Exam 1: Limits, Alternatives, and Choices

-The slope of a line parallel to the vertical axis is:

When economists describe "a market," they mean:

-The vertical intercept of line (2) on the above graph is:

If economic theories are solidly based on relevant facts, then there can be no question as to the character of appropriate economic policy.

Purposeful behaviour suggests that:

The production possibilities curve shows:

Even though local newspapers are very inexpensive, people rarely buy more than one of them each day. This fact:

If two variables are inversely related, then as the value of one variable:

A major argument for economic growth is that it:

The process of developing hypotheses, testing them against facts, and using the results to construct theories is called:

-Refer to the diagram below. The concept of opportunity cost is best represented by the:

-Refer to the above diagram. Starting at point E, the production of successive units of bread will cost:

If an economy is operating inside its production possibilities curve for consumer goods and capital goods, this means that it:

The production possibilities curve represents:

In a linear equation relating income and consumption, you know that the intercept is $1,000 and the slope of the line is .4. If income is $20,000, then consumption is:

-Refer to the above production possibilities curve. At the onset of World War II the Soviet Union's economy was already at full employment. Its economic adjustment from peacetime to wartime can best be described by the movement from point:

The study of economics exists because:

Economic models:

Refer to the diagram below. Points A, B, C, D, and E show:

A production possibilities curve illustrates: