Question 1

If economic theories are solidly based on relevant facts,then appropriate economic policy becomes obvious and uncontroversial.

Accepted Answer

A) True 
 B)False

Question 2

A person should consume more of something when its marginal:

Accepted Answer

A)   benefit exceeds its marginal cost.
B)   cost exceeds its marginal benefit.
C)   cost equals its marginal benefit.
D)   benefit is still better.E) None of the above
F) A) and C)

Question 3

The production possibilities curve:

Accepted Answer

A)   shows all of those levels of production that are consistent with a stable price level.
B)   indicates that any combination of goods lying outside the curve is economically inefficient.
C)   is a frontier between all combinations of two goods that can be produced and those combinations that cannot be produced.
D)   shows all of those combinations of two goods that are most preferred by society.E) A) and D)
F) A) and C)

Question 4

If the equation y = 15 - 4x was plotted,the:

Accepted Answer

A)   vertical intercept would be -4.
B)   vertical intercept would be +4.
C)   vertical intercept would be +9.
D)   slope would be -4.E) A) and B)
F) A) and C)

Question 5

According to economists,economic self-interest:

Accepted Answer

A)   is a reality that underlies economic behavior.
B)   has the same meaning as selfishness.
C)   means that people never make wrong decisions.
D)   is usually self-defeating.E) None of the above
F) B) and D)

Question 6

Positive statements are expressions of value judgments.

Accepted Answer

A) True 
 B)False

Question 7

(Last Word) A study found that the incidence of skin cancer increases along with the amount of time people work under fluorescent light,leading some people to conclude that fluorescent lighting is a cause of skin cancer.But further analysis found that people who work in offices,where fluorescent light is common,suffer more sunburn on their vacations than other workers.The sunburns,not the fluorescent light,were the cause of the higher incidence of skin cancer.The original conclusion illustrates:

Accepted Answer

A)   the fallacy of composition.
B)   confusion of correlation and causation.
C)   identifying marginal costs and marginal benefits.
D)   biases and loaded terminology.E) None of the above
F) A) and B)

Question 8

(Last Word) "The government deregulated the electricity industry in California and a shortage of electricity soon occurred.It is clear that the deregulation caused the shortage." This statement needs careful analysis because it may reflect the:

Accepted Answer

A)   fallacy of composition.
B)   post hoc,ergo propter hoc fallacy.
C)   use of loaded terminology.
D)   law of averages.E) A) and C)
F) A) and B)

Question 9

"Economics is concerned with how individuals,institutions,and society make optimal choices under conditions of scarcity." This statement is:

Accepted Answer

A)   positive but incorrect.
B)   positive and correct.
C)   normative but incorrect.
D)   normative and correct.E) A) and B)
F) A) and D)

Question 10

(Consider This) At fast-food restaurants:

Accepted Answer

A)   consumers enjoy complete and accurate information.
B)   decisions are usually made by trial and error.
C)   decisions entail comparisons of marginal costs and marginal benefits.
D)   benefits always exceed costs.E) A) and D)
F) C) and D)

Question 11

Answer the question on the basis of the following five data sets wherein it is assumed that the variable shown on the left is the independent variable and the one on the right is the dependent variable.Assume in graphing these data that the independent variable is shown on the horizontal axis and the dependent variable on the vertical axis.  \quad \quad  (1)  \quad \quad \quad \quad  (2)  \quad \quad \quad \quad  (3)  \quad \quad \quad \quad  (4)  \quad \quad \quad \quad  (5) 
 \begin{array}{rl}{J} & K \\hline 0 & 10 \40 & 20 \80 & 30 \120 & 40 \160 & 50 \200 & 60\end{array}\begin{array}{rr}\mathrm{L} & \mathrm{M} \\hline 0 & -15 \30 & -5 \60 & 5 \90 & 15 \120 & 25 \150 & 35\end{array}\begin{array}{rl}\mathrm{N}& \mathrm{P} \\hline 100 & 40 \80 & 50 \60 & 60 \40 & 70 \20 & 80 \0 & 90\end{array}\begin{array}{rc}\mathrm{R}& \mathrm{T} \\hline 0 & -15 \20 & -25 \40 & -35 \60 & -45 \80 & -55 \100 & -65\end{array}\begin{array}{rr}\mathrm{U} & \mathrm{V }\\hline 0 & 0 \5 & 10 \10 & 20 \15 & 30 \20 & 40 \25 & 50\end{array}  Refer to the data sets.The equation for data set 5 is:

Accepted Answer

A)   V = .5Y.
B)   U = -.5V.
C)   U = V.
D)   V = 2U. E) None of the above
F) All of the above

Question 12

Answer the question on the basis of the following production possibilities tables for two countries,North Cantina and South Cantina:  Refer to the tables.The opportunity cost of the fifth unit of capital goods:

Accepted Answer

A)   is higher in North Cantina than in South Cantina.
B)   is the same in North Cantina and South Cantina.
C)   is lower in North Cantina than in South Cantina.
D)   cannot be determined from the information provided.E) C) and D)
F) A) and D)

Question 13

Answer the question on the basis of the following production possibilities tables for two countries,North Cantina and South Cantina:  Refer to the tables.Suppose that North Cantina is producing 2 units of capital goods and 17 units of consumer goods while South Cantina is producing 2 units of capital goods and 21 units of consumer goods.We can conclude that:

Accepted Answer

A)   North Cantina is fully and efficiently using its resources,but South Cantina is not.
B)   South Cantina is fully and efficiently using its resources,but North Cantina is not.
C)   neither South Cantina nor North Cantina is fully and efficiently using its resources.
D)   both South Cantina and North Cantina are fully and efficiently using their resources.E) A) and B)
F) A) and C)

Question 14

Which of the following statements is true?

Accepted Answer

A)   Microeconomics focuses on specific decision-making units of the economy;macroeconomics examines the economy as a whole.
B)   Macroeconomics focuses on specific decision-making units of the economy;microeconomics examines the economy as a whole.
C)   Every topic in economics is either a microeconomic or a macroeconomic issue;a topic cannot be both.
D)   Topics in microeconomics have public policy implications;topics in macroeconomics do not.E) A) and B)
F) A) and C)

Question 15

The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 - .02Qd,where Qd is the amount of pizzas purchased per week and P is the price of pizzas.On the basis of this information we can say that:

Accepted Answer

A)   if pizzas were free,people would consume 800 per week.
B)   more pizzas will be purchased at a high price than at a low price.
C)   if the price of pizzas is $6,then 150 will be purchased.
D)   50 fewer pizzas will be purchased per week for every $1 increase in price.E) All of the above
F) B) and C)

Question 16

A country can achieve some combination of goods outside its production possibilities curve by:

Accepted Answer

A)   idling some of its resources.
B)   specializing and engaging in international trade.
C)   buying the debt (bonds and stocks) of foreign nations.
D)   producing more capital goods and fewer consumer goods.E) All of the above
F) B) and C)

Question 17

The problems of aggregate inflation and unemployment are:

Accepted Answer

A)   major topics of macroeconomics.
B)   not relevant to the U.S.economy.
C)   major topics of microeconomics.
D)   peculiar to command economies.E) B) and C)
F) C) and D)

Question 18

The term "other things equal" means that:

Accepted Answer

A)   the associated statement is normative.
B)   many variables affect the variable under consideration.
C)   a number of relevant variables are assumed to be constant.
D)   when variable X increases so does related variable Y.E) A) and B)
F) A) and C)

Question 19

The lower the consumer's income,the higher his or her budget line.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements pertains to macroeconomics?

Accepted Answer

A)   Because the minimum wage was raised,Mrs.Olsen decided to enter the labor force.
B)   A decline in the price of soybeans caused farmer Wanek to plant more land in wheat.
C)   National income grew by 2.7 percent last year.
D)   The Pumpkin Center State Bank increased its interest rate on consumer loans by 1 percentage point.E) A) and C)
F) A) and B)

Exam 1: Limits, Alternatives, and Choices

(Last Word) "The government deregulated the electricity industry in California and a shortage of electricity soon occurred.It is clear that the deregulation caused the shortage." This statement needs careful analysis because it may reflect the:

Correct Answer
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Correct Answer
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Answer the question on the basis of the following production possibilities tables for two countries,North Cantina and South Cantina: Refer to the tables.The opportunity cost of the fifth unit of capital goods:

Correct Answer
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Which of the following statements is true?

Correct Answer
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The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 - .02Q_d,where Q_d is the amount of pizzas purchased per week and P is the price of pizzas.On the basis of this information we can say that:

Correct Answer
verified

Correct Answer
verified

According to economists,economic self-interest:

Correct Answer
verified

Correct Answer
verified

If economic theories are solidly based on relevant facts,then appropriate economic policy becomes obvious and uncontroversial.

Correct Answer
verified

The lower the consumer's income,the higher his or her budget line.

Correct Answer
verified

The problems of aggregate inflation and unemployment are:

Correct Answer
verified

The term "other things equal" means that:

Correct Answer
verified

"Economics is concerned with how individuals,institutions,and society make optimal choices under conditions of scarcity." This statement is:

Correct Answer
verified

A person should consume more of something when its marginal:

Correct Answer
verified

(Consider This) At fast-food restaurants:

Correct Answer
verified

A country can achieve some combination of goods outside its production possibilities curve by:

Correct Answer
verified

Which of the following statements pertains to macroeconomics?

Correct Answer
verified

The production possibilities curve:

Correct Answer
verified

If the equation y = 15 - 4x was plotted,the:

Correct Answer
verified

Positive statements are expressions of value judgments.

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

(Last Word) "The government deregulated the electricity industry in California and a shortage of electricity soon occurred.It is clear that the deregulation caused the shortage." This statement needs careful analysis because it may reflect the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Answer the question on the basis of the following production possibilities tables for two countries,North Cantina and South Cantina: Refer to the tables.The opportunity cost of the fifth unit of capital goods:

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 - .02Qd,where Qd is the amount of pizzas purchased per week and P is the price of pizzas.On the basis of this information we can say that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

According to economists,economic self-interest:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If economic theories are solidly based on relevant facts,then appropriate economic policy becomes obvious and uncontroversial.

Correct AnswerverifiedShow Answer

The lower the consumer's income,the higher his or her budget line.

Correct AnswerverifiedShow Answer

The problems of aggregate inflation and unemployment are:

Correct AnswerverifiedShow Answer

The term "other things equal" means that:

Correct AnswerverifiedShow Answer

"Economics is concerned with how individuals,institutions,and society make optimal choices under conditions of scarcity." This statement is:

Correct AnswerverifiedShow Answer

A person should consume more of something when its marginal:

Correct AnswerverifiedShow Answer

(Consider This) At fast-food restaurants:

Correct AnswerverifiedShow Answer

A country can achieve some combination of goods outside its production possibilities curve by:

Correct AnswerverifiedShow Answer

Which of the following statements pertains to macroeconomics?

Correct AnswerverifiedShow Answer

The production possibilities curve:

Correct AnswerverifiedShow Answer

If the equation y = 15 - 4x was plotted,the:

Correct AnswerverifiedShow Answer

Positive statements are expressions of value judgments.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 - .02Q_d,where Q_d is the amount of pizzas purchased per week and P is the price of pizzas.On the basis of this information we can say that:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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