Question 1

The slope of a vertical line is

Accepted Answer

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

Question 2

The government should increase the minimum age for collecting Social Security benefits. This statement is best described as

Accepted Answer

A)  an example of marginalism. 
B)  an example of the fallacy of logic. 
C)  a normative statement. 
D)  a positive statement.

Question 3

________ economy is an economy that produces what consumers demand and does so at the least possible cost.

Accepted Answer

A)  An inefficient 
B)  An efficient 
C)  A government-controlled 
D)  A command

Question 4

The study of how benefits are determined for city employees would be considered

Accepted Answer

A)  microeconomics. 
B)  macroeconomics. 
C)  descriptive economics. 
D)  institutional economics.

Question 5

Equity is synonymous with fairness.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  equity. 
B)  causation. 
C)  correlation. 
D)  opportunity cost.

Question 7

The principle that irrelevant detail should not be included in a model is known as

Accepted Answer

A)  a fallacy. 
B)  ceteris paribus. 
C)  Ockham's razor. 
D)  normative economics.

Question 8

Refer to the information provided in Figure 1.1 below to answer the question(s) that follow.  Figure 1.1
-Refer to Figure 1.1. There is ________ relationship between the daily temperature and the number of gallons of ice cream purchased.

Accepted Answer

A)  a negative 
B)  a positive 
C)  both a negative and a positive 
D)  an inverse

Question 9

Refer to the information provided in Figure 1.7 below to answer the question(s) that follow.  Figure 1.7
-Refer to Figure 1.7. At Point A the slope of the line is 0.67, so at Point C the slope would be

Accepted Answer

A)  greater than 0.67. 
B)  less than 0.67. 
C)  equal to 0.67. 
D)  indeterminate from this information.

Question 10

You decide to go to LEGOLAND after you visit Disneyworld in Orlando. The cost of going to LEGOLAND after you visit Disneyworld is the ________ cost of getting from Disneyworld to LEGOLAND.

Accepted Answer

A)  efficiency 
B)  marginal time and money 
C)  opportunity 
D)  profit maximizing

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Stability implies a steady rate of economic growth with full employment of resources.

Accepted Answer

A) True 
 B)False

Question 13

If you can download 10 ring tones for your cell phone for $10 or you could download 11 ring tones for your cell phone for $10.50, then the marginal cost of the eleventh ring tone is

Accepted Answer

A)  $0.50. 
B)  $10.00. 
C)  $10.50. 
D)  $20.50.

Question 14

Refer to the information provided in Figure 1.3 below to answer the question(s) that follow.  Figure 1.3
-Refer to Figure 1.3. If a 45-degree line were also graphed, the existing line shown on the graph would ________ it.

Accepted Answer

A)  lie above 
B)  lie below 
C)  cross 
D)  The answer is indeterminate from this information.

Question 15

The value of the best alternative foregone is the opportunity cost of making a decision.

Accepted Answer

A) True 
 B)False

Question 16

Scarce resources give rise to the concept of

Accepted Answer

A)  efficient markets. 
B)  opportunity costs. 
C)  laissez-faire. 
D)  positive economics.

Question 17

There is great concern over the fact that global warming is causing permanent damage to the global environment. A study of the costs and benefits of purchasing carbon offsets to combat global warming is an example of

Accepted Answer

A)  labor economics. 
B)  normative economics. 
C)  positive economics. 
D)  laissez-faire economics.

Question 18

Related to the Economics in Practice on p. 9: Prior to joining the glee club, Anjelica spent most of her free time studying in the library. Once she joined the glee club, Anjelica spent her free time hanging out in karaoke bars with other glee club members. This change in behavior is best described by

Accepted Answer

A)  the fallacy of logic. 
B)  the post hoc ergo prompter hoc fallacy. 
C)  the problem of peer effects. 
D)  the ceteris paribus error.

Question 19

Normative economics

Accepted Answer

A)  is the focus of most modern economic reasoning. 
B)  answers the question "What ought to be?" 
C)  predicts the consequences of alternative actions. 
D)  answers the question "What is?"

Question 20

Opportunity cost is

Accepted Answer

A)  the additional cost incurred from the consumption of one more unit of output. 
B)  the cost involved when choosing between alternatives. 
C)  the cost of production which cannot be recaptured. 
D)  the total cost incurred from the consumption of additional output.

Exam 1: The Scope and Method of Economics

The slope of a vertical line is

The government should increase the minimum age for collecting Social Security benefits. This statement is best described as

________ economy is an economy that produces what consumers demand and does so at the least possible cost.

The study of how benefits are determined for city employees would be considered

Equity is synonymous with fairness.

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

The principle that irrelevant detail should not be included in a model is known as

Refer to the information provided in Figure 1.1 below to answer the question(s) that follow. Figure 1.1 -Refer to Figure 1.1. There is ________ relationship between the daily temperature and the number of gallons of ice cream purchased.

Refer to the information provided in Figure 1.7 below to answer the question(s) that follow. Figure 1.7 -Refer to Figure 1.7. At Point A the slope of the line is 0.67, so at Point C the slope would be

You decide to go to LEGOLAND after you visit Disneyworld in Orlando. The cost of going to LEGOLAND after you visit Disneyworld is the ________ cost of getting from Disneyworld to LEGOLAND.

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

Stability implies a steady rate of economic growth with full employment of resources.

If you can download 10 ring tones for your cell phone for $10 or you could download 11 ring tones for your cell phone for $10.50, then the marginal cost of the eleventh ring tone is

Refer to the information provided in Figure 1.3 below to answer the question(s) that follow. Figure 1.3 -Refer to Figure 1.3. If a 45-degree line were also graphed, the existing line shown on the graph would ________ it.

The value of the best alternative foregone is the opportunity cost of making a decision.

Scarce resources give rise to the concept of

There is great concern over the fact that global warming is causing permanent damage to the global environment. A study of the costs and benefits of purchasing carbon offsets to combat global warming is an example of

Normative economics

Opportunity cost is