Question 1

If a nation produces more consumer goods and less capital goods, then the nation will have

Accepted Answer

A)  more consumption now, but less consumption later. 
B)  less consumption now, but more consumption later. 
C)  more consumption now, with no effect on consumption later. 
D)  less consumption later, with no effect on consumption now. 
A)  more consumption now, but less consumption later. 
B)  less consumption now, but more consumption later. 
C)  more consumption now, with no effect on consumption later. 
D)  less consumption later, with no effect on consumption now.

Question 2

The lower the consumer's income, the higher his or her budget line.

Accepted Answer

A) True 
 B)False

Question 3

Answer the question on the basis of the data given in the following production possibilities table.   Refer to the table. For these data, the law of increasing opportunity costs is reflected in the fact that

Accepted Answer

A)  the amount of consumer goods that must be sacrificed to get more capital goods diminishes beyond a point. 
B)  larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods. 
C)  the production possibilities data would graph as a straight downsloping line. 
D)  the economy's resources are presumed to be scarce. 
A)  the amount of consumer goods that must be sacrificed to get more capital goods diminishes beyond a point. 
B)  larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods. 
C)  the production possibilities data would graph as a straight downsloping line. 
D)  the economy's resources are presumed to be scarce.

Question 4

If the equation y = 15 - 4x was plotted, the

Accepted Answer

A)  vertical intercept would be -4. 
B)  vertical intercept would be +4. 
C)  slope would be +15. 
D)  slope would be -4. 
A)  vertical intercept would be -4. 
B)  vertical intercept would be +4. 
C)  slope would be +15. 
D)  slope would be -4.

Question 5

The issues of inflation, unemployment, and business cycles are

Accepted Answer

A)  major topics of macroeconomics. 
B)  not relevant to the U.S. economy. 
C)  the primary focus of microeconomics. 
D)  positive economic issues, but not normative issues. 
A)  major topics of macroeconomics. 
B)  not relevant to the U.S. economy. 
C)  the primary focus of microeconomics. 
D)  positive economic issues, but not normative issues.

Question 6

As a consequence of the problem of scarcity,

Accepted Answer

A)  there is never enough of anything. 
B)  individuals have to make choices from among alternatives. 
C)  only some people can "have it all." 
D)  things which are plentiful have relatively high prices. 
A)  there is never enough of anything. 
B)  individuals have to make choices from among alternatives. 
C)  only some people can "have it all." 
D)  things which are plentiful have relatively high prices.

Question 7

If we say that two variables are directly related, this means that

Accepted Answer

A)  the relationship between the two is purely random. 
B)  an increase in one variable is associated with a decrease in the other variable. 
C)  an increase in one variable is associated with an increase in the other variable. 
D)  the two graph as a downsloping line. 
A)  the relationship between the two is purely random. 
B)  an increase in one variable is associated with a decrease in the other variable. 
C)  an increase in one variable is associated with an increase in the other variable. 
D)  the two graph as a downsloping line.

Question 8

(Last Word) A caller to a radio talk show states that oil companies are "greedy price gougers." This is an example of

Accepted Answer

A)  loaded terminology. 
B)  the "after this, therefore because of this fallacy." 
C)  the fallacy of composition. 
D)  the economic perspective. 
A)  loaded terminology. 
B)  the "after this, therefore because of this fallacy." 
C)  the fallacy of composition. 
D)  the economic perspective.

Question 9

The process of producing and accumulating capital goods is called

Accepted Answer

A)  money capital. 
B)  depreciation. 
C)  investment. 
D)  consumption. 
A)  money capital. 
B)  depreciation. 
C)  investment. 
D)  consumption.

Question 10

The budget line shows the various incomes that an individual can earn from different jobs.

Accepted Answer

A) True 
 B)False

Question 11

If a positive relationship exists between x and y,

Accepted Answer

A)  an increase in x will cause y to decrease. 
B)  a decrease in x will cause y to increase. 
C)  the relationship will graph as an upsloping line. 
D)  the vertical intercept must be positive. 
A)  an increase in x will cause y to decrease. 
B)  a decrease in x will cause y to increase. 
C)  the relationship will graph as an upsloping line. 
D)  the vertical intercept must be positive.

Question 12

Which of the following is not considered by economists to be an economic resource?

Accepted Answer

A)  money 
B)  factory workers 
C)  computers at a retail store. 
D)  a forest 
A)  money 
B)  factory workers 
C)  computers at a retail store. 
D)  a forest

Question 13

A point or combination that is on the production possibilities curve is

Accepted Answer

A)  attainable, and resources are fully employed. 
B)  attainable, but some resources are unemployed. 
C)  unattainable, but some resources are unemployed. 
D)  attainable only if we get additional resources. 
A)  attainable, and resources are fully employed. 
B)  attainable, but some resources are unemployed. 
C)  unattainable, but some resources are unemployed. 
D)  attainable only if we get additional resources.

