Question 1

-In the figure above, an increase in z leads to a

Accepted Answer

A)  rightward shift of the line showing the relationship between x and y. 
B)  leftward shift of the line showing the relationship between x and y. 
C)  movement down along one of the lines showing the relationship between x and y. 
D)  movement up along one of the lines showing the relationship between x and y.

Question 2

The study of the choices made by individuals is part of the definition of

Accepted Answer

A)  positive economics. 
B)  macroeconomics. 
C)  normative economics. 
D)  microeconomics.

Question 3

$$\begin{array} { | l | l | } 
\hline x & y \
\hline 0 & 4 \
\hline 1 & 5 \
\hline 2 & 8 \
\hline 3 & 13 \
\hline 4 & 20 \
\hline
\end{array}$$
-In the above table, the relationship between x and y is and, with y measured on the vertical axis, the slope between y = 5 and y = 8 is equal to .

Accepted Answer

A)  positive; 5 
B)  positive; 3 
C)  negative; 6 
D)  negative; 8

Question 4

A linear relationship

Accepted Answer

A)  always has a maximum. 
B)  never has a constant slope. 
C)  always has a constant slope. 
D)  always slopes up to the right.

Question 5

Which of the following is a microeconomic topic?

Accepted Answer

A)  The reasons why total employment decreases. 
B)  The reasons why Kathy buys less orange juice. 
C)  The reasons for a decline in average prices. 
D)  The effect of the government budget deficit on inflation.

Question 6

On Saturday morning, you rank your choices for activities in the following order: go to the library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the library. Your opportunity cost is

Accepted Answer

A)  zero because you do not have to pay money to use the library. 
B)  working out at the gym. 
C)  not clear because not enough information is given. 
D)  working out at the gym, having breakfast with friends, and sleeping late.

Question 7

The opportunity cost of attending college includes the cost of

Accepted Answer

A)  the tuition but not the job at which you would otherwise have worked. 
B)  tuition, books, and the lost wages for the hours spent studying. 
C)  the highest valued alternative to attending college plus the cost of tuition. 
D)  the highest valued alternative to attending college.

Question 8

An example of a question that might be explored in microeconomics is to determine

Accepted Answer

A)  savings by the household sector. 
B)  why the U.S. economy has grown more rapidly than the Japanese economy. 
C)  the number of workers employed by Intel. 
D)  the total employment within the U.S. economy.

Question 9

-In the above figure, using the slope across an arc, the slope of the curve between points a and b is

Accepted Answer

A)  -2. 
B)  1/2. 
C)  2. 
D)  -1/2.

Question 10

The statement ʺUnemployment should be below 6 percentʺ is

Accepted Answer

A)  a positive statement. 
B)  an assumption. 
C)  a prediction. 
D)  a normative statement.

Question 11

An inducement to take a particular action is called

Accepted Answer

A)  the marginal benefit. 
B)  the marginal cost. 
C)  an incentive. 
D)  opportunity cost.

Question 12

Explain whether the statement, ʺHillary Clinton was elected President of the United States in 2008,ʺ is a normative or positive statement.

Accepted Answer

The answer of Explain whether the statement, ʺHillary Clinton was...

Question 13

Along a curved line, the slope at the maximum

Accepted Answer

A)  is zero. 
B)  is less than zero. 
C)  is greater than zero. 
D)  may be greater than, less than, or equal to zero.

Question 14

The marginal benefit is the

Accepted Answer

A)  loss of the highest-valued alternative. 
B)  additional gain from one more unit of an activity. 
C)  additional gain from one more unit of an activity minus the additional cost from one more unit of the activity. 
D)  additional cost from one more unit of an activity.

Question 15

Which factor of production earns profit?

Accepted Answer

A)  human capital 
B)  entrepreneurship 
C)  money 
D)  land

Question 16

Which of the following statements is correct?

Accepted Answer

A)  The percentage of people producing goods in the United States has steadily increased over the last 60 years. 
B)  The United States produces more services than goods. 
C)  The United States produces an equal amount of goods and services. 
D)  The United States produces more goods than services.

Question 17

What is a tradeoff? Give an example.

Accepted Answer

The answer of What is a tradeoff? Give an example....

Question 18

A graph of two variables is a vertical line. What is the interpretation of this result?

Accepted Answer

The answer of A graph of two variables is a...

Question 19

What is the relationship between wants, factors of production, scarcity, and choices? Discuss the relationship for an individual and for a society.

Accepted Answer

The answer of What is the relationship between wants, factors...

Question 20

A negative relationship exists between the variable measured along the y-axis and the variable measured along the x-axis if

Accepted Answer

A)  a reduction in the variable measured along the x-axis is associated with a reduction in the variable measured along the y-axis. 
B)  the variable measured along the x-axis and the variable measured along the y-axis move in the opposite direction. 
C)  an increase in the variable measured along the x-axis is associated with an increase in the variable measured along the y-axis. 
D)  the variable measured along the x-axis and the variable measured along the y-axis move in the same direction.

Exam 1: What Is Economics