Question 1

The term 'market' refers to trading arrangements by which buyers and sellers come together.

Accepted Answer

A) True 
 B)False  True

Question 2

Explain the economic idea that 'people respond to incentives'.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Human beings act from a variety of motives, including religious belief, envy and compassion. 'People respond to incentives' means that people will act if they feel it is in their best economic interest to do so.

Question 3

'Marginal analysis' involves undertaking an activity:

Accepted Answer

A) until its marginal costs start declining. 
B) only when its marginal benefits are positive. 
C) until its marginal benefits equal marginal costs. 
D) only if its marginal costs are greater than its marginal benefits. 
A) until its marginal costs start declining. 
B) only when its marginal benefits are positive. 
C) until its marginal benefits equal marginal costs. 
D) only if its marginal costs are greater than its marginal benefits. C

Question 4

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 5

Consider the following economic agents:
A.the government
B.consumers
C.producers
Who, in a market economy, decides what goods and services will be produced with the scarce resources available in that economy?

Accepted Answer

A) the government 
B) producers 
C) consumers 
D) consumers and producers 
A) the government 
B) producers 
C) consumers 
D) consumers and producers

Question 6

In economics, the term 'equity' means:

Accepted Answer

A) everyone has an equal standard of living. 
B) the hardest working individuals consume all they want. 
C) only elected officials have high standards of living. 
D) economic benefits are distributed fairly. 
A) everyone has an equal standard of living. 
B) the hardest working individuals consume all they want. 
C) only elected officials have high standards of living. 
D) economic benefits are distributed fairly.

Question 7

The revenue received from the sale of ________ of a product is a marginal benefit to the firm.

Accepted Answer

A) an additional unit 
B) the total number of units 
C) no units 
D) only profitable units 
A) an additional unit 
B) the total number of units 
C) no units 
D) only profitable units

Question 8

Figure 1.3
  
-Refer to Figure 1.3. Calculate the area of the trapezoid X.

Accepted Answer

A) $270 
B) $720 
C) $810 
D) $2 520 
A) $270 
B) $720 
C) $810 
D) $2 520

Question 9

Positive analysis is concerned with 'what ought to be', while normative analysis is concerned with 'what is'.

Accepted Answer

A) True 
 B)False

Question 10

Explain the economic assumption that 'people are rational'.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

'People are rational' means that economi

Question 11

If it costs Sinclair $300 to produce 3 suede jackets and $450 to produce 4 suede jackets, then the difference of $150 is the marginal cost of producing the fourth suede jacket.

Accepted Answer

A) True 
 B)False

Question 12

'Scarcity' refers to a situation in which unlimited wants exceed the limited resources available to fulfil those wants.

Accepted Answer

A) True 
 B)False

Question 13

Consider the following economic agents:
A.the government
B.consumers
C.producers
Who, in a centrally planned economy, decides what goods and services will be produced with the scarce resources available in that economy?

Accepted Answer

A) the government 
B) producers 
C) consumers 
D) consumers and producers 
A) the government 
B) producers 
C) consumers 
D) consumers and producers

Question 14

________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

Accepted Answer

A) Competition 
B) Voluntary exchange 
C) Equity 
D) A centrally planned economy 
A) Competition 
B) Voluntary exchange 
C) Equity 
D) A centrally planned economy

Question 15

The government makes all economic decisions in a market economy.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is part of an economic model?

Accepted Answer

A) norms 
B) hypotheses 
C) opinions 
D) preferences of economic agents 
A) norms 
B) hypotheses 
C) opinions 
D) preferences of economic agents

Question 17

Suppose that to increase sales of hybrid vehicles, car manufacturers are offering large cash incentives. This is an example of a macroeconomics topic.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Suppose a doctor can earn an additional $25 000 per year in revenue by keeping her office open on Sundays. At what additional cost would keeping the office open on Sundays not be considered economically rational?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

If the additional cost of keep

Question 20

Who receives the most of what is produced in a market economy?

Accepted Answer

A) Lawmakers and other politically favoured groups. 
B) Those who are willing and able to buy them. 
C) People who earn the highest incomes. 
D) Everyone receives an equal amount. 
A) Lawmakers and other politically favoured groups. 
B) Those who are willing and able to buy them. 
C) People who earn the highest incomes. 
D) Everyone receives an equal amount.

The term 'market' refers to trading arrangements by which buyers and sellers come together.

Explain the economic idea that 'people respond to incentives'. _ _

'Marginal analysis' involves undertaking an activity:

Which of the following statements is true?

Consider the following economic agents: A.the government B.consumers C.producers Who, in a market economy, decides what goods and services will be produced with the scarce resources available in that economy?

In economics, the term 'equity' means:

The revenue received from the sale of ________ of a product is a marginal benefit to the firm.

Figure 1.3 -Refer to Figure 1.3. Calculate the area of the trapezoid X.

Positive analysis is concerned with 'what ought to be', while normative analysis is concerned with 'what is'.

Explain the economic assumption that 'people are rational'. _ _

If it costs Sinclair $300 to produce 3 suede jackets and $450 to produce 4 suede jackets, then the difference of $150 is the marginal cost of producing the fourth suede jacket.

'Scarcity' refers to a situation in which unlimited wants exceed the limited resources available to fulfil those wants.

Consider the following economic agents: A.the government B.consumers C.producers Who, in a centrally planned economy, decides what goods and services will be produced with the scarce resources available in that economy?

________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

The government makes all economic decisions in a market economy.

Which of the following is part of an economic model?

Suppose that to increase sales of hybrid vehicles, car manufacturers are offering large cash incentives. This is an example of a macroeconomics topic.

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:

Suppose a doctor can earn an additional $25 000 per year in revenue by keeping her office open on Sundays. At what additional cost would keeping the office open on Sundays not be considered economically rational? _ _

Who receives the most of what is produced in a market economy?

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Gdp: Measuring Total Production, Income and Economic Growth

Economic Growth, the Financial System and Business Cycles

Long-Run Economic Growth: Sources and Policies

Unemployment

Inflation

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 1: Economics: Foundations and Models

The term 'market' refers to trading arrangements by which buyers and sellers come together.

Explain the economic idea that 'people respond to incentives'. _____________________________________________________________________________________________ _____________________________________________________________________________________________

'Marginal analysis' involves undertaking an activity:

Which of the following statements is true?

Consider the following economic agents: A.the government B.consumers C.producers Who, in a market economy, decides what goods and services will be produced with the scarce resources available in that economy?

In economics, the term 'equity' means:

The revenue received from the sale of ________ of a product is a marginal benefit to the firm.

Figure 1.3 -Refer to Figure 1.3. Calculate the area of the trapezoid X.

Positive analysis is concerned with 'what ought to be', while normative analysis is concerned with 'what is'.

Explain the economic assumption that 'people are rational'. _____________________________________________________________________________________________ _____________________________________________________________________________________________

If it costs Sinclair $300 to produce 3 suede jackets and $450 to produce 4 suede jackets, then the difference of $150 is the marginal cost of producing the fourth suede jacket.

'Scarcity' refers to a situation in which unlimited wants exceed the limited resources available to fulfil those wants.

Consider the following economic agents: A.the government B.consumers C.producers Who, in a centrally planned economy, decides what goods and services will be produced with the scarce resources available in that economy?

________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

The government makes all economic decisions in a market economy.

Which of the following is part of an economic model?

Suppose that to increase sales of hybrid vehicles, car manufacturers are offering large cash incentives. This is an example of a macroeconomics topic.

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:

Who receives the most of what is produced in a market economy?

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Gdp: Measuring Total Production, Income and Economic Growth

Economic Growth, the Financial System and Business Cycles

Long-Run Economic Growth: Sources and Policies

Unemployment

Inflation

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Explain the economic idea that 'people respond to incentives'. _ _

Explain the economic assumption that 'people are rational'. _ _