Question 1

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

Accepted Answer

A)  The slope of the tangent at E is positive. 
B)  The slope of the tangent at F is negative. 
C)  The slope of the tangent at E and the slope of the tangent at F are equal. 
D)  Neither the slope of the tangent at E nor the slope of the tangent at F are equal to zero. 
A)  The slope of the tangent at E is positive. 
B)  The slope of the tangent at F is negative. 
C)  The slope of the tangent at E and the slope of the tangent at F are equal. 
D)  Neither the slope of the tangent at E nor the slope of the tangent at F are equal to zero.

Question 2

Which of the following is a microeconomics question?

Accepted Answer

A)  How much will be saved and how much will be produced in the entire economy? 
B)  What will the level of economic growth be in the entire economy? 
C)  What factors determine the price of carrots? 
D)  What determines the average price level and inflation? 
A)  How much will be saved and how much will be produced in the entire economy? 
B)  What will the level of economic growth be in the entire economy? 
C)  What factors determine the price of carrots? 
D)  What determines the average price level and inflation?

Question 3

Which of the following is not an example of an economic trade-off that a firm has to make?

Accepted Answer

A)  whether it is cheaper to produce with more machines or with more workers 
B)  whether it is to outsource the production of a good or service 
C)  whether or not consumers will buy its products 
D)  whether it should produce more of its product 
A)  whether it is cheaper to produce with more machines or with more workers 
B)  whether it is to outsource the production of a good or service 
C)  whether or not consumers will buy its products 
D)  whether it should produce more of its product

Question 4

When voluntary exchange takes place,both parties gain from the exchange.

Accepted Answer

A) True 
 B)False

Question 5

The decisions Apple makes in determining production levels for its iPhone is an example of a microeconomics topic.

Accepted Answer

A) True 
 B)False

Question 6

Allocative efficiency is achieved when firms produce goods and services

Accepted Answer

A)  at the lowest possible cost. 
B)  that consumers value most. 
C)  at the lowest opportunity cost. 
D)  at a marginal cost of zero. 
A)  at the lowest possible cost. 
B)  that consumers value most. 
C)  at the lowest opportunity cost. 
D)  at a marginal cost of zero.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Markets promote

Accepted Answer

A)  equity and competition. 
B)  voluntary exchange and equality. 
C)  equity and equality. 
D)  competition and voluntary exchange. 
A)  equity and competition. 
B)  voluntary exchange and equality. 
C)  equity and equality. 
D)  competition and voluntary exchange.

Question 9

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics?
a.gasoline prices
b.unemployment
c.inflation
d.health care costs
e.air pollution
f.economic growth

Accepted Answer

b,c,and f are primar

Question 10

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

Accepted Answer

A)  lawmakers and other politically favored groups 
B)  those who are willing and able to buy them 
C)  everyone receives an equal amount 
D)  people who earn the highest incomes 
A)  lawmakers and other politically favored groups 
B)  those who are willing and able to buy them 
C)  everyone receives an equal amount 
D)  people who earn the highest incomes

Question 11

Suppose the U.S.government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000.These doctors would be exemplifying the economic idea that

Accepted Answer

A)  people are rational. 
B)  people respond to economic incentives. 
C)  optimal decisions are made at the margin. 
D)  equity is more important than efficiency. 
A)  people are rational. 
B)  people respond to economic incentives. 
C)  optimal decisions are made at the margin. 
D)  equity is more important than efficiency.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is motivated by an efficiency concern?

Accepted Answer

A)  In December 2006, the Bush administration restarted a short-term housing assistance program for victims of Hurricane Katrina. 
B)  Each year, the University of Notre Dame conducts a lottery to parcel out the 30,000 seats available to contributors, former athletes and parents in the 80,000-seat stadium. 
C)  The United Network for Organ Sharing advocates a system of rationing scarce kidneys that would favor young patients over old in an effort to wring more life out of donated organs. 
D)  The federal government's housing choice voucher program assists very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. 
A)  In December 2006, the Bush administration restarted a short-term housing assistance program for victims of Hurricane Katrina. 
B)  Each year, the University of Notre Dame conducts a lottery to parcel out the 30,000 seats available to contributors, former athletes and parents in the 80,000-seat stadium. 
C)  The United Network for Organ Sharing advocates a system of rationing scarce kidneys that would favor young patients over old in an effort to wring more life out of donated organs. 
D)  The federal government's housing choice voucher program assists very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market.

