Question 1

Normative statements are concerned primarily with

Accepted Answer

A)  facts and theories. 
B)  what ought to be. 
C)  what is. 
D)  rational choice involving costs and benefits. 
A)  facts and theories. 
B)  what ought to be. 
C)  what is. 
D)  rational choice involving costs and benefits. B

Question 2

The fundamental economic problem faced by a society is that productive resources are so varied and versatile that it is hard to decide what to do with them.

Accepted Answer

A) True 
 B)False  False

Question 3

A point inside the production possibilities curve is , while a point outside the curve is .

Accepted Answer

A)  attainable; unattainable 
B)  unattainable; attainable 
C)  below the maximum possible; the maximum possible 
D)  the maximum possible; below the maximum possible 
A)  attainable; unattainable 
B)  unattainable; attainable 
C)  below the maximum possible; the maximum possible 
D)  the maximum possible; below the maximum possible A

Question 4

In graphing a relationship between two variables, economists always follow the mathematical convention. Thus, if price is the independent variable then it is measured on the horizontal axis.

Accepted Answer

A) True 
 B)False

Question 5

(Last Word) A caller to a radio talk show states that protesters against globalization are a collection of "anarchist punks, naïve college students, and trade union radicals." This is an example of

Accepted Answer

A)  the fallacy of composition. 
B)  the economic perspective. 
C)  loaded terminology. 
D)  marginal analysis. 
A)  the fallacy of composition. 
B)  the economic perspective. 
C)  loaded terminology. 
D)  marginal analysis.

Question 6

The process by which capital goods are accumulated is known as investment.

Accepted Answer

A) True 
 B)False

Question 7

The slope of a graph relating two variables is -5. This indicates that as one variable decreases, the other variable also decreases.

Accepted Answer

A) True 
 B)False

Question 8

Economists

Accepted Answer

A)  always put the independent variable on the horizontal axis and the dependent variable on the vertical axis. 
B)  always put the dependent variable on the horizontal axis and the independent variable on the vertical axis. 
C)  are somewhat arbitrary in assigning independent and dependent variables to the horizontal and vertical axes. 
D)  measure the slope of a line differently than do mathematicians. 
A)  always put the independent variable on the horizontal axis and the dependent variable on the vertical axis. 
B)  always put the dependent variable on the horizontal axis and the independent variable on the vertical axis. 
C)  are somewhat arbitrary in assigning independent and dependent variables to the horizontal and vertical axes. 
D)  measure the slope of a line differently than do mathematicians.

Question 9

The scientific method is

Accepted Answer

A)  not applicable to economics because economics deals with human beings. 
B)  also known as the economic perspective. 
C)  employed to form hypotheses out of existing laws and theories. 
D)  used by economists and other social scientists, as well as by physical scientists and life scientists, to formulate and test hypotheses. 
A)  not applicable to economics because economics deals with human beings. 
B)  also known as the economic perspective. 
C)  employed to form hypotheses out of existing laws and theories. 
D)  used by economists and other social scientists, as well as by physical scientists and life scientists, to formulate and test hypotheses.

Question 10

Which of the following will enable a nation to obtain a combination of consumer goods and capital goods outside its production possibilities curve?

Accepted Answer

A)  full employment 
B)  international specialization and trade 
C)  full production 
D)  productive efficiency 
A)  full employment 
B)  international specialization and trade 
C)  full production 
D)  productive efficiency

Question 11

A typical concave (bowed out from the origin) production possibilities curve implies

Accepted Answer

A)  that economic resources are unlimited. 
B)  that society must choose among various attainable combinations of goods. 
C)  decreasing opportunity costs. 
D)  that society is using a market system to allocate resources. 
A)  that economic resources are unlimited. 
B)  that society must choose among various attainable combinations of goods. 
C)  decreasing opportunity costs. 
D)  that society is using a market system to allocate resources.

Question 12

Camille is at the candy store with Grandma Mary, who offers to buy her $6 worth of candy. If lollipops are $1 each and candy bars are $2 each, what combination of candy can Camille's Grandma Mary buy her?

Accepted Answer

A)  six lollipops and three candy bars 
B)  two lollipops and two candy bars 
C)  three lollipops and two candy bars 
D)  one lollipop and three candy bars 
A)  six lollipops and three candy bars 
B)  two lollipops and two candy bars 
C)  three lollipops and two candy bars 
D)  one lollipop and three candy bars

Question 13

If economic resources are perfectly interchangeable between the two products shown on a production possibilities graph,

Accepted Answer

A)  the economy will always be at full employment. 
B)  more of one product can be produced without producing less of the other product. 
C)  the production possibilities curve would be a straight line. 
D)  the two products are of equal value to the economy. 
A)  the economy will always be at full employment. 
B)  more of one product can be produced without producing less of the other product. 
C)  the production possibilities curve would be a straight line. 
D)  the two products are of equal value to the economy.

Question 14

The economic principle that the "unemployment rate will tend to increase as the economy moves into a recession" is an example of

Accepted Answer

A)  a normative statement. 
B)  an assumption. 
C)  loaded terminology. 
D)  a generalization. 
A)  a normative statement. 
B)  an assumption. 
C)  loaded terminology. 
D)  a generalization.

Question 15

Specialization and international trade allow a nation to

Accepted Answer

A)  produce a combination of goods that is beyond (or outside) its production possibilities. 
B)  consume a combination of goods that is beyond (or outside) its production possibilities. 
C)  have an upward-sloping production possibilities curve. 
D)  consume a lot of goods without having to produce any output. 
A)  produce a combination of goods that is beyond (or outside) its production possibilities. 
B)  consume a combination of goods that is beyond (or outside) its production possibilities. 
C)  have an upward-sloping production possibilities curve. 
D)  consume a lot of goods without having to produce any output.

Question 16

"Macroeconomics is the part of economics concerned with individual units, such as a person, a household, a firm, or an industry." This statement is

Accepted Answer

A)  positive but incorrect. 
B)  positive and correct. 
C)  normative but incorrect. 
D)  normative and correct. 
A)  positive but incorrect. 
B)  positive and correct. 
C)  normative but incorrect. 
D)  normative and correct.

Question 17

In deciding whether to study for an economics quiz or go to a concert, one is confronted by the idea(s) of

Accepted Answer

A)  scarcity and opportunity costs. 
B)  money and real capital. 
C)  complementary economic goals. 
D)  full production. 
A)  scarcity and opportunity costs. 
B)  money and real capital. 
C)  complementary economic goals. 
D)  full production.

Question 18

Which of the following would not be considered a capital resource by economists?

Accepted Answer

A)  a van used by a mother to transport the family around 
B)  an office computer used by an accountant 
C)  a crane used by a building contractor 
D)  a camera used by a professional photographer 
A)  a van used by a mother to transport the family around 
B)  an office computer used by an accountant 
C)  a crane used by a building contractor 
D)  a camera used by a professional photographer

Question 19

The economic perspective entails

Accepted Answer

A)  irrational behavior by individuals and institutions. 
B)  a comparison of marginal benefits and marginal costs in decision making. 
C)  short-term but not long-term thinking. 
D)  rejection of the scientific method. 
A)  irrational behavior by individuals and institutions. 
B)  a comparison of marginal benefits and marginal costs in decision making. 
C)  short-term but not long-term thinking. 
D)  rejection of the scientific method.

Question 20

In a curved graph that is dome-shaped, the tangent line at its maximum, or highest point, has an infinite slope.

Accepted Answer

A) True 
 B)False

Exam 1: Limits, Alternatives, and Choices

Normative statements are concerned primarily with

The fundamental economic problem faced by a society is that productive resources are so varied and versatile that it is hard to decide what to do with them.

A point inside the production possibilities curve is , while a point outside the curve is .

In graphing a relationship between two variables, economists always follow the mathematical convention. Thus, if price is the independent variable then it is measured on the horizontal axis.

(Last Word) A caller to a radio talk show states that protesters against globalization are a collection of "anarchist punks, naïve college students, and trade union radicals." This is an example of

The process by which capital goods are accumulated is known as investment.

The slope of a graph relating two variables is -5. This indicates that as one variable decreases, the other variable also decreases.

Economists

The scientific method is

Which of the following will enable a nation to obtain a combination of consumer goods and capital goods outside its production possibilities curve?

A typical concave (bowed out from the origin) production possibilities curve implies

Camille is at the candy store with Grandma Mary, who offers to buy her $6 worth of candy. If lollipops are $1 each and candy bars are $2 each, what combination of candy can Camille's Grandma Mary buy her?

If economic resources are perfectly interchangeable between the two products shown on a production possibilities graph,

The economic principle that the "unemployment rate will tend to increase as the economy moves into a recession" is an example of

Specialization and international trade allow a nation to

"Macroeconomics is the part of economics concerned with individual units, such as a person, a household, a firm, or an industry." This statement is

In deciding whether to study for an economics quiz or go to a concert, one is confronted by the idea(s) of

Which of the following would not be considered a capital resource by economists?

The economic perspective entails

In a curved graph that is dome-shaped, the tangent line at its maximum, or highest point, has an infinite slope.

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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