Question 1

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10,the slope of this line is

Accepted Answer

A)  negative 11 divided by 6. 
B)  seven tenths. 
C)  negative seven tenths. 
D)  6 divided by 11. 
A)  negative 11 divided by 6. 
B)  seven tenths. 
C)  negative seven tenths. 
D)  6 divided by 11.

Question 2

When voluntary exchange takes place,both parties gain from the exchange.

Accepted Answer

A) True 
 B)False

Question 3

Automobile manufacturers produce a range of automobiles such as sports utility vehicles,luxury sedans,pickup trucks and compact cars.What fundamental economic question are they addressing by making this range of products?

Accepted Answer

A)  How to produce goods that consumers want? 
B)  Why produce a variety of automobiles? 
C)  What to produce? 
D)  Who to produce automobiles for? 
A)  How to produce goods that consumers want? 
B)  Why produce a variety of automobiles? 
C)  What to produce? 
D)  Who to produce automobiles for?

Question 4

Suppose when the price of laptops fall,college students buy more laptops.This implies that

Accepted Answer

A)  there is a positive relationship between laptop prices and quantities purchased by college students. 
B)  there is a negative relationship between laptop prices and quantities purchased by college students. 
C)  there is a direct relationship between laptop prices and quantities purchased by college students. 
D)  there is a one-to-one relationship between laptop prices and quantities purchased by college students. 
A)  there is a positive relationship between laptop prices and quantities purchased by college students. 
B)  there is a negative relationship between laptop prices and quantities purchased by college students. 
C)  there is a direct relationship between laptop prices and quantities purchased by college students. 
D)  there is a one-to-one relationship between laptop prices and quantities purchased by college students.

Question 5

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 6

Suppose the U.S.government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000.These doctors would be 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 7

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 8

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

Accepted Answer

A) True 
 B)False

Question 9

Soo Jin shares a one-bedroom apartment with her classmate.Her share of the rent is $700 per month.She is considering moving to a studio apartment which she will not have to share with anyone.The studio apartment rents for $950 per month.Recently,you ran into Soo Jin on campus and she tells you that she has moved into the studio apartment.Soo Jin is as rational as any other person.As an economics major,you rightly conclude that

Accepted Answer

A)  Soo Jin did not have a choice; her roommate was a slob. 
B)  Soo Jin figures that the additional benefit of having her own place (as opposed to sharing) is at least $250. 
C)  Soo Jin figures that the benefit of having her own place (as opposed to sharing) is at least $950. 
D)  the cost of having one's own space outweighs the benefits. 
A)  Soo Jin did not have a choice; her roommate was a slob. 
B)  Soo Jin figures that the additional benefit of having her own place (as opposed to sharing) is at least $250. 
C)  Soo Jin figures that the benefit of having her own place (as opposed to sharing) is at least $950. 
D)  the cost of having one's own space outweighs the benefits.

Question 10

Which of the following statements is true about competition in a market?

Accepted Answer

A)  Competition forces firms to outsource the production of their labor-intensive products. 
B)  Competition forces firms to undercut their selling price, thus benefiting consumers who will be able to purchase products at the lowest price possible. 
C)  Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production. 
D)  Competition forces firms to add only low profit margins to their costs of production. 
A)  Competition forces firms to outsource the production of their labor-intensive products. 
B)  Competition forces firms to undercut their selling price, thus benefiting consumers who will be able to purchase products at the lowest price possible. 
C)  Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production. 
D)  Competition forces firms to add only low profit margins to their costs of production.

Question 11

How are the fundamental economic decisions determined in North Korea?

Accepted Answer

A)  Individuals, firms, and the government interact in a market to make these economic decisions. 
B)  These decisions are made by the country's elders who have had much experience in answering these questions. 
C)  The government decides because North Korea is a centrally planned economy. 
D)  The United Nations decides because North Korea is a developing economy. 
A)  Individuals, firms, and the government interact in a market to make these economic decisions. 
B)  These decisions are made by the country's elders who have had much experience in answering these questions. 
C)  The government decides because North Korea is a centrally planned economy. 
D)  The United Nations decides because North Korea is a developing economy.

