Question 1

In the figure above, the relationship between the x variable and the y variable

Accepted Answer

A)  is negative. 
B)  is positive. 
C)  is non-existent because the two variables are unrelated. 
D)  starts by being negative and then becomes positive. 
E)  starts by being positive and then becomes negative.

Question 2

When the Adelaide Crows score more than 100 points in a home game, they win the game. This is an example of

Accepted Answer

A)  an incentive to win the game. 
B)  an economic theory. 
C)  a normative statement. 
D)  a statement on the margin. 
E)  a correlation.

Question 3

The opportunity cost of a decision is measured in terms of

Accepted Answer

A)  sunk cost. 
B)  the next best thing given up. 
C)  the price of the alternative we choose. 
D)  time. 
E)  the price of a new opportunity that arises.

Question 4

Demonstrating how an economic variable changes from one year to the next is best illustrated by a

Accepted Answer

A)  time-series graph. 
B)  linear graph. 
C)  Venn diagram. 
D)  scatter diagram. 
E)  cross-section graph.

Question 5

The slope of the curve at point B

Accepted Answer

A)  is less than the slope at point A. 
B)  cannot be compared with the slope at point A. 
C)  can be compared with the slope at point A, but more information is needed to determine if the slope is greater than, less than or equal to the slope at point A. 
D)  is greater than the slope at point A. 
E)  is equal to the slope at point A.

Question 6

Correlation means:

Accepted Answer

A)  other things remaining the same. 
B)  'after this, therefore because of this'. 
C)  'on the margin'. 
D)  a natural experiment has been conducted. 
E)  the tendency for the values of two variables to move in a predictable and related way.

Question 7

Which of the following BEST describes macroeconomics?

Accepted Answer

A)  It is not a social science because its predictions cannot be tested. 
B)  It examines how the choices that individuals make affect governments. 
C)  It analyses the aggregate effects on the national economy of the choices made by individuals, firms and governments. 
D)  Proving causation is never a problem for macroeconomics. 
E)  It studies the choices that individuals and businesses make when coping with scarcity

Question 8

A cross-section graph:

Accepted Answer

A)  is divided into different sections. 
B)  measures time on the x-axis and the variable in which we are interested on the y-axis. 
C)  shows the values of an economic variable for different groups in a population at a point in time. 
D)  Both answers A and C are correct. 
E)  Both answers B and C are correct.

Question 9

Which of the following is a microeconomic issue?

Accepted Answer

A)  The unemployment rate soars in Spain. 
B)  The Brazilian economy experiences rapid economic growth. 
C)  Inflation skyrockets in Russia. 
D)  The price of petrol increases in the United States this year. 
E)  The Australian government cuts taxes to combat a recession.

Question 10

Matthew has eaten two hamburgers and is considering a third. The marginal benefit in his decision is the pleasure from consuming

Accepted Answer

A)  all three hamburgers. 
B)  just the third hamburger. 
C)  just the second hamburger. 
D)  the third hamburger minus the pleasure from consuming zero hamburgers. 
E)  the two previous hamburgers.

Question 11

A curve with a positive but decreasing slope represents a relationship where, every time the variable measured along the horizontal axis increases by one unit, the variable measured along the vertical axis

Accepted Answer

A)  does not change by much. 
B)  increases by a constant amount. 
C)  decreases. 
D)  increases by an increasing amount. 
E)  increases by a decreasing amount.

Question 12

Which type of economic graph reveals trends in data?

Accepted Answer

A)  Time-series graph 
B)  Cross-section graph 
C)  Scatter diagram 
D)  Answers A and C are correct. 
E)  Answers A, B and C are all correct.

Question 13

In order to determine whether to major in economics, a rational individual compares the ________ of the decision.

Accepted Answer

A)  marginal benefit and marginal cost 
B)  normative benefits and positive costs 
C)  self-interest and social interest 
D)  positive benefits and normative costs 
E)  opportunity cost and the sunk cost

Question 14

Australia has a universal health care system called Medicare, so that everyone, regardless of their ability to pay, has some access to health care. Based on this observation, Australia has decided that 'everyone, regardless of their ability to pay' is the answer to what microeconomic question?

Accepted Answer

A)  How will health care be produced? 
B)  Why will we offer health care? 
C)  What type of health care will be produced and in what quantity? 
D)  Must we offer health care? 
E)  For whom will health care be produced?

Question 15

Scarcity forces people to:

Accepted Answer

A)  cheat and steal. 
B)  choose among the available alternatives. 
C)  be unwilling to help others. 
D)  live at a low standard of living. 
E)  consume as much as they can as quickly as they can.

Question 16

In the above figure, the diagram shows

Accepted Answer

A)  a two-variable scatter diagram. 
B)  a cross-section graph between x and time. 
C)  an upward trend in x. 
D)  a scatter diagram. 
E)  a downward trend in x.

Question 17

Which of the following statements is correct?

Accepted Answer

A)  The slope of a straight line changes depending where on the line it is calculated. 
B)  A straight line that slopes upward moving to the right has a positive slope. 
C)  The slope of a curved line is not defined because it is impossible to calculate the slope along a curved line. 
D)  Answers A and B are correct. 
E)  Answers A and C are correct.

Question 18

When Tesla decides to increase production of electric cars, it directly answers the ________ question.

Accepted Answer

A)  why 
B)  how 
C)  what 
D)  for whom 
E)  where

Question 19

Matt pays a $50 a month membership fee at Bruno's Gym. He can exercise at the gym as many times as he wishes. If the membership fee is measured along the vertical axis and the number of times he exercises is measured along the horizontal axis, the graph between his membership fee and the number of times he exercises will

Accepted Answer

A)  start out positively sloped and then, as Matt loses interest, become negatively sloped. 
B)  be a horizontal line. 
C)  be negatively sloped. 
D)  be a vertical line. 
E)  be positively sloped.

Question 20

An incentive is

Accepted Answer

A)  the marginal cost of some course of action. 
B)  a constraint that society imposes on those who make self-interested choices. 
C)  the net gain of some course of action. 
D)  an inducement to take a particular action. 
E)  the marginal benefit of some course of action.

Exam 1: Getting Started