Question 1

On a two-dimensional graph,________ allows for the effects of additional variables.

Accepted Answer

A) moving along a curve 
B) shifting curves 
C) eliminating a curve 
D) adding an additional curve 
A) moving along a curve 
B) shifting curves 
C) eliminating a curve 
D) adding an additional curve

Question 2

An economic model is a simplified version of reality used to analyse real-world economic situations.

Accepted Answer

A) True 
 B)False

Question 3

Marginal analysis involves undertaking an activity

Accepted Answer

A) until its marginal costs start declining. 
B) only when its marginal benefits are positive. 
C) until its marginal benefits equal marginal costs. 
D) only if its marginal costs are greater than its marginal benefits. 
A) until its marginal costs start declining. 
B) only when its marginal benefits are positive. 
C) until its marginal benefits equal marginal costs. 
D) only if its marginal costs are greater than its marginal benefits.

Question 4

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

Accepted Answer

A) True 
 B)False

Question 5

In economics,the term ________ means 'additional' or 'extra.'

Accepted Answer

A) allocative 
B) marginal 
C) equity 
D) optimal 
A) allocative 
B) marginal 
C) equity 
D) optimal

Question 6

Which of the following statements is true?

Accepted Answer

A) Anytime you have to decide which action to take,you are experiencing economic equity. 
B) Trade-offs do not apply when the consumers purchase a product for which there is excess supply,such as a stock clearance sale. 
C) Every individual,no matter how rich or poor,is faced with making trade-offs. 
D) Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited. 
A) Anytime you have to decide which action to take,you are experiencing economic equity. 
B) Trade-offs do not apply when the consumers purchase a product for which there is excess supply,such as a stock clearance sale. 
C) Every individual,no matter how rich or poor,is faced with making trade-offs. 
D) Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited.

Question 7

In economics,the term 'equity' means

Accepted Answer

A) everyone has an equal standard of living. 
B) the hardest working individuals consume all they want. 
C) only elected officials have high standards of living. 
D) economic benefits are distributed fairly. 
A) everyone has an equal standard of living. 
B) the hardest working individuals consume all they want. 
C) only elected officials have high standards of living. 
D) economic benefits are distributed fairly.

Question 8

Which of the following statements about the economic decisions consumers,firms,and the government have to make is false?

Accepted Answer

A) Governments face the problem of scarcity in making economic decisions. 
B) Only individuals face scarcity;firms and the government do not. 
C) Both firms and individuals face scarcity. 
D) Each faces the problem of scarcity which necessitates trade-offs in making economic decisions. 
A) Governments face the problem of scarcity in making economic decisions. 
B) Only individuals face scarcity;firms and the government do not. 
C) Both firms and individuals face scarcity. 
D) Each faces the problem of scarcity which necessitates trade-offs in making economic decisions.

Question 9

The term 'market' refers to trading arrangements by which buyers and sellers come together.

Accepted Answer

A) True 
 B)False

Question 10

Figure 1-2  
-Refer to Figure 1-2.Calculate the area of the triangle A.

Accepted Answer

A) $1.3 million 
B) $2.6 million 
C) $3.4 million 
D) $5.2 million 
A) $1.3 million 
B) $2.6 million 
C) $3.4 million 
D) $5.2 million

Question 11

A university must decide if it wants to offer more Internet-based classes.This decision involves answering the economic question of 'what to produce.'

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements about positive economic analysis is false?

Accepted Answer

A) Positive analysis uses an economic model to estimate the costs and benefits of different courses of action. 
B) There is much more disagreement among economists over normative economic analysis than over positive economic analysis. 
C) There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D) Unlike normative economic analysis,positive economic analysis can be tested. 
A) Positive analysis uses an economic model to estimate the costs and benefits of different courses of action. 
B) There is much more disagreement among economists over normative economic analysis than over positive economic analysis. 
C) There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D) Unlike normative economic analysis,positive economic analysis can be tested.

Question 13

Economists assume that rational behaviour is useful in explaining choices people make

Accepted Answer

A) because irrational people do not make economic choices. 
B) even though people may not behave rationally all the time. 
C) because individuals act rationally all the time in all circumstances. 
D) even though people rarely,if ever,behave in a rational manner. 
A) because irrational people do not make economic choices. 
B) even though people may not behave rationally all the time. 
C) because individuals act rationally all the time in all circumstances. 
D) even though people rarely,if ever,behave in a rational manner.

