Question 1

Which of the following is a positive economic statement?

Accepted Answer

A) People should use public transportation more often. 
B) The government should ban diesel engines in automobiles. 
C) Due to a decrease in state funding, university tuition has risen. 
D) Foreign citizens should not be allowed to work without a work visa. 
A) People should use public transportation more often. 
B) The government should ban diesel engines in automobiles. 
C) Due to a decrease in state funding, university tuition has risen. 
D) Foreign citizens should not be allowed to work without a work visa.

Question 2

Which of the following statements is true?

Accepted Answer

A) Anytime you have to decide which action to take you are experiencing economic equity. 
B) Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale. 
C) Every individual, no matter how rich or poor, is faced with making trade-offs. 
D) Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited. 
A) Anytime you have to decide which action to take you are experiencing economic equity. 
B) Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale. 
C) Every individual, no matter how rich or poor, is faced with making trade-offs. 
D) Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited.

Question 3

Political candidates often hold fund raisers by charging "per plate" for dinner.Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate.Is this transaction economically efficient?

Accepted Answer

A) No, political candidates should never be allowed to overcharge for a fund raising dinner. 
B) Yes, it was a voluntary exchange that benefited both parties. 
C) No, Wendy paid too much for four dinners. 
D) Yes, it is efficient only from the perspective of the candidate but not from the perspective of Wendy. 
A) No, political candidates should never be allowed to overcharge for a fund raising dinner. 
B) Yes, it was a voluntary exchange that benefited both parties. 
C) No, Wendy paid too much for four dinners. 
D) Yes, it is efficient only from the perspective of the candidate but not from the perspective of Wendy.

Question 4

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Accepted Answer

A) collective 
B) cooperative 
C) market 
D) trade-off 
A) collective 
B) cooperative 
C) market 
D) trade-off

Question 5

An "omitted variable" is

Accepted Answer

A) a variable which is purposely omitted from an economic analysis. 
B) a variable which is inadvertently omitted from an economic analysis. 
C) a variable that has no impact on other variables in an economic analysis. 
D) a variable that affects other variables and its omission from economic analysis can lead to false conclusions about cause and effect. 
A) a variable which is purposely omitted from an economic analysis. 
B) a variable which is inadvertently omitted from an economic analysis. 
C) a variable that has no impact on other variables in an economic analysis. 
D) a variable that affects other variables and its omission from economic analysis can lead to false conclusions about cause and effect.

Question 6

Even if the population declines,scarcity will still exist.

Accepted Answer

A) True 
 B)False

Question 7

Scenario 1-1
Suppose a cell phone manufacturer currently sells 20,000 cell phones per week and makes a profit of $5,000 per week.A manager at the plant observes, "Although the last 3,000 cell phones we produced and sold increased our revenue by $6,000 and our costs by $6,700, we are still making an overall profit of $5,000 per week so I think we're on the right track.We are producing the optimal number of cell phones."
-Refer to Scenario 1-1.Using marginal analysis terminology,what is another economic term for the incremental revenue received from the sale of the last 3,000 cell phones?

Accepted Answer

A) gross earnings 
B) marginal revenue 
C) sales revenue 
D) gross profit 
A) gross earnings 
B) marginal revenue 
C) sales revenue 
D) gross profit

Question 8

Which of the following is a positive economic statement?

Accepted Answer

A) U)S.citizens should only buy products which are produced in the United States. 
B) The government should ban the production and sale of incandescent light bulbs. 
C) Raising the tax on gasoline raises the selling price of gasoline. 
D) The government should revamp its immigration policies. 
A) U)S.citizens should only buy products which are produced in the United States. 
B) The government should ban the production and sale of incandescent light bulbs. 
C) Raising the tax on gasoline raises the selling price of gasoline. 
D) The government should revamp its immigration policies.

Question 9

What is the difference between an invention and an innovation?

Accepted Answer

An invention is the development of a new

Question 10

An economic model is a simplified version of reality used to analyze real-world economic situations.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is true about scarcity?

Accepted Answer

A) Scarcity refers to the situation in which unlimited wants exceed limited resources. 
B) Scarcity is not a problem for the wealthy. 
C) Scarcity is only a problem when a country has too large a population. 
D) Scarcity arises when there is a wide disparity in income distribution. 
A) Scarcity refers to the situation in which unlimited wants exceed limited resources. 
B) Scarcity is not a problem for the wealthy. 
C) Scarcity is only a problem when a country has too large a population. 
D) Scarcity arises when there is a wide disparity in income distribution.

Question 12

Figure 1-2
  
-Refer to Figure 1-2.Calculate the area of the triangle A.

Accepted Answer

A) $1.3 million 
B) $2.6 million 
C) $3.4 million 
D) $5.2 million 
A) $1.3 million 
B) $2.6 million 
C) $3.4 million 
D) $5.2 million

Question 13

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1,200.Then,the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1,200 or more.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a microeconomics question?

Accepted Answer

A) When will the government better secure the borders? 
B) Why hasn't the federal government raised the minimum wage? 
C) How does Fiat decide on the price of the 500 Pop model? 
D) What determines the level of U.S.imports and exports? 
A) When will the government better secure the borders? 
B) Why hasn't the federal government raised the minimum wage? 
C) How does Fiat decide on the price of the 500 Pop model? 
D) What determines the level of U.S.imports and exports?

Question 15

All of the following are part of an economic model except

Accepted Answer

A) assumptions. 
B) hypotheses. 
C) data. 
D) opinions. 
A) assumptions. 
B) hypotheses. 
C) data. 
D) opinions.

Question 16

In a modern mixed economy,who decides what goods and services will be produced?

Accepted Answer

A) only the producers 
B) only consumers 
C) only the government 
D) all of the above 
A) only the producers 
B) only consumers 
C) only the government 
D) all of the above

Question 17

The Stogie Shop,a cigar store in the mall,sells hand-rolled cigars for $10.00 and machine-made cigars for $2.50 each.What is the opportunity cost of buying a hand-rolled cigar?

Accepted Answer

A) 4 machine-made cigars 
B) 1/4 of a machine-made cigar 
C) $10.00 
D) $2.50 
A) 4 machine-made cigars 
B) 1/4 of a machine-made cigar 
C) $10.00 
D) $2.50

Question 18

What is the "omitted variable" problem in determining cause and effect?

Accepted Answer

A) It is a problem that arises when an insignificant variable is given too much weight in an economic analysis leading to skewed conclusions about cause and effect. 
B) It is a problem that arises when a significant variable is not given enough weight in an economic experiment leading to skewed conclusions about cause and effect. 
C) It is a problem that arises when an insignificant economic variable that should have been omitted is included in an economic experiment leading to false conclusions about cause and effect. 
D) It is a problem that arises when an economic variable that affects other variables is omitted from an analysis and its omission leads to false conclusions about cause and effect. 
A) It is a problem that arises when an insignificant variable is given too much weight in an economic analysis leading to skewed conclusions about cause and effect. 
B) It is a problem that arises when a significant variable is not given enough weight in an economic experiment leading to skewed conclusions about cause and effect. 
C) It is a problem that arises when an insignificant economic variable that should have been omitted is included in an economic experiment leading to false conclusions about cause and effect. 
D) It is a problem that arises when an economic variable that affects other variables is omitted from an analysis and its omission leads to false conclusions about cause and effect.

Question 19

When Mr.Peabody decides on the companies to which he will donate his time and money,a ________ issue is being addressed.

Accepted Answer

A) microeconomic 
B) macroeconomic 
C) positive economic 
D) normative economic 
A) microeconomic 
B) macroeconomic 
C) positive economic 
D) normative economic

Question 20

________ have a horizontal and a vertical axis and are used in economics to illustrate relationships between two economic variables.

Accepted Answer

A) Two-dimensional graphs 
B) One-dimensional graphs 
C) Pie Charts 
D) Bar graphs 
A) Two-dimensional graphs 
B) One-dimensional graphs 
C) Pie Charts 
D) Bar graphs

Which of the following is a positive economic statement?

Which of the following statements is true?

Political candidates often hold fund raisers by charging "per plate" for dinner.Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate.Is this transaction economically efficient?

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

An "omitted variable" is

Even if the population declines,scarcity will still exist.

Which of the following is a positive economic statement?

What is the difference between an invention and an innovation?

An economic model is a simplified version of reality used to analyze real-world economic situations.

Which of the following statements is true about scarcity?

Figure 1-2 -Refer to Figure 1-2.Calculate the area of the triangle A.

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1,200.Then,the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1,200 or more.

Which of the following is a microeconomics question?

All of the following are part of an economic model except

In a modern mixed economy,who decides what goods and services will be produced?

The Stogie Shop,a cigar store in the mall,sells hand-rolled cigars for $10.00 and machine-made cigars for $2.50 each.What is the opportunity cost of buying a hand-rolled cigar?

What is the "omitted variable" problem in determining cause and effect?

When Mr.Peabody decides on the companies to which he will donate his time and money,a ________ issue is being addressed.

________ have a horizontal and a vertical axis and are used in economics to illustrate relationships between two economic variables.

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 1: Economics: Foundations and Models

Which of the following is a positive economic statement?

Which of the following statements is true?

Political candidates often hold fund raisers by charging "per plate" for dinner.Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate.Is this transaction economically efficient?

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

An "omitted variable" is

Even if the population declines,scarcity will still exist.

Which of the following is a positive economic statement?

What is the difference between an invention and an innovation?

An economic model is a simplified version of reality used to analyze real-world economic situations.

Which of the following statements is true about scarcity?

Figure 1-2 -Refer to Figure 1-2.Calculate the area of the triangle A.

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1,200.Then,the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1,200 or more.

Which of the following is a microeconomics question?

All of the following are part of an economic model except

In a modern mixed economy,who decides what goods and services will be produced?

The Stogie Shop,a cigar store in the mall,sells hand-rolled cigars for $10.00 and machine-made cigars for $2.50 each.What is the opportunity cost of buying a hand-rolled cigar?

What is the "omitted variable" problem in determining cause and effect?

When Mr.Peabody decides on the companies to which he will donate his time and money,a ________ issue is being addressed.

________ have a horizontal and a vertical axis and are used in economics to illustrate relationships between two economic variables.

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters