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

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 3

Economists assume that rational people do all of the following except

Accepted Answer

A)  use all available information as they act to achieve their goals. 
B)  undertake activities that benefit others and hurt themselves. 
C)  weigh the benefits and costs of all possible alternative actions. 
D)  respond to economic incentives. 
A)  use all available information as they act to achieve their goals. 
B)  undertake activities that benefit others and hurt themselves. 
C)  weigh the benefits and costs of all possible alternative actions. 
D)  respond to economic incentives.

Question 4

Which of the following is a result of a market economy?

Accepted Answer

A)  Environmental protection 
B)  An equal income distribution 
C)  Agreement on equity 
D)  Voluntary exchange 
A)  Environmental protection 
B)  An equal income distribution 
C)  Agreement on equity 
D)  Voluntary exchange

Question 5

Trina's Tropical Fish Store sells goldfish for $2 each and angelfish for $10 each.What is the opportunity cost of buying a goldfish?

Accepted Answer

A)  5 angelfish 
B)  1/5 of an angelfish 
C)  $10 
D)  $2 
A)  5 angelfish 
B)  1/5 of an angelfish 
C)  $10 
D)  $2

Question 6

When voluntary exchange takes place,neither party gains from the exchange.

Accepted Answer

A) True 
 B)False

Question 7

A grocery store sells a bag of potatoes at a fixed price of $2.30.Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?

Accepted Answer

A)  Marginal revenue 
B)  Gross earnings 
C)  Pure profit 
D)  Marginal cost 
A)  Marginal revenue 
B)  Gross earnings 
C)  Pure profit 
D)  Marginal cost

Question 8

What is marginal cost?

Accepted Answer

Marginal cost is the

Question 9

Which of the following correctly describes the relationship between economic efficiency and economic equity?

Accepted Answer

A)  They are both automatically achieved in a free market economy. 
B)  They always call for opposite outcomes. 
C)  There is no conflict between the two goals. 
D)  There is often a trade-off between the two. 
A)  They are both automatically achieved in a free market economy. 
B)  They always call for opposite outcomes. 
C)  There is no conflict between the two goals. 
D)  There is often a trade-off between the two.

Question 10

Economists assume that rational behaviour is useful in explaining the 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 11

Suppose the extra cost for a doctor to keep his office open for one extra hour is $200.Then,the doctor should stay open for the extra hour if he can generate additional revenue of $200 or more for that hour.

Accepted Answer

A) True 
 B)False

Question 12

What is voluntary exchange?

Accepted Answer

Voluntary exchange is a situat

Question 13

Suppose that some investors have decided that economic and financial uncertainty have made the prospect of investing in domestic stock markets more risky than investing in foreign stock markets,and therefore choose to invest in foreign markets.By using all available information as they act to achieve their goals,these investors are exemplifying the economic idea that

Accepted Answer

A)  people are rational. 
B)  people respond to economic incentives. 
C)  optimal decisions are made at the margin. 
D)  equity is more important than efficiency. 
A)  people are rational. 
B)  people respond to economic incentives. 
C)  optimal decisions are made at the margin. 
D)  equity is more important than efficiency.

Question 14

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Accepted Answer

A)  2 1/2 Russian tea cakes 
B)  2/5 of a Russian tea cake 
C)  $2.50 
D)  $1.00 
A)  2 1/2 Russian tea cakes 
B)  2/5 of a Russian tea cake 
C)  $2.50 
D)  $1.00

Question 15

Which of the following is a microeconomics question?

Accepted Answer

A)  How much will be saved and how much will be produced in the entire economy? 
B)  What will the level of economic growth be in the entire economy? 
C)  What factors determine the price of carrots? 
D)  What determines the average price level and inflation? 
A)  How much will be saved and how much will be produced in the entire economy? 
B)  What will the level of economic growth be in the entire economy? 
C)  What factors determine the price of carrots? 
D)  What determines the average price level and inflation?

Question 16

Which of the following are positive economic statements and which are normative economic statements?
a.An increase in the price of petrol will decrease the quantity of petrol purchased.
b.The government should eliminate the minimum wage.
c.All states should raise the minimum wage to at least $10 per hour.
d.The government should scrap its current income tax structure in favour of a flat tax.
e.Unemployment has increased since the onset of the recession.
f.The government should not bail out investment banks during a financial crisis.

Accepted Answer

Statements a and e are positiv

Question 17

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 18

If a graph has a line that shows the amount of outsourcing in the last ten years,it is known as

Accepted Answer

A)  a pie chart. 
B)  a time-series graph. 
C)  a demand curve for outsourcing. 
D)  a supply curve of outsourcing. 
A)  a pie chart. 
B)  a time-series graph. 
C)  a demand curve for outsourcing. 
D)  a supply curve of outsourcing.

Question 19

How are the fundamental economic questions answered in a market economy?

Accepted Answer

A)  The government alone decides the answers. 
B)  Individuals, firms, and the government interact in markets to decide the answers to these questions. 
C)  Households and firms interact in markets to decide the answers to these questions. 
D)  Large corporations alone decide the answers. 
A)  The government alone decides the answers. 
B)  Individuals, firms, and the government interact in markets to decide the answers to these questions. 
C)  Households and firms interact in markets to decide the answers to these questions. 
D)  Large corporations alone decide the answers.

Question 20

Making optimal decisions 'at the margin' requires

Accepted Answer

A)  making decisions according to one's whims and fancies. 
B)  making consistently irrational decisions. 
C)  weighing the costs and benefits of a decision before deciding if it should be pursued. 
D)  making borderline decisions. 
A)  making decisions according to one's whims and fancies. 
B)  making consistently irrational decisions. 
C)  weighing the costs and benefits of a decision before deciding if it should be pursued. 
D)  making borderline decisions.

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

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

Economists assume that rational people do all of the following except

Which of the following is a result of a market economy?

Trina's Tropical Fish Store sells goldfish for $2 each and angelfish for $10 each.What is the opportunity cost of buying a goldfish?

When voluntary exchange takes place,neither party gains from the exchange.

A grocery store sells a bag of potatoes at a fixed price of $2.30.Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?

What is marginal cost?

Which of the following correctly describes the relationship between economic efficiency and economic equity?

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

Suppose the extra cost for a doctor to keep his office open for one extra hour is $200.Then,the doctor should stay open for the extra hour if he can generate additional revenue of $200 or more for that hour.

What is voluntary exchange?

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Which of the following is a microeconomics question?

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

If a graph has a line that shows the amount of outsourcing in the last ten years,it is known as

How are the fundamental economic questions answered in a market economy?

Making optimal decisions 'at the margin' requires

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 1: Economics: Foundations and Models

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

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

Economists assume that rational people do all of the following except

Which of the following is a result of a market economy?

Trina's Tropical Fish Store sells goldfish for $2 each and angelfish for $10 each.What is the opportunity cost of buying a goldfish?

When voluntary exchange takes place,neither party gains from the exchange.

A grocery store sells a bag of potatoes at a fixed price of $2.30.Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?

What is marginal cost?

Which of the following correctly describes the relationship between economic efficiency and economic equity?

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

Suppose the extra cost for a doctor to keep his office open for one extra hour is $200.Then,the doctor should stay open for the extra hour if he can generate additional revenue of $200 or more for that hour.

What is voluntary exchange?

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Which of the following is a microeconomics question?

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

If a graph has a line that shows the amount of outsourcing in the last ten years,it is known as

How are the fundamental economic questions answered in a market economy?

Making optimal decisions 'at the margin' requires

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters