Question 1

When voluntary exchange takes place, neither party gains from the exchange.

Accepted Answer

A) True 
 B)False  False

Question 2

What kind of graphs have a horizontal and a vertical atlas and are used in economics to illustrate relationships between two economic variables?

Accepted Answer

A) Two-dimensional graphs 
B) One-dimensional graphs 
C) Pie Charts 
D) Bar graphs 
A) Two-dimensional graphs 
B) One-dimensional graphs 
C) Pie Charts 
D) Bar graphs A

Question 3

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 A

Question 4

Productive efficiency is generated by:

Accepted Answer

A) competition among sellers. 
B) competition among buyers. 
C) government inspectors. 
D) government production rules and regulations. 
A) competition among sellers. 
B) competition among buyers. 
C) government inspectors. 
D) government production rules and regulations.

Question 5

What are the three fundamental questions that any economy must address?

Accepted Answer

A) What will be the prices of goods and services; how will these goods and services be produced; and who will receive them? 
B) What goods and services will be produced; how will these goods and services be produced; and who receives them? 
C) Who gets jobs; what wages do workers earn; and who owns what property? 
D) How much will be saved; what will be produced; and how can these goods and services be fairly distributed? 
A) What will be the prices of goods and services; how will these goods and services be produced; and who will receive them? 
B) What goods and services will be produced; how will these goods and services be produced; and who receives them? 
C) Who gets jobs; what wages do workers earn; and who owns what property? 
D) How much will be saved; what will be produced; and how can these goods and services be fairly distributed?

Question 6

Consider the following statements: 
a. Consumers buy more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area.
b. Schools take steps to increase security since they believe it is more costly to allow vandalism than to hire additional security guards.
c. Citrus growers produce more oranges when the selling price of oranges falls.
The statement above that demonstrates that economic agents respond to incentives is:

Accepted Answer

A) a only 
B) b only 
C) a and b 
D) a, b, and c 
A) a only 
B) b only 
C) a and b 
D) a, b, and c

Question 7

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service.For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package.Should DeShawn continue to offer the engine detailing service?

Accepted Answer

A) Yes, he still makes a profit by selling the engine detailing service with the basic detailing package. 
B) Yes, but only if he raises the price of the basic detailing package. 
C) No, his marginal benefit is less than his marginal cost. 
D) More information is needed for DeShawn to make this decision. 
A) Yes, he still makes a profit by selling the engine detailing service with the basic detailing package. 
B) Yes, but only if he raises the price of the basic detailing package. 
C) No, his marginal benefit is less than his marginal cost. 
D) More information is needed for DeShawn to make this decision.

Question 8

Define productive efficiency.Does productive efficiency imply allocative efficiency? Explain.
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

Productive efficiency is an efficiency c

Question 9

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.

Question 10

What is voluntary exchange?
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

Voluntary exchange is a situat

Question 11

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

Accepted Answer

A) $270 
B) $720 
C) $810 
D) $2520 
A) $270 
B) $720 
C) $810 
D) $2520

Question 12

Define microeconomics.
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

Microeconomics is the study of

Question 13

What is a marginal cost?
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

Marginal cost is the

Question 14

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 courses of action. 
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 courses of action. 
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.

Question 15

Which of the following statements is false?

Accepted Answer

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

Question 16

Which of the following statements is true about scarcity?

Accepted Answer

A) Scarcity refers to the situation in which unlimited wants exceed limited resources. 
B) Scarcity is not a problem for the wealthy. 
C) Scarcity is only a problem when a country has too large a population. 
D) Scarcity arises when there is a wide disparity in income distribution. 
A) Scarcity refers to the situation in which unlimited wants exceed limited resources. 
B) Scarcity is not a problem for the wealthy. 
C) Scarcity is only a problem when a country has too large a population. 
D) Scarcity arises when there is a wide disparity in income distribution.

Question 17

What is a marginal benefit?
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

Marginal benefit is

Question 18

Macroeconomics is the study of________.

Accepted Answer

A) how households make choices. 
B) how firms make choices. 
C) how households and firms make choices. 
D) the economy as a whole. 
A) how households make choices. 
B) how firms make choices. 
C) how households and firms make choices. 
D) the economy as a whole.

Question 19

A restaurant sells a large soft drink at a fixed price of $1.79.What is the term used by economists to describe the money received from the sale of an additional large soft drink?

Accepted Answer

A) Marginal revenue 
B) Gross earnings 
C) Pure profit 
D) Net benefit 
A) Marginal revenue 
B) Gross earnings 
C) Pure profit 
D) Net benefit

Question 20

Explain why economics is considered a social science.
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

Economics is a social science

When voluntary exchange takes place, neither party gains from the exchange.

What kind of graphs have a horizontal and a vertical atlas and are used in economics to illustrate relationships between two economic variables?

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

Productive efficiency is generated by:

What are the three fundamental questions that any economy must address?

Define productive efficiency.Does productive efficiency imply allocative efficiency? Explain. __________________________________________________________________________________________________________________________________________________________________________________________

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

What is voluntary exchange? __________________________________________________________________________________________________________________________________________________________________________________________

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

Define microeconomics. __________________________________________________________________________________________________________________________________________________________________________________________

What is a marginal cost? __________________________________________________________________________________________________________________________________________________________________________________________

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

Which of the following statements is false?

Which of the following statements is true about scarcity?

What is a marginal benefit? __________________________________________________________________________________________________________________________________________________________________________________________

Macroeconomics is the study of________.

A restaurant sells a large soft drink at a fixed price of $1.79.What is the term used by economists to describe the money received from the sale of an additional large soft drink?

Explain why economics is considered a social science. __________________________________________________________________________________________________________________________________________________________________________________________

Choices and Trade-Offs in the Market

Where Prices Come From: The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition: The Competitive Model in a More Realistic

Oligopoly: Markets With Few Competitors

The Markets for Labour and Other Factors of Production

Comparative Advantage and the Gains From International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 1: Economics: Foundations and Models

When voluntary exchange takes place, neither party gains from the exchange.

What kind of graphs have a horizontal and a vertical atlas and are used in economics to illustrate relationships between two economic variables?

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

Productive efficiency is generated by:

What are the three fundamental questions that any economy must address?

Define productive efficiency.Does productive efficiency imply allocative efficiency? Explain. __________________________________________________________________________________________________________________________________________________________________________________________

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

What is voluntary exchange? __________________________________________________________________________________________________________________________________________________________________________________________

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

Define microeconomics. __________________________________________________________________________________________________________________________________________________________________________________________

What is a marginal cost? __________________________________________________________________________________________________________________________________________________________________________________________

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

Which of the following statements is false?

Which of the following statements is true about scarcity?

What is a marginal benefit? __________________________________________________________________________________________________________________________________________________________________________________________

Macroeconomics is the study of________.

A restaurant sells a large soft drink at a fixed price of $1.79.What is the term used by economists to describe the money received from the sale of an additional large soft drink?

Explain why economics is considered a social science. __________________________________________________________________________________________________________________________________________________________________________________________

Choices and Trade-Offs in the Market

Where Prices Come From: The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition: The Competitive Model in a More Realistic

Oligopoly: Markets With Few Competitors

The Markets for Labour and Other Factors of Production

Comparative Advantage and the Gains From International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters