Question 1

_____ people are forced to make tradeoffs.

Accepted Answer

A)   Only wealthy
B)   Only middle-class
C)   Only poor
D)   All

Question 2

Paying a salesperson more for increased sales is an example of:

Accepted Answer

A)   an incentive.
B)   an opportunity cost.
C)   efficiency.
D)   equity.

Question 3

An economy exhibits production efficiency if:

Accepted Answer

A)   it produces more than enough clothes to clothe everyone.
B)   economic growth increases every year.
C)   it produces goods at the lowest possible cost.
D)   it eliminates poverty.

Question 4

Stylized models boil down issues and facts to their basic relevant elements.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)   energy policy
B)   unemployment
C)   inflation
D)   recessions

Question 6

Time series graphs include the value of a variable on the vertical axis and minutes, hours, days, months, quarters, or years on the horizontal axis.

Accepted Answer

A) True 
 B)False

Question 7

Time series graphs allow us to see trends in one variable over a set time frame.

Accepted Answer

A) True 
 B)False

Question 8

A theory composed of a number of assumptions and facts boiled down to their basic relevant elements is called a:

Accepted Answer

A)   metaphor.
B)   model.
C)   conclusion.
D)   practice.

Question 9

Economics is only about money.

Accepted Answer

A) True 
 B)False

Question 10

A recent decision regarding the Federal Reserve's impending interest rate increase is an example of a _____ topic. On the other hand, a debate on the impact of the arrival of Uber on local taxi businesses is an example of a _____ topic.

Accepted Answer

A)   microeconomic; macroeconomic
B)   macroeconomic; macroeconomic
C)   microeconomic; microeconomic
D)   macroeconomic; microeconomic

Question 11

If a graph showed that as the amount of time a person spent partying increased, her GPA decreased, then this relationship would be:

Accepted Answer

A)   negative.
B)   positive.
C)   linear.
D)   nonlinear.

Question 12

Why is it important for students to study economics?

Accepted Answer

A)   Most students will work as professional economists.
B)   It helps us reduce our personal income taxes.
C)   It helps us make better and wiser decisions, given our limited resources.
D)   There is no long-term benefit to studying economics.

Question 13

People tend to make rational choices for which they rely on:

Accepted Answer

A)   scarcity.
B)   utility.
C)   information.
D)   ceteris paribus.

Question 14

Economists like to use graphs and equations primarily because:

Accepted Answer

A)   these tools efficiently express economic concepts.
B)   economics should be difficult.
C)   mathematical aptitude is necessary to understand economics.
D)   the use of mathematics reduces rigor.

Question 15

Markets provide an incentive structure to:

Accepted Answer

A)   maximize equity.
B)   eliminate scarcity.
C)   maximize market information.
D)   maximize efficiency.

Question 16

Allocative inefficiency implies that:

Accepted Answer

A)   goods are produced at too high at cost.
B)   the people who want a specific good the most cannot get it, while others can.
C)   too many Twinkies and too few Ding Dongs were produced.
D)   workers are lazy.

Question 17

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.

Question 18

What drives and disciplines markets?

Accepted Answer

A)   equity
B)   prices and profits
C)   ceteris paribus assumptions
D)   efficiency

Question 19

Economics deals only with financial issues.

Accepted Answer

A) True 
 B)False

Question 20

The main focus of efficiency is for:

Accepted Answer

A)   firms to charge high prices for their goods.
B)   firms to earn the largest profits.
C)   consumers to get the goods and services they want at the lowest possible resource cost.
D)   consumers to pay high prices.

Exam 1: Exploring Economics

Time series graphs include the value of a variable on the vertical axis and minutes, hours, days, months, quarters, or years on the horizontal axis.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

People tend to make rational choices for which they rely on:

Correct AnswerverifiedShow Answer

If a graph showed that as the amount of time a person spent partying increased, her GPA decreased, then this relationship would be:

Correct AnswerverifiedShow Answer

The main focus of efficiency is for:

Correct AnswerverifiedShow Answer

Stylized models boil down issues and facts to their basic relevant elements.

Correct AnswerverifiedShow Answer

Opportunity costs exist because:

Correct AnswerverifiedShow Answer

Economics is only about money.

Correct AnswerverifiedShow Answer

_____ people are forced to make tradeoffs.

Correct AnswerverifiedShow Answer

Markets provide an incentive structure to:

Correct AnswerverifiedShow Answer

What drives and disciplines markets?

Correct AnswerverifiedShow Answer

Economics deals only with financial issues.

Correct AnswerverifiedShow Answer

Paying a salesperson more for increased sales is an example of:

Correct AnswerverifiedShow Answer

Allocative inefficiency implies that:

Correct AnswerverifiedShow Answer

Economists like to use graphs and equations primarily because:

Correct AnswerverifiedShow Answer

A theory composed of a number of assumptions and facts boiled down to their basic relevant elements is called a:

Correct AnswerverifiedShow Answer

An economy exhibits production efficiency if:

Correct AnswerverifiedShow Answer

Time series graphs allow us to see trends in one variable over a set time frame.

Correct AnswerverifiedShow Answer

A recent decision regarding the Federal Reserve's impending interest rate increase is an example of a _____ topic. On the other hand, a debate on the impact of the arrival of Uber on local taxi businesses is an example of a _____ topic.

Correct AnswerverifiedShow Answer

Why is it important for students to study economics?

Correct AnswerverifiedShow Answer

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A recent decision regarding the Federal Reserve's impending interest rate increase is an example of a _ topic. On the other hand, a debate on the impact of the arrival of Uber on local taxi businesses is an example of a _ topic.

Correct Answer
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