Question 1

The economizing problem is:

Accepted Answer

A)  the need to make choices because economic wants exceed economic means. 
B)  how to distribute resources equally among all members of society. 
C)  that people's means often exceed their wants. 
D)  that people do not know how to rationally allocate resources. 
A)  the need to make choices because economic wants exceed economic means. 
B)  how to distribute resources equally among all members of society. 
C)  that people's means often exceed their wants. 
D)  that people do not know how to rationally allocate resources.

Question 2

The assertion that "there is no free lunch" means that:

Accepted Answer

A)  there are always trade-offs between economic goals. 
B)  all production involves the use of scarce resources and thus the sacrifice of alternative goods. 
C)  marginal analysis is used in economic reasoning. 
D)  choices need not be made if behavior is rational. 
A)  there are always trade-offs between economic goals. 
B)  all production involves the use of scarce resources and thus the sacrifice of alternative goods. 
C)  marginal analysis is used in economic reasoning. 
D)  choices need not be made if behavior is rational.

Question 3

Answer the question on the basis of the following data: $\begin{array}{cc}
\underline{\text { After-Tax Income} } &\underline{ \text { Consumption }} \
\$ 1,000 & \$ 900 \
2,000 & 1,800 \
3,000 & 2,700 \
4,000 & 3,600 \
5,000 & 4,500
\end{array}$ The data suggest that:

Accepted Answer

A)  consumption varies inversely with after-tax income. 
B)  consumption varies directly with after-tax income. 
C)  consumption and after-tax income are unrelated. 
D)  a tax increase will increase consumption. 
A)  consumption varies inversely with after-tax income. 
B)  consumption varies directly with after-tax income. 
C)  consumption and after-tax income are unrelated. 
D)  a tax increase will increase consumption.

Question 4

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.

Question 5

The typical production possibilities curve is:

Accepted Answer

A)  an upsloping line that is bowed out from the origin. 
B)  a downsloping line that is bowed in toward the origin. 
C)  a downsloping line that is bowed out from the origin. 
D)  a straight upsloping line. 
A)  an upsloping line that is bowed out from the origin. 
B)  a downsloping line that is bowed in toward the origin. 
C)  a downsloping line that is bowed out from the origin. 
D)  a straight upsloping line.

Question 6

Answer the question on the basis of the data given in the following production possibilities table: $\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\underline{\text { Production Possibilities (Alternatives) }}$
$\begin{array}{ccccccc}
&\underline{A}&\underline{B}&\underline{C}& \underline{D} &\underline{E}&\underline{F} \
 
\text { Capital Goods } &5&4&3&2&1&0\
\text { onsumer Goods } & 0 & 5 & 9 & 12 & 14 & 15 
\end{array}$  Refer to the table.For this economy to produce a total output of 3 units of capital goods and 13 units of consumer goods,it must:

Accepted Answer

A)  achieve economic growth. 
B)  use its resources more efficiently than the data in the table now indicate. 
C)  allocate its available resources most efficiently among alternative uses. 
D)  achieve the full employment of available resources. 
A)  achieve economic growth. 
B)  use its resources more efficiently than the data in the table now indicate. 
C)  allocate its available resources most efficiently among alternative uses. 
D)  achieve the full employment of available resources.

Question 7

Economic resources are also called:

Accepted Answer

A)  free gifts of nature. 
B)  consumption goods. 
C)  units of money capital. 
D)  factors of production. 
A)  free gifts of nature. 
B)  consumption goods. 
C)  units of money capital. 
D)  factors of production.

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 production possibilities curve has:

Accepted Answer

A)  a positive slope that increases as we move along it from left to right. 
B)  a negative slope that increases as we move along it from left to right. 
C)  a negative slope that decreases as we move along it from left to right. 
D)  a negative slope that is constant as we move along it from left to right. 
A)  a positive slope that increases as we move along it from left to right. 
B)  a negative slope that increases as we move along it from left to right. 
C)  a negative slope that decreases as we move along it from left to right. 
D)  a negative slope that is constant as we move along it from left to right.

Question 10

Answer the question on the basis of the data given in the following production possibilities table: $\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\underline{\text { Production Possibilities (Alternatives) }}$
$\begin{array}{ccccccc}
&\underline{A}&\underline{B}&\underline{C}& \underline{D} &\underline{E}&\underline{F} \
 
\text { Capital Goods } &5&4&3&2&1&0\
\text { onsumer Goods } & 0 & 5 & 9 & 12 & 14 & 15 
\end{array}$  Refer to the table.As compared to production alternative D,the choice of alternative C would:

Accepted Answer

A)  tend to generate a more rapid growth rate. 
B)  be unattainable. 
C)  entail unemployment. 
D)  tend to generate a slower growth rate. 
A)  tend to generate a more rapid growth rate. 
B)  be unattainable. 
C)  entail unemployment. 
D)  tend to generate a slower growth rate.

