Question 1

An economist observed that as more computers are added to a factory,the costs of production initially decline,reach a minimum,and then rise.In a diagram that has costs on the vertical axis and the number of computers on the horizontal axis,the relationship always is

Accepted Answer

A)  negative and then linear after the minimum point. 
B)  positive and then negative after the minimum point. 
C)  negative and then positive after the minimum point. 
D)  linear and then positive after the minimum point. 
E)  negative both before and after the minimum point.

Question 2

A time-series graph measures

Accepted Answer

A)  the value of one variable against the value of another variable. 
B)  the value of an economic variable for different groups in a population at a point in time. 
C)  time on the x-axis and the variable or variables in which we are interested on the y-axis. 
D)  time on the y-axis and the variable or variables in which we are interested on the x-axis. 
E)  time on both the x-axis and y-axis and the variable or variables in which we are interested in the rest of the figure.

Question 3

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 4

Because resources are scarce,economists would say that

Accepted Answer

A)  the best things in life are always free. 
B)  people's wants are unlimited. 
C)  every choice has an opportunity cost. 
D)  anything worth doing is worth doing well. 
E)  there are no benefits from cooperation.

Question 5

Correlation means

Accepted Answer

A)  holding everything else constant. 
B)  after this, therefore because of this. 
C)  the values of two variables move in a predictable and related way. 
D)  making statements about how the world should be. 
E)  the same as causation.

Question 6

The marginal benefit of an activity is
i.the benefit from a one-unit increase in the activity.
ii.the benefit of a small,unimportant activity.
iii.measured by what the person is willing to give up to get one additional unit of the activity.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  ii and iii

Question 7

Explain whether the statement "The government should increase tariffs on Japanese cars to protect the American car industry from competition," is a normative or positive statement.

Accepted Answer

The answer of Explain whether the statement "The government should...

Exam 1: Getting Started

An economist observed that as more computers are added to a factory,the costs of production initially decline,reach a minimum,and then rise.In a diagram that has costs on the vertical axis and the number of computers on the horizontal axis,the relationship always is

A time-series graph measures

Because resources are scarce,economists would say that

Correlation means

The marginal benefit of an activity is i.the benefit from a one-unit increase in the activity. ii.the benefit of a small,unimportant activity. iii.measured by what the person is willing to give up to get one additional unit of the activity.

Explain whether the statement "The government should increase tariffs on Japanese cars to protect the American car industry from competition," is a normative or positive statement.