Question 1

Examining the conditions that could lead to a recession in an economy is an example of a macroeconomic topic.

Accepted Answer

A) True 
 B)False

Question 2

Suppose the extra cost for a company to advertise for one extra day each week in the local newspaper is $200.Then, the company should advertise on that additional day if it can generate additional revenue of $200 each week.

Accepted Answer

A) True 
 B)False

Question 3

Consider the following economic agents:
A.the government
B.consumers
C.producers
Who, in a centrally planned economy, decides what goods and services will be produced with the scarce resources available in that economy?

Accepted Answer

A) the government 
B) producers 
C) consumers 
D) consumers and producers 
E) the government, consumers, and producers

Question 4

Which of the following correctly describes the relationship between economic efficiency and economic equity?

Accepted Answer

A) They are both automatically achieved in a free market economy. 
B) They always call for opposite outcomes. 
C) There is no conflict between the two goals. 
D) There is often a trade-off between the two.

Question 5

Economists reason that the optimal decision is to continue any activity up to the point where the

Accepted Answer

A) marginal benefit is zero. 
B) marginal benefit is greater than the marginal cost. 
C) marginal cost is zero. 
D) marginal benefit equals the marginal cost.

Question 6

Table 1-2
  
Thuy Anh runs a small flower shop in the town of Florabunda.She is debating whether she should extend her hours of operation.Thuy Anh figures that her sales revenue will depend on the number of extra hours the flower shop is open as shown in the table above.She would have to hire a worker for those extra hours at a wage rate of $16 per hour.
-Refer to Table 1-2.What is Thuy Anh's marginal cost if she decides to stay open for an extra three hours instead of two hours?

Accepted Answer

A) $0 
B) $16 
C) $25 
D) $32 
E) $45

Question 7

Suppose a used car dealer can earn an additional $25,000 in revenue per year by increasing advertising on a local radio station from 3 times a day to 5 times a day.At what additional cost would this increase in advertising not be considered economically rational?

Accepted Answer

The answer of Suppose a used car dealer can earn...

Question 8

Table 1-1
  
Lydia runs a small nail salon in the town of New Hope.She is debating whether she should extend her hours of operation.Lydia figures that her sales revenue will depend on the number of extra hours the nail salon is open as shown in the table above.She would have to hire a worker for those extra hours at a wage rate of $10 per hour.
-Refer to Table 1-1.What is Lydia's marginal cost if she decides to stay open for an extra two hours instead of one hour?

Accepted Answer

A) $10 
B) $20 
C) $25 
D) $40

Question 9

Figure 1-4
 
-Refer to Figure 1-4.Which of the following statements is false?

Accepted Answer

A) The slope of the tangent at E is positive. 
B) The slope of the tangent at F is negative. 
C) The slope of the tangent at E and the slope of the tangent at F are equal. 
D) Neither the slope of the tangent at E nor the slope of the tangent at F are equal to zero.

Question 10

List the five main factors of production.

Accepted Answer

The answer of List the five main factors of production....

Question 11

Economists assume that rational behavior is useful in explaining choices people make

Accepted Answer

A) because irrational people do not make economic choices. 
B) even though people may not behave rationally all the time. 
C) because individuals act rationally all the time in all circumstances. 
D) even though people rarely, if ever, behave in a rational manner.

Question 12

Table 1-3
  
Santiago runs a comic book store in the town of East Arbor.He is debating whether he should extend his hours of operation.Santiago figures that his sales revenue will depend on the number of extra hours the store is open as shown in the table above.He would have to hire a worker for those extra hours at a wage rate of $18 per hour.
-Refer to Table 1-3.What is Santiago's marginal benefit if he decides to stay open for an extra two hours instead of one hour?

Accepted Answer

A) $40 
B) $50 
C) $120 
D) $190

Question 13

Microeconomics is the study of

Accepted Answer

A) how households and firms make choices. 
B) the economy as a whole. 
C) the global economy. 
D) topics such as unemployment, inflation, and economic growth.

Question 14

Suppose the extra cost to a pet store of advertising one additional day each week in the local newspaper is $450.Then, the pet store should advertize that one additional day each week if doing so brings in additional revenue of $450 or more each week.

Accepted Answer

A) True 
 B)False

Question 15

Table 1-3
  
Santiago runs a comic book store in the town of East Arbor.He is debating whether he should extend his hours of operation.Santiago figures that his sales revenue will depend on the number of extra hours the store is open as shown in the table above.He would have to hire a worker for those extra hours at a wage rate of $18 per hour.
-Refer to Table 1-3.What is Santiago's marginal cost if he decides to stay open for an extra two hours instead of one hour?

Accepted Answer

A) $18 
B) $36 
C) $38 
D) $102

Question 16

If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16, the slope of this line is

Accepted Answer

A) negative 8 divided by 4. 
B) seven-tenths. 
C) negative one-half. 
D) one and one-half.

Question 17

Soo Jin shares a one-bedroom apartment with her classmate.Her share of the rent is $700 per month.She is considering moving to a studio apartment which she will not have to share with anyone.The studio apartment rents for $950 per month.Recently, you ran into Soo Jin on campus and she tells you that she has moved into the studio apartment.Soo Jin is as rational as any other person.As an economics student, you rightly conclude that

Accepted Answer

A) Soo Jin did not have a choice; her roommate was a slob. 
B) Soo Jin figures that the additional benefit of having her own place (as opposed to sharing)is at least $250. 
C) Soo Jin figures that the additional benefit of having her own place (as opposed to sharing)is at least $950. 
D) the cost of having one's own space outweighs the benefits.

Question 18

Technology is defined as

Accepted Answer

A) the process of developing and revising models. 
B) new innovations and creations. 
C) the processes used to produce goods and services. 
D) the process of recycling products.

Question 19

Which of the following is not an example of an economic trade-off that a firm has to face?

Accepted Answer

A) whether it is cheaper to produce with more machines or with more workers 
B) whether it is to outsource the production of a good or service 
C) whether or not consumers will buy its products 
D) whether it should produce more of its product

Question 20

The ________ the sale of an additional unit of a product is a marginal benefit to the firm.

Accepted Answer

A) revenue received from 
B) extra cost of 
C) total value of 
D) sales tax on

Exam 1: Economics: Foundations and Models

Examining the conditions that could lead to a recession in an economy is an example of a macroeconomic topic.

Suppose the extra cost for a company to advertise for one extra day each week in the local newspaper is $200.Then, the company should advertise on that additional day if it can generate additional revenue of $200 each week.

Consider the following economic agents: A.the government B.consumers C.producers Who, in a centrally planned economy, decides what goods and services will be produced with the scarce resources available in that economy?

Which of the following correctly describes the relationship between economic efficiency and economic equity?

Economists reason that the optimal decision is to continue any activity up to the point where the

Suppose a used car dealer can earn an additional $25,000 in revenue per year by increasing advertising on a local radio station from 3 times a day to 5 times a day.At what additional cost would this increase in advertising not be considered economically rational?

Figure 1-4 -Refer to Figure 1-4.Which of the following statements is false?

List the five main factors of production.

Economists assume that rational behavior is useful in explaining choices people make

Microeconomics is the study of

Suppose the extra cost to a pet store of advertising one additional day each week in the local newspaper is $450.Then, the pet store should advertize that one additional day each week if doing so brings in additional revenue of $450 or more each week.

If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16, the slope of this line is

Technology is defined as

Which of the following is not an example of an economic trade-off that a firm has to face?

The ________ the sale of an additional unit of a product is a marginal benefit to the firm.