Question 1

Which of the following lists includes only capital resources (and therefore no labor or land resources)?

Accepted Answer

A)  An ice arena;a professional hockey player;hockey uniforms. 
B)  The owner of a new startup firm;a chemistry lab;a researcher. 
C)  A hydroelectric dam;water behind the dam;power lines. 
D)  Autos owned by a car rental firm;computers at the car rental agency;the vans that shuttle rental customers to and from the airport. 
A)  An ice arena;a professional hockey player;hockey uniforms. 
B)  The owner of a new startup firm;a chemistry lab;a researcher. 
C)  A hydroelectric dam;water behind the dam;power lines. 
D)  Autos owned by a car rental firm;computers at the car rental agency;the vans that shuttle rental customers to and from the airport.

Question 2

Microeconomics is concerned with:

Accepted Answer

A)  the aggregate or total levels of income,employment,and output. 
B)  a detailed examination of specific economic units that make up the economic system. 
C)  positive economics,but not normative economics. 
D)  the establishing of an overall view of the operation of the economic system. 
A)  the aggregate or total levels of income,employment,and output. 
B)  a detailed examination of specific economic units that make up the economic system. 
C)  positive economics,but not normative economics. 
D)  the establishing of an overall view of the operation of the economic system.

Question 3

Answer the question on the basis of the following five data sets wherein it is assumed that the variable shown on the left is the independent variable and the one on the right is the dependent variable.Assume in graphing these data that the independent variable is shown on the horizontal axis and the dependent variable on the vertical axis. $\quad $$\quad $(1)$\quad $$\quad $$\quad $$\quad $(2)$\quad $$\quad $$\quad $$\quad $(3)$\quad $$\quad $$\quad $$\quad $(4)$\quad $$\quad $$\quad $$\quad $(5)
$\begin{array}{rl}
{J} & K \
\hline 0 & 10 \
40 & 20 \
80 & 30 \
120 & 40 \
160 & 50 \
200 & 60
\end{array}
\begin{array}{rr}
\mathrm{L} & \mathrm{M} \
\hline 0 & -15 \
30 & -5 \
60 & 5 \
90 & 15 \
120 & 25 \
150 & 35
\end{array}\
\begin{array}{rl}
\mathrm{N}& \mathrm{P} \
\hline 100 & 40 \
80 & 50 \
60 & 60 \
40 & 70 \
20 & 80 \
0 & 90
\end{array}
\begin{array}{rc}
\mathrm{R}& \mathrm{T} \
\hline 0 & -15 \
20 & -25 \
40 & -35 \
60 & -45 \
80 & -55 \
100 & -65
\end{array}
\begin{array}{rr}
\mathrm{U} & \mathrm{V }\
\hline 0 & 0 \
5 & 10 \
10 & 20 \
15 & 30 \
20 & 40 \
25 & 50
\end{array}$ Refer to the data sets.The equation for data set 3 is:

Accepted Answer

A)  P = 90 - .5N. 
B)  P = 90 + .5N. 
C)  P = .5N. 
D)  P = 40 + .5N. 
A)  P = 90 - .5N. 
B)  P = 90 + .5N. 
C)  P = .5N. 
D)  P = 40 + .5N.

Question 4

The entrepreneur's sole function is to combine other resources (land,labor,and capital)in the production of some good or service.

Accepted Answer

A) True 
 B)False

Question 5

Slopes of lines are especially important in economics because:

Accepted Answer

A)  they measure marginal changes. 
B)  they always tell us something about profits. 
C)  positive slopes are always preferred to negative slopes. 
D)  they always relate to resource and output scarcity. 
A)  they measure marginal changes. 
B)  they always tell us something about profits. 
C)  positive slopes are always preferred to negative slopes. 
D)  they always relate to resource and output scarcity.

Question 6

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.

Question 7

Suppose that an economy is producing on its production possibilities curve but is not producing quantities of each good where the marginal benefit equals the marginal cost for each good.This economy:

Accepted Answer

A)  should not change its production because it cannot improve its allocation by shifting resources. 
B)  can improve its allocation by lowering the unemployment rate. 
C)  can improve its allocation by producing more of one good and less of the other. 
D)  can improve its allocation by producing more of both goods. 
A)  should not change its production because it cannot improve its allocation by shifting resources. 
B)  can improve its allocation by lowering the unemployment rate. 
C)  can improve its allocation by producing more of one good and less of the other. 
D)  can improve its allocation by producing more of both goods.

Question 8

The basic difference between consumer goods and capital goods is that:

Accepted Answer

A)  consumer goods are produced in the private sector and capital goods are produced in the public sector. 
B)  an economy that commits a relatively large proportion of its resources to capital goods must accept a lower growth rate. 
C)  the production of capital goods is not subject to the law of increasing opportunity costs. 
D)  consumer goods satisfy wants directly while capital goods satisfy wants indirectly. 
A)  consumer goods are produced in the private sector and capital goods are produced in the public sector. 
B)  an economy that commits a relatively large proportion of its resources to capital goods must accept a lower growth rate. 
C)  the production of capital goods is not subject to the law of increasing opportunity costs. 
D)  consumer goods satisfy wants directly while capital goods satisfy wants indirectly.

Question 9

Some agricultural sub-Saharan nations of Africa have overfarmed and overgrazed their land to the extent that significant portions of it have turned into desert.This suggests that:

Accepted Answer

A)  the production possibilities curves of such nations are more bowed out from the origin. 
B)  the production possibilities curves of such nations have shifted inward. 
C)  the production possibilities curves of such nations have shifted outward. 
D)  these nations are operating at some point outside of their production possibilities curves. 
A)  the production possibilities curves of such nations are more bowed out from the origin. 
B)  the production possibilities curves of such nations have shifted inward. 
C)  the production possibilities curves of such nations have shifted outward. 
D)  these nations are operating at some point outside of their production possibilities curves.

Question 10

Suppose an economist says that "other things equal,the lower the price of bananas,the greater the amount of bananas purchased." This statement indicates that:

Accepted Answer

A)  the quantity of bananas purchased determines the price of bananas. 
B)  all factors other than the price of bananas (for example,consumer tastes and incomes)are assumed to be constant. 
C)  economists can conduct controlled laboratory experiments. 
D)  one cannot generalize about the relationship between the price of bananas and the quantity purchased. 
A)  the quantity of bananas purchased determines the price of bananas. 
B)  all factors other than the price of bananas (for example,consumer tastes and incomes)are assumed to be constant. 
C)  economists can conduct controlled laboratory experiments. 
D)  one cannot generalize about the relationship between the price of bananas and the quantity purchased.

Question 11

(Consider This)Consumers might leave a fast-food restaurant without being served because:

Accepted Answer

A)  they are misinformed about the marginal cost and marginal benefits of the food being served. 
B)  they conclude that the marginal cost (monetary plus time costs)exceeds the marginal benefit. 
C)  the environment is not conducive to a rational choice. 
D)  the lines waiting for service are not of equal length. 
A)  they are misinformed about the marginal cost and marginal benefits of the food being served. 
B)  they conclude that the marginal cost (monetary plus time costs)exceeds the marginal benefit. 
C)  the environment is not conducive to a rational choice. 
D)  the lines waiting for service are not of equal length.

Question 12

The marginal benefit curve is:

Accepted Answer

A)  upsloping because of increasing marginal opportunity costs. 
B)  upsloping because successive units of a specific product yield less and less extra benefit. 
C)  downsloping because of increasing marginal opportunity costs. 
D)  downsloping because successive units of a specific product yield less and less extra benefit. 
A)  upsloping because of increasing marginal opportunity costs. 
B)  upsloping because successive units of a specific product yield less and less extra benefit. 
C)  downsloping because of increasing marginal opportunity costs. 
D)  downsloping because successive units of a specific product yield less and less extra benefit.

Question 13

Answer the question on the basis of the following five data sets wherein it is assumed that the variable shown on the left is the independent variable and the one on the right is the dependent variable.Assume in graphing these data that the independent variable is shown on the horizontal axis and the dependent variable on the vertical axis. $\quad $$\quad $(1)$\quad $$\quad $$\quad $$\quad $(2)$\quad $$\quad $$\quad $$\quad $(3)$\quad $$\quad $$\quad $$\quad $(4)$\quad $$\quad $$\quad $$\quad $(5)
$\begin{array}{rl}
{J} & K \
\hline 0 & 10 \
40 & 20 \
80 & 30 \
120 & 40 \
160 & 50 \
200 & 60
\end{array}
\begin{array}{rr}
\mathrm{L} & \mathrm{M} \
\hline 0 & -15 \
30 & -5 \
60 & 5 \
90 & 15 \
120 & 25 \
150 & 35
\end{array}\
\begin{array}{rl}
\mathrm{N}& \mathrm{P} \
\hline 100 & 40 \
80 & 50 \
60 & 60 \
40 & 70 \
20 & 80 \
0 & 90
\end{array}
\begin{array}{rc}
\mathrm{R}& \mathrm{T} \
\hline 0 & -15 \
20 & -25 \
40 & -35 \
60 & -45 \
80 & -55 \
100 & -65
\end{array}
\begin{array}{rr}
\mathrm{U} & \mathrm{V }\
\hline 0 & 0 \
5 & 10 \
10 & 20 \
15 & 30 \
20 & 40 \
25 & 50
\end{array}$ Refer to the data sets.The vertical intercept is negative for:

Accepted Answer

A)  none of the data sets. 
B)  data sets 1 and 3 only. 
C)  data sets 2 and 4 only. 
D)  data sets 1 and 5 only. 
A)  none of the data sets. 
B)  data sets 1 and 3 only. 
C)  data sets 2 and 4 only. 
D)  data sets 1 and 5 only.

Question 14

The production possibilities curve illustrates the basic principle that:

Accepted Answer

A)  the production of more of any one good will in time require smaller and smaller sacrifices of other goods. 
B)  an economy will automatically obtain full employment of its resources. 
C)  if all the resources of an economy are in use,more of one good can be produced only if less of another good is produced. 
D)  an economy's capacity to produce increases in proportion to its population size. 
A)  the production of more of any one good will in time require smaller and smaller sacrifices of other goods. 
B)  an economy will automatically obtain full employment of its resources. 
C)  if all the resources of an economy are in use,more of one good can be produced only if less of another good is produced. 
D)  an economy's capacity to produce increases in proportion to its population size.

Question 15

Products and services are scarce because resources are scarce.

Accepted Answer

A) True 
 B)False

Question 16

According to Emerson: "Want is a growing giant whom the coat of Have was never large enough to cover." According to economists,"Want" exceeds "Have" because:

Accepted Answer

A)  people are greedy. 
B)  productive resources are limited. 
C)  human beings are inherently insecure. 
D)  people are irrational. 
A)  people are greedy. 
B)  productive resources are limited. 
C)  human beings are inherently insecure. 
D)  people are irrational.

Question 17

If two variables are inversely related,then as the value of one variable:

Accepted Answer

A)  increases,the value of the other may either increase or decrease. 
B)  decreases,the value of the other decreases. 
C)  increases,the value of the other decreases. 
D)  increases,the value of the other increases. 
A)  increases,the value of the other may either increase or decrease. 
B)  decreases,the value of the other decreases. 
C)  increases,the value of the other decreases. 
D)  increases,the value of the other increases.

Question 18

Joe sold gold coins for $1,000 that he bought a year ago for $1,000.He says,"At least I didn't lose any money on my financial investment." His economist friend points out that in effect he did lose money because he could have received a 3 percent return on the $1,000 if he had bought a bank certificate of deposit instead of the coins.The economist's analysis in this case incorporates the idea of:

Accepted Answer

A)  opportunity costs. 
B)  marginal benefits that exceed marginal costs. 
C)  imperfect information. 
D)  normative economics. 
A)  opportunity costs. 
B)  marginal benefits that exceed marginal costs. 
C)  imperfect information. 
D)  normative economics.

