Question 1

Which of the following is a microeconomic issue?

Accepted Answer

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

Question 2

-In the diagram above,which figure(s) show(s) a direct relationship between the variables?

Accepted Answer

A)   both B and C
B)   both A and C
C)   only A
D)   only D
E)   only BF) B) and E)
G) B) and D)

Question 3

What is NOT true about rational choice?

Accepted Answer

A)   It can result in different decisions for different individuals.
B)   It involves comparing costs and benefits.
C)   It might turn out not to have been the best choice after the event.
D)   It is a choice that uses the available resources to best achieve the objective of the person making the choice.
E)   It is the same for all individuals.F) C) and E)
G) A) and C)

Question 4

-In the above,which figure(s) show relationship between the variables that is always positive?

Accepted Answer

A)   Figure A only
B)   Figures C and D
C)   Figures A and C
D)   Figures A, C, and D
E)   Figures A and BF) A) and D)
G) C) and E)

Question 5

Which of the following statements best describes the study of economics? Economics studies how

Accepted Answer

A)   to organize production so that scarcity does not occur.
B)   firms make profits.
C)   we make choices in the face of scarcity.
D)   to create incentives so that scarcity does not exist.
E)   businesses reach decisions.F) None of the above
G) C) and D)

Question 6

If a small change in the x variable results in a large change in the y variable,the curve will be

Accepted Answer

A)   positively sloped.
B)   negatively sloped.
C)   steep.
D)   flat.
E)   trended.F) B) and C)
G) B) and E)

Question 7

Most economic graphs have two lines perpendicular to each other.Where these lines met is called the

Accepted Answer

A)   origin.
B)   y-axis.
C)   x-axis.
D)   variable.
E)   point of beginning.F) A) and B)
G) C) and D)

Question 8

The tendency for the values of two variables to move in a predictable and related way is known as

Accepted Answer

A)   a natural experiment.
B)   a normative relationship.
C)   an economic model.
D)   correlation.
E)   a policy relationship.F) All of the above
G) None of the above

Question 9

Define marginal cost and marginal benefit.

Accepted Answer

Marginal cost is the opportuni...

Question 10

The study of economics is best described as a study of

Accepted Answer

A)   the factors that influence the stock and bond markets.
B)   capitalism.
C)   the choices made in producing goods and services.
D)   coping with scarcity, and choices made as a result of scarcity in a society.
E)   how people earn a living.F) C) and E)
G) A) and D)

Question 11

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.F) B) and C)
G) A) and E)

Question 12

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.F) B) and E)
G) C) and D)

Question 13

Moving from left to right,a U-shaped curve starts with a

Accepted Answer

A)   positive slope, reaches a maximum, then ends with a negative slope.
B)   positive slope, reaches a minimum, then ends with a negative slope.
C)   negative slope, reaches a maximum, then ends with a positive slope.
D)   negative slope, reaches a minimum, then ends with a positive slope.
E)   negative slope, reaches a minimum, then ends with a negative slope.F) A) and B)
G) A) and C)

Question 14

What is the reason that all economic issues and problems occur?

Accepted Answer

A)   All nations use some form of money to buy and sell goods and services.
B)   Humans are always wasteful and inefficient in production and consumption.
C)   Powerful governments are able to control production and consumption.
D)   Human wants exceed the resources available to satisfy them.
E)   People seek only their own self-interest.F) A) and E)
G) A) and D)

Question 15

A positive relationship exists between two variables if

Accepted Answer

A)   one variable has "positively" no effect on the other variable.
B)   a decrease in one variable is associated with an increase in the other variable.
C)   a decrease in one variable is associated with a decrease in the other variable.
D)   an increase in one variable is associated with both a decrease and an increase in the other variable.
E)   None of the above answers is correct.F) All of the above
G) B) and E)

Question 16

Why do economists say that even very rich people face scarcity?

Accepted Answer

A person faces scarcity whenever his or ...

Question 17

A graph shows that the number of U.S.tourists visiting a Caribbean island increases as the temperature in the northeastern United States falls.The graph shows

Accepted Answer

A)   a positive relationship.
B)   a direct relationship.
C)   a negative relationship.
D)   no relationship.
E)   an invalid relationship.F) A) and E)
G) A) and C)

Question 18

The minimum point of a U-shaped curve,

Accepted Answer

A)   is a point where the variable is neither increasing nor decreasing.
B)   has a slope equal to zero.
C)   has the maximum slope possible.
D)   Both answers A and B are correct.
E)   Both answers A and C are correct.F) C) and E)
G) A) and E)

Question 19

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.F) C) and E)
G) A) and C)

Question 20

Which of the following is a positive statement?

Accepted Answer

A)   Taxes should be lower because then people get to keep more of what they earn, so they will work more.
B)   My economics class should last for two terms because it is my favorite class.
C)   A 10 percent increase in income leads to a 4 percent increase in the consumption of beef.
D)   Given their negative impact on productivity, the government should eliminate labor unions.
E)   The class average on this test should be more than 80 percent.F) A) and E)
G) B) and C)

Exam 1: Getting Started

A graph shows that the number of U.S.tourists visiting a Caribbean island increases as the temperature in the northeastern United States falls.The graph shows

Correct AnswerverifiedShow Answer

Economics is best defined as the social science that studies

Correct AnswerverifiedShow Answer

Define marginal cost and marginal benefit.

Correct AnswerverifiedMarginal cost is the opportuni...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

The minimum point of a U-shaped curve,

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Which of the following statements best describes the study of economics? Economics studies how

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

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What is NOT true about rational choice?

Correct AnswerverifiedShow Answer

The tendency for the values of two variables to move in a predictable and related way is known as

Correct AnswerverifiedShow Answer

Which of the following is a positive statement?

Correct AnswerverifiedShow Answer

Why do economists say that even very rich people face scarcity?

Correct AnswerverifiedA person faces scarcity whenever his or ...View AnswerShow Answer

The study of economics is best described as a study of

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Moving from left to right,a U-shaped curve starts with a

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What is the reason that all economic issues and problems occur?

Correct AnswerverifiedShow Answer

A positive relationship exists between two variables if

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-In the above,which figure(s) show relationship between the variables that is always positive?

Correct AnswerverifiedShow Answer

-In the diagram above,which figure(s) show(s) a direct relationship between the variables?

Correct AnswerverifiedShow Answer

Which of the following is a microeconomic issue?

Correct AnswerverifiedShow Answer

Most economic graphs have two lines perpendicular to each other.Where these lines met is called the

Correct AnswerverifiedShow Answer

If a small change in the x variable results in a large change in the y variable,the curve will be

Correct AnswerverifiedShow Answer

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Marginal cost is the opportuni...
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A person faces scarcity whenever his or ...
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