers on the horizontal axis and the number of shoes on the vertical axis,the relationship between the number of workers and the number of shoes starts as ________ and then,after the maximum point,is ________.

Accepted Answer

A)  positive; negative 
B)  negative; positive 
C)  linear; negative 
D)  positive; linear 
E)  positive; nonexistent 
A)  positive; negative 
B)  negative; positive 
C)  linear; negative 
D)  positive; linear 
E)  positive; nonexistent

Question 19

Explain whether the statement,"There is life on Mars," is a normative or positive statement.

Accepted Answer

The statement is a positive statement be

Question 20

Scarcity requires that we

Accepted Answer

A)  produce efficiently. 
B)  learn to limit our wants. 
C)  have the most rapid economic growth possible. 
D)  have unlimited resources. 
E)  make choices about what goods and services to produce. 
A)  produce efficiently. 
B)  learn to limit our wants. 
C)  have the most rapid economic growth possible. 
D)  have unlimited resources. 
E)  make choices about what goods and services to produce.

The question of "How are goods and services produced?" most closely addresses which of the following issues?

Choices that are best for the society as a whole are choices in pursuit of

Congress and the President passed a national health care policy.This is an example of

Ali decides to attend the one-hour review session for microeconomics instead of working at his job.His job pays him $10 per hour.Ali's opportunity cost of attending the review session is

Whenever people's incomes increase,they buy more guitars.Hence a scatter diagram shows that the relationship between income and guitars purchased is

In a graph,a straight line has a negative slope if the line

Economics is best defined as the social science that studies

As part of its proposal to win the 2012 Olympics,London developed a carbon offset plan to reduce the Games' impact on the environment.In 2011,the organizers decided to drop this plan to reduce emissions.We can conclude that

If the change in y = 10 and the change in x = 3,there is

Scarcity

What is the relationship between wants ,resources ,scarcity,and choices? Discuss the relationship for an individual and for a society.

A positive relationship exists between two variables if

The important characteristic of normative statements is that they

As a person increases his or her caloric intake,the person's weight increases,ceteris paribus.The relationship between the person's caloric intake and the person's weight is an example of

The slope

Which type of economic graph reveals trends in data?

The benefit of a one-unit increase in an activity

Explain whether the statement,"There is life on Mars," is a normative or positive statement.

Scarcity requires that we

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

The question of "How are goods and services produced?" most closely addresses which of the following issues?

Choices that are best for the society as a whole are choices in pursuit of

Congress and the President passed a national health care policy.This is an example of

Ali decides to attend the one-hour review session for microeconomics instead of working at his job.His job pays him $10 per hour.Ali's opportunity cost of attending the review session is

Whenever people's incomes increase,they buy more guitars.Hence a scatter diagram shows that the relationship between income and guitars purchased is

In a graph,a straight line has a negative slope if the line

Economics is best defined as the social science that studies

As part of its proposal to win the 2012 Olympics,London developed a carbon offset plan to reduce the Games' impact on the environment.In 2011,the organizers decided to drop this plan to reduce emissions.We can conclude that

If the change in y = 10 and the change in x = 3,there is

Scarcity

What is the relationship between wants ,resources ,scarcity,and choices? Discuss the relationship for an individual and for a society.

A positive relationship exists between two variables if

The important characteristic of normative statements is that they

As a person increases his or her caloric intake,the person's weight increases,ceteris paribus.The relationship between the person's caloric intake and the person's weight is an example of

The slope

Which type of economic graph reveals trends in data?

The benefit of a one-unit increase in an activity

Explain whether the statement,"There is life on Mars," is a normative or positive statement.

Scarcity requires that we

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