Question 1

At the optimal or efficient level of an activity, the activity's marginal benefit must

Accepted Answer

A)  be zero.
B)  be greater than zero.
C)  equal the marginal cost of the activity.
D)  exceed the marginal cost of the activity.

Question 2

Which of the following is not one of the four broad categories of resources?

Accepted Answer

A)  labor
B)  money
C)  capital
D)  entrepreneurship
E)  land

Question 3

A theory

Accepted Answer

A)  is built on the major factors or variables that the theorist believes explain some event.
B)  is an exact representation of the real world.
C)  very rarely helps to understand the real world.
D)  can be proved, but not disproved.

Question 4

Explain why the ceteris paribus assumption is essential when assessing an economic theory.  Give an example to help support your answer.

Accepted Answer

Economists use the ceteris paribus assum...

Question 5

Which of the following is an example of a positive economic statement?

Accepted Answer

A)  The U.S. public should devote more resources to education.
B)  The poor should pay lower taxes and the rich should pay higher taxes.
C)  Soap operas should be taken off television.
D)  If you drop a ball from the top of a building, it will fall to the ground.

Question 6

"If you hadn't gone to dinner with your friends, you would have stayed home and watched television." It follows that

Accepted Answer

A)  watching television is the opportunity cost of having dinner with your friends.
B)  the price of having dinner with your friends is more than the price you would have had to pay to watch television.
C)  the opportunity cost of having dinner with your friends is lower than the opportunity cost of watching television.
D)  it is less costly to watch television than to have dinner with your friends.

Question 7

In economics, something that provides utility is called a

Accepted Answer

A)  good.
B)  bad.
C)  want.
D)  need.

Question 8

Which of the following statements is false ?

Accepted Answer

A)  To an economist, the resource land includes natural resources such as minerals, forests, water and unimproved land.
B)  To an economist, the resource capital consists of unproduced goods that can be turned into produced goods.
C)  To an economist, the resource labor consists of the physical and mental talents people contribute to the production process.
D)  To an economist, the resource entrepreneurship refers to a particular talent that some people have for organizing the resources of land, labor, and capital to produce goods, seek new business opportunities, and develop new ways of doing things.

Question 9

Every time you make a __________, you incur a(n) __________.

Accepted Answer

A)  decision; efficient effect
B)  choice; opportunity cost
C)  competitive move; price
D)  decision; mistake

Question 10

If variable X falls as a result of variable Y falling, then X and Y are

Accepted Answer

A)  directly related.
B)  negatively related.
C)  inversely related.
D)  independent.

Question 11

Describe at least three of the key concepts in economics introduced in Chapter 1 of the textbook that define how an economist views the world.

Accepted Answer

Economists view the world using a number...

Question 12

Define the term scarcity and discuss two of its consequences.

Accepted Answer

Scarcity is the condition in which our w...

Question 13

If an economist says "the higher the price of oranges, the fewer oranges individuals will buy, ceteris paribus ," this means that

Accepted Answer

A)  individuals don't like high-priced oranges.
B)  as the price of oranges rises, individuals' preferences change and they no longer like oranges as much as they once did.
C)  as the price of oranges rises, individuals' preferences do not change, nor does anything else, but individuals buy fewer oranges in response to the higher price of oranges.
D)  the higher the price of oranges, the fewer oranges individuals will buy, assuming that people have economic motives.

Question 14

Entrepreneurship is

Accepted Answer

A)  the talent for organizing the use of land, labor and capital, among other things.
B)  skill in influencing government regulators and legislators.
C)  accumulated technical knowledge in using labor and capital.
D)  knowledge of the particular natural resources to be found in a given area.

Question 15

Produced goods used as inputs for the production of other goods comprise the resource known as

Accepted Answer

A)  natural resources.
B)  services.
C)  capital.
D)  entrepreneurship.

Question 16

The coordinates of point A are 400 units of X and 40 units of Y. The coordinates of point B are 480 units of X and 60 units of Y. With X on the horizontal axis and Y on the vertical axis, the slope of the line between points A and B is

Accepted Answer

A)  + 0.25
B)  + 4.00
C)  + 0.33
D)  - 4.00
E)  - 0.25

Question 17

Variables X and Y are independent of each other. If we plot X on the horizontal axis and Y on the vertical axis, the line that connects combinations of X and Y plotted in a two-variable diagram could be

Accepted Answer

A)  parallel to the horizontal axis.
B)  downward-sloping.
C)  either upward-sloping or downward-sloping.
D)  upward-sloping.

Question 18

The study of an economy's price level is explicitly a part of

Accepted Answer

A)  macroeconomics.
B)  microeconomics.
C)  positive economics.
D)  normative economics.

Question 19

Which of the following is the best example of a possible rationing device?

Accepted Answer

A)  dollar price
B)  positive economics
C)  normative economics
D)  scarcity

Question 20

A characteristic of a 45-degree line is that

Accepted Answer

A)  any point on the line is equidistant from the two axes.
B)  it is parallel to the horizontal axis.
C)  the slope of the line is always 0.
D)  a and c

Exam 1: What Economics Is About

Variables X and Y are independent of each other. If we plot X on the horizontal axis and Y on the vertical axis, the line that connects combinations of X and Y plotted in a two-variable diagram could be

Correct AnswerverifiedShow Answer

At the optimal or efficient level of an activity, the activity's marginal benefit must

Correct AnswerverifiedShow Answer

Define the term scarcity and discuss two of its consequences.

Correct AnswerverifiedScarcity is the condition in which our w...View AnswerShow Answer

Describe at least three of the key concepts in economics introduced in Chapter 1 of the textbook that define how an economist views the world.

Correct AnswerverifiedEconomists view the world using a number...View AnswerShow Answer

A theory

Correct AnswerverifiedShow Answer

If an economist says "the higher the price of oranges, the fewer oranges individuals will buy, ceteris paribus ," this means that

Correct AnswerverifiedShow Answer

Which of the following statements is false ?

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If variable X falls as a result of variable Y falling, then X and Y are

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Which of the following is an example of a positive economic statement?

Correct AnswerverifiedShow Answer

The study of an economy's price level is explicitly a part of

Correct AnswerverifiedShow Answer

In economics, something that provides utility is called a

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Which of the following is not one of the four broad categories of resources?

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"If you hadn't gone to dinner with your friends, you would have stayed home and watched television." It follows that

Correct AnswerverifiedShow Answer

The coordinates of point A are 400 units of X and 40 units of Y. The coordinates of point B are 480 units of X and 60 units of Y. With X on the horizontal axis and Y on the vertical axis, the slope of the line between points A and B is

Correct AnswerverifiedShow Answer

A characteristic of a 45-degree line is that

Correct AnswerverifiedShow Answer

Which of the following is the best example of a possible rationing device?

Correct AnswerverifiedShow Answer

Produced goods used as inputs for the production of other goods comprise the resource known as

Correct AnswerverifiedShow Answer

Every time you make a __________, you incur a(n) __________.

Correct AnswerverifiedShow Answer

Explain why the ceteris paribus assumption is essential when assessing an economic theory. Give an example to help support your answer.

Correct AnswerverifiedEconomists use the ceteris paribus assum...View AnswerShow Answer

Entrepreneurship is

Correct AnswerverifiedShow Answer

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Scarcity is the condition in which our w...
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Economists view the world using a number...
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Every time you make a , you incur a(n) .

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Economists use the ceteris paribus assum...
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Correct Answer
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