Question 1

Which of the following is not an assumption usually made about markets and market participants?

Accepted Answer

A) Collective welfare maximization 
B) Self-interested behavior 
C) Scarce resources 
D) Rational behavior 
A) Collective welfare maximization 
B) Self-interested behavior 
C) Scarce resources 
D) Rational behavior A

Question 2

If a production possibility frontier (PPF)is drawn concave to the origin,with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement upward along the PPF reflects:

Accepted Answer

A) an increasing opportunity cost of producing T-shirts. 
B) an increasing opportunity cost of producing shoes. 
C) constant opportunity cost of producing T-shirts. 
D) constant opportunity cost of producing shoes. 
A) an increasing opportunity cost of producing T-shirts. 
B) an increasing opportunity cost of producing shoes. 
C) constant opportunity cost of producing T-shirts. 
D) constant opportunity cost of producing shoes. A

Question 3

What does the consumer price index measure?

Accepted Answer

A) The average price of a good over five years 
B) The change in nominal prices of goods and services 
C) The change in the value of a currency 
D) The change in the average price level in the economy 
A) The average price of a good over five years 
B) The change in nominal prices of goods and services 
C) The change in the value of a currency 
D) The change in the average price level in the economy B

Question 4

Which of the following is generally considered a microeconomic question?

Accepted Answer

A) The relationship between the money supply and nominal GDP 
B) The relationship between the unemployment and inflation 
C) The impact of a tax cut on public saving 
D) The effect of anti-discrimination laws on employers' hiring practices. 
A) The relationship between the money supply and nominal GDP 
B) The relationship between the unemployment and inflation 
C) The impact of a tax cut on public saving 
D) The effect of anti-discrimination laws on employers' hiring practices.

Question 5

Which of the following is true of positive analysis?

Accepted Answer

A) It draws on accepted bodies of theory and evidence to ascertain the likely consequences of a policy or action. 
B) It is always used to evaluate proposed policy changes in the most positive way. 
C) It is sufficient to determine whether a policy is desirable or undesirable. 
D) It claims that the impact of policies cannot be quantified. 
A) It draws on accepted bodies of theory and evidence to ascertain the likely consequences of a policy or action. 
B) It is always used to evaluate proposed policy changes in the most positive way. 
C) It is sufficient to determine whether a policy is desirable or undesirable. 
D) It claims that the impact of policies cannot be quantified.

Question 6

A farmer can produce 10,000 pears on his one acre farmland.When he uses the same land for apple cultivation,a total of 5,000 apples can be produced.He realizes that with the introduction of a new fertilizer,he can increase the maximum production of apples to 7,000.The maximum production of pears,however,remains unchanged.Given that his production possibility frontier (PPF)is linear and apples are graphed on the Y-axis and pears on the X-axis,calculate the slope of his PPF.

Accepted Answer

A) -1.4 
B) -0.2 
C) -0.7 
D) -0.4 
A) -1.4 
B) -0.2 
C) -0.7 
D) -0.4

Question 7

Microeconomics is also known as price theory because:

Accepted Answer

A) everything has a price. 
B) prices have important effects on individual and firm decisions. 
C) prices are the only determinant of economic outcomes. 
D) prices change constantly. 
A) everything has a price. 
B) prices have important effects on individual and firm decisions. 
C) prices are the only determinant of economic outcomes. 
D) prices change constantly.

Question 8

What would be the impact on the real price of automobiles if the nominal price increases by 60 percent over a ten year period?

Accepted Answer

A) The real price will increase by 60 percent. 
B) The real price will increase,but by less than 60 percent. 
C) The real price will decrease. 
D) The real price cannot be determined without more information. 
A) The real price will increase by 60 percent. 
B) The real price will increase,but by less than 60 percent. 
C) The real price will decrease. 
D) The real price cannot be determined without more information.