Question 19

(Consider This)An exception to the advice "go to college,stay in college,and earn a degree" occurs when:

Accepted Answer

A)  tuition expenses are high and rising. 
B)  the opportunity cost of attending college is extraordinarily high. 
C)  the price of textbooks is high and rising. 
D)  the economy is growing rapidly and jobs are plentiful. 
A)  tuition expenses are high and rising. 
B)  the opportunity cost of attending college is extraordinarily high. 
C)  the price of textbooks is high and rising. 
D)  the economy is growing rapidly and jobs are plentiful.

Question 20

When an economy is operating under conditions of full employment,the production of more of commodity A will mean the production of less of commodity B because:

Accepted Answer

A)  of the law of increasing opportunity costs. 
B)  economic wants are insatiable. 
C)  resources are limited. 
D)  resources are specialized and only imperfectly substitutable. 
A)  of the law of increasing opportunity costs. 
B)  economic wants are insatiable. 
C)  resources are limited. 
D)  resources are specialized and only imperfectly substitutable.

Which of the following lists includes only capital resources (and therefore no labor or land resources)?

Microeconomics is concerned with:

The entrepreneur's sole function is to combine other resources (land,labor,and capital)in the production of some good or service.

Slopes of lines are especially important in economics because:

Normative statements are concerned primarily with:

Suppose that an economy is producing on its production possibilities curve but is not producing quantities of each good where the marginal benefit equals the marginal cost for each good.This economy:

The basic difference between consumer goods and capital goods is that:

Some agricultural sub-Saharan nations of Africa have overfarmed and overgrazed their land to the extent that significant portions of it have turned into desert.This suggests that:

Suppose an economist says that "other things equal,the lower the price of bananas,the greater the amount of bananas purchased." This statement indicates that:

(Consider This)Consumers might leave a fast-food restaurant without being served because:

The marginal benefit curve is:

The production possibilities curve illustrates the basic principle that:

Products and services are scarce because resources are scarce.

According to Emerson: "Want is a growing giant whom the coat of Have was never large enough to cover." According to economists,"Want" exceeds "Have" because:

If two variables are inversely related,then as the value of one variable:

(Consider This)An exception to the advice "go to college,stay in college,and earn a degree" occurs when:

When an economy is operating under conditions of full employment,the production of more of commodity A will mean the production of less of commodity B because:

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 Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

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

Filters

Exam 1: Limits, Alternatives, and Choices

Which of the following lists includes only capital resources (and therefore no labor or land resources)?

Microeconomics is concerned with:

The entrepreneur's sole function is to combine other resources (land,labor,and capital)in the production of some good or service.

Slopes of lines are especially important in economics because:

Normative statements are concerned primarily with:

Suppose that an economy is producing on its production possibilities curve but is not producing quantities of each good where the marginal benefit equals the marginal cost for each good.This economy:

The basic difference between consumer goods and capital goods is that:

Some agricultural sub-Saharan nations of Africa have overfarmed and overgrazed their land to the extent that significant portions of it have turned into desert.This suggests that:

Suppose an economist says that "other things equal,the lower the price of bananas,the greater the amount of bananas purchased." This statement indicates that:

(Consider This)Consumers might leave a fast-food restaurant without being served because:

The marginal benefit curve is:

The production possibilities curve illustrates the basic principle that:

Products and services are scarce because resources are scarce.

According to Emerson: "Want is a growing giant whom the coat of Have was never large enough to cover." According to economists,"Want" exceeds "Have" because:

If two variables are inversely related,then as the value of one variable:

(Consider This)An exception to the advice "go to college,stay in college,and earn a degree" occurs when:

When an economy is operating under conditions of full employment,the production of more of commodity A will mean the production of less of commodity B because:

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 Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

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

Filters