Question 1

Economics is best defined as the study of how people,businesses,governments,and societies

Accepted Answer

A)  choose abundance over scarcity. 
B)  make choices to cope with scarcity. 
C)  use their infinite resources. 
D)  attain wealth. 
A)  choose abundance over scarcity. 
B)  make choices to cope with scarcity. 
C)  use their infinite resources. 
D)  attain wealth. B

Question 2

When Al makes the statement,"The cost of living has increased 10 percent over the past 10 years," he is

Accepted Answer

A)  making a normative statement. 
B)  making a positive statement. 
C)  testing an economic model. 
D)  facing the standard of living tradeoff. 
A)  making a normative statement. 
B)  making a positive statement. 
C)  testing an economic model. 
D)  facing the standard of living tradeoff. B

Question 3

-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 is held constant. 
B)  price of a pound of peanuts is held constant. 
C)  quantity of peanuts that farmers supply is constant. 
D)  Both answers A and B are true. 
A)  price of a pound of pecans is held constant. 
B)  price of a pound of peanuts is held constant. 
C)  quantity of peanuts that farmers supply is constant. 
D)  Both answers A and B are true. A

Question 4

A natural resource,such as fishing territories,is considered an example of

Accepted Answer

A)  both land and labor. 
B)  land, labor, capital and entrepreneurship. 
C)  land only. 
D)  only capital. 
A)  both land and labor. 
B)  land, labor, capital and entrepreneurship. 
C)  land only. 
D)  only capital.

Question 5

Which of the following statements are correct?
I. The "highest-valued alternative given up to get something" is the opportunity cost.
II. Wealthy economies don't experience opportunity costs.
III. Scarcity creates opportunity costs.

Accepted Answer

A)  I only 
B)  I and II 
C)  I and III 
D)  I, II, and III 
A)  I only 
B)  I and II 
C)  I and III 
D)  I, II, and III

Question 6

Microeconomics is the study of ________.

Accepted Answer

A)  the choices that individuals and businesses make 
B)  all aspects of scarcity 
C)  the global economy 
D)  the national economy 
A)  the choices that individuals and businesses make 
B)  all aspects of scarcity 
C)  the global economy 
D)  the national economy

Question 7

15 Appendix: Numeric and Graphing Questions
  
-The figure above shows how the sales of the video game "Tomb Raider-Lara Retires" change when the advertising spent on the game changes.Is the relationship between advertising and the number of games sold positive,negative,or neither?
Explain your answer.

Accepted Answer

The figure shows that there is a positiv

Question 8

-Suppose we are considering the relationship between two variables y and x.y is measured on the y-axis and x is measured on the x-axis,and the relationship between then is a straight line.Suppose that the slope of the line is equal to 1.This slope means that

Accepted Answer

A)  a change in x is associated with a bigger change in y. 
B)  a change in x is associated with a smaller change in y. 
C)  a change in x is associated with no change in y. 
D)  a change in x is associated with an equal change in y. 
A)  a change in x is associated with a bigger change in y. 
B)  a change in x is associated with a smaller change in y. 
C)  a change in x is associated with no change in y. 
D)  a change in x is associated with an equal change in y.

Question 9

Assume that the quantity consumed of pizza is dependent on three factors: the price of a pizza,the income of pizza purchasers,and consumers' taste for pizza.When graphing the relationship between the price of a pizza and the quantity of pizza consumed

Accepted Answer

A)  the price of a pizza and the income of pizza consumers are the only variables that are allowed to change. 
B)  the price of pizza and quantity consumed of pizza are the only variables that are allowed to change. 
C)  consumers' taste for pizza and the income of pizza purchasers are the only variables that are allowed to change. 
D)  None of the above answers are correct. 
A)  the price of a pizza and the income of pizza consumers are the only variables that are allowed to change. 
B)  the price of pizza and quantity consumed of pizza are the only variables that are allowed to change. 
C)  consumers' taste for pizza and the income of pizza purchasers are the only variables that are allowed to change. 
D)  None of the above answers are correct.

Question 10

Which of the following is an example of a positive statement?

