Question 1

The slope

Accepted Answer

A) of a straight line is the same regardless of where on the line it is calculated. 
B) equals the change in the value of the variable measured on the vertical axis divided by the change in the variable measured along the horizontal axis. 
C) will be small if a large change in the variable measured on the vertical axis is associated with a small change in the variable measured along the horizontal axis. 
D) Answers A and B are correct. 
E) Answers A and C are correct.

Question 2

In order to make a rational choice,people must

Accepted Answer

A) only know what they want. 
B) be able to afford the choice decided upon. 
C) decide quickly without wasting time. 
D) compare marginal costs and marginal benefits. 
E) determine what is in the social interest.

Question 3

When people make rational choices,they

Accepted Answer

A) behave selfishly. 
B) do not consider their emotions. 
C) weigh the costs and benefits of their options and act to satisfy their wants. 
D) necessarily make a decision in the social interest. 
E) are necessarily making the best decision.

Question 4

The question "Should we produce houses using bricks or wood?" is an example of a ________ question.

Accepted Answer

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

Question 5

In making your decision whether to take a trip during spring break,you compare all the other activities you could undertake.As a result,you

Accepted Answer

A) are making a choice on the margin. 
B) limit the cost and the benefits you can gain. 
C) are not making a rational choice. 
D) do not face an opportunity cost. 
E) must have made a choice in the social interest.

Question 6

Three variables are related and two of them are plotted in a figure.If the variable that is not measured on either the x-axis or the y-axis changes,then there is

Accepted Answer

A) a movement along the drawn curve. 
B) a shift in the curve. 
C) no impact on the curve because the variable is not measured on either of the axes. 
D) either a shift in the curve or a movement along the curve,but more information is needed to determine which. 
E) None of the above answers is correct.

Question 7

Shaniq can spend the next hour studying for a finance test,hiking along the Oregon coast,watching reruns of Lost on television,or napping.If she decides to study,what is the opportunity cost of her choice: hiking,watching television,or napping?

Accepted Answer

The answer of Shaniq can spend the next hour studying...

Question 8

Economics is best defined as the social science that studies

Accepted Answer

A) how a person can get everything he or she wants. 
B) the reason money exists. 
C) the way to eliminate choices in our decisions. 
D) the choices that societies,and the people and institutions that make up societies,make in dealing with the issue of scarcity. 
E) how choices made in the social interest must conflict with choices made in the self-interest.

Question 9

The opportunity cost of a one-unit increase in an activity

Accepted Answer

A) is greater than the marginal benefit. 
B) is called rational cost. 
C) decreases as you do more of it. 
D) is called marginal cost. 
E) is measured by what the person is willing to give up to get one more unit of the activity.

Question 10

A change in a marginal benefit or cost will

Accepted Answer

A) increase consumption. 
B) decrease production. 
C) cause an individual to make a rational choice. 
D) increase sunk costs. 
E) change incentives.

Question 11

-The graph shows

Accepted Answer

A) a positive relationship that becomes less steep. 
B) a negative relationship that is linear. 
C) a positive relationship that is linear. 
D) no relationship between the variables. 
E) a trend relationship between the variables.

Question 12

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 13

When the federal government decides to pay senators more than it pays soldiers,it answers the ________ question.

Accepted Answer

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

Question 14

To make a rational choice,a person

Accepted Answer

A) compares the extra benefits of one more unit to the extra costs of one more unit. 
B) adds the total benefits and the total costs and then compares the two totals. 
C) adds the total benefits to determine if the total is large enough. 
D) adds the total costs to determine if the total is small enough. 
E) takes account of all benefits and all opportunity costs,including both marginal costs and sunk costs.

Question 15

Discuss what is necessary to make rational decisions.Be sure to mention opportunity cost,marginal cost,and marginal benefit.

Accepted Answer

The answer of Discuss what is necessary to make rational...

Question 16

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

Question 17

As part of its proposal to win the 2012 Olympics,London developed a carbon offset plan to reduce the Games' impact on the environment.In 2011,the organizers decided to drop this plan to reduce emissions.We can conclude that

Accepted Answer

A) the marginal cost of reducing emissions exceeded the marginal benefits of reducing emissions. 
B) the organizers are not making a rational decision. 
C) the organizers are ignoring a sunk cost. 
D) there are no incentives to reduce carbon emissions. 
E) it is difficult to calculate the cost of reducing emissions.

Question 18

Most economic graphs have two lines perpendicular to each other.The vertical line is called the

Accepted Answer

A) origin. 
B) y-axis. 
C) x-axis. 
D) variable. 
E) time axis.

Question 19

Wichita is building a convention center and financing it with revenues raised from a city hotel tax.Local politicians assert that the convention center is essentially free for Wichita residents because out-of-town visitors are paying for it.Someone who is practicing the economic way of thinking would disagree because

Accepted Answer

A) they believe that Wichita does not need a new convention center. 
B) there are other projects that could be undertaken with the tax funds. 
C) the convention center may not pass a marginal cost-benefit test. 
D) the hotel tax may lead to a decline in visits to Wichita. 
E) the hotel tax may reduce commercial property values in the area.

Question 20

We are investigating the relationship among three variables.We have graphed two of them.Suppose that the variable that is not measured on the x-axis or the y-axis changes.Then,there is

Accepted Answer

A) a movement along the plotted curve. 
B) a shift in the plotted curve. 
C) no impact on the plotted curve because the variable is not measured on either of the axes. 
D) an omitted variable. 
E) a violation of the absence of trend assumption.

Exam 1: Getting Started