Question 9

Along a concave production possibility frontier,the per-unit opportunity cost of increasing output typically:

Accepted Answer

A) increasing because specializing in the production of just one good is irrational. 
B) decreasing because resources are difficult to move from one sector to another. 
C) increasing because some resources are better-suited to producing one good than to the other. 
D) decreasing because resource productivity increases naturally over time. 
A) increasing because specializing in the production of just one good is irrational. 
B) decreasing because resources are difficult to move from one sector to another. 
C) increasing because some resources are better-suited to producing one good than to the other. 
D) decreasing because resource productivity increases naturally over time.

Question 10

Positive economic analysis utilizes:

Accepted Answer

A) value judgments of highly trained professional economists. 
B) economic theories and empirical tests of the theories. 
C) normative economic theories in arriving at judgments on the suitability of a change in government economic policy. 
D) the same criteria as normative economics,but does not take into consideration the value judgments of the policy makers. 
A) value judgments of highly trained professional economists. 
B) economic theories and empirical tests of the theories. 
C) normative economic theories in arriving at judgments on the suitability of a change in government economic policy. 
D) the same criteria as normative economics,but does not take into consideration the value judgments of the policy makers.

Question 11

Which of the following is generally considered to be a microeconomic question?

Accepted Answer

A) The relationship between the money supply and nominal GDP 
B) The responsiveness of aggregate demand to change in government expenditure. 
C) The relationship between productivity of workers and wages received by them 
D) The relationship between inflation and unemployment 
A) The relationship between the money supply and nominal GDP 
B) The responsiveness of aggregate demand to change in government expenditure. 
C) The relationship between productivity of workers and wages received by them 
D) The relationship between inflation and unemployment

Question 12

Which of the following is an assumption usually made about markets and market participants by economists?

Accepted Answer

A) Market participants are interested in maximizing social welfare. 
B) Market participants are generally altruistic. 
C) Market participants engage in irrational behavior. 
D) Market participants confront scarce resources. 
A) Market participants are interested in maximizing social welfare. 
B) Market participants are generally altruistic. 
C) Market participants engage in irrational behavior. 
D) Market participants confront scarce resources.

Question 13

Consider the production possibility frontier of an economy in Figure 1-1.What is the opportunity cost of moving from point B to point C to produce 5 more apples?

Accepted Answer

A) 25 computers. 
B) 15 computers. 
C) 5 computers. 
D) 10 computers. 
A) 25 computers. 
B) 15 computers. 
C) 5 computers. 
D) 10 computers.

Question 14

Do you think that the behavior of a student,who is focused on achieving superior grades and aims to top the class,will be described as goal-oriented behavior by economists?

Accepted Answer

The assumption of goal-oriented behavior

Question 15

If a production possibility frontier is drawn concave to the origin with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement downward along the PPF reflects:

Accepted Answer

A) a decreasing opportunity cost of both shoes and T-shirts. 
B) an increasing opportunity cost of both shoes and T-shirts. 
C) an increasing opportunity cost of shoes. 
D) a decreasing opportunity cost of shoes. 
A) a decreasing opportunity cost of both shoes and T-shirts. 
B) an increasing opportunity cost of both shoes and T-shirts. 
C) an increasing opportunity cost of shoes. 
D) a decreasing opportunity cost of shoes.

Question 16

In judging the value of a theory,the most important criteria is:

Accepted Answer

A) how realistic or valid the assumptions of the theory are as compared to real world circumstances. 
B) how well the theory predicts that which it is designed to predict. 
C) how well the theory builds upon the theorists' experiences. 
D) how simple the theory is for the average people to understand. 
A) how realistic or valid the assumptions of the theory are as compared to real world circumstances. 
B) how well the theory predicts that which it is designed to predict. 
C) how well the theory builds upon the theorists' experiences. 
D) how simple the theory is for the average people to understand.

Question 17

Value judgments:

Accepted Answer

A) always produce predictable results. 
B) are subjective opinions that cannot be proven correct on the basis of objective facts or evidence. 
C) should be the basis for all serious policy discussions. 
D) can always be tested and verified using accepted standards of logic and evidence. 
A) always produce predictable results. 
B) are subjective opinions that cannot be proven correct on the basis of objective facts or evidence. 
C) should be the basis for all serious policy discussions. 
D) can always be tested and verified using accepted standards of logic and evidence.

Question 18

The opportunity cost of a good is always constant if the production possibility frontier is:

Accepted Answer

A) a downward-sloping straight line. 
B) concave to the origin. 
C) convex to the origin. 
D) negatively sloped. 
A) a downward-sloping straight line. 
B) concave to the origin. 
C) convex to the origin. 
D) negatively sloped.

Question 19

The explicit cost of production equals:

Accepted Answer

A) opportunity cost minus sunk cost. 
B) implicit cost minus sunk cost. 
C) economic cost minus opportunity cost. 
D) opportunity cost minus implicit cost. 
A) opportunity cost minus sunk cost. 
B) implicit cost minus sunk cost. 
C) economic cost minus opportunity cost. 
D) opportunity cost minus implicit cost.

Question 20

If the nominal price of apples has increased by 20 percent over a year in which the average price level has risen by 10 percent,then the real price of apples:

Accepted Answer

A) has increased. 
B) has stayed the same. 
C) has decreased. 
D) cannot be determined without further information. 
A) has increased. 
B) has stayed the same. 
C) has decreased. 
D) cannot be determined without further information.

Which of the following is not an assumption usually made about markets and market participants?

If a production possibility frontier (PPF)is drawn concave to the origin,with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement upward along the PPF reflects:

What does the consumer price index measure?

Which of the following is generally considered a microeconomic question?

Which of the following is true of positive analysis?

Microeconomics is also known as price theory because:

What would be the impact on the real price of automobiles if the nominal price increases by 60 percent over a ten year period?

Along a concave production possibility frontier,the per-unit opportunity cost of increasing output typically:

Positive economic analysis utilizes:

Which of the following is generally considered to be a microeconomic question?

Which of the following is an assumption usually made about markets and market participants by economists?

Consider the production possibility frontier of an economy in Figure 1-1.What is the opportunity cost of moving from point B to point C to produce 5 more apples?

Do you think that the behavior of a student,who is focused on achieving superior grades and aims to top the class,will be described as goal-oriented behavior by economists?

If a production possibility frontier is drawn concave to the origin with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement downward along the PPF reflects:

In judging the value of a theory,the most important criteria is:

Value judgments:

The opportunity cost of a good is always constant if the production possibility frontier is:

The explicit cost of production equals:

If the nominal price of apples has increased by 20 percent over a year in which the average price level has risen by 10 percent,then the real price of apples:

Supply and Demand

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters

Exam 1: An Introduction to Microeconomics

Which of the following is not an assumption usually made about markets and market participants?

If a production possibility frontier (PPF)is drawn concave to the origin,with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement upward along the PPF reflects:

What does the consumer price index measure?

Which of the following is generally considered a microeconomic question?

Which of the following is true of positive analysis?

Microeconomics is also known as price theory because:

What would be the impact on the real price of automobiles if the nominal price increases by 60 percent over a ten year period?

Along a concave production possibility frontier,the per-unit opportunity cost of increasing output typically:

Positive economic analysis utilizes:

Which of the following is generally considered to be a microeconomic question?

Which of the following is an assumption usually made about markets and market participants by economists?

Consider the production possibility frontier of an economy in Figure 1-1.What is the opportunity cost of moving from point B to point C to produce 5 more apples?

Do you think that the behavior of a student,who is focused on achieving superior grades and aims to top the class,will be described as goal-oriented behavior by economists?

If a production possibility frontier is drawn concave to the origin with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement downward along the PPF reflects:

In judging the value of a theory,the most important criteria is:

Value judgments:

The opportunity cost of a good is always constant if the production possibility frontier is:

The explicit cost of production equals:

If the nominal price of apples has increased by 20 percent over a year in which the average price level has risen by 10 percent,then the real price of apples:

Supply and Demand

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters