Question 1

Answer the question on the basis of the following five data sets, wherein it is assumed that the variable shown on the left is the independent variable and the one on the right is the dependent variable. Assume in graphing these data that the independent variable is shown on the horizontal axis and the dependent variable on the vertical axis.  Refer to the data sets. The equation for data set 5 is

Accepted Answer

A)   V = .5Y.
B)   U = -.5V.
C)   U = V.
D)   V = 2U.E) A) and D)
F) B) and C)

Question 2

Which of the following statements is an explanation for the law of increasing opportunity costs?

Accepted Answer

A)   Many economic resources are better at producing one product rather than another.
B)   The economy is employing all of its available resources.
C)   In any economy, the state of technology is changing and resources are variable.
D)   The economy is achieving productive efficiency by producing goods at the least cost.E) A) and B)
F) A) and C)

Question 3

Which of the following is associated with macroeconomics?

Accepted Answer

A)   an examination of the incomes of professional athletes
B)   an empirical investigation of the general price level and unemployment rates since 1990
C)   a study of the trend of pecan prices since the Second World War
D)   a case study of pricing and production in the textbook industryE) All of the above
F) C) and D)

Question 4

Which of the following is not a main function of the entrepreneur?

Accepted Answer

A)   to make routine pricing decisions
B)   to innovate
C)   to assume the risk of economic losses
D)   to make strategic business decisionsE) All of the above
F) A) and B)

Question 5

The slope of a budget line reflects the

Accepted Answer

A)   desirability of the two products.
B)   price ratio of the two products.
C)   amount of the consumer's income.
D)   utility ratio of the two products.E) A) and C)
F) B) and D)

Question 6

Answer the question on the basis of the following production possibilities tables for two countries, North Cantina and South Cantina.  Refer to the tables. If North Cantina is producing at production alternative B, the opportunity cost of the eleventh unit of consumer goods will be

Accepted Answer

A)   10 units of capital goods.
B)   ¼ of a unit of capital goods.
C)   8 units of capital goods.
D)   ⅛ of a unit of capital goods.E) B) and C)
F) A) and D)

Question 7

If we are considering the relationship between two variables and release one of the other-things-equal assumptions, we would expect

Accepted Answer

A)   the relationship to change from direct to inverse.
B)   the line representing that relationship on a graph to shift.
C)   the data points to have a tighter fit to the line representing the relationship.
D)   the relationship to change from inverse to direct.E) B) and C)
F) A) and D)

Question 8

A reduction in the unemployment rate will cause the nation's production possibilities curve to shift outward.

Accepted Answer

A) True 
 B)False

Question 9

Economics is the social science concerned with the best use of scarce resources to achieve maximum satisfaction of economic wants.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a land resource?

Accepted Answer

A)   a farmer
B)   an oil drilling rig
C)   a machine for detecting earthquakes
D)   natural gasE) A) and B)
F) A) and C)

Question 11

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) All of the above

Question 12

An economic model is an ideal or utopian type of economy that society should strive to obtain through economic policy.

Accepted Answer

A) True 
 B)False

Question 13

Another way of saying "ceteris paribus" is

Accepted Answer

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

Question 14

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) All of the above
F) A) and D)

Question 15

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities schedule.  Given the production possibilities schedule above, a combination of 3 tanks and 350 autos

Accepted Answer

A)   illustrates the trade-off between tanks and autos.
B)   is attainable but entails some unemployment or inefficient use of society's resources.
C)   cannot be produced by society, given its current resources and production technology.
D)   is not attainable because this combination is not listed in the schedule.E) All of the above
F) A) and B)

Question 16

If economic theories are solidly based on relevant facts, then appropriate economic policy becomes obvious and uncontroversial.

Accepted Answer

A) True 
 B)False

Question 17

Consider an economy that is producing inside its production possibilities curve. This economy could move closer toward its production possibilities curve by

Accepted Answer

A)   distributing incomes more equally.
B)   employing more of its available resources.
C)   increasing the levels of wages and prices.
D)   acquiring additional resources.E) B) and D)
F) B) and C)

Question 18

Assume a household would consume $100 worth of goods and services per week if its weekly income were zero and would spend an additional $80 per week for each $100 of additional income. Letting C represent consumption and Y represent income, the equation that summarizes this relationship is

Accepted Answer

A)   C = 80 + 100Y.
B)   C = 100 + .8Y.
C)   C = 100 + 80Y.
D)   C = 80 + .1Y.E) A) and B)
F) None of the above

Question 19

Suppose an economist says that "other things equal, the lower the price of bananas, the greater the amount of bananas purchased." This statement indicates that

Accepted Answer

A)   the quantity of bananas purchased determines the price of bananas.
B)   all factors other than the price of bananas (for example, consumer tastes and incomes)  are assumed to be constant.
C)   everyone will buy more bananas when the price falls.
D)   one cannot generalize about the relationship between the price of bananas and the quantity purchased.E) B) and D)
F) B) and C)

Question 20

(Consider This)  A direct cost of going to college is

Accepted Answer

A)   tuition, while an indirect cost (opportunity cost)  is books and other supplies.
B)   forgone income while in college, while an indirect cost (opportunity cost)  is tuition.
C)   tuition, while an indirect cost (opportunity cost)  is forgone income while in college.
D)   books and supplies, while an indirect cost (opportunity cost)  is food and housing.E) None of the above
F) All of the above

Exam 1: Limits, Alternatives, and Choices

If we are considering the relationship between two variables and release one of the other-things-equal assumptions, we would expect

Correct Answer
verified

An economic model is an ideal or utopian type of economy that society should strive to obtain through economic policy.

Correct Answer
verified

Consider an economy that is producing inside its production possibilities curve. This economy could move closer toward its production possibilities curve by

Correct Answer
verified

Which of the following statements is an explanation for the law of increasing opportunity costs?

Correct Answer
verified

Economics is the social science concerned with the best use of scarce resources to achieve maximum satisfaction of economic wants.

Correct Answer
verified

Which of the following is associated with macroeconomics?

Correct Answer
verified

Assume a household would consume $100 worth of goods and services per week if its weekly income were zero and would spend an additional $80 per week for each $100 of additional income. Letting C represent consumption and Y represent income, the equation that summarizes this relationship is

Correct Answer
verified

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 Answer
verified

Slopes of lines are especially important in economics because

Correct Answer
verified

Which of the following is a land resource?

Correct Answer
verified

Suppose an economist says that "other things equal, the lower the price of bananas, the greater the amount of bananas purchased." This statement indicates that

Correct Answer
verified

Correct Answer
verified

Another way of saying "ceteris paribus" is

Correct Answer
verified

A reduction in the unemployment rate will cause the nation's production possibilities curve to shift outward.

Correct Answer
verified

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities schedule. Given the production possibilities schedule above, a combination of 3 tanks and 350 autos

Correct Answer
verified

The slope of a budget line reflects the

Correct Answer
verified

Answer the question on the basis of the following production possibilities tables for two countries, North Cantina and South Cantina. Refer to the tables. If North Cantina is producing at production alternative B, the opportunity cost of the eleventh unit of consumer goods will be

Correct Answer
verified

(Consider This) A direct cost of going to college is

Correct Answer
verified

If economic theories are solidly based on relevant facts, then appropriate economic policy becomes obvious and uncontroversial.

Correct Answer
verified

Which of the following is not a main function of the entrepreneur?

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

If we are considering the relationship between two variables and release one of the other-things-equal assumptions, we would expect

Correct AnswerverifiedShow Answer

An economic model is an ideal or utopian type of economy that society should strive to obtain through economic policy.

Correct AnswerverifiedShow Answer

Consider an economy that is producing inside its production possibilities curve. This economy could move closer toward its production possibilities curve by

Correct AnswerverifiedShow Answer

Which of the following statements is an explanation for the law of increasing opportunity costs?

Correct AnswerverifiedShow Answer

Economics is the social science concerned with the best use of scarce resources to achieve maximum