Question 11

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

Question 12

Opportunity costs exist because:

Accepted Answer

A)  the decision to engage in one activity means forgoing some other activity. 
B)  wants are scarce relative to resources. 
C)  households and businesses make rational decisions. 
D)  most decisions do not involve sacrifices or trade-offs. 
A)  the decision to engage in one activity means forgoing some other activity. 
B)  wants are scarce relative to resources. 
C)  households and businesses make rational decisions. 
D)  most decisions do not involve sacrifices or trade-offs.

Question 13

Rational individuals may make different choices because their preferences and circumstances differ.

Accepted Answer

A) True 
 B)False

Question 14

Answer the question on the basis of the following production possibilities tables for two countries,North Cantina and South Cantina:   Refer to the tables.Suppose that resources in North Cantina and South Cantina are identical in quantity and quality.We can conclude that:

Accepted Answer

A)  South Cantina has better technology than North Cantina in producing both capital and consumer goods. 
B)  North Cantina has better technology than South Cantina in producing both capital and consumer goods. 
C)  North Cantina is growing more rapidly than South Cantina. 
D)  North Cantina has better technology than South Cantina in producing consumer goods but not capital goods. 
A)  South Cantina has better technology than North Cantina in producing both capital and consumer goods. 
B)  North Cantina has better technology than South Cantina in producing both capital and consumer goods. 
C)  North Cantina is growing more rapidly than South Cantina. 
D)  North Cantina has better technology than South Cantina in producing consumer goods but not capital goods.

Question 15

Economic theories:

Accepted Answer

A)  are useless because they are not based on laboratory experimentation. 
B)  that are true for individual economic units are never true for the economy as a whole. 
C)  are generalizations based on a careful observation of facts. 
D)  are abstractions and therefore of no application to real situations. 
A)  are useless because they are not based on laboratory experimentation. 
B)  that are true for individual economic units are never true for the economy as a whole. 
C)  are generalizations based on a careful observation of facts. 
D)  are abstractions and therefore of no application to real situations.

Question 16

The main function of the entrepreneur is to:

Accepted Answer

A)  make routine pricing decisions. 
B)  innovate. 
C)  purchase capital. 
D)  create market demand. 
A)  make routine pricing decisions. 
B)  innovate. 
C)  purchase capital. 
D)  create market demand.

Question 17

If an economy is operating on its production possibilities curve for consumer goods and capital goods,this means that:

Accepted Answer

A)  it is impossible to produce more consumer goods. 
B)  resources cannot be reallocated between the two goods. 
C)  it is impossible to produce more capital goods. 
D)  more consumer goods can only be produced at the cost of fewer capital goods. 
A)  it is impossible to produce more consumer goods. 
B)  resources cannot be reallocated between the two goods. 
C)  it is impossible to produce more capital goods. 
D)  more consumer goods can only be produced at the cost of fewer capital goods.

Question 18

Normative statements are expressions of facts.

Accepted Answer

A) True 
 B)False

Question 19

(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 20

Which of the following will shift the production possibilities curve to the right?

Accepted Answer

A)  An increase in the unemployment rate from 6 to 8 percent. 
B)  A decline in the efficiency with which the present labor force is allocated. 
C)  A decrease in the unemployment rate from 8 to 6 percent. 
D)  A technological advance that allows farmers to produce more output from given inputs. 
A)  An increase in the unemployment rate from 6 to 8 percent. 
B)  A decline in the efficiency with which the present labor force is allocated. 
C)  A decrease in the unemployment rate from 8 to 6 percent. 
D)  A technological advance that allows farmers to produce more output from given inputs.

The economizing problem is:

The assertion that "there is no free lunch" means that:

Answer the question on the basis of the following data: \ 1,000 \ 900 2,000 1,800 3,000 2,700 4,000 3,600 5,000 4,500 The data suggest that:

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

The typical production possibilities curve is:

Economic resources are also called:

Economists:

The production possibilities curve has:

The marginal cost curve is:

Opportunity costs exist because:

Rational individuals may make different choices because their preferences and circumstances differ.

Answer the question on the basis of the following production possibilities tables for two countries,North Cantina and South Cantina: Refer to the tables.Suppose that resources in North Cantina and South Cantina are identical in quantity and quality.We can conclude that:

Economic theories:

The main function of the entrepreneur is to:

If an economy is operating on its production possibilities curve for consumer goods and capital goods,this means that:

Normative statements are expressions of facts.

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

Which of the following will shift the production possibilities curve to the right?

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

The economizing problem is:

The assertion that "there is no free lunch" means that:

Answer the question on the basis of the following data: \ 1,000 \ 900 2,000 1,800 3,000 2,700 4,000 3,600 5,000 4,500 The data suggest that:

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

The typical production possibilities curve is:

Economic resources are also called:

Economists:

The production possibilities curve has:

The marginal cost curve is:

Opportunity costs exist because:

Rational individuals may make different choices because their preferences and circumstances differ.

Answer the question on the basis of the following production possibilities tables for two countries,North Cantina and South Cantina: Refer to the tables.Suppose that resources in North Cantina and South Cantina are identical in quantity and quality.We can conclude that:

Economic theories:

The main function of the entrepreneur is to:

If an economy is operating on its production possibilities curve for consumer goods and capital goods,this means that:

Normative statements are expressions of facts.

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

Which of the following will shift the production possibilities curve to the right?

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