Question 14

Suppose that a fully employed economy produces only two goods, hamburgers and flat-panel TVs. If the economy is currently producing more than the optimal quantity of hamburgers, then to attain the optimal allocation of resources, it should

Accepted Answer

A)  produce more hamburgers and fewer TVs. 
B)  produce more TVs and fewer hamburgers. 
C)  produce more of both goods. 
D)  produce fewer of both goods. 
A)  produce more hamburgers and fewer TVs. 
B)  produce more TVs and fewer hamburgers. 
C)  produce more of both goods. 
D)  produce fewer of both goods.

Question 15

Through specialization and international trade, a nation

Accepted Answer

A)  can attain some combination of goods lying outside its production possibilities curve. 
B)  can move from a high consumption-low investment to a high investment-low consumption point on its production possibilities curve. 
C)  will only attain some combination of goods lying within its production possibilities curve. 
D)  will cause its production possibilities curve to shift leftward. 
A)  can attain some combination of goods lying outside its production possibilities curve. 
B)  can move from a high consumption-low investment to a high investment-low consumption point on its production possibilities curve. 
C)  will only attain some combination of goods lying within its production possibilities curve. 
D)  will cause its production possibilities curve to shift leftward.

Question 16

Assume an economy is incurring unemployment. The effect of resolving this problem will be to

Accepted Answer

A)  move the level of actual output closer to the economy's production possibilities curve. 
B)  create a less equal distribution of income. 
C)  shift its production possibilities curve to the left. 
D)  shift its production possibilities curve to the right. 
A)  move the level of actual output closer to the economy's production possibilities curve. 
B)  create a less equal distribution of income. 
C)  shift its production possibilities curve to the left. 
D)  shift its production possibilities curve to the right.

Question 17

The study of economics is primarily concerned with

Accepted Answer

A)  keeping private businesses from losing money. 
B)  demonstrating that capitalistic economies are superior to socialistic economies. 
C)  choices that are made in seeking the best use of resources. 
D)  determining the most equitable distribution of society's output. 
A)  keeping private businesses from losing money. 
B)  demonstrating that capitalistic economies are superior to socialistic economies. 
C)  choices that are made in seeking the best use of resources. 
D)  determining the most equitable distribution of society's output.

Question 18

Money is not an economic resource because

Accepted Answer

A)  money, as such, does not produce anything. 
B)  idle money balances do not earn interest income. 
C)  it is not scarce. 
D)  money is not a free gift of nature. 
A)  money, as such, does not produce anything. 
B)  idle money balances do not earn interest income. 
C)  it is not scarce. 
D)  money is not a free gift of nature.

Question 19

The slope of a line parallel to the vertical axis is

Accepted Answer

A)  zero. 
B)  one. 
C)  infinite. 
D)  one-half. 
A)  zero. 
B)  one. 
C)  infinite. 
D)  one-half.

Question 20

The alternative combinations of two goods that a consumer can purchase with a specific money income is shown by

Accepted Answer

A)  a production possibilities curve. 
B)  a demand curve. 
C)  a consumer expenditure line. 
D)  a budget line. 
A)  a production possibilities curve. 
B)  a demand curve. 
C)  a consumer expenditure line. 
D)  a budget line.

Exam 1: Limits, Alternatives, and Choices

If a nation produces more consumer goods and less capital goods, then the nation will have

The lower the consumer's income, the higher his or her budget line.

Answer the question on the basis of the data given in the following production possibilities table. Refer to the table. For these data, the law of increasing opportunity costs is reflected in the fact that

If the equation y = 15 - 4x was plotted, the

The issues of inflation, unemployment, and business cycles are

As a consequence of the problem of scarcity,

If we say that two variables are directly related, this means that

(Last Word) A caller to a radio talk show states that oil companies are "greedy price gougers." This is an example of

The process of producing and accumulating capital goods is called

The budget line shows the various incomes that an individual can earn from different jobs.

If a positive relationship exists between x and y,

Which of the following is not considered by economists to be an economic resource?

A point or combination that is on the production possibilities curve is

Suppose that a fully employed economy produces only two goods, hamburgers and flat-panel TVs. If the economy is currently producing more than the optimal quantity of hamburgers, then to attain the optimal allocation of resources, it should

Through specialization and international trade, a nation

Assume an economy is incurring unemployment. The effect of resolving this problem will be to

The study of economics is primarily concerned with

Money is not an economic resource because

The slope of a line parallel to the vertical axis is

The alternative combinations of two goods that a consumer can purchase with a specific money income is shown by

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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