Question 1

Assume the price of product Y (the quantity of which is on the vertical axis) is $15 and the price of product X (the quantity of which is on the horizontal axis) is $3. Also assume that money income is $60. The absolute value of the slope of the resulting budget line is

Accepted Answer

A)  5.
B)  1/5.
C)  4.
D)  20.E) A) and B)
F) A) and C)

Question 2

Products and services are scarce because resources are scarce.

Accepted Answer

A) True 
 B)False

Question 3

The quantity or supply of land resources available to a nation is pretty much fixed and cannot increase over time.

Accepted Answer

A) True 
 B)False

Question 4

Marginal analysis means that decision makers compare the extra benefits with the extra costs of a specific choice.

Accepted Answer

A) True 
 B)False

Question 5

If falling gasoline prices are good for the consumers, then they must be good everyone in the economy.

Accepted Answer

A) True 
 B)False

Question 6

Economic models do not reflect the full complexity of reality, but instead are based on

Accepted Answer

A)  simplifications.
B)  trade-offs.
C)  value judgments.
D)  predictions.E) C) and D)
F) B) and D)

Question 7

If two sets of data are inversely related, they will appear on a graph as an upward-sloping line.

Accepted Answer

A) True 
 B)False

Question 8

Which one of the following is a normative economic statement?

Accepted Answer

A)  The unemployment rate fell for the fourth straight month, reflecting the effects from stronger economic growth in the second quarter.
B)  The worsening balance of trade must be corrected if this nation is to remain competitive in the world economy.
C)  Consumer prices are rising at a faster rate than in past months, indicating a renewal of inflationary pressures on the economy.
D)  To help balance the Federal budget, Congress increased the tax on gasoline to its highest level in the past 10 years.E) None of the above
F) B) and C)

Question 9

The basic truth that underlies the study of economics is the fact that we all face

Accepted Answer

A)  death.
B)  taxes.
C)  risk.
D)  scarcity.E) A) and D)
F) B) and D)

Question 10

Entrepreneurship refers to a new college graduate who is looking for a job with a large company.

Accepted Answer

A) True 
 B)False

Question 11

"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 C)

Question 12

Suppose that Julia receives a $20 gift card for the local coffee shop, where she only buys lattes and muffins. If the price of a latte is $4 and the price of a muffin is $2, then we can conclude that Julia

Accepted Answer

A)  should only buy muffins.
B)  should only buy lattes.
C)  can buy 5 lattes or 10 muffins if she chooses to buy only one of the two goods.
D)  can buy 5 lattes and 10 muffins with her $20 gift card.E) None of the above
F) C) and D)

Question 13

For economists, the word "utility" means

Accepted Answer

A)  versatility and flexibility.
B)  rationality.
C)  pleasure or satisfaction.
D)  purposefulness.E) B) and C)
F) A) and D)

Question 14

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities schedule.  In moving from combination B to A, the opportunity cost of producing 50 more autos is

Accepted Answer

A)  1 units of tanks.
B)  1 unit of tanks.
C)  950 units of autos.
D)  1,950 units of autos.E) A) and C)
F) A) and D)

Question 15

A positive statement is concerned primarily with

Accepted Answer

A)  some goal that is desirable to society.
B)  what should be.
C)  what is.
D)  the formulation of economic policy.E) B) and C)
F) B) and D)

Question 16

Economic growth is shown as an increase in production from inside the production possibilities curve out toward a point on the possibilities curve.

Accepted Answer

A) True 
 B)False

Question 17

When firms give away "freebies" like free apps, free checking accounts, free maps, or free toothbrushes, they are contradicting economists' contention that "there is no free lunch."

Accepted Answer

A) True 
 B)False

Question 18

Purposeful behavior implies that everyone will make identical choices.

Accepted Answer

A) True 
 B)False

Question 19

The economizing problem for individuals arises from the conflict between having relatively unlimited time and relatively limited jobs to do.

Accepted Answer

A) True 
 B)False

Question 20

Scarcity

Accepted Answer

A)  persists only because countries have failed to achieve continuous full employment.
B)  persists because economic wants exceed available resources.
C)  has been solved in all industrialized nations.
D)  has been eliminated in affluent societies such as the United States and Canada.E) A) and B)
F) A) and C)

Exam 1: Limits, Alternatives, and Choices

The basic truth that underlies the study of economics is the fact that we all face

Correct AnswerverifiedShow Answer

Suppose that Julia receives a $20 gift card for the local coffee shop, where she only buys lattes and muffins. If the price of a latte is $4 and the price of a muffin is $2, then we can conclude that Julia

Correct AnswerverifiedShow Answer

For economists, the word "utility" means

Correct AnswerverifiedShow Answer

Purposeful behavior implies that everyone will make identical choices.

Correct AnswerverifiedShow Answer

If two sets of data are inversely related, they will appear on a graph as an upward-sloping line.

Correct AnswerverifiedShow Answer

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities schedule. In moving from combination B to A, the opportunity cost of producing 50 more autos is

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

The quantity or supply of land resources available to a nation is pretty much fixed and cannot increase over time.

Correct AnswerverifiedShow Answer

Products and services are scarce because resources are scarce.

Correct AnswerverifiedShow Answer

Entrepreneurship refers to a new college graduate who is looking for a job with a large company.

Correct AnswerverifiedShow Answer

Economic models do not reflect the full complexity of reality, but instead are based on

Correct AnswerverifiedShow Answer

Economic growth is shown as an increase in production from inside the production possibilities curve out toward a point on the possibilities curve.

Correct AnswerverifiedShow Answer

If falling gasoline prices are good for the consumers, then they must be good everyone in the economy.

Correct AnswerverifiedShow Answer

A positive statement is concerned primarily with

Correct AnswerverifiedShow Answer

Assume the price of product Y (the quantity of which is on the vertical axis) is $15 and the price of product X (the quantity of which is on the horizontal axis) is $3. Also assume that money income is $60. The absolute value of the slope of the resulting budget line is

Correct AnswerverifiedShow Answer

Which one of the following is a normative economic statement?

Correct AnswerverifiedShow Answer

Scarcity

Correct AnswerverifiedShow Answer

The economizing problem for individuals arises from the conflict between having relatively unlimited time and relatively limited jobs to do.

Correct AnswerverifiedShow Answer

When firms give away "freebies" like free apps, free checking accounts, free maps, or free toothbrushes, they are contradicting economists' contention that "there is no free lunch."

Correct AnswerverifiedShow Answer

Marginal analysis means that decision makers compare the extra benefits with the extra costs of a specific choice.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified