Question 1

The "economic perspective" entails:

Accepted Answer

A)  rational behaviour by individuals and institutions. 
B)  a comparison of marginal benefits and marginal costs in decision making. 
C)  the altering of behaviour when marginal benefits and marginal costs change. 
D)  all of the above. 
A)  rational behaviour by individuals and institutions. 
B)  a comparison of marginal benefits and marginal costs in decision making. 
C)  the altering of behaviour when marginal benefits and marginal costs change. 
D)  all of the above.

Question 2

Economics is concerned with using scarce productive resources efficiently in attempting to satisfy society's material wants.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 3

-Refer to the above table.What is the opportunity cost of producing the fourth unit of capital goods?

Accepted Answer

A)  6 units of consumer goods 
B)  7 units of consumer goods 
C)  15 units of consumer goods 
D)  22 units of consumer goods 
A)  6 units of consumer goods 
B)  7 units of consumer goods 
C)  15 units of consumer goods 
D)  22 units of consumer goods

Question 4

Macroeconomics approaches the study of economics from the viewpoint of:

Accepted Answer

A)  the entire economy. 
B)  governmental units. 
C)  the operation of specific product and resource markets. 
D)  individual firms. 
A)  the entire economy. 
B)  governmental units. 
C)  the operation of specific product and resource markets. 
D)  individual firms.

Question 5

-The slope of a line parallel to the horizontal axis is:

Accepted Answer

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

Question 6

Ben says that "An increase in the tax on beer will raise its price." Holly argues that "Taxes should be increased on beer because college students drink too much." We can conclude that:

Accepted Answer

A)  Ben's statement is normative,but Holly's is positive. 
B)  Holly's statement is normative,but Ben's is positive. 
C)  Both statements are normative. 
D)  Both statements are positive. 
A)  Ben's statement is normative,but Holly's is positive. 
B)  Holly's statement is normative,but Ben's is positive. 
C)  Both statements are normative. 
D)  Both statements are positive.

Question 7

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 seek that level of output at which all of its resources are employed. 
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 seek that level of output at which all of its resources are employed. 
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 8

Through specialization and international trade a nation:

Accepted Answer

A)  can achieve 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 achieve some combination of goods lying within its production possibilities curve. 
D)  will cause its production possibilities curve to shift leftward. 
A)  can achieve 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 achieve some combination of goods lying within its production possibilities curve. 
D)  will cause its production possibilities curve to shift leftward.

Question 9

Marginal analysis means that decision-makers compare the extra benefits with the extra costs of a specific choice.

Accepted Answer

A) True 
 B)False

Question 10

In drawing the production possibilities curve we assume that:

Accepted Answer

A)  technology is fixed. 
B)  unemployment exists. 
C)  economic resources are unlimited. 
D)  wants are limited. 
A)  technology is fixed. 
B)  unemployment exists. 
C)  economic resources are unlimited. 
D)  wants are limited.

Question 11

(The following economy produces two products. )
Production Possibilities Table
  
-The production possibilities curve represents:

Accepted Answer

A)  the maximum amount of labour and capital available for production. 
B)  combinations of goods and services among which consumers are indifferent. 
C)  maximum combinations of products available with fixed resources and technology. 
D)  the maximum rate of growth of capital and labour in an economy. 
A)  the maximum amount of labour and capital available for production. 
B)  combinations of goods and services among which consumers are indifferent. 
C)  maximum combinations of products available with fixed resources and technology. 
D)  the maximum rate of growth of capital and labour in an economy.

Question 12

From the perspective of economists,which term provides the highest degree of confidence for explaining economic behaviour?

Accepted Answer

A)  an economic principle or a law 
B)  a fact 
C)  a hypothesis 
D)  an assumption 
A)  an economic principle or a law 
B)  a fact 
C)  a hypothesis 
D)  an assumption

Question 13

Tammie makes $150 a day as a bank clerk.She takes off two days of work without pay to fly to another city to attend the concert of her favourite music group.The cost of transportation for the trip is $250.The cost of the concert ticket is $50.The opportunity cost of Tammie's trip to the concert is:

Accepted Answer

A)  $300 
B)  $450 
C)  $500 
D)  $600 
A)  $300 
B)  $450 
C)  $500 
D)  $600

Question 14

Which situation would most likely cause a nation's production possibilities curve to shift inward?

Accepted Answer

A)  the construction of more capital goods 
B)  a decrease in discrimination based on race 
C)  an increase in the number of skilled immigrant workers 
D)  the destruction from bombing and warfare in a losing military conflict 
A)  the construction of more capital goods 
B)  a decrease in discrimination based on race 
C)  an increase in the number of skilled immigrant workers 
D)  the destruction from bombing and warfare in a losing military conflict

Question 15

Assume that a tradeoff exists in the short run between inflation and unemployment.This relationship means that:

Accepted Answer

A)  a low rate of unemployment causes a low rate of inflation. 
B)  the unemployment rate always equals the inflation rate. 
C)  less unemployment can be achieved with more inflation. 
D)  less unemployment can be achieved with less inflation. 
A)  a low rate of unemployment causes a low rate of inflation. 
B)  the unemployment rate always equals the inflation rate. 
C)  less unemployment can be achieved with more inflation. 
D)  less unemployment can be achieved with less inflation.

Question 16

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

Accepted Answer

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

Question 17

-The vertical intercept of line (2)on the above graph is:

Accepted Answer

A)  8 
B)  12 
C)  16 
D)  24 
A)  8 
B)  12 
C)  16 
D)  24

Question 18

-Refer to the above diagram.Which line(s)show(s)a negative vertical intercept?

Accepted Answer

A)  C only 
B)  both C and E 
C)  B,C,and E 
D)  both B and C 
A)  C only 
B)  both C and E 
C)  B,C,and E 
D)  both B and C

Question 19

The law of increasing opportunity costs exists because:

Accepted Answer

A)  resources are not equally efficient in producing various goods. 
B)  the value of the dollar has diminished historically because of persistent inflation. 
C)  wage rates invariably rise as the economy approaches full employment. 
D)  consumers tend to value any good more highly when they have little of it. 
A)  resources are not equally efficient in producing various goods. 
B)  the value of the dollar has diminished historically because of persistent inflation. 
C)  wage rates invariably rise as the economy approaches full employment. 
D)  consumers tend to value any good more highly when they have little of it.

Question 20

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.

The "economic perspective" entails:

Economics is concerned with using scarce productive resources efficiently in attempting to satisfy society's material wants.This statement is:

-Refer to the above table.What is the opportunity cost of producing the fourth unit of capital goods?

Macroeconomics approaches the study of economics from the viewpoint of:

-The slope of a line parallel to the horizontal axis is:

Ben says that "An increase in the tax on beer will raise its price." Holly argues that "Taxes should be increased on beer because college students drink too much." We can conclude that:

The production possibilities curve illustrates the basic principle that:

Through specialization and international trade a nation:

Marginal analysis means that decision-makers compare the extra benefits with the extra costs of a specific choice.

In drawing the production possibilities curve we assume that:

(The following economy produces two products. ) Production Possibilities Table -The production possibilities curve represents:

From the perspective of economists,which term provides the highest degree of confidence for explaining economic behaviour?

Tammie makes $150 a day as a bank clerk.She takes off two days of work without pay to fly to another city to attend the concert of her favourite music group.The cost of transportation for the trip is $250.The cost of the concert ticket is $50.The opportunity cost of Tammie's trip to the concert is:

Which situation would most likely cause a nation's production possibilities curve to shift inward?

Assume that a tradeoff exists in the short run between inflation and unemployment.This relationship means that:

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

-The vertical intercept of line (2)on the above graph is:

-Refer to the above diagram.Which line(s)show(s)a negative vertical intercept?

The law of increasing opportunity costs exists because:

Consumers might leave a fast-food restaurant without being served because:

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters

Exam 1: Limits, Alternatives, and Choices

The "economic perspective" entails:

Economics is concerned with using scarce productive resources efficiently in attempting to satisfy society's material wants.This statement is:

-Refer to the above table.What is the opportunity cost of producing the fourth unit of capital goods?

Macroeconomics approaches the study of economics from the viewpoint of:

-The slope of a line parallel to the horizontal axis is:

Ben says that "An increase in the tax on beer will raise its price." Holly argues that "Taxes should be increased on beer because college students drink too much." We can conclude that:

The production possibilities curve illustrates the basic principle that:

Through specialization and international trade a nation:

Marginal analysis means that decision-makers compare the extra benefits with the extra costs of a specific choice.

In drawing the production possibilities curve we assume that:

(The following economy produces two products. ) Production Possibilities Table -The production possibilities curve represents:

From the perspective of economists,which term provides the highest degree of confidence for explaining economic behaviour?

Tammie makes $150 a day as a bank clerk.She takes off two days of work without pay to fly to another city to attend the concert of her favourite music group.The cost of transportation for the trip is $250.The cost of the concert ticket is $50.The opportunity cost of Tammie's trip to the concert is:

Which situation would most likely cause a nation's production possibilities curve to shift inward?

Assume that a tradeoff exists in the short run between inflation and unemployment.This relationship means that:

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

-The vertical intercept of line (2)on the above graph is:

-Refer to the above diagram.Which line(s)show(s)a negative vertical intercept?

The law of increasing opportunity costs exists because:

Consumers might leave a fast-food restaurant without being served because:

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters