Question 1

That which we forgo,or give up,when we make a choice or decision is called

Accepted Answer

A) out-of-pocket cost. 
B) marginal cost. 
C) real cost. 
D) opportunity cost. 
A) out-of-pocket cost. 
B) marginal cost. 
C) real cost. 
D) opportunity cost.

Question 2

Opportunity cost is

Accepted Answer

A) that which we forgo,or give up,when we make a choice or a decision. 
B) a cost that cannot be avoided,regardless of what is done in the future. 
C) the additional cost of producing an additional unit of output. 
D) the additional cost of buying an additional unit of a product. 
A) that which we forgo,or give up,when we make a choice or a decision. 
B) a cost that cannot be avoided,regardless of what is done in the future. 
C) the additional cost of producing an additional unit of output. 
D) the additional cost of buying an additional unit of a product.

Question 3

Refer to the information provided in Figure 1.4 below to answer the questions that follow.
   Figure 1.4
-Refer to Figure 1.4.Which of the curves or lines has a slope that is first positive and then negative?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 4

A market in which profit opportunities are eliminated almost instantaneously is

Accepted Answer

A) a laissez-faire market. 
B) a capitalist market. 
C) a socialist market. 
D) an efficient market. 
A) a laissez-faire market. 
B) a capitalist market. 
C) a socialist market. 
D) an efficient market.

Question 5

I have lived in a house on the Mississippi River for many years and have never seen a flood.Therefore,there is no reason for anyone to buy flood insurance.This statement is an example of

Accepted Answer

A) fallacy of composition. 
B) post hoc,ergo propter hoc fallacy. 
C) fallacy of inductive reasoning. 
D) ceteris paribus fallacy. 
A) fallacy of composition. 
B) post hoc,ergo propter hoc fallacy. 
C) fallacy of inductive reasoning. 
D) ceteris paribus fallacy.

Question 6

If your tuition is $5,000 this semester,your books cost $600,you can only work 20 rather than 40 hours per week during the 15 weeks you are taking classes and you make $15 per hour,and your room and board is $3000 this semester (same as if not attending college),then your opportunity cost of attending college this semester is

Accepted Answer

A) $5,600. 
B) $5,900. 
C) $10,100. 
D) $11,600. 
A) $5,600. 
B) $5,900. 
C) $10,100. 
D) $11,600.

Question 7

An efficient market is characterized by the fact that

Accepted Answer

A) output is steady or growing and there is low inflation. 
B) profit opportunities are eliminated almost instantaneously. 
C) there are no opportunity costs. 
D) wealth is distributed fairly. 
A) output is steady or growing and there is low inflation. 
B) profit opportunities are eliminated almost instantaneously. 
C) there are no opportunity costs. 
D) wealth is distributed fairly.

Question 8

If the slope of a straight line is -3.and if Y (the variable on the vertical axis)decreases by 6,then X (the variable on the horizontal axis)will

Accepted Answer

A) increase by 2. 
B) decrease by 2. 
C) increase by 18. 
D) decrease by 18. 
A) increase by 2. 
B) decrease by 2. 
C) increase by 18. 
D) decrease by 18.

Question 9

Economists often refer to risk-free ventures as

Accepted Answer

A) efficient market outcomes. 
B) profit opportunities. 
C) those with no opportunity costs. 
D) break-even propositions. 
A) efficient market outcomes. 
B) profit opportunities. 
C) those with no opportunity costs. 
D) break-even propositions.

Question 10

Refer to the information provided in Figure 1.4 below to answer the questions that follow.
   Figure 1.4
-Refer to Figure 1.4.Which of the curves or lines has a slope that is negative and then positive?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 11

The slope of a vertical line is

Accepted Answer

A) zero. 
B) infinite. 
C) continually changing. 
D) negative. 
A) zero. 
B) infinite. 
C) continually changing. 
D) negative.

Question 12

Economists use the phrase ceteris paribus to express the assumption

Accepted Answer

A) "all else equal." 
B) "everything affects everything else." 
C) "scarcity is a fact of life." 
D) "there is no such thing as a free lunch." 
A) "all else equal." 
B) "everything affects everything else." 
C) "scarcity is a fact of life." 
D) "there is no such thing as a free lunch."

Question 13

A graph illustrating how one variable changes over time is a Cartesian coordinate system.

Accepted Answer

A) True 
 B)False

Question 14

A change in economic output is potentially efficient

Accepted Answer

A) if the value of the resulting gains exceeds the value of the resulting losses. 
B) if the value of the resulting gains exactly equals the value of the resulting losses. 
C) only if no one is made worse off. 
D) if the value of the resulting gains is less than the value of the resulting losses. 
A) if the value of the resulting gains exceeds the value of the resulting losses. 
B) if the value of the resulting gains exactly equals the value of the resulting losses. 
C) only if no one is made worse off. 
D) if the value of the resulting gains is less than the value of the resulting losses.

Question 15

Positive economics seeks to understand behavior,but not make judgments.

Accepted Answer

A) True 
 B)False

Question 16

Refer to Scenario 1.1 below to answer the questions that follow.
SCENARIO 1.1: An economist wants to understand the relationship between minimum wages and the level of teenage unemployment.The economist collects data on the values of the minimum wage and the levels of teenage unemployment over time.The economist concludes that a 1% increase in minimum wage causes a 0.2% increase in teenage unemployment.From this information he concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers.
-Refer to Scenario 1.1.The statement,"the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers," is an example of

Accepted Answer

A) marginal economics. 
B) normative economics. 
C) positive economics. 
D) the fallacy of composition. 
A) marginal economics. 
B) normative economics. 
C) positive economics. 
D) the fallacy of composition.

Question 17

Inflation and unemployment

Accepted Answer

A) are the focus of normative economics. 
B) are a focus of microeconomics. 
C) are a focus of positive economics. 
D) are a focus of macroeconomics. 
A) are the focus of normative economics. 
B) are a focus of microeconomics. 
C) are a focus of positive economics. 
D) are a focus of macroeconomics.

Question 18

Positive economics looks at outcomes of economic behavior and evaluates them as good or bad.

Accepted Answer

A) True 
 B)False

Question 19

There is a possibility that a national sales tax will be implemented.Many economists argue that items such as food and clothing should be exempt from such a tax because low-income people spend a greater percentage of their income on these goods than do high-income individuals.This argument is motivated by concerns over

Accepted Answer

A) economic growth. 
B) economic stability. 
C) efficiency. 
D) equity. 
A) economic growth. 
B) economic stability. 
C) efficiency. 
D) equity.

Question 20

Normative economics is an approach to economics that

Accepted Answer

A) seeks to understand behavior and the operation of systems without making judgments. 
B) analyzes outcomes of economic behavior,evaluates them as good or bad,and may prescribe preferred courses of action. 
C) applies statistical techniques and data to economic problems. 
D) examines the role of government in the economy. 
A) seeks to understand behavior and the operation of systems without making judgments. 
B) analyzes outcomes of economic behavior,evaluates them as good or bad,and may prescribe preferred courses of action. 
C) applies statistical techniques and data to economic problems. 
D) examines the role of government in the economy.

That which we forgo,or give up,when we make a choice or decision is called

Opportunity cost is

Refer to the information provided in Figure 1.4 below to answer the questions that follow. Figure 1.4 -Refer to Figure 1.4.Which of the curves or lines has a slope that is first positive and then negative?

A market in which profit opportunities are eliminated almost instantaneously is

I have lived in a house on the Mississippi River for many years and have never seen a flood.Therefore,there is no reason for anyone to buy flood insurance.This statement is an example of

An efficient market is characterized by the fact that

If the slope of a straight line is -3.and if Y (the variable on the vertical axis)decreases by 6,then X (the variable on the horizontal axis)will

Economists often refer to risk-free ventures as

Refer to the information provided in Figure 1.4 below to answer the questions that follow. Figure 1.4 -Refer to Figure 1.4.Which of the curves or lines has a slope that is negative and then positive?

The slope of a vertical line is

Economists use the phrase ceteris paribus to express the assumption

A graph illustrating how one variable changes over time is a Cartesian coordinate system.

A change in economic output is potentially efficient

Positive economics seeks to understand behavior,but not make judgments.

Inflation and unemployment

Positive economics looks at outcomes of economic behavior and evaluates them as good or bad.

Normative economics is an approach to economics that

The Economic Problem: Scarcity and Choice

Demand,supply,and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment,inflation,and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

Filters

Exam 1: The Scope and Method of Economics

That which we forgo,or give up,when we make a choice or decision is called

Opportunity cost is

Refer to the information provided in Figure 1.4 below to answer the questions that follow. Figure 1.4 -Refer to Figure 1.4.Which of the curves or lines has a slope that is first positive and then negative?

A market in which profit opportunities are eliminated almost instantaneously is

I have lived in a house on the Mississippi River for many years and have never seen a flood.Therefore,there is no reason for anyone to buy flood insurance.This statement is an example of

An efficient market is characterized by the fact that

If the slope of a straight line is -3.and if Y (the variable on the vertical axis)decreases by 6,then X (the variable on the horizontal axis)will

Economists often refer to risk-free ventures as

Refer to the information provided in Figure 1.4 below to answer the questions that follow. Figure 1.4 -Refer to Figure 1.4.Which of the curves or lines has a slope that is negative and then positive?

The slope of a vertical line is

Economists use the phrase ceteris paribus to express the assumption

A graph illustrating how one variable changes over time is a Cartesian coordinate system.

A change in economic output is potentially efficient

Positive economics seeks to understand behavior,but not make judgments.

Inflation and unemployment

Positive economics looks at outcomes of economic behavior and evaluates them as good or bad.

Normative economics is an approach to economics that

The Economic Problem: Scarcity and Choice

Demand,supply,and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment,inflation,and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

Filters