Question 1

In deciding whether to study for an economics quiz or go to a concert, one is confronted by the idea(s)  of

Accepted Answer

A)  scarcity and opportunity costs.
B)  money and real capital.
C)  complementary economic goals.
D)  full production.E) A) and B)
F) None of the above

Question 2

Which of the following is another way of saying "marginal benefits of an action"?

Accepted Answer

A)  benefits given up, once the action is taken
B)  unintended gains from taking the action
C)  benefits accruing to others as a result of one's action
D)  extra benefits resulting from the actionE) A) and C)
F) A) and D)

Question 3

A typical concave (bowed out from the origin)  production possibilities curve implies

Accepted Answer

A)  that economic resources are unlimited.
B)  that society must choose among various attainable combinations of goods.
C)  decreasing opportunity costs.
D)  that society is using a market system to allocate resources.E) All of the above
F) A) and B)

Question 4

Which of the following exemplifies a microeconomic question?

Accepted Answer

A)  What is the current national rate of unemployment?
B)  Is the economy experiencing a decline in the rate of inflation?
C)  Will a new type of electronic reader or tablet increase the number of buyers?
D)  Is the aggregate output in the economy greater this year than last year?E) A) and B)
F) C) and D)

Question 5

A point inside the production possibilities curve is , while a point outside the curve is .

Accepted Answer

A)  attainable; unattainable
B)  unattainable; attainable
C)  below the maximum possible; the maximum possible
D)  the maximum possible; below the maximum possibleE) A) and D)
F) A) and C)

Question 6

A point outside (to the right of)  the production possibilities curve of a nation

Accepted Answer

A)  is not attainable for this nation.
B)  is easily attainable for this nation.
C)  implies that there are unemployed resources in this nation.
D)  implies that this nation is using its resources fully.E) None of the above
F) A) and B)

Question 7

When economists talk about the capital resources in the economy, they are referring to the amount of money circulating in the economy.

Accepted Answer

A) True 
 B)False

Question 8

The statement in a newspaper that "consumer prices rose last month by 1 percent, and if this trend continues, the annual rate of inflation will be 12 percent for the year" is an example of

Accepted Answer

A)  a normative economic statement.
B)  a positive economic statement.
C)  microeconomic analysis.
D)  rational self-interest.E) None of the above
F) B) and C)

Question 9

Which of the following is the best synonym for "marginal" in economics?

Accepted Answer

A)  scarce
B)  additional
C)  basic
D)  minorE) None of the above
F) All of the above

Question 10

The study of economics is not useful for consumers, because economic analysis focuses only on businesses and the economy.

Accepted Answer

A) True 
 B)False

Question 11

Economic growth may be represented by

Accepted Answer

A)  a movement from one end of the production possibilities curve to the other.
B)  an upward-sloping production possibilities curve.
C)  a movement from a point inside to a point on the production possibilities curve.
D)  a rightward shift of the production possibilities curve.E) All of the above
F) B) and C)

Question 12

Because of increasing opportunity costs, the production possibilities curve

Accepted Answer

A)  is bowed out from (or concave to)  the origin.
B)  can be either downward- or upward-sloping.
C)  at first rises, then falls eventually.
D)  is a straight downward-sloping line.E) B) and C)
F) None of the above

Question 13

(Consider This)  The economic perspective used in customer decision making at fast-food restaurants is reflected in

Accepted Answer

A)  customers selecting the shortest line.
B)  decisions for which marginal costs exceed marginal benefits.
C)  all customer lines tending to be of different lengths.
D)  irrational purchasing of high-fat-content food.E) B) and D)
F) All of the above

Question 14

Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas.The price of an apple is $1.50 and the price of a banana is $0.75.This means that, in order to buy two bananas, this consumer must forgo

Accepted Answer

A)  1 apple.
B)  1.5 apples.
C)  0.5 apple.
D)  0.75 apple.E) A) and D)
F) A) and C)

Question 15

The fundamental economic problem faced by a society is that productive resources are so varied and versatile that it is hard to decide what to do with them.

Accepted Answer

A) True 
 B)False

Question 16

Money is not an economic resource because

Accepted Answer

A)  money, as such, does not produce anything.
B)  idle money balances do not earn interest income.
C)  it is not scarce.
D)  money is not a free gift of nature.E) A) and D)
F) None of the above

Question 17

Which pitfall to sound economic reasoning is reflected in a person's view that "pharmaceutical and oil companies are price-gouging the consumers"?

Accepted Answer

A)  faulty definition
B)  post hoc fallacy
C)  loaded terminology
D)  confusing correlation and causationE) None of the above
F) B) and C)

Question 18

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) C) and D)
F) B) and D)

Question 19

Given: the intercept for a straight line is 12.If the value of the independent variable is 3, then the value of the dependent variable would be 18.The slope of this line is

Accepted Answer

A)  1.
B)  2.
C)  3.
D)  4.E) B) and C)
F) A) and D)

Question 20

The process by which economists test hypotheses against facts to develop theories, principles, and models is called

Accepted Answer

A)  the economic perspective.
B)  the scientific method.
C)  policy economics.
D)  microeconomics.E) A) and C)
F) All of the above

Exam 1: Limits, Alternatives, and Choices

Which pitfall to sound economic reasoning is reflected in a person's view that "pharmaceutical and oil companies are price-gouging the consumers"?

Correct AnswerverifiedShow Answer

In deciding whether to study for an economics quiz or go to a concert, one is confronted by the idea(s) of

Correct AnswerverifiedShow Answer

Economic growth may be represented by

Correct AnswerverifiedShow Answer

The study of economics is not useful for consumers, because economic analysis focuses only on businesses and the economy.

Correct AnswerverifiedShow Answer

Which of the following exemplifies a microeconomic question?

Correct AnswerverifiedShow Answer

The process by which economists test hypotheses against facts to develop theories, principles, and models is called

Correct AnswerverifiedShow Answer

Which of the following is the best synonym for "marginal" in economics?

Correct AnswerverifiedShow Answer

(Consider This) The economic perspective used in customer decision making at fast-food restaurants is reflected in

Correct AnswerverifiedShow Answer

Because of increasing opportunity costs, the production possibilities curve

Correct AnswerverifiedShow Answer

A typical concave (bowed out from the origin) production possibilities curve implies

Correct AnswerverifiedShow Answer

Which of the following is another way of saying "marginal benefits of an action"?

Correct AnswerverifiedShow Answer

The fundamental economic problem faced by a society is that productive resources are so varied and versatile that it is hard to decide what to do with them.

Correct AnswerverifiedShow Answer

Money is not an economic resource because

Correct AnswerverifiedShow Answer

Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas.The price of an apple is $1.50 and the price of a banana is $0.75.This means that, in order to buy two bananas, this consumer must forgo

Correct AnswerverifiedShow Answer

A point outside (to the right of) the production possibilities curve of a nation

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A point inside the production possibilities curve is , while a point outside the curve is .

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The statement in a newspaper that "consumer prices rose last month by 1 percent, and if this trend continues, the annual rate of inflation will be 12 percent for the year" is an example of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Given: the intercept for a straight line is 12.If the value of the independent variable is 3, then the value of the dependent variable would be 18.The slope of this line is

Correct AnswerverifiedShow Answer

When economists talk about the capital resources in the economy, they are referring to the amount of money circulating in the economy.

Correct AnswerverifiedShow Answer

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