Question 1

Which of the following is a positive statement?

Accepted Answer

A)  The humidity is too high today. 
B)  It is too hot to jog today. 
C)  The temperature is 30 degrees today. 
D)  I enjoy summer evenings when it cools off. 
A)  The humidity is too high today. 
B)  It is too hot to jog today. 
C)  The temperature is 30 degrees today. 
D)  I enjoy summer evenings when it cools off.

Question 2

In drawing a budget line it is assumed that:

Accepted Answer

A)  consumer preferences are fixed. 
B)  the prices of the two products are variable. 
C)  money income is fixed. 
D)  consumer willingness to substitute between the two products is fixed. 
A)  consumer preferences are fixed. 
B)  the prices of the two products are variable. 
C)  money income is fixed. 
D)  consumer willingness to substitute between the two products is fixed.

Question 3

As a consequence of the condition of scarcity:

Accepted Answer

A)  there is always enough of everything. 
B)  production has to be centrally planned. 
C)  things which are plentiful have relatively high prices. 
D)  individuals and communities have to make choices among alternatives. 
A)  there is always enough of everything. 
B)  production has to be centrally planned. 
C)  things which are plentiful have relatively high prices. 
D)  individuals and communities have to make choices among alternatives.

Question 4

The future location of the economy's production possibilities curve will be affected by:

Accepted Answer

A)  the current division of domestic output between consumption and capital goods. 
B)  the rate of technological progress. 
C)  the growth of the economy's supplies of resources. 
D)  all of the above. 
A)  the current division of domestic output between consumption and capital goods. 
B)  the rate of technological progress. 
C)  the growth of the economy's supplies of resources. 
D)  all of the above.

Question 5

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 6

-Refer to the above 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 7

Which of the following will not shift a nation's production possibilities curve?

Accepted Answer

A)  the acquisition of more education and training by its labour force 
B)  the widespread application of irrigation to its agricultural land 
C)  an increase in the rate of unemployment 
D)  the discovery of new super-conductivity materials which makes manufacturing more efficient 
A)  the acquisition of more education and training by its labour force 
B)  the widespread application of irrigation to its agricultural land 
C)  an increase in the rate of unemployment 
D)  the discovery of new super-conductivity materials which makes manufacturing more efficient

Question 8

Refer to the production possibilities curves.The movement from curve (a)to curve (c)indicates an improvement in civilian goods technology but not in war goods technology.

Accepted Answer

A) True 
 B)False

Question 9

An economy cannot produce at a point outside of its production possibilities curve because human material wants are insatiable.

Accepted Answer

A) True 
 B)False

Question 10

The term "other things equal" means that:

Accepted Answer

A)  the associated statement is normative. 
B)  many variables affect the variable under consideration. 
C)  the assumption that factors other than those being considered do not change. 
D)  when variable X increases so does related variable Y. 
A)  the associated statement is normative. 
B)  many variables affect the variable under consideration. 
C)  the assumption that factors other than those being considered do not change. 
D)  when variable X increases so does related variable Y.

Question 11

In drawing a production possibilities curve we hold constant:

Accepted Answer

A)  the money supply. 
B)  the consumer price index. 
C)  both technology and resource supplies 
D)  resource supplies only. 
A)  the money supply. 
B)  the consumer price index. 
C)  both technology and resource supplies 
D)  resource supplies only.

Question 12

If the equation y = 5 + 6x was graphed,the:

Accepted Answer

A)  slope would be -5. 
B)  slope would be +5. 
C)  slope would be +6. 
D)  vertical intercept would be +.6. 
A)  slope would be -5. 
B)  slope would be +5. 
C)  slope would be +6. 
D)  vertical intercept would be +.6.

Question 13

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

Accepted Answer

A)  0 
B)  .66. 
C)  .75. 
D)  1.50. 
A)  0 
B)  .66. 
C)  .75. 
D)  1.50.

Question 14

The present choice of position on the production possibilities curve will not influence the future location of the curve.

Accepted Answer

A) True 
 B)False

Question 15

If we say that two variables are inversely related,this means that:

Accepted Answer

A)  the two graph as an upsloping line. 
B)  an increase in one variable is associated with a decrease in the other. 
C)  an increase in one variable is associated with an increase in the other. 
D)  the resulting relationship can be portrayed by a straight line parallel to the horizontal axis. 
A)  the two graph as an upsloping line. 
B)  an increase in one variable is associated with a decrease in the other. 
C)  an increase in one variable is associated with an increase in the other. 
D)  the resulting relationship can be portrayed by a straight line parallel to the horizontal axis.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Assume that if the interest rate that businesses must pay to borrow funds were 20 percent,it would be unprofitable for businesses to invest in new machinery and equipment so that investment would be zero.But if the interest rate were 16 percent,businesses would find it profitable to invest $10 billion.If the interest rate were 12 percent,$20 billion would be invested.Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate.
-Refer to the above information.Which of the following correctly expresses the indicated relationship as an equation?

Accepted Answer

A)  i = 20 - 4I. 
B)  i = 20 - .4I. 
C)  i = 24 - .4I. 
D)  i = 20 - 10I. 
A)  i = 20 - 4I. 
B)  i = 20 - .4I. 
C)  i = 24 - .4I. 
D)  i = 20 - 10I.

Question 18

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 19

In every economic system,choices must be made because resources are:

Accepted Answer

A)  infinite,but economic wants are finite. 
B)  finite,but economic wants are insatiable. 
C)  unlimited,but economic wants are limited. 
D)  limited,and so are economic wants. 
A)  infinite,but economic wants are finite. 
B)  finite,but economic wants are insatiable. 
C)  unlimited,but economic wants are limited. 
D)  limited,and so are economic wants.

Question 20

International specialization and trade:

Accepted Answer

A)  allow a nation to get more of a desired good at less sacrifice of some other good. 
B)  can allow an economy to circumvent the output limits imposed by its domestic production possibilities curve. 
C)  Has the same effect as having more and better resources. 
D)  All of the above. 
A)  allow a nation to get more of a desired good at less sacrifice of some other good. 
B)  can allow an economy to circumvent the output limits imposed by its domestic production possibilities curve. 
C)  Has the same effect as having more and better resources. 
D)  All of the above.

Which of the following is a positive statement?

In drawing a budget line it is assumed that:

As a consequence of the condition of scarcity:

The future location of the economy's production possibilities curve will be affected by:

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

-Refer to the above table.As compared to production alternative D,the choice of alternative C would:

Which of the following will not shift a nation's production possibilities curve?

Refer to the production possibilities curves.The movement from curve (a)to curve (c)indicates an improvement in civilian goods technology but not in war goods technology.

An economy cannot produce at a point outside of its production possibilities curve because human material wants are insatiable.

The term "other things equal" means that:

In drawing a production possibilities curve we hold constant:

If the equation y = 5 + 6x was graphed,the:

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

The present choice of position on the production possibilities curve will not influence the future location of the curve.

If we say that two variables are inversely related,this means that:

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

Economic resources are also called:

In every economic system,choices must be made because resources are:

International specialization and trade:

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

Which of the following is a positive statement?

In drawing a budget line it is assumed that:

As a consequence of the condition of scarcity:

The future location of the economy's production possibilities curve will be affected by:

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

-Refer to the above table.As compared to production alternative D,the choice of alternative C would:

Which of the following will not shift a nation's production possibilities curve?

Refer to the production possibilities curves.The movement from curve (a)to curve (c)indicates an improvement in civilian goods technology but not in war goods technology.

An economy cannot produce at a point outside of its production possibilities curve because human material wants are insatiable.

The term "other things equal" means that:

In drawing a production possibilities curve we hold constant:

If the equation y = 5 + 6x was graphed,the:

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

The present choice of position on the production possibilities curve will not influence the future location of the curve.

If we say that two variables are inversely related,this means that:

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

Economic resources are also called:

In every economic system,choices must be made because resources are:

International specialization and trade:

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