Question 1

(Figure: Graph Interpretation)  In the graph, the equation for the line is

Accepted Answer

A)   R = 120 - 0.4S.
B)   R = 120 - 300S.
C)   R = 120 + 0.4S.
D)   R = 300 + 120S.E) B) and C)
F) All of the above

Question 2

If two variables are positively related, then, as one variable

Accepted Answer

A)   decreases the other variable decreases, and as one variable increases the other variable decreases.
B)   increases the other variable increases, and as one variable decreases the other variable increases.
C)   decreases the other variable increases, and as one variable increases the other variable decreases.
D)   increases the other variable increases, and as one variable decreases the other variable decreases.E) B) and D)
F) A) and B)

Question 3

Which paired variables might indicate a correlation but NOT causation?

Accepted Answer

A)   advertising expenditures and sales
B)   snowfall amounts and stock market performance
C)   age and health care expenditures
D)   grade point average and future incomeE) C) and D)
F) None of the above

Question 4

Microeconomics looks at particular markets within an economy.

Accepted Answer

A) True 
 B)False

Question 5

Evaluate this statement: There is more than one concept of economic efficiency.

Accepted Answer

Efficiency has to do with how things are...

Question 6

Opportunity costs exist because

Accepted Answer

A)   using resources for one activity means that their use elsewhere must be given up.
B)   sellers are unwilling to give up their product without a price.
C)   there are opportunities to find ways to reduce costs.
D)   buyers always have an opportunity to go to another seller.E) A) and D)
F) C) and D)

Question 7

Which statement is a characteristic of economic models?

Accepted Answer

A)   Models try to boil down an economic situation to its most basic elements.
B)   Models are always complex because the economy is complex.
C)   Models attempt to reproduce reality exactly.
D)   Models try to avoid invoking the ceteris paribus assumption.E) B) and C)
F) A) and D)

Question 8

_____ people are forced to make tradeoffs.

Accepted Answer

A)   Only wealthy
B)   Only middle-class
C)   Only poor
D)   AllE) A) and B)
F) None of the above

Question 9

Stylized economic models must include

Accepted Answer

A)   assumptions.
B)   inflation.
C)   money.
D)   complexity.E) B) and C)
F) C) and D)

Question 10

At the start of the war in Iraq, homeowners in the United States found it difficult to find plywood. At the same time, the U.S. military was constructing buildings in Iraq. How do the two situations reflect economic tradeoffs?

Accepted Answer

All economic resources, including plywoo...

Question 11

Questions that involve the understanding of basic facts are _____ questions.

Accepted Answer

A)   positive
B)   subjective
C)   evaluative
D)   normativeE) A) and D)
F) All of the above

Question 12

Which statement about economic models is TRUE?

Accepted Answer

A)   In practice, it is easy for an economist to isolate economic variables.
B)   Economists hold all other variables constant in order to see the impact of one particular variable.
C)   To be useful, an economic model must include every detail possible and not be an abstraction.
D)   Complex models are always better than simple ones.E) All of the above
F) None of the above

Question 13

What is the opportunity cost of taking an economics class?

Accepted Answer

Each student will have a different respo...

Question 14

Which statement is an example of a normative question?

Accepted Answer

A)   How do interest rates influence employment?
B)   How should a society achieve full employment?
C)   How do unemployment rates differ among nations?
D)   What are the long-term effects of unemployment?E) A) and D)
F) A) and C)

Question 15

Opportunity costs

Accepted Answer

A)   are generally the same from individual to individual.
B)   involve monetary rather than nonmonetary costs.
C)   decrease as individuals become wealthier.
D)   influence all economic decisions.E) A) and C)
F) A) and B)

Question 16

The study of economics

Accepted Answer

A)   primarily considers the stock market.
B)   is about people making decisions regarding their use of scarce resources.
C)   does not apply to decisions made by businesses.
D)   states that efficiency and equity do not conflict.E) None of the above
F) A) and B)

Question 17

What are the benefits of learning the techniques and tools involved within economic analysis?

Accepted Answer

Economic analysis provides a structure f...

Question 18

Which topic is MOST likely to be studied in a microeconomics course?

Accepted Answer

A)   energy policy
B)   unemployment
C)   inflation
D)   recessionsE) All of the above
F) A) and B)

Question 19

Economics is about allocating limited resources to maximize an individual or society's well-being or satisfaction.

Accepted Answer

A) True 
 B)False

Question 20

If a restaurant that traditionally has served only lunch and dinner wants to open for breakfast, which factor should be considered?

Accepted Answer

A)   rent
B)   furniture
C)   cost of the additional food
D)   insurance costsE) C) and D)
F) B) and C)

Exam 1: Exploring Economics

Which statement is an example of a normative question?

Correct AnswerverifiedShow Answer

What is the opportunity cost of taking an economics class?

Correct AnswerverifiedEach student will have a different respo...View AnswerShow Answer

(Figure: Graph Interpretation) In the graph, the equation for the line is

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Which statement is a characteristic of economic models?

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If two variables are positively related, then, as one variable

Correct AnswerverifiedShow Answer

Economics is about allocating limited resources to maximize an individual or society's well-being or satisfaction.

Correct AnswerverifiedShow Answer

Stylized economic models must include

Correct AnswerverifiedShow Answer

If a restaurant that traditionally has served only lunch and dinner wants to open for breakfast, which factor should be considered?

Correct AnswerverifiedShow Answer

Opportunity costs exist because

Correct AnswerverifiedShow Answer

Which paired variables might indicate a correlation but NOT causation?

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_____ people are forced to make tradeoffs.

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The study of economics

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At the start of the war in Iraq, homeowners in the United States found it difficult to find plywood. At the same time, the U.S. military was constructing buildings in Iraq. How do the two situations reflect economic tradeoffs?

Correct AnswerverifiedAll economic resources, including plywoo...View AnswerShow Answer

Opportunity costs

Correct AnswerverifiedShow Answer

What are the benefits of learning the techniques and tools involved within economic analysis?

Correct AnswerverifiedEconomic analysis provides a structure f...View AnswerShow Answer

Evaluate this statement: There is more than one concept of economic efficiency.

Correct AnswerverifiedEfficiency has to do with how things are...View AnswerShow Answer

Which statement about economic models is TRUE?

Correct AnswerverifiedShow Answer

Microeconomics looks at particular markets within an economy.

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Questions that involve the understanding of basic facts are _____ questions.

Correct AnswerverifiedShow Answer

Which topic is MOST likely to be studied in a microeconomics course?

Correct AnswerverifiedShow Answer

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Each student will have a different respo...
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All economic resources, including plywoo...
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Economic analysis provides a structure f...
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Efficiency has to do with how things are...
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Correct Answer
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