Question 1

The slope of a budget line reflects the:

Accepted Answer

A)   desirability of the two products.
B)   price ratio of the two products.
C)   amount of the consumer's income.
D)   utility ratio of the two products.

Question 2

Assume an economy is incurring unemployment.The effect of resolving this problem will be to:

Accepted Answer

A)   move the level of actual output on to the economy's production possibilities curve.
B)   create a less equal distribution of income.
C)   shift its production possibilities curve to the left.
D)   shift its production possibilities curve to the right.

Question 3

Alex sees that his neighbors' lawns all need mowing.He offers to provide the service in exchange for a wage of $20 per hour.Some neighbors accept Alex's offer and others refuse.Economists would describe Alex's behavior as:

Accepted Answer

A)   rational self-interest because he is attempting to increase his own income by identifying and satisfying someone else's wants.
B)   greedy because he is asking for a high wage that some of his neighbors can't afford to pay.
C)   selfish because he is asking for a wage that is higher than others might charge.
D)   irrational because some neighbors refused his offer.

Question 4

If a positive relationship exists between x and y:

Accepted Answer

A)   an increase in x will cause y to decrease.
B)   a decrease in x will cause y to increase.
C)   the relationship will graph as an upsloping line.
D)   the vertical intercept must be positive.

Question 5

Any combination of goods lying outside of the budget line:

Accepted Answer

A)   implies that the consumer is not spending all his income.
B)   yields less utility than any point on the budget line.
C)   yields less utility than any point inside the budget line.
D)   is unattainable,given the consumer's income.

Question 6

Which of the following is associated with macroeconomics?

Accepted Answer

A)   An examination of the incomes of Harvard Business School graduates.
B)   An empirical investigation of the general price level and unemployment rates since 1990.
C)   A study of the trend of pecan prices since the Second World War.
D)   A case study of pricing and production in the textbook industry.

Question 7

Although sleeping in on a work day or school day has an opportunity cost,sleeping late on the weekend does not.

Accepted Answer

A) True 
 B)False

Question 8

Answer the question on the basis of the following production possibilities tables for two countries,North Cantina and South Cantina: 1/4 of a unit of capital goods. C)  8 units of capital goods. D)  1/8 of a unit of capital goods." class="answers-bank-image d-inline" rel="preload" > Refer to the tables.If North Cantina is producing at production alternative B,the opportunity cost of the eleventh unit of consumer goods will be:

Accepted Answer

A)   10 units of capital goods.
B)   1/4 of a unit of capital goods.
C)   8 units of capital goods.
D)   1/8 of a unit of capital goods.

Question 9

Suppose that a fully employed economy produces only two goods,hamburgers and flat-panel TVs.If the economy is currently producing more than the optimal quantity of hamburgers,then to attain the optimal allocation of resources it should:

Accepted Answer

A)   produce more hamburgers and fewer TVs.
B)   produce more TVs and fewer hamburgers.
C)   produce more of both goods.
D)   produce fewer of both goods.

Question 10

(Consider This) In response to the terrorist attacks of September 11,2001,the government decided to allocate more resources toward defense goods.The government's decision reflects their assessment that:

Accepted Answer

A)   the marginal benefits of additional defense goods outweighed the marginal cost.
B)   the marginal cost of additional defense goods outweighed the marginal benefit.
C)   there cannot be too many defense goods.
D)   civilian goods are not worth producing.

Exam 1: Limits, Alternatives, and Choices

Any combination of goods lying outside of the budget line:

Correct Answer
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If a positive relationship exists between x and y:

Correct Answer
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Assume an economy is incurring unemployment.The effect of resolving this problem will be to:

Correct Answer
verified

Alex sees that his neighbors' lawns all need mowing.He offers to provide the service in exchange for a wage of $20 per hour.Some neighbors accept Alex's offer and others refuse.Economists would describe Alex's behavior as:

Correct Answer
verified

Answer the question on the basis of the following production possibilities tables for two countries,North Cantina and South Cantina: Refer to the tables.If North Cantina is producing at production alternative B,the opportunity cost of the eleventh unit of consumer goods will be:

Correct Answer
verified

Suppose that a fully employed economy produces only two goods,hamburgers and flat-panel TVs.If the economy is currently producing more than the optimal quantity of hamburgers,then to attain the optimal allocation of resources it should:

Correct Answer
verified

(Consider This) In response to the terrorist attacks of September 11,2001,the government decided to allocate more resources toward defense goods.The government's decision reflects their assessment that:

Correct Answer
verified

The slope of a budget line reflects the:

Correct Answer
verified

Although sleeping in on a work day or school day has an opportunity cost,sleeping late on the weekend does not.

Correct Answer
verified

Which of the following is associated with macroeconomics?

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

Any combination of goods lying outside of the budget line:

Correct AnswerverifiedShow Answer

If a positive relationship exists between x and y:

Correct AnswerverifiedShow Answer

Assume an economy is incurring unemployment.The effect of resolving this problem will be to:

Correct AnswerverifiedShow Answer

Alex sees that his neighbors' lawns all need mowing.He offers to provide the service in exchange for a wage of $20 per hour.Some neighbors accept Alex's offer and others refuse.Economists would describe Alex's behavior as:

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.If North Cantina is producing at production alternative B,the opportunity cost of the eleventh unit of consumer goods will be:

Correct AnswerverifiedShow Answer

Suppose that a fully employed economy produces only two goods,hamburgers and flat-panel TVs.If the economy is currently producing more than the optimal quantity of hamburgers,then to attain the optimal allocation of resources it should:

Correct AnswerverifiedShow Answer

(Consider This) In response to the terrorist attacks of September 11,2001,the government decided to allocate more resources toward defense goods.The government's decision reflects their assessment that:

Correct AnswerverifiedShow Answer

The slope of a budget line reflects the:

Correct AnswerverifiedShow Answer

Although sleeping in on a work day or school day has an opportunity cost,sleeping late on the weekend does not.

Correct AnswerverifiedShow Answer

Which of the following is associated with macroeconomics?

Correct AnswerverifiedShow 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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