Question 1

A graph's origin is the point of intersection of all lines or curves in the graph.

Accepted Answer

A) True 
 B)False

Question 2

Inaccurate prediction generally invalidates the use of theory in economics.

Accepted Answer

A) True 
 B)False

Question 3

Abstraction can lead to gross distortions of pertinent facts.

Accepted Answer

A) True 
 B)False

Question 4

Figure 1-1
 
-The slope of the line in Figure 1-1 is

Accepted Answer

A)  0.5.
B)  2.0.
C)  −0.5.
D)  −2.0.

Question 5

The opportunity cost of any good or service is the

Accepted Answer

A)  actual dollar cost of doing or making it.
B)  highest price that a seller can get for the item.
C)  value of the next best alternative.
D)  cost associated with a value judgment.
E)  cost of producing the good or service.

Question 6

In the United States the distribution of income is relatively unequal, and output is relatively high, while in the former Soviet Union the distribution of income was more equal and output per worker was much lower.Give one possible explanation for this phenomenon.

Accepted Answer

This problem illustrates the trade-off b...

Question 7

Opportunity cost is the value of the next best alternative to a given choice.

Accepted Answer

A) True 
 B)False

Question 8

A theory is an abstraction used often by economists to

Accepted Answer

A)  describe a problem.
B)  keep all assumptions in their proper places.
C)  explain why things work the way they do.
D)  describe a hierarchical ordering of facts.
E)  arrange variables into a graphical format.

Question 9

Which of the following is an example of a fiscal policy initiative?

Accepted Answer

A)  Lowering of interest rates.
B)  Increase in reserve requirements.
C)  Reduction in taxes.
D)  Decrease in money supply.

Question 10

Over the past century, the main factor responsible for rising living standards in the United States has been productivity growth.

Accepted Answer

A) True 
 B)False

Question 11

The use of chlorofluorocarbons in refrigerators and air conditioners is alleged to cause the destruction of the ozone layer that surrounds the earth.This layer protects humans from ultraviolet radiation, which causes skin cancer.Industry has been prohibited from using these substances in aerosol cans, but the government has been reluctant to ban their use altogether because of the serious economic consequences.Economists analyze such problems and refer to them as

Accepted Answer

A)  issues of unfairness.
B)  examples of excess abstraction.
C)  externalities.
D)  comparative advantage issues.
E)  examples of trade-offs between output and equality.

Question 12

It is impossible for both nations to gain when trading with one other.

Accepted Answer

A) True 
 B)False

Question 13

Many believe that fairness calls for higher income taxes on the wealthy.Using one of the "Ideas for Beyond the Final Exam," explain how higher taxes on the wealthy will affect output.

Accepted Answer

Greater equality comes at the expense of...

Question 14

In terms of the competing claims of equality and efficiency, in the United States we have

Accepted Answer

A)  chosen greater wage inequality for lower unemployment.
B)  chosen higher unemployment for less wage inequality.
C)  both greater wage inequality and higher unemployment.
D)  not faced a trade-off between wage inequality and unemployment.
E)  been able to choose both less wage inequality and lower unemployment.

Question 15

People generally purchase less of a commodity as its price increases.This implies that the relationship between quantity purchased and the price of the commodity must have a

Accepted Answer

A)  slope always equal to one.
B)  positive slope.
C)  zero slope.
D)  negative slope.

Question 16

Opportunity cost can best be defined as the

Accepted Answer

A)  value of what must be given up in order to acquire an item.
B)  money cost to the buyer to acquire a good or service.
C)  total value of all the other items that otherwise could be acquired.
D)  cost to the seller to produce an item.
E)  time cost to obtain the money to buy an item.

Question 17

Slope will vary along a curve (as opposed to a straight line).

Accepted Answer

A) True 
 B)False

Question 18

Carefully define the following terms, and explain their importance in economics.
a.opportunity cost
b.abstraction
c.theory
d.model
e.marginal analysis

Accepted Answer

a.Opportunity cost for a decision is the...

Question 19

A vertical line always has a slope of one.

Accepted Answer

A) True 
 B)False

Question 20

The term opportunity cost refers to the

Accepted Answer

A)  value of what is gained when a choice is made.
B)  difference between the value of what is gained and the value of what is forgone when a choice is made.
C)  value of what is forgone when a choice is made.
D)  direct costs involved in making a choice.

Exam 1: What Is Economics

A graph's origin is the point of intersection of all lines or curves in the graph.

Correct Answer
verified

A theory is an abstraction used often by economists to

Correct Answer
verified

People generally purchase less of a commodity as its price increases.This implies that the relationship between quantity purchased and the price of the commodity must have a

Correct Answer
verified

In terms of the competing claims of equality and efficiency, in the United States we have

Correct Answer
verified

Over the past century, the main factor responsible for rising living standards in the United States has been productivity growth.

Correct Answer
verified

Figure 1-1 -The slope of the line in Figure 1-1 is

Correct Answer
verified

A vertical line always has a slope of one.

Correct Answer
verified

Correct Answer
verified

Carefully define the following terms, and explain their importance in economics. a.opportunity cost b.abstraction c.theory d.model e.marginal analysis

Correct Answer
verified
a.Opportunity cost for a decision is the...
View Answer

Abstraction can lead to gross distortions of pertinent facts.

Correct Answer
verified

The term opportunity cost refers to the

Correct Answer
verified

Many believe that fairness calls for higher income taxes on the wealthy.Using one of the "Ideas for Beyond the Final Exam," explain how higher taxes on the wealthy will affect output.

Correct Answer
verified
Greater equality comes at the expense of...
View Answer

In the United States the distribution of income is relatively unequal, and output is relatively high, while in the former Soviet Union the distribution of income was more equal and output per worker was much lower.Give one possible explanation for this phenomenon.

Correct Answer
verified
This problem illustrates the trade-off b...
View Answer

The opportunity cost of any good or service is the

Correct Answer
verified

Opportunity cost is the value of the next best alternative to a given choice.

Correct Answer
verified

Inaccurate prediction generally invalidates the use of theory in economics.

Correct Answer
verified

Which of the following is an example of a fiscal policy initiative?

Correct Answer
verified

Opportunity cost can best be defined as the

Correct Answer
verified

Slope will vary along a curve (as opposed to a straight line).

Correct Answer
verified

It is impossible for both nations to gain when trading with one other.

Correct Answer
verified

Exam 1: What Is Economics

A graph's origin is the point of intersection of all lines or curves in the graph.

Correct AnswerverifiedShow Answer

A theory is an abstraction used often by economists to

Correct AnswerverifiedShow Answer

People generally purchase less of a commodity as its price increases.This implies that the relationship between quantity purchased and the price of the commodity must have a

Correct AnswerverifiedShow Answer

In terms of the competing claims of equality and efficiency, in the United States we have

Correct AnswerverifiedShow Answer

Over the past century, the main factor responsible for rising living standards in the United States has been productivity growth.

Correct AnswerverifiedShow Answer

Figure 1-1 -The slope of the line in Figure 1-1 is

Correct AnswerverifiedShow Answer

A vertical line always has a slope of one.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Carefully define the following terms, and explain their importance in economics. a.opportunity cost b.abstraction c.theory d.model e.marginal analysis

Correct Answerverifieda.Opportunity cost for a decision is the...View AnswerShow Answer

Abstraction can lead to gross distortions of pertinent facts.

Correct AnswerverifiedShow Answer

The term opportunity cost refers to the

Correct AnswerverifiedShow Answer

Many believe that fairness calls for higher income taxes on the wealthy.Using one of the "Ideas for Beyond the Final Exam," explain how higher taxes on the wealthy will affect output.

Correct AnswerverifiedGreater equality comes at the expense of...View AnswerShow Answer

In the United States the distribution of income is relatively unequal, and output is relatively high, while in the former Soviet Union the distribution of income was more equal and output per worker was much lower.Give one possible explanation for this phenomenon.

Correct AnswerverifiedThis problem illustrates the trade-off b...View AnswerShow Answer

The opportunity cost of any good or service is the

Correct AnswerverifiedShow Answer

Opportunity cost is the value of the next best alternative to a given choice.

Correct AnswerverifiedShow Answer

Inaccurate prediction generally invalidates the use of theory in economics.

Correct AnswerverifiedShow Answer

Which of the following is an example of a fiscal policy initiative?

Correct AnswerverifiedShow Answer

Opportunity cost can best be defined as the

Correct AnswerverifiedShow Answer

Slope will vary along a curve (as opposed to a straight line).

Correct AnswerverifiedShow Answer

It is impossible for both nations to gain when trading with one other.

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
a.Opportunity cost for a decision is the...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Greater equality comes at the expense of...
View Answer

Correct Answer
verified
This problem illustrates the trade-off b...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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