Question 1

The four factors of production are

Accepted Answer

A)  land, labor, capital, and money.
B)  land, labor, capital, and entrepreneurial ability.
C)  labor, capital, technology, and entrepreneurial ability.
D)  labor, capital, entrepreneurial ability, and money.E) C) and D)
F) B) and D)

Question 2

Economic analysis assumes "purposeful behavior," which means that people will pursue decisions or actions

Accepted Answer

A)  that will increase their well-being.
B)  always based on full or complete information.
C)  with minimal consideration for their emotions.
D)  without making any logical mistakes.E) A) and D)
F) C) and D)

Question 3

The basic purpose of the other-things-equal assumption is to

Accepted Answer

A)  allow one to reason about the relationship between variables X and Y without the intrusion of variable Z.
B)  allow one to focus upon micro variables by ignoring macro variables.
C)  allow one to focus upon macro variables by ignoring micro variables.
D)  determine whether X causes Y or vice versa.E) None of the above
F) B) and C)

Question 4

The slope of a line parallel to the horizontal axis is

Accepted Answer

A)  zero.
B)  one.
C)  infinite.
D)  one-half.E) None of the above
F) All of the above

Question 5

If all discrimination in the United States were eliminated, the economy would

Accepted Answer

A)  have a less concave production possibilities curve.
B)  produce at some point closer to its production possibilities curve.
C)  be able to produce at some point outside of its production possibilities curve.
D)  produce more consumer goods and fewer investment goods.E) A) and B)
F) A) and C)

Question 6

Which of the following statements pertains to macroeconomics?

Accepted Answer

A)  Because the minimum wage was raised, Mrs.Olsen decided to enter the labor force.
B)  A decline in the price of soybeans caused farmer Wanek to plant more wheat.
C)  National income grew by 2.7 percent last year.
D)  The Pumpkin Center State Bank increased its interest rate on consumer loans by 1 percentage point.E) All of the above
F) B) and D)

Question 7

Suppose that Scoobania, which has full employment, can obtain 1 unit of capital goods by sacrificing 2 units of consumer goods domestically but can obtain 1 unit of capital goods from another country by trading 1 unit of consumer goods for it.This reality illustrates

Accepted Answer

A)  a rightward (outward)  shift of the production possibilities curve.
B)  increasing opportunity costs.
C)  achieving points beyond the production possibilities curve through international specialization and trade.
D)  productive efficiency.E) None of the above
F) A) and C)

Question 8

Economists

Accepted Answer

A)  always put the independent variable on the horizontal axis and the dependent variable on the vertical axis.
B)  always put the dependent variable on the horizontal axis and the independent variable on the vertical axis.
C)  are somewhat arbitrary in assigning independent and dependent variables to the horizontal and vertical axes.
D)  measure the slope of a line differently than do mathematicians.E) A) and B)
F) A) and C)

Question 9

When economists say that people act rationally in their self-interest, they mean that individuals

Accepted Answer

A)  look for and pursue opportunities to increase their utility.
B)  generally disregard the interests of others.
C)  are mainly creatures of habit.
D)  are usually impulsive and unpredictable.E) C) and D)
F) None of the above

Question 10

Macroeconomics explains the behavior of individual households and business firms; microeconomics is concerned with the behavior of aggregates or the economy as a whole.

Accepted Answer

A) True 
 B)False

Question 11

All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve, except

Accepted Answer

A)  emigration of skilled workers to other nations.
B)  a decline in the birthrate.
C)  an increase in the average skill level of all occupational groups.
D)  depletion and reduced availability of major energy resources.E) B) and C)
F) None of the above

Question 12

The economic principle that the "unemployment rate will tend to increase as the economy moves into a recession" is an example of

Accepted Answer

A)  a normative statement.
B)  an assumption.
C)  loaded terminology.
D)  a generalization.E) A) and B)
F) None of the above

Question 13

When studying human behavior, economists assume rational self-interest.This means that

Accepted Answer

A)  people make decisions based on some desired outcome.
B)  people are quite selfish and are not concerned about others.
C)  people always make the right decisions.
D)  people have all the information they need to make a decision.E) B) and D)
F) B) and C)

Question 14

The best output or the optimal production of the nation is

Accepted Answer

A)  a combination of products at the midpoint of the production possibilities curve.
B)  a combination of products at either of the two endpoints of the production possibilities curve.
C)  determined by equalizing the marginal benefits and marginal costs of each product.
D)  the production combination where the opportunity costs are minimized.E) None of the above
F) A) and C)

Question 15

If we say that two variables are inversely related, this means that

Accepted Answer

A)  the two graph as an upsloping line.
B)  an increase in one variable is associated with a decrease in the other.
C)  an increase in one variable is associated with an increase in the other.
D)  the resulting relationship can be portrayed by a straight line parallel to the horizontal axis.E) B) and C)
F) A) and D)

Question 16

Economic theories

Accepted Answer

A)  are useless because they are not based on laboratory experimentation.
B)  that are true for individual economic units are never true for the economy as a whole.
C)  are generalizations based on hypotheses tested and supported with observed facts.
D)  are abstractions and therefore of no application to real situations.E) A) and B)
F) None of the above

Question 17

What is a major opportunity cost of going to college on a full-time basis?

Accepted Answer

A)  the cost of transportation to college instead of to a job
B)  the cost of living expenses (room and board)  to attend college
C)  the forgone income that would have been earned working in a full-time job
D)  the greater income that will be earned from having a college degreeE) A) and B)
F) A) and D)

Question 18

Other things equal, which of the following would shift an economy's production possibilities curve to the left?

Accepted Answer

A)  the discovery of a low-cost means of generating and storing solar energy
B)  the entrance of more women into the labor force
C)  a law requiring mandatory retirement from the labor force at age 55
D)  an increase in the proportion of total output that consists of capital or investment goodsE) A) and B)
F) A) and C)

Question 19

Slopes of lines are especially important in economics because

Accepted Answer

A)  they measure marginal changes.
B)  they always tell us something about profits.
C)  positive slopes are always preferred to negative slopes.
D)  they always relate to resource and output scarcity.E) A) and C)
F) A) and B)

Question 20

Another way of saying "ceteris paribus" is

Accepted Answer

A)  other things equal.
B)  in general.
C)  in reality.
D)  because of this.E) C) and D)
F) B) and C)

Exam 1: Limits, Alternatives, and Choices

The slope of a line parallel to the horizontal axis is

Correct AnswerverifiedShow Answer

The best output or the optimal production of the nation is

Correct AnswerverifiedShow Answer

Suppose that Scoobania, which has full employment, can obtain 1 unit of capital goods by sacrificing 2 units of consumer goods domestically but can obtain 1 unit of capital goods from another country by trading 1 unit of consumer goods for it.This reality illustrates

Correct AnswerverifiedShow Answer

Another way of saying "ceteris paribus" is

Correct AnswerverifiedShow Answer

When economists say that people act rationally in their self-interest, they mean that individuals

Correct AnswerverifiedShow Answer

What is a major opportunity cost of going to college on a full-time basis?

Correct AnswerverifiedShow Answer

Slopes of lines are especially important in economics because

Correct AnswerverifiedShow Answer

Other things equal, which of the following would shift an economy's production possibilities curve to the left?

Correct AnswerverifiedShow Answer

Economic theories

Correct AnswerverifiedShow Answer

When studying human behavior, economists assume rational self-interest.This means that

Correct AnswerverifiedShow Answer

If we say that two variables are inversely related, this means that

Correct AnswerverifiedShow Answer

If all discrimination in the United States were eliminated, the economy would

Correct AnswerverifiedShow Answer

All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve, except

Correct AnswerverifiedShow Answer

Which of the following statements pertains to macroeconomics?

Correct AnswerverifiedShow Answer

The basic purpose of the other-things-equal assumption is to

Correct AnswerverifiedShow Answer

Economic analysis assumes "purposeful behavior," which means that people will pursue decisions or actions

Correct AnswerverifiedShow Answer

The economic principle that the "unemployment rate will tend to increase as the economy moves into a recession" is an example of

Correct AnswerverifiedShow Answer

Economists

Correct AnswerverifiedShow Answer

The four factors of production are

Correct AnswerverifiedShow Answer

Macroeconomics explains the behavior of individual households and business firms; microeconomics is concerned with the behavior of aggregates or the economy as a whole.

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