Accepted Answer

A)  We should cut back on our use of carbon-based fuels such as coal and oil. 
B)  Increasing the minimum wage results in more unemployment. 
C)  Every American should have equal access to health care. 
D)  The Federal Reserve ought to cut the interest rate. 
A)  We should cut back on our use of carbon-based fuels such as coal and oil. 
B)  Increasing the minimum wage results in more unemployment. 
C)  Every American should have equal access to health care. 
D)  The Federal Reserve ought to cut the interest rate.

Question 11

"Government should act to reduce poverty levels."

Accepted Answer

A)  This statement is a normative statement. 
B)  This statement is a positive statement. 
C)  This statement is an example of the fallacy of composition. 
D)  This statement is an example of the post hoc fallacy. 
A)  This statement is a normative statement. 
B)  This statement is a positive statement. 
C)  This statement is an example of the fallacy of composition. 
D)  This statement is an example of the post hoc fallacy.

Question 12

Which of the following is a normative statement?

Accepted Answer

A)  Low rents will restrict the supply of housing. 
B)  Low rents are good because they make apartments more affordable. 
C)  Housing costs are rising. 
D)  Owners of apartment buildings are free to charge whatever rent they want. 
A)  Low rents will restrict the supply of housing. 
B)  Low rents are good because they make apartments more affordable. 
C)  Housing costs are rising. 
D)  Owners of apartment buildings are free to charge whatever rent they want.

Question 13

-Using the above figure,which of the following is true?

Accepted Answer

A)  Axis 1 is typically called the y-axis. 
B)  Axis 1 is also known as the origin. 
C)  Axis 2 is typically called the x-axis. 
D)  Point b is known as the origin. 
A)  Axis 1 is typically called the y-axis. 
B)  Axis 1 is also known as the origin. 
C)  Axis 2 is typically called the x-axis. 
D)  Point b is known as the origin.

Question 14

Suppose you plan to go to school this summer.The cost of tuition and textbooks is $1,400 and housing,board,and entertainment will cost you $500.If you didn't go to school,you'd live in your parents' house for free,but your other living expenses would be about the same.Also,if you didn't go to school you'd work full time and could earn $8,000.You can still work part time while attending the summer school,but you will earn only $3,000.
a) What will the summer school cost you in terms of money explicitly paid?
b) What are the opportunity costs of going to summer school that you don't pay explicitly?
Explain.
c) What is your total opportunity costs of going to school this summer?
Explain your answer.

Accepted Answer

a)You explicitly pay the cost of tuition

Question 15

Which of the following is NOT part of the first big economic question?

Accepted Answer

A)  What goods and services are produced? 
B)  How are goods and services produced? 
C)  For whom are goods and services produced? 
D)  Why do incentives affect only marginal costs? 
A)  What goods and services are produced? 
B)  How are goods and services produced? 
C)  For whom are goods and services produced? 
D)  Why do incentives affect only marginal costs?

Question 16

Suppose that for the past two months,you have studied economics one hour a day.You now decide to study economics two hours a day.For the past two months,________.

Accepted Answer

A)  your marginal cost of studying economics for an hour must have exceeded its marginal benefit 
B)  the marginal cost of studying economics must have fallen 
C)  your marginal benefit from studying economics an hour must have been greater than its marginal cost 
D)  the opportunity cost of studying economics must have risen. 
A)  your marginal cost of studying economics for an hour must have exceeded its marginal benefit 
B)  the marginal cost of studying economics must have fallen 
C)  your marginal benefit from studying economics an hour must have been greater than its marginal cost 
D)  the opportunity cost of studying economics must have risen.

Question 17

A lawn service is deciding whether to add an additional employee to its summer crew.The marginal cost of hiring this worker depends on the

Accepted Answer

A)  total amount paid to only the new worker. 
B)  total amount paid to all previously hired workers. 
C)  the total amount paid to all the workers, both the new one and the previously hired workers. 
D)  the additional revenue created by having an additional worker minus the cost of hiring the worker. 
A)  total amount paid to only the new worker. 
B)  total amount paid to all previously hired workers. 
C)  the total amount paid to all the workers, both the new one and the previously hired workers. 
D)  the additional revenue created by having an additional worker minus the cost of hiring the worker.

Question 18

Which factor of production earns profit?

Accepted Answer

A)  land 
B)  human capital 
C)  money 
D)  entrepreneurship 
A)  land 
B)  human capital 
C)  money 
D)  entrepreneurship

Question 19

-In the above figure,which of the graphs demonstrates a curve with a decreasing slope,that is,a slope getting smaller in magnitude as x increases?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 20

$$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
x \text {-variable } \
\text { (on the horizontal axis) }
\end{array} & \begin{array} { c } 
y \text {-variable } \
\text { (on the vertical axis) }
\end{array} \
\hline 8 & 14 \
\hline 10 & 18 \
\hline 12 & 22 \
\hline
\end{array}$$
-The above table gives data on two variables.If these data were graphed,the slope of the line would be

Accepted Answer

A)  1. 
B)  -2. 
C)  2. 
D)  -4. 
A)  1. 
B)  -2. 
C)  2. 
D)  -4.

Economics is best defined as the study of how people,businesses,governments,and societies

When Al makes the statement,"The cost of living has increased 10 percent over the past 10 years," he is

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

A natural resource,such as fishing territories,is considered an example of

Which of the following statements are correct? I. The "highest-valued alternative given up to get something" is the opportunity cost. II. Wealthy economies don't experience opportunity costs. III. Scarcity creates opportunity costs.

Microeconomics is the study of ________.

15 Appendix: Numeric and Graphing Questions -The figure above shows how the sales of the video game "Tomb Raider-Lara Retires" change when the advertising spent on the game changes.Is the relationship between advertising and the number of games sold positive,negative,or neither? Explain your answer.

-Suppose we are considering the relationship between two variables y and x.y is measured on the y-axis and x is measured on the x-axis,and the relationship between then is a straight line.Suppose that the slope of the line is equal to 1.This slope means that

Assume that the quantity consumed of pizza is dependent on three factors: the price of a pizza,the income of pizza purchasers,and consumers' taste for pizza.When graphing the relationship between the price of a pizza and the quantity of pizza consumed

Which of the following is an example of a positive statement?

"Government should act to reduce poverty levels."

Which of the following is a normative statement?

-Using the above figure,which of the following is true?

Which of the following is NOT part of the first big economic question?

Suppose that for the past two months,you have studied economics one hour a day.You now decide to study economics two hours a day.For the past two months,________.

A lawn service is deciding whether to add an additional employee to its summer crew.The marginal cost of hiring this worker depends on the

Which factor of production earns profit?

-In the above figure,which of the graphs demonstrates a curve with a decreasing slope,that is,a slope getting smaller in magnitude as x increases?

x -variable (on the horizontal axis) y -variable (on the vertical axis) 8 14 10 18 12 22 -The above table gives data on two variables.If these data were graphed,the slope of the line would be

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 1: What Is Economics

Economics is best defined as the study of how people,businesses,governments,and societies

When Al makes the statement,"The cost of living has increased 10 percent over the past 10 years," he is

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

A natural resource,such as fishing territories,is considered an example of

Which of the following statements are correct? I. The "highest-valued alternative given up to get something" is the opportunity cost. II. Wealthy economies don't experience opportunity costs. III. Scarcity creates opportunity costs.

Microeconomics is the study of ________.

-Suppose we are considering the relationship between two variables y and x.y is measured on the y-axis and x is measured on the x-axis,and the relationship between then is a straight line.Suppose that the slope of the line is equal to 1.This slope means that

Assume that the quantity consumed of pizza is dependent on three factors: the price of a pizza,the income of pizza purchasers,and consumers' taste for pizza.When graphing the relationship between the price of a pizza and the quantity of pizza consumed

Which of the following is an example of a positive statement?

"Government should act to reduce poverty levels."

Which of the following is a normative statement?

-Using the above figure,which of the following is true?

Which of the following is NOT part of the first big economic question?

Suppose that for the past two months,you have studied economics one hour a day.You now decide to study economics two hours a day.For the past two months,________.

A lawn service is deciding whether to add an additional employee to its summer crew.The marginal cost of hiring this worker depends on the

Which factor of production earns profit?

-In the above figure,which of the graphs demonstrates a curve with a decreasing slope,that is,a slope getting smaller in magnitude as x increases?

x -variable (on the horizontal axis) y -variable (on the vertical axis) 8 14 10 18 12 22 -The above table gives data on two variables.If these data were graphed,the slope of the line would be

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters