Question 1

Which of the following is a positive macroeconomics statement?

Accepted Answer

A)   The central bank should increase the nation's money supply.
B)   The increase in the nation's money supply helped push the nation's unemployment rate down in the short run.
C)   Ford Motor Company's new advertising campaign ended up hurting General Motors' sales.
D)   The local government ought to spend more on recreational facilities.

Question 2

In the text,economics is defined as the science of

Accepted Answer

A)   money and business.
B)   choices.
C)   scarcity.
D)   price.
E)   individuals' actions.

Question 3

If scarcity didn't exist,neither would

Accepted Answer

A)   rationing devices.
B)   competition.
C)   labor.
D)   capital.
E)   a and b

Question 4

Something that provides disutility is called a

Accepted Answer

A)   good.
B)   want.
C)   need.
D)   bad.
E)   none of the above

Question 5

"If you hadn't gone to dinner with your friends,you would have stayed home and surfed the Internet." It follows that

Accepted Answer

A)   surfing the Internet is the opportunity cost of having dinner with your friends.
B)   the price of having dinner with your friends is more than the price you would have had to pay to surf the Internet.
C)   the opportunity cost of having dinner with your friends is lower than the opportunity cost of surfing the Internet.
D)   it is less costly to surf the Internet than to have dinner with your friends.

Question 6

Which of the following issues is most unlikely to be addressed by an economist practicing positive economics?

Accepted Answer

A)   the relationship between the minimum wage and the number of unemployed unskilled workers
B)   the effect of a minimum wage increase on inner-city crime rates
C)   the desirability of a minimum wage increase
D)   the consequences of implementing a minimum wage law in China

Question 7

Which of the following statements uses the term ceteris paribus correctly?

Accepted Answer

A)   In economics, there are numerous theories, ceteris paribus.
B)   New York City is a major American city, ceteris paribus.
C)   The price of pineapples is low in Hawaii, ceteris paribus.
D)   The more ice cream you eat, the more weight you will gain, ceteris paribus.
E)   none of the above

Question 8

Variables A and B are inversely related.If we plot A on the horizontal axis and B on the vertical axis,the line that connects combinations of A and B in a two-variable diagram is

Accepted Answer

A)   parallel to the horizontal axis.
B)   downward-sloping (left to right) .
C)   parallel to the vertical axis.
D)   upward-sloping (left to right) .
E)   a or c

Question 9

If someone gives you a free ticket to the movies,then there is no opportunity cost involved with going to the movies.

Accepted Answer

A) True 
 B)False

Question 10

In every economy people vie for the economy's rationing device,a process called

Accepted Answer

A)   competition.
B)   entrepreneurship.
C)   marginal benefit.
D)   positive economics.

Question 11

At the optimal or efficient level of an activity,the activity's marginal benefit must

Accepted Answer

A)   be zero.
B)   be greater than zero.
C)   equal the marginal cost of the activity.
D)   exceed the marginal cost of the activity.

Question 12

Which of the following is an example of a positive economic statement?

Accepted Answer

A)   The U.S. public should devote more resources to education.
B)   The poor should pay lower taxes and the rich should pay higher taxes.
C)   Soap operas should be taken off television.
D)   If you drop a ball from the top of a building, it will fall to the ground.

Question 13

A characteristic of a 45-degree line is that

Accepted Answer

A)   any point on the line is equidistant from the two axes.
B)   it bisects a right angle.
C)   its slope is 1.
D)   a and c
E)   a, b, and c

Question 14

If people want more cars than there are cars available,then it is necessarily true that

Accepted Answer

A)   cars are scarce.
B)   there is a surplus of cars.
C)   there is a decreased supply of cars.
D)   none of the above

Question 15

To an economist,utility means:

Accepted Answer

A)   additional.
B)   usefulness.
C)   satisfaction.
D)   marginal.

Question 16

Opportunity cost is the __________ alternative forfeited when a choice is made.

Accepted Answer

A)   least-valued
B)   most highly-valued
C)   most convenient
D)   most recently considered

Question 17

Something that provides utility is called a

Accepted Answer

A)   good.
B)   bad.
C)   want.
D)   need.
E)   a and d

Question 18

Scarcity occurs in both wealthy societies and poor societies.

Accepted Answer

A) True 
 B)False

Question 19

The higher the opportunity cost of attending college,

Accepted Answer

A)   the more likely an individual will go to college.
B)   the more economics classes an individual will take at college.
C)   the fewer economics classes an individual will take at college.
D)   the less likely an individual will go to college.

Question 20

The coordinates of point A are 300 units of X and 40 units of Y.The coordinates of point B are 280 units of X and 30 units of Y.With X on the horizontal axis and Y on the vertical axis,the slope of the line between points A and B is

Accepted Answer

A)   + 0.50
B)   + 2.00
C)   + 0.33
D)   - 2.00
E)   - 0.50

Exam 1: What Economics Is About

"If you hadn't gone to dinner with your friends,you would have stayed home and surfed the Internet." It follows that

Correct AnswerverifiedShow Answer

To an economist,utility means:

Correct AnswerverifiedShow Answer

Which of the following is an example of a positive economic statement?

Correct AnswerverifiedShow Answer

Which of the following issues is most unlikely to be addressed by an economist practicing positive economics?

Correct AnswerverifiedShow Answer

The higher the opportunity cost of attending college,

Correct AnswerverifiedShow Answer

At the optimal or efficient level of an activity,the activity's marginal benefit must

Correct AnswerverifiedShow Answer

Something that provides disutility is called a

Correct AnswerverifiedShow Answer

In the text,economics is defined as the science of

Correct AnswerverifiedShow Answer

If people want more cars than there are cars available,then it is necessarily true that

Correct AnswerverifiedShow Answer

If scarcity didn't exist,neither would

Correct AnswerverifiedShow Answer

Variables A and B are inversely related.If we plot A on the horizontal axis and B on the vertical axis,the line that connects combinations of A and B in a two-variable diagram is

Correct AnswerverifiedShow Answer

Which of the following statements uses the term ceteris paribus correctly?

Correct AnswerverifiedShow Answer

Which of the following is a positive macroeconomics statement?

Correct AnswerverifiedShow Answer

Something that provides utility is called a

Correct AnswerverifiedShow Answer

A characteristic of a 45-degree line is that

Correct AnswerverifiedShow Answer

Opportunity cost is the __________ alternative forfeited when a choice is made.

Correct AnswerverifiedShow Answer

If someone gives you a free ticket to the movies,then there is no opportunity cost involved with going to the movies.

Correct AnswerverifiedShow Answer

Scarcity occurs in both wealthy societies and poor societies.

Correct AnswerverifiedShow Answer

In every economy people vie for the economy's rationing device,a process called

Correct AnswerverifiedShow Answer

The coordinates of point A are 300 units of X and 40 units of Y.The coordinates of point B are 280 units of X and 30 units of Y.With X on the horizontal axis and Y on the vertical axis,the slope of the line between points A and B is

Correct AnswerverifiedShow Answer

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