Question 1

The decisions Apple makes in determining production levels for its iPhone is an example of a microeconomics topic.

Accepted Answer

A) True 
 B)False

Question 2

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 3

________ is a problem that occurs when one concludes that a change in variable X caused a change in variable Y when in actual fact,it is a change in variable Y that caused a change in variable X.

Accepted Answer

A)  The omitted variable 
B)  The positive-to-negative relationship 
C)  Reverse causality 
D)  Nonlinear slope 
A)  The omitted variable 
B)  The positive-to-negative relationship 
C)  Reverse causality 
D)  Nonlinear slope

Question 4

Explain the economic assumption that "people are rational."

Accepted Answer

"People are rational" means that economi

Question 5

An economic ________ is a simplified version of some aspect of economic life used to analyze an economic issue.

Accepted Answer

A)  market 
B)  trade-off 
C)  variable 
D)  model 
A)  market 
B)  trade-off 
C)  variable 
D)  model

Question 6

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

Accepted Answer

A) True 
 B)False

Question 7

A restaurant sells a large soft drink at a fixed price of $1.79.A term used by economists to describe the money received from the sale of an additional large soft drink is

Accepted Answer

A)  marginal revenue. 
B)  gross earnings. 
C)  pure profit. 
D)  net benefit. 
A)  marginal revenue. 
B)  gross earnings. 
C)  pure profit. 
D)  net benefit.

Question 8

What is the difference between goods and services?

Accepted Answer

Goods are tangible merchandise

Question 9

"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement.

Accepted Answer

A) True 
 B)False

Question 10

Since 1994,obesity rates in the United States

Accepted Answer

A)  have been on a slow and steady decline. 
B)  have increased in all 50 states. 
C)  have primarily increased in the Southeast and remained constant or slightly decreased in the remainder of the country. 
D)  have remained fairly constant throughout the country. 
A)  have been on a slow and steady decline. 
B)  have increased in all 50 states. 
C)  have primarily increased in the Southeast and remained constant or slightly decreased in the remainder of the country. 
D)  have remained fairly constant throughout the country.

Question 11

The extra cost associated with undertaking an activity is called

Accepted Answer

A)  net loss. 
B)  marginal cost. 
C)  opportunity cost. 
D)  foregone cost. 
A)  net loss. 
B)  marginal cost. 
C)  opportunity cost. 
D)  foregone cost.

Question 12

Scenario 1-1
Suppose a cell phone manufacturer currently sells 20,000 cell phones per week and makes a profit of $5,000 per week. A manager at the plant observes, "Although the last 3,000 cell phones we produced and sold increased our revenue by $6,000 and our costs by $6,700, we are still making an overall profit of $5,000 per week so I think we're on the right track. We are producing the optimal number of cell phones."
-Refer to Scenario 1-1.Using marginal analysis terminology,what is another economic term for the incremental cost of producing the last 3,000 cell phones?

Accepted Answer

A)  marginal cost 
B)  operating cost 
C)  explicit cost 
D)  Any of the above terms are correct. 
A)  marginal cost 
B)  operating cost 
C)  explicit cost 
D)  Any of the above terms are correct.

Question 13

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes.A student concludes that it is likely that living in a nursing home causes Alzheimer's dementia.What is the flaw in the student's reasoning?

Accepted Answer

A)  The student has failed to take into account other causes of Alzheimer's disease. 
B)  The student is drawing a false conclusion; he is confusing cause and effect. 
C)  The student is using an inadequate sample size. 
D)  The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents. 
A)  The student has failed to take into account other causes of Alzheimer's disease. 
B)  The student is drawing a false conclusion; he is confusing cause and effect. 
C)  The student is using an inadequate sample size. 
D)  The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents.

Question 14

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 15

The distribution of income primarily determines which of the fundamental economic questions?

Accepted Answer

A)  What goods and services are to be produced? 
B)  How the goods and services are to be produced? 
C)  Who will receive the goods and services produced? 
D)  How to plan the economy? 
A)  What goods and services are to be produced? 
B)  How the goods and services are to be produced? 
C)  Who will receive the goods and services produced? 
D)  How to plan the economy?

Question 16

Which of the following is a positive economic statement?

Accepted Answer

A)  The standard of living in the United States should be higher. 
B)  If the price of iPhones falls, a larger quantity of iPhones will be purchased. 
C)  The government should revamp the health care system. 
D)  The U.S. government should not have bailed out U.S. auto manufacturers. 
A)  The standard of living in the United States should be higher. 
B)  If the price of iPhones falls, a larger quantity of iPhones will be purchased. 
C)  The government should revamp the health care system. 
D)  The U.S. government should not have bailed out U.S. auto manufacturers.

Question 17

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 18

What is equity,and how does it differ from efficiency?

Accepted Answer

Equity refers to the fair distribution o

Question 19

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 even if he can generate additional revenue of $200 for that hour.

Accepted Answer

A) True 
 B)False

Question 20

Article Summary
In an August 2013 speech from the Lincoln Memorial, President Obama was expected to emphasize that increased economic equality is needed to improve racial equality. Economic gaps based on race have endured for 50 years, with the differences in unemployment rates between blacks and whites remaining virtually unchanged and the gap in wealth actually increasing. "If you look at 50 years after the 1960s civil rights movement, the most stubborn and persistent challenge when it comes to the nation's racial challenge remains in the areas of economics and wealth," said Marc Morial, president of the National Urban League.
Source: Zachary A. Goldfarb, "For Obama, 50 years after historic march, economic equality the path to racial justice," Washington Post, August 17, 2013.
-Refer to the Article Summary.The article mentions increased economic equality is needed in terms of wealth,and for some people this means a more equitable distribution of wealth.What is meant by a more equitable distribution of wealth?

Accepted Answer

A)  a more allocatively efficient distribution of wealth 
B)  a more productively efficient distribution of wealth 
C)  a more fair distribution of wealth 
D)  wealth distributed based on income levels 
A)  a more allocatively efficient distribution of wealth 
B)  a more productively efficient distribution of wealth 
C)  a more fair distribution of wealth 
D)  wealth distributed based on income levels

The decisions Apple makes in determining production levels for its iPhone is an example of a microeconomics topic.

Which of the following generates productive efficiency?

________ is a problem that occurs when one concludes that a change in variable X caused a change in variable Y when in actual fact,it is a change in variable Y that caused a change in variable X.

Explain the economic assumption that "people are rational."

An economic ________ is a simplified version of some aspect of economic life used to analyze an economic issue.

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

A restaurant sells a large soft drink at a fixed price of $1.79.A term used by economists to describe the money received from the sale of an additional large soft drink is

What is the difference between goods and services?

"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement.

Since 1994,obesity rates in the United States

The extra cost associated with undertaking an activity is called

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes.A student concludes that it is likely that living in a nursing home causes Alzheimer's dementia.What is the flaw in the student's reasoning?

Which of the following statements is true?

The distribution of income primarily determines which of the fundamental economic questions?

Which of the following is a positive economic statement?

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

What is equity,and how does it differ from efficiency?

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 even if he can generate additional revenue of $200 for that hour.

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

Filters

Exam 1: Economics: Foundations and Models

The decisions Apple makes in determining production levels for its iPhone is an example of a microeconomics topic.

Which of the following generates productive efficiency?

________ is a problem that occurs when one concludes that a change in variable X caused a change in variable Y when in actual fact,it is a change in variable Y that caused a change in variable X.

Explain the economic assumption that "people are rational."

An economic ________ is a simplified version of some aspect of economic life used to analyze an economic issue.

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

A restaurant sells a large soft drink at a fixed price of $1.79.A term used by economists to describe the money received from the sale of an additional large soft drink is

What is the difference between goods and services?

"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement.

Since 1994,obesity rates in the United States

The extra cost associated with undertaking an activity is called

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes.A student concludes that it is likely that living in a nursing home causes Alzheimer's dementia.What is the flaw in the student's reasoning?

Which of the following statements is true?

The distribution of income primarily determines which of the fundamental economic questions?

Which of the following is a positive economic statement?

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

What is equity,and how does it differ from efficiency?

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 even if he can generate additional revenue of $200 for that hour.

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

Filters