Question 1

Economists believe that people's wants are

Accepted Answer

A)  finite.
B)  infinite.
C)  irrational.
D)  unimportant because needs are more important than wants.

Question 2

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 plotted in a two-variable diagram would be

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) .

Question 3

Economists use the ceteris paribus assumption primarily in order to

Accepted Answer

A)  make their analyses easier for them to conduct.
B)  designate what they believe is the correct relationship between two variables.
C)  explain why people sometimes consume more of a good when its price rises.
D)  explain why those things that come first do not necessarily cause those things that come later.
E)  designate the difference between normative and positive economics.

Question 4

Making a decision at the margin is __________ an all-or-nothing decision.

Accepted Answer

A)  consistent with
B)  inconsistent with
C)  the same as making
D)  conditioned upon making

Question 5

If variable X rises as result of variable Y falling, then X and Y are

Accepted Answer

A)  directly related.
B)  inversely related.
C)  independent.
D)  positively related.

Question 6

Scarcity is defined as the condition in which

Accepted Answer

A)  both wants and resources are limited.
B)  wants are finite and resources infinite.
C)  both wants and resources are infinite.
D)  wants are infinite and resources finite.

Question 7

The higher the opportunity cost of doing something, the more likely it will be done.

Accepted Answer

A) True 
 B)False

Question 8

In general, there is a ______________ relationship between the number of hours spent studying for a test and the grade earned on the test.

Accepted Answer

A)  independent
B)  direct
C)  inverse
D)  smooth

Question 9

Which of the following statements is true?

Accepted Answer

A)  Oil is classified as part of the resource category land.
B)  A person working for a company is classified  as part of the resource category capital.
C)  A machine in a factory is classified as part of the resource category land.
D)  A person with the particular talent for organizing the resources of land, labor, and capital to produce goods, seek new business opportunities, and develop new ways of doing things is classified as part of the resource category labor.

Question 10

The primary economic reason why people cannot have everything they want is because

Accepted Answer

A)  people are selfish.
B)  scarcity exists.
C)  there is not enough economic growth in the world.
D)  the population of the world is declining.

Question 11

Several years ago, a bookstore chain extended its closing time from 9 p.m. to 10 p.m. Now it is considering a further extension to 11 p.m. In making this marginal decision, the results of having gone from 9 p.m. to 10 p.m. are

Accepted Answer

A)  no longer relevant to the current decision.
B)  relevant if the marginal costs and benefits were unequal.
C)  relevant since they are part of the calculation of total costs and benefits.
D)  relevant if the marginal costs and benefits were equal.

Question 12

The purpose of the ceteris paribus assumption is to allow economists to

Accepted Answer

A)  determine the relationship among several variables.
B)  determine the impact of several variables on another variable.
C)  isolate the impact of one variable on several variables.
D)  isolate the relationship between two variables.

Question 13

What is the difference between macroeconomics and microeconomics? Give an example of a question that a macroeconomist might be interested in answering, then do the same for a microeconomist.

Accepted Answer

Macroeconomics is the branch of economics that looks at human behavior and choices as they relate to the entire economy. Microeconomics deals with human behavior and choices as they relate to relatively small units ---an individual, a firm, an industry, a single market. A macroeconomist would be concerned about questions that impact the whole economy such as, "How will the proposed tax cut affect unemployment, inflation and economic growth?" A microeconomist would ask questions that relate to the various parts that make up the economy such as, "How will the drought impact the price of corn?"

Question 14

Some economic studies have shown that mandatory seat belt laws do not lead to a reduction in traffic fatalities.

Accepted Answer

A) True 
 B)False

Question 15

The __________ the opportunity cost of doing an activity, the __________.

Accepted Answer

A)  lower; less likely a person will do that activity
B)  lower; more likely a person will do that activity
C)  higher; more likely a person will do that activity
D)  higher; likelihood of doing the activity will remain unchanged B

Question 16

In most societies, dollar price acts as the main rationing device. If dollar price weren't the main rationing device, would there still be a need for some rationing device to take its place?

Accepted Answer

A)  No, because with dollar price there would be no scarcity, although shortages would still exist.
B)  Yes, because there is a need for a rationing device as long as scarcity exists.
C)  Yes, because there is a need for a rationing device as long as the world's population is so large.
D)  No, because dollar price creates scarcity and without money price scarcity wouldn't exist. B

Question 17

Economists use the terms resource and input as synonyms.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following would NOT be considered a macroeconomic topic?

Accepted Answer

A)  the reasons for a decline in the price of crude oil
B)  the cause of a downturn in the economy
C)  the effect of the government budget deficit on inflation
D)  the causes of inflation and unemployment

Question 19

The synonym economists commonly use for additional is

Accepted Answer

A)  capital.
B)  rational.
C)  marginal.
D)  economic.

Question 20

In economics, a synonym for utility is

Accepted Answer

A)  usefulness.
B)  satisfaction.
C)  sacrifice.
D)  a service.

Exam 1: What Economics Is About

Economists believe that people's wants are

Correct Answer
verified

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 plotted in a two-variable diagram would be

Correct Answer
verified

Economists use the ceteris paribus assumption primarily in order to

Correct Answer
verified

Making a decision at the margin is __________ an all-or-nothing decision.

Correct Answer
verified

If variable X rises as result of variable Y falling, then X and Y are

Correct Answer
verified

Scarcity is defined as the condition in which

Correct Answer
verified

The higher the opportunity cost of doing something, the more likely it will be done.

Correct Answer
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In general, there is a ______________ relationship between the number of hours spent studying for a test and the grade earned on the test.

Correct Answer
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Which of the following statements is true?

Correct Answer
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The primary economic reason why people cannot have everything they want is because

Correct Answer
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Several years ago, a bookstore chain extended its closing time from 9 p.m. to 10 p.m. Now it is considering a further extension to 11 p.m. In making this marginal decision, the results of having gone from 9 p.m. to 10 p.m. are

Correct Answer
verified

The purpose of the ceteris paribus assumption is to allow economists to

Correct Answer
verified

What is the difference between macroeconomics and microeconomics? Give an example of a question that a macroeconomist might be interested in answering, then do the same for a microeconomist.

Some economic studies have shown that mandatory seat belt laws do not lead to a reduction in traffic fatalities.

Correct Answer
verified

The the opportunity cost of doing an activity, the .

Correct Answer
verified
B

In most societies, dollar price acts as the main rationing device. If dollar price weren't the main rationing device, would there still be a need for some rationing device to take its place?

Correct Answer
verified
B

Economists use the terms resource and input as synonyms.

Correct Answer
verified

Which of the following would NOT be considered a macroeconomic topic?

Correct Answer
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The synonym economists commonly use for additional is

Correct Answer
verified

In economics, a synonym for utility is

Correct Answer
verified

Exam 1: What Economics Is About

Economists believe that people's wants are

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 plotted in a two-variable diagram would be

Correct AnswerverifiedShow Answer

Economists use the ceteris paribus assumption primarily in order to

Correct AnswerverifiedShow Answer

Making a decision at the margin is __________ an all-or-nothing decision.

Correct AnswerverifiedShow Answer

If variable X rises as result of variable Y falling, then X and Y are

Correct AnswerverifiedShow Answer

Scarcity is defined as the condition in which

Correct AnswerverifiedShow Answer

The higher the opportunity cost of doing something, the more likely it will be done.

Correct AnswerverifiedShow Answer

In general, there is a ______________ relationship between the number of hours spent studying for a test and the grade earned on the test.

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

The primary economic reason why people cannot have everything they want is because

Correct AnswerverifiedShow Answer

Several years ago, a bookstore chain extended its closing time from 9 p.m. to 10 p.m. Now it is considering a further extension to 11 p.m. In making this marginal decision, the results of having gone from 9 p.m. to 10 p.m. are

Correct AnswerverifiedShow Answer

The purpose of the ceteris paribus assumption is to allow economists to

Correct AnswerverifiedShow Answer

What is the difference between macroeconomics and microeconomics? Give an example of a question that a macroeconomist might be interested in answering, then do the same for a microeconomist.

Some economic studies have shown that mandatory seat belt laws do not lead to a reduction in traffic fatalities.

Correct AnswerverifiedShow Answer

The __________ the opportunity cost of doing an activity, the __________.

Correct AnswerverifiedB

In most societies, dollar price acts as the main rationing device. If dollar price weren't the main rationing device, would there still be a need for some rationing device to take its place?

Correct AnswerverifiedB

Economists use the terms resource and input as synonyms.

Correct AnswerverifiedShow Answer

Which of the following would NOT be considered a macroeconomic topic?

Correct AnswerverifiedShow Answer

The synonym economists commonly use for additional is

Correct AnswerverifiedShow Answer

In economics, a synonym for utility is

Correct AnswerverifiedShow Answer

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The the opportunity cost of doing an activity, the .

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B

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B

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