Question 14

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40,and he charges $75 for this service.For a total price of $90,DeShawn will also detail the car's engine,a service that adds an additional $20 to the total cost of the package.What is DeShawn's marginal benefit if he sells a basic detailing package?

Accepted Answer

A) $35 
B) $75 
C) He incurs a marginal loss of $15,not a marginal benefit. 
D) The marginal benefit cannot be determined. 
A) $35 
B) $75 
C) He incurs a marginal loss of $15,not a marginal benefit. 
D) The marginal benefit cannot be determined.

Question 15

'The distribution of income should be determined by the government' is an example of a positive economic statement.

Accepted Answer

A) True 
 B)False

Question 16

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that

Accepted Answer

A) people with health insurance will be less likely to be overweight than people without health insurance. 
B) people with health insurance will be more likely to be overweight than people without health insurance. 
C) people with health insurance will be equally likely to be overweight as people without health insurance. 
D) there is no correlation between having health insurance and being overweight. 
A) people with health insurance will be less likely to be overweight than people without health insurance. 
B) people with health insurance will be more likely to be overweight than people without health insurance. 
C) people with health insurance will be equally likely to be overweight as people without health insurance. 
D) there is no correlation between having health insurance and being overweight.

Question 17

Which of the following statements is true about scarcity?

Accepted Answer

A) Scarcity refers to the situation in which unlimited wants exceed limited resources. 
B) Scarcity is not a problem for the wealthy. 
C) Scarcity is only a problem when a country has too large a population. 
D) Scarcity arises when there is a wide disparity in income distribution. 
A) Scarcity refers to the situation in which unlimited wants exceed limited resources. 
B) Scarcity is not a problem for the wealthy. 
C) Scarcity is only a problem when a country has too large a population. 
D) Scarcity arises when there is a wide disparity in income distribution.

Question 18

Consider the following statements:
A.Consumers buy more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area.
B.Schools take steps to increase security since they believe it is more costly to allow vandalism than to hire additional security guards.
C.Citrus growers produce more oranges when the selling price of oranges falls.
Which of the above statements demonstrates that economic agents respond to incentives?

Accepted Answer

A) a only. 
B) b only. 
C) a and b. 
D) a,b,and c. 
A) a only. 
B) b only. 
C) a and b. 
D) a,b,and c.

Question 19

If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets,then the difference of $120 is the marginal cost of producing the 4th suede jacket.

Accepted Answer

A) True 
 B)False

Question 20

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal benefit.

Accepted Answer

A) True 
 B)False

On a two-dimensional graph,________ allows for the effects of additional variables.

An economic model is a simplified version of reality used to analyse real-world economic situations.

Marginal analysis involves undertaking an activity

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

In economics,the term ________ means 'additional' or 'extra.'

Which of the following statements is true?

In economics,the term 'equity' means

Which of the following statements about the economic decisions consumers,firms,and the government have to make is false?

The term 'market' refers to trading arrangements by which buyers and sellers come together.

Figure 1-2 -Refer to Figure 1-2.Calculate the area of the triangle A.

A university must decide if it wants to offer more Internet-based classes.This decision involves answering the economic question of 'what to produce.'

Which of the following statements about positive economic analysis is false?

Economists assume that rational behaviour is useful in explaining choices people make

'The distribution of income should be determined by the government' is an example of a positive economic statement.

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that

Which of the following statements is true about scarcity?

If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets,then the difference of $120 is the marginal cost of producing the 4th suede jacket.

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal benefit.

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: the Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 1: Economics: Foundations and Models

On a two-dimensional graph,________ allows for the effects of additional variables.

An economic model is a simplified version of reality used to analyse real-world economic situations.

Marginal analysis involves undertaking an activity

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

In economics,the term ________ means 'additional' or 'extra.'

Which of the following statements is true?

In economics,the term 'equity' means

Which of the following statements about the economic decisions consumers,firms,and the government have to make is false?

The term 'market' refers to trading arrangements by which buyers and sellers come together.

Figure 1-2 -Refer to Figure 1-2.Calculate the area of the triangle A.

A university must decide if it wants to offer more Internet-based classes.This decision involves answering the economic question of 'what to produce.'

Which of the following statements about positive economic analysis is false?

Economists assume that rational behaviour is useful in explaining choices people make

'The distribution of income should be determined by the government' is an example of a positive economic statement.

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that

Which of the following statements is true about scarcity?

If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets,then the difference of $120 is the marginal cost of producing the 4th suede jacket.

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal benefit.

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: the Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters