Question 1

The highest valued alternative that must be given up to engage in an activity is the definition of

Accepted Answer

A) economic equity. 
B) marginal benefit. 
C) opportunity cost. 
D) marginal cost. 
A) economic equity. 
B) marginal benefit. 
C) opportunity cost. 
D) marginal cost.

Question 2

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

Accepted Answer

A) Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others. 
B) Failure to do this could lead to an inequitable allocation of goods and services produced. 
C) Failure to do this could lead to drastic shortages of good and services. 
D) Failure to do this could reduces efficiency and leads to an inequitable allocation of output. 
A) Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others. 
B) Failure to do this could lead to an inequitable allocation of goods and services produced. 
C) Failure to do this could lead to drastic shortages of good and services. 
D) Failure to do this could reduces efficiency and leads to an inequitable allocation of output.

Question 3

Scarcity refers to the situation in which

Accepted Answer

A) unlimited wants exceed limited resources. 
B) unlimited resources exceed limited wants. 
C) a country's population is larger than its resource base. 
D) a nation's poverty level increases faster than its population. 
A) unlimited wants exceed limited resources. 
B) unlimited resources exceed limited wants. 
C) a country's population is larger than its resource base. 
D) a nation's poverty level increases faster than its population.

Question 4

Cassie's Quilts alters,reconstructs and restores heirloom quilts.Cassie has just spent $800 purchasing,cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished.After having spent $800,Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task.Alternatively,she can sell the quilt "as is" now for $900.What should she do?

Accepted Answer

A) She should cut her losses and sell the quilt now. 
B) It does not matter what she does; she is going to take a loss on her project. 
C) She should purchase the period fabric, complete the task and then sell the quilt. 
D) She should not do anymore work on the quilt because she has already spent too much time on it and has not been paid for that time. 
A) She should cut her losses and sell the quilt now. 
B) It does not matter what she does; she is going to take a loss on her project. 
C) She should purchase the period fabric, complete the task and then sell the quilt. 
D) She should not do anymore work on the quilt because she has already spent too much time on it and has not been paid for that time.

Question 5

If a straight line passes through the point x = 8 and y = 4 and also through the point x = 12 and y = 6,the slope of this line is

Accepted Answer

A) negative 4 divided by 2. 
B) two. 
C) negative one half. 
D) one half. 
A) negative 4 divided by 2. 
B) two. 
C) negative one half. 
D) one half.

Question 6

Figure 1-4
  
-Refer to Figure 1-4.Which of the following statements is true?

Accepted Answer

A) The slope of the tangent at E is positive and the slope of the tangent at F is negative. 
B) The slope of the tangent at E is negative and the slope of the tangent at F is positive. 
C) The slope of the tangent at E and the slope of the tangent at F are negative. 
D) The slope of the tangent at E and the slope of the tangent at F are positive. 
A) The slope of the tangent at E is positive and the slope of the tangent at F is negative. 
B) The slope of the tangent at E is negative and the slope of the tangent at F is positive. 
C) The slope of the tangent at E and the slope of the tangent at F are negative. 
D) The slope of the tangent at E and the slope of the tangent at F are positive.

Question 7

Which of the following statements is true?

Accepted Answer

A) An inverse relationship has a positive slope value. 
B) A direct relationship has a negative slope value. 
C) A curved line has slope values that change at every point. 
D) A straight line has a slope of one. 
A) An inverse relationship has a positive slope value. 
B) A direct relationship has a negative slope value. 
C) A curved line has slope values that change at every point. 
D) A straight line has a slope of one.

Question 8

Which of the following is correct about the economic decisions consumers,firms,and the government have to make?

Accepted Answer

A) Governments may face the problem of shortages but not scarcity in making economic decisions. 
B) Only individuals face scarcity; firms and the government do not. 
C) Firms and the government face scarcity, individuals only face shortages. 
D) Each faces the problem of scarcity which necessitates trade-offs in making economic decisions. 
A) Governments may face the problem of shortages but not scarcity in making economic decisions. 
B) Only individuals face scarcity; firms and the government do not. 
C) Firms and the government face scarcity, individuals only face shortages. 
D) Each faces the problem of scarcity which necessitates trade-offs in making economic decisions.

Question 9

In economics,the practical application of an invention is known as

Accepted Answer

A) technology. 
B) entrepreneurship. 
C) physical capital. 
D) innovation. 
A) technology. 
B) entrepreneurship. 
C) physical capital. 
D) innovation.

Question 10

If it costs Hobie $900 to produce 5 lamps and $1,200 to produce 6 lamps,then the difference of $300 is the marginal cost of producing the 5th lamp.

Accepted Answer

A) True 
 B)False

Question 11

If the price of milk was $1.25 a gallon and it is now $2.25 a gallon,what is the percentage change in price?

Accepted Answer

A) 4.4 percent 
B) 8 percent 
C) 44 percent 
D) 80 percent 
A) 4.4 percent 
B) 8 percent 
C) 44 percent 
D) 80 percent

Question 12

Every society faces trade-offs.Explain the concept of trade-offs.

Accepted Answer

Trade-offs refer to the idea t

Question 13

Table 1-6
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Hours } \
\text { Open }
\end{array} & \begin{array} { c } 
\text { Tatal } \
\text { Revenue } \
\text { (dallars) }
\end{array} \
\hline 1 & \$ 275 \
\hline 2 & 375 \
\hline 3 & 450 \
\hline 4 & 500 \
\hline 5 & 530 \
\hline 6 & 550 \
\hline
\end{array}$$ 
Ivan runs a custom jewelry shop in Sparkle City.He is debating whether he should extend his hours of operation.Ivan figures that his sales revenue will depend on the number of hours the jewelry shop is open as shown in the table above.He would have to hire a worker for those hours at a wage rate of $25 per hour.
-Refer to Table 1-6.What is Ivan's marginal cost if he decides to stay open for six hours instead of five hours?

Accepted Answer

A) $10 
B) $20 
C) $25 
D) $91.67 
A) $10 
B) $20 
C) $25 
D) $91.67

Question 14

Figure 1-1
  
-Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2007 and 2011.

Accepted Answer

A) 30% 
B) 50% 
C) 66.7% 
D) 100% 
A) 30% 
B) 50% 
C) 66.7% 
D) 100%

Question 15

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10,the slope of this line is

Accepted Answer

A) negative 11 divided by 6. 
B) seven tenths. 
C) negative seven tenths. 
D) 6 divided by 11. 
A) negative 11 divided by 6. 
B) seven tenths. 
C) negative seven tenths. 
D) 6 divided by 11.

Question 16

The branch of economics which studies the behavior of entire economies is called

Accepted Answer

A) public economics. 
B) microeconomics. 
C) macroeconomics. 
D) normative economics. 
A) public economics. 
B) microeconomics. 
C) macroeconomics. 
D) normative economics.

Question 17

The town of Harmonia gives away all 500 tickets to its annual Founder's Day Free Concert-in-the-Park to local residents.Each year,more than 500 people wish to attend the concert,so some of the residents who receive the free tickets sell them for as much as $75 each.Is a transaction where someone pays a resident $75 for a "free ticket" economically efficient?

Accepted Answer

A) No, people should never be allowed to sell items they received for free. 
B) Yes, it was a voluntary exchange that benefited both parties. 
C) No, the buyer paid too much for the ticket. 
D) Yes, it is efficient only from the perspective of the seller and not from the perspective of the buyer. 
A) No, people should never be allowed to sell items they received for free. 
B) Yes, it was a voluntary exchange that benefited both parties. 
C) No, the buyer paid too much for the ticket. 
D) Yes, it is efficient only from the perspective of the seller and not from the perspective of the buyer.

Question 18

Selling tickets to graduation ceremonies has long been a tradition among students at institutions that limit the number of guests.Suppose your classmate,Heidi purchased two tickets for $40 each.Is this transaction economically efficient?

Accepted Answer

A) No, people should never be allowed to sell items they received for free. 
B) Yes, it was a voluntary exchange that benefited both parties. 
C) No, Heidi paid too much for the tickets. 
D) Yes, it is efficient only from the perspective of the seller and not from the perspective of the buyer. 
A) No, people should never be allowed to sell items they received for free. 
B) Yes, it was a voluntary exchange that benefited both parties. 
C) No, Heidi paid too much for the tickets. 
D) Yes, it is efficient only from the perspective of the seller and not from the perspective of the buyer.

Question 19

Cassie's Quilts alters,reconstructs and restores heirloom quilts.Cassie has just spent $800 purchasing,cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished.After having spent $800,Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task.Alternatively,she can sell the quilt "as is" now for $900.What is the marginal cost of completing the task?

Accepted Answer

A) $200 
B) $500 
C) $1,000 
D) $1,000 plus the value of her time 
A) $200 
B) $500 
C) $1,000 
D) $1,000 plus the value of her time

Question 20

All economic questions arise from the fact that resources are unlimited.

Accepted Answer

A) True 
 B)False

The highest valued alternative that must be given up to engage in an activity is the definition of

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

Scarcity refers to the situation in which

If a straight line passes through the point x = 8 and y = 4 and also through the point x = 12 and y = 6,the slope of this line is

Figure 1-4 -Refer to Figure 1-4.Which of the following statements is true?

Which of the following statements is true?

Which of the following is correct about the economic decisions consumers,firms,and the government have to make?

In economics,the practical application of an invention is known as

If it costs Hobie $900 to produce 5 lamps and $1,200 to produce 6 lamps,then the difference of $300 is the marginal cost of producing the 5th lamp.

If the price of milk was $1.25 a gallon and it is now $2.25 a gallon,what is the percentage change in price?

Every society faces trade-offs.Explain the concept of trade-offs.

Figure 1-1 -Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2007 and 2011.

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10,the slope of this line is

The branch of economics which studies the behavior of entire economies is called

Selling tickets to graduation ceremonies has long been a tradition among students at institutions that limit the number of guests.Suppose your classmate,Heidi purchased two tickets for $40 each.Is this transaction economically efficient?

All economic questions arise from the fact that resources are unlimited.

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

The highest valued alternative that must be given up to engage in an activity is the definition of

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

Scarcity refers to the situation in which

If a straight line passes through the point x = 8 and y = 4 and also through the point x = 12 and y = 6,the slope of this line is

Figure 1-4 -Refer to Figure 1-4.Which of the following statements is true?

Which of the following statements is true?

Which of the following is correct about the economic decisions consumers,firms,and the government have to make?

In economics,the practical application of an invention is known as

If it costs Hobie $900 to produce 5 lamps and $1,200 to produce 6 lamps,then the difference of $300 is the marginal cost of producing the 5th lamp.

If the price of milk was $1.25 a gallon and it is now $2.25 a gallon,what is the percentage change in price?

Every society faces trade-offs.Explain the concept of trade-offs.

Figure 1-1 -Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2007 and 2011.

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10,the slope of this line is

The branch of economics which studies the behavior of entire economies is called

Selling tickets to graduation ceremonies has long been a tradition among students at institutions that limit the number of guests.Suppose your classmate,Heidi purchased two tickets for $40 each.Is this transaction economically efficient?

All economic questions arise from the fact that resources are unlimited.

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