Question 1

Microeconomics is the study of aggregate behavior in the economy.

Accepted Answer

A) True 
 B)False  False

Question 2

Economic models explore decision making by individuals, firms and other organizations.

Accepted Answer

A) True 
 B)False  True

Question 3

Jerome has a "C" average in his philosophy course and a "B" average in his economics course. He decides to study an extra hour for his philosophy exam. This is an example of

Accepted Answer

A)   thinking at the margin.
B)   using assumptions to simplify.
C)   ceteris paribus.
D)   caveat emptor. A

Question 4

If the variable on the vertical axis increases by 20 and the variable on the horizontal axis increases by 5, the slope of the line is

Accepted Answer

A)   0.25.
B)   4.
C)   15.
D)   100.

Question 5

All of the following are considered natural resources EXCEPT

Accepted Answer

A)   a coral reef.
B)   gold.
C)   labor.
D)   a redwood forest.

Question 6

Explain three ways we can use microeconomic analysis.

Accepted Answer

The answer of Explain three ways we can use microeconomic...

Question 7

Prior to the financial crisis and recession which began in 2007, credit for mortgages was ________, creating a ________.

Accepted Answer

A)   virtually unavailable; housing bubble
B)   only available to borrowers with high credit scores; shortage of affordable housing
C)   easily obtained; housing boom
D)   unavailable to low-income borrowers; large demand for rental properties

Question 8

Which of the following is an example of a normative question?

Accepted Answer

A)   How will an increase in the inheritance tax affect tax revenues?
B)   What fraction of an income tax cut will be spent on imported goods?
C)   Should Florida implement a state income tax to reduce its deficit?
D)   How will an increase in unemployment benefits affect the unemployment rate?

Question 9

Economists assume that individuals make informed decisions and act in their own self-interest.

Accepted Answer

A) True 
 B)False

Question 10

Deciding how a society's products are distributed among its citizens answers the economic question of

Accepted Answer

A)   who consumes the products produced.
B)   what products will be produced.
C)   where will the products be consumed.
D)   how will the products be produced.

Question 11

Would an economist consider clean air a scarce resource? Explain.

Accepted Answer

The answer of Would an economist consider clean air a...

Question 12

One example of a microeconomic question is, "Should unemployment benefits be increased?"

Accepted Answer

A) True 
 B)False

Question 13

Recall the Application about housing prices in Cuba to answer the following question(s).
-According to the Application, recent reforms in Cuba have relied less on the free market in determining prices in the housing market.

Accepted Answer

A) True 
 B)False

Question 14

In the past few centuries, choices have led to a substantial decline in the standards of living around the globe.

Accepted Answer

A) True 
 B)False

Question 15

When determining an appropriate congestion tax, economists would use which of the following elements of the economic way of thinking?

Accepted Answer

A)   thinking at the margin
B)   isolating variables
C)   making assumptions
D)   all of the above

Question 16

Resources are all of the following EXCEPT

Accepted Answer

A)   unlimited and in abundance.
B)   the things we use to produce goods and services.
C)   limited in quantity and can be used in different ways.
D)   scarce and therefore require choices to be made.

Question 17

Richard runs a pizza delivery restaurant. List the three basic types of decisions studied in economics and give an example from Richard's restaurant.

Accepted Answer

The answer of Richard runs a pizza delivery restaurant. List...

Question 18

Recall the Application about the government of Mexico City repainting highway lane lines to transform a 4-lane highway into a 6-lane highway to answer the following question(s).
-When the government converted the highway from 4 lanes into 6 lanes, they claimed the capacity had increased by 50 percent. When the government switched the highway back from 6 lanes to 4 lanes, they claimed the capacity had been decreased by 33 percent. Had the government used the midpoint method, the percentage increase would have been ________ percent and the percentage decrease would have been ________ percent.

Accepted Answer

A)   33; 50
B)   33; 33
C)   40; 40
D)   50; 50

Question 19

Ceteris paribus means "Let the buyer beware."

Accepted Answer

A) True 
 B)False

Question 20

Figure 1A.2
-Refer to Figure 1A.2. The slope between points a and c is

Accepted Answer

A)   -5.
B)   -6.
C)   10.
D)   30.

Exam 1: Introduction: What Is Economics

Microeconomics is the study of aggregate behavior in the economy.

Economic models explore decision making by individuals, firms and other organizations.

Jerome has a "C" average in his philosophy course and a "B" average in his economics course. He decides to study an extra hour for his philosophy exam. This is an example of

If the variable on the vertical axis increases by 20 and the variable on the horizontal axis increases by 5, the slope of the line is

All of the following are considered natural resources EXCEPT

Explain three ways we can use microeconomic analysis.

Prior to the financial crisis and recession which began in 2007, credit for mortgages was , creating a .

Which of the following is an example of a normative question?

Economists assume that individuals make informed decisions and act in their own self-interest.

Deciding how a society's products are distributed among its citizens answers the economic question of

Would an economist consider clean air a scarce resource? Explain.

One example of a microeconomic question is, "Should unemployment benefits be increased?"

Recall the Application about housing prices in Cuba to answer the following question(s). -According to the Application, recent reforms in Cuba have relied less on the free market in determining prices in the housing market.

In the past few centuries, choices have led to a substantial decline in the standards of living around the globe.

When determining an appropriate congestion tax, economists would use which of the following elements of the economic way of thinking?

Resources are all of the following EXCEPT

Richard runs a pizza delivery restaurant. List the three basic types of decisions studied in economics and give an example from Richard's restaurant.

Ceteris paribus means "Let the buyer beware."

Figure 1A.2 -Refer to Figure 1A.2. The slope between points a and c is