Question 12

Figure 1-1  
-Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2008 and 2011.

Accepted Answer

A)  23.1% 
B)  23.8% 
C)  30% 
D)  42.9% 
A)  23.1% 
B)  23.8% 
C)  30% 
D)  42.9%

Question 13

The relationship between consumer spending and disposable personal income is

Accepted Answer

A)  an inverse relationship. 
B)  a direct relationship. 
C)  a negative relationship. 
D)  independent. 
A)  an inverse relationship. 
B)  a direct relationship. 
C)  a negative relationship. 
D)  independent.

Question 14

What is the difference between positive economic analysis and normative economic analysis? Give one example each of a positive and normative economic issue or question or statement.

Accepted Answer

Positive economic analysis is concerned

Question 15

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 16

Which of the following generates productive efficiency?

Accepted Answer

A)  competition among sellers 
B)  competition among buyers 
C)  government inspectors 
D)  government production rules and regulations 
A)  competition among sellers 
B)  competition among buyers 
C)  government inspectors 
D)  government production rules and regulations

Question 17

What are some of the reasons given for the the decline in the number of physicians choosing to enter private practices?

Accepted Answer

The reasons include lower insu

Question 18

What is meant by the statement that "optimal decisions are made at the margin"?

Accepted Answer

In economics,the word "marginal" means "

Question 19

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.Should DeShawn continue to offer the engine detailing service?

Accepted Answer

A)  yes, he still makes a profit by selling the engine detailing service with the basic detailing package 
B)  yes, but only if he raises the price of the basic detailing package 
C)  no, his marginal benefit is less than his marginal cost 
D)  More information is needed for DeShawn to make this decision. 
A)  yes, he still makes a profit by selling the engine detailing service with the basic detailing package 
B)  yes, but only if he raises the price of the basic detailing package 
C)  no, his marginal benefit is less than his marginal cost 
D)  More information is needed for DeShawn to make this decision.

Question 20

The U.S.Health Resources and Services Administration (HRSA)forecasts that in 2020

Accepted Answer

A)  there will be a shortage of doctors in the United States. 
B)  the number of doctors in the United States will decrease and the number of doctors needed will increase. 
C)  the number of doctors in the United States will increase and the number of doctors needed will decrease. 
D)  there will be a surplus of doctors in the United States. 
A)  there will be a shortage of doctors in the United States. 
B)  the number of doctors in the United States will decrease and the number of doctors needed will increase. 
C)  the number of doctors in the United States will increase and the number of doctors needed will decrease. 
D)  there will be a surplus of doctors in the United States.

Exam 1: Economics: Foundations and Models

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10,the slope of this line is

When voluntary exchange takes place,both parties gain from the exchange.

Automobile manufacturers produce a range of automobiles such as sports utility vehicles,luxury sedans,pickup trucks and compact cars.What fundamental economic question are they addressing by making this range of products?

Suppose when the price of laptops fall,college students buy more laptops.This implies that

In economics,the term "equity" means

Suppose the U.S.government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000.These doctors would be exemplifying the economic idea that

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

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

Which of the following statements is true about competition in a market?

How are the fundamental economic decisions determined in North Korea?

Figure 1-1 -Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2008 and 2011.

The relationship between consumer spending and disposable personal income is

What is the difference between positive economic analysis and normative economic analysis? Give one example each of a positive and normative economic issue or question or statement.

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

Which of the following generates productive efficiency?

What are some of the reasons given for the the decline in the number of physicians choosing to enter private practices?

What is meant by the statement that "optimal decisions are made at the margin"?

The U.S.Health Resources and Services Administration (HRSA)forecasts that in 2020

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: The Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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