Question 14

Which of the following statements is true about competition in a market?

Accepted Answer

A)  Competition forces firms to outsource the production of their labor-intensive products. 
B)  Competition forces firms to undercut their selling price, thus benefiting consumers who will be able to purchase products at the lowest price possible. 
C)  Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production. 
D)  Competition forces firms to add only low profit margins to their costs of production. 
A)  Competition forces firms to outsource the production of their labor-intensive products. 
B)  Competition forces firms to undercut their selling price, thus benefiting consumers who will be able to purchase products at the lowest price possible. 
C)  Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production. 
D)  Competition forces firms to add only low profit margins to their costs of production.

Question 15

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 cost of producing the last 3,000 cell phones?

Accepted Answer

A)  marginal cost 
B)  operating cost 
C)  explicit cost 
D)  Any of the above terms are correct. 
A)  marginal cost 
B)  operating cost 
C)  explicit cost 
D)  Any of the above terms are correct.

Question 16

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.

Question 17

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

Accepted Answer

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

Question 18

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that

Accepted Answer

A)  people with health insurance will be less likely to be overweight than people without health insurance. 
B)  people with health insurance will be more likely to be overweight than people without health insurance. 
C)  people with health insurance will be equally likely to be overweight as people without health insurance. 
D)  there is no correlation between having health insurance and being overweight. 
A)  people with health insurance will be less likely to be overweight than people without health insurance. 
B)  people with health insurance will be more likely to be overweight than people without health insurance. 
C)  people with health insurance will be equally likely to be overweight as people without health insurance. 
D)  there is no correlation between having health insurance and being overweight.

Question 19

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements about positive economic analysis is false?

Accepted Answer

A)  Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. 
B)  There is much more disagreement among economists over normative economic analysis than over positive economic analysis. 
C)  There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D)  Unlike normative economic analysis, positive economic analysis can be tested. 
A)  Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. 
B)  There is much more disagreement among economists over normative economic analysis than over positive economic analysis. 
C)  There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D)  Unlike normative economic analysis, positive economic analysis can be tested.

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

Which of the following is a microeconomics question?

Which of the following is not an example of an economic trade-off that a firm has to make?

When voluntary exchange takes place,both parties gain from the exchange.

The decisions Apple makes in determining production levels for its iPhone is an example of a microeconomics topic.

Allocative efficiency is achieved when firms produce goods and services

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

Markets promote

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics? a.gasoline prices b.unemployment c.inflation d.health care costs e.air pollution f.economic growth

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

Suppose the U.S.government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000.These doctors would be exemplifying the economic idea that

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

Which of the following is motivated by an efficiency concern?

Which of the following statements is true about competition in a market?

Marginal analysis involves undertaking an activity

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

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

Which of the following statements about positive economic analysis is false?

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 1: Economics: Foundations and Models

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

Which of the following is a microeconomics question?

Which of the following is not an example of an economic trade-off that a firm has to make?

When voluntary exchange takes place,both parties gain from the exchange.

The decisions Apple makes in determining production levels for its iPhone is an example of a microeconomics topic.

Allocative efficiency is achieved when firms produce goods and services

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

Markets promote

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics? a.gasoline prices b.unemployment c.inflation d.health care costs e.air pollution f.economic growth

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

Suppose the U.S.government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000.These doctors would be exemplifying the economic idea that

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

Which of the following is motivated by an efficiency concern?

Which of the following statements is true about competition in a market?

Marginal analysis involves undertaking an activity

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

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

Which of the following statements about positive economic analysis is false?

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters