Question 1

"As the price of gasoline increases, fewer people buy cars that are gas guzzlers." A graph showing this relationship would

Accepted Answer

A)  have a negative slope. 
B)  have a positive relationship. 
C)  have a direct relationship. 
D)  be a horizontal line. 
E)  be a vertical line. 
A)  have a negative slope. 
B)  have a positive relationship. 
C)  have a direct relationship. 
D)  be a horizontal line. 
E)  be a vertical line.

Question 2

A normative statement i. can be tested as to whether it is true or false.
Ii) is considered negative.
Iii) depends on a person's values.

Accepted Answer

A)  i only 
B)  iii only 
C)  i and iii 
D)  ii and iii 
E)  i, ii, and iii 
A)  i only 
B)  iii only 
C)  i and iii 
D)  ii and iii 
E)  i, ii, and iii

Question 3

Whenever one variable increases, another variable decreases.The two variables are

Accepted Answer

A)  definitely related through a third variable. 
B)  negatively related. 
C)  positively related. 
D)  unrelated to each other. 
E)  related but whether positively or negatively related depends on which variable is plotted on the vertical axis. 
A)  definitely related through a third variable. 
B)  negatively related. 
C)  positively related. 
D)  unrelated to each other. 
E)  related but whether positively or negatively related depends on which variable is plotted on the vertical axis.

Question 4

Which of the following statements best describes the study of economics? Economics studies how

Accepted Answer

A)  to organize production so that scarcity does not occur. 
B)  firms make profits. 
C)  we make choices in the face of scarcity. 
D)  to create incentives so that scarcity does not exist. 
E)  businesses reach decisions. 
A)  to organize production so that scarcity does not occur. 
B)  firms make profits. 
C)  we make choices in the face of scarcity. 
D)  to create incentives so that scarcity does not exist. 
E)  businesses reach decisions.

Question 5

The marginal benefit of an activity is i. the benefit from a one-unit increase in the activity
Ii) the benefit of a small, unimportant activity.
Iii) measured by what the person is willing to give up to get one additional unit of the activity.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  ii and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  ii and iii

Question 6

Decision making on the margin involves

Accepted Answer

A)  comparing the marginal cost and marginal benefits when making a decision. 
B)  comparing the total cost and the total benefit when making a decision. 
C)  eliminating the additional cost when making a decision. 
D)  determining the total benefits of a decision. 
E)  comparing the benefits from the social interest to the benefits from the person's self-interest. 
A)  comparing the marginal cost and marginal benefits when making a decision. 
B)  comparing the total cost and the total benefit when making a decision. 
C)  eliminating the additional cost when making a decision. 
D)  determining the total benefits of a decision. 
E)  comparing the benefits from the social interest to the benefits from the person's self-interest.

Question 7

-In the figure above, ceteris paribus, an increase in x is associated with

Accepted Answer

A)  an increase in y. 
B)  a decrease in y. 
C)  an increase in z. 
D)  a random change in z. 
E)  no change in either y or z. 
A)  an increase in y. 
B)  a decrease in y. 
C)  an increase in z. 
D)  a random change in z. 
E)  no change in either y or z.

Question 8

Making choices on the margin means

Accepted Answer

A)  scribbling on the edges of your notebook paper. 
B)  comparing all relevant alternatives systematically and incrementally. 
C)  making a decision based on emotions. 
D)  making decisions in the largest possible increments. 
E)  taking account of all marginal benefits, all opportunity costs, and all sunk costs. 
A)  scribbling on the edges of your notebook paper. 
B)  comparing all relevant alternatives systematically and incrementally. 
C)  making a decision based on emotions. 
D)  making decisions in the largest possible increments. 
E)  taking account of all marginal benefits, all opportunity costs, and all sunk costs.

Question 9

A statement that argues that "if taxes on gasoline increase, gasoline consumption will decrease" is an example of what kind of statement?

Accepted Answer

A)  a marginal statement 
B)  a macroeconomic statement 
C)  a normative statement 
D)  a positive statement 
E)  a statement that violates rational choice 
A)  a marginal statement 
B)  a macroeconomic statement 
C)  a normative statement 
D)  a positive statement 
E)  a statement that violates rational choice

Question 10

The question "Should we produce houses using bricks or wood? " is an example of a ________ question.

Accepted Answer

A)  what 
B)  how 
C)  for whom 
D)  where 
E)  why 
A)  what 
B)  how 
C)  for whom 
D)  where 
E)  why

Question 11

Your friend is preparing for this exam and in your practice session makes the following statement: "Instead of attending microeconomics class for two hours, Kiki could have played tennis or watched a movie.Therefore, the opportunity cost of attending class is the tennis and the movie she had to give up." Is your friend's analysis correct or not?
 Explain your answer.

Accepted Answer

Your friend's analysis is incorrect.The

Question 12

Which of the following is true?
I.A rational choice is made on the margin.
II.Microeconomics is the study of the national economy while macroeconomics is the study of the global economy.
III.Economists try to understand how the economic world works by testing normative statements.

Accepted Answer

A)  Only I 
B)  I and III 
C)  Only II 
D)  Only III 
E)  I and II 
A)  Only I 
B)  I and III 
C)  Only II 
D)  Only III 
E)  I and II

Question 13

What is the difference between microeconomics and macroeconomics?

Accepted Answer

Microeconomics studies the decisions of

Question 14

On a graph showing the relationship between x and y, the ceteris paribus condition implies that

Accepted Answer

A)  no other variables are related to x and y. 
B)  the value of x is held constant. 
C)  the value of y is held constant. 
D)  other variables not shown are held constant. 
E)  the value of x and the value of y are held constant. 
A)  no other variables are related to x and y. 
B)  the value of x is held constant. 
C)  the value of y is held constant. 
D)  other variables not shown are held constant. 
E)  the value of x and the value of y are held constant.

Question 15

Huey has eaten two hamburgers and is considering a third.The marginal benefit in his decision is the pleasure from consuming

Accepted Answer

A)  the two previous hamburgers. 
B)  all three hamburgers. 
C)  just the third hamburger. 
D)  just the second hamburger. 
E)  the third hamburger minus the pleasure from consuming zero hamburgers. 
A)  the two previous hamburgers. 
B)  all three hamburgers. 
C)  just the third hamburger. 
D)  just the second hamburger. 
E)  the third hamburger minus the pleasure from consuming zero hamburgers.

Question 16

Suppose you paid $400 tuition for a three-credit course.After the official withdrawal date has elapsed, you decide to drop the course but you cannot get back your $400.At this time, the $400 is

Accepted Answer

A)  the benefit of earning three credits. 
B)  an expenditure made on the margin. 
C)  a sunk cost. 
D)  the opportunity cost of the course. 
E)  the marginal cost of the course. 
A)  the benefit of earning three credits. 
B)  an expenditure made on the margin. 
C)  a sunk cost. 
D)  the opportunity cost of the course. 
E)  the marginal cost of the course.

Question 17

A graph shows the wages of factory workers.The slope of the line is positive for periods when the wage is

Accepted Answer

A)  falling. 
B)  rising. 
C)  high and not changing. 
D)  low and falling. 
E)  high and falling. 
A)  falling. 
B)  rising. 
C)  high and not changing. 
D)  low and falling. 
E)  high and falling.

Question 18

Rational choice

Accepted Answer

A)  is a choice that uses the available resources to best achieve the objective of the person making the choice. 
B)  is always efficient. 
C)  is what you must give up get what you want. 
D)  is made by comparing different incentives. 
E)  provides the answer to only the "how" question. 
A)  is a choice that uses the available resources to best achieve the objective of the person making the choice. 
B)  is always efficient. 
C)  is what you must give up get what you want. 
D)  is made by comparing different incentives. 
E)  provides the answer to only the "how" question.

Question 19

People must make choices because

Accepted Answer

A)  most people enjoy shopping. 
B)  of scarcity. 
C)  there are many goods available. 
D)  the question "What goods and services are produced?" is not adequately answered. 
E)  making choices is in the social interest. 
A)  most people enjoy shopping. 
B)  of scarcity. 
C)  there are many goods available. 
D)  the question "What goods and services are produced?" is not adequately answered. 
E)  making choices is in the social interest.

Question 20

-In the above figure, while drawing the line showing the relationship between the price of a pound of peanuts and the quantity sold, the

Accepted Answer

A)  price of a pound of pecans does not change. 
B)  price of a pound of peanuts does not change. 
C)  the quantity of peanuts that farmers supply does not change. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct. 
A)  price of a pound of pecans does not change. 
B)  price of a pound of peanuts does not change. 
C)  the quantity of peanuts that farmers supply does not change. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct.

"As the price of gasoline increases, fewer people buy cars that are gas guzzlers." A graph showing this relationship would

A normative statement i. can be tested as to whether it is true or false. Ii) is considered negative. Iii) depends on a person's values.

Whenever one variable increases, another variable decreases.The two variables are

Which of the following statements best describes the study of economics? Economics studies how

The marginal benefit of an activity is i. the benefit from a one-unit increase in the activity Ii) the benefit of a small, unimportant activity. Iii) measured by what the person is willing to give up to get one additional unit of the activity.

Decision making on the margin involves

-In the figure above, ceteris paribus, an increase in x is associated with

Making choices on the margin means

A statement that argues that "if taxes on gasoline increase, gasoline consumption will decrease" is an example of what kind of statement?

The question "Should we produce houses using bricks or wood? " is an example of a ________ question.

Which of the following is true? I.A rational choice is made on the margin. II.Microeconomics is the study of the national economy while macroeconomics is the study of the global economy. III.Economists try to understand how the economic world works by testing normative statements.

What is the difference between microeconomics and macroeconomics?

On a graph showing the relationship between x and y, the ceteris paribus condition implies that

Huey has eaten two hamburgers and is considering a third.The marginal benefit in his decision is the pleasure from consuming

Suppose you paid $400 tuition for a three-credit course.After the official withdrawal date has elapsed, you decide to drop the course but you cannot get back your $400.At this time, the $400 is

A graph shows the wages of factory workers.The slope of the line is positive for periods when the wage is

Rational choice

People must make choices because

-In the above figure, while drawing the line showing the relationship between the price of a pound of peanuts and the quantity sold, the

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 1: Getting Started

"As the price of gasoline increases, fewer people buy cars that are gas guzzlers." A graph showing this relationship would

A normative statement i. can be tested as to whether it is true or false. Ii) is considered negative. Iii) depends on a person's values.

Whenever one variable increases, another variable decreases.The two variables are

Which of the following statements best describes the study of economics? Economics studies how

The marginal benefit of an activity is i. the benefit from a one-unit increase in the activity Ii) the benefit of a small, unimportant activity. Iii) measured by what the person is willing to give up to get one additional unit of the activity.

Decision making on the margin involves

-In the figure above, ceteris paribus, an increase in x is associated with

Making choices on the margin means

A statement that argues that "if taxes on gasoline increase, gasoline consumption will decrease" is an example of what kind of statement?

The question "Should we produce houses using bricks or wood? " is an example of a ________ question.

Which of the following is true? I.A rational choice is made on the margin. II.Microeconomics is the study of the national economy while macroeconomics is the study of the global economy. III.Economists try to understand how the economic world works by testing normative statements.

What is the difference between microeconomics and macroeconomics?

On a graph showing the relationship between x and y, the ceteris paribus condition implies that

Huey has eaten two hamburgers and is considering a third.The marginal benefit in his decision is the pleasure from consuming

Suppose you paid $400 tuition for a three-credit course.After the official withdrawal date has elapsed, you decide to drop the course but you cannot get back your $400.At this time, the $400 is

A graph shows the wages of factory workers.The slope of the line is positive for periods when the wage is

Rational choice

People must make choices because

-In the above figure, while drawing the line showing the relationship between the price of a pound of peanuts and the quantity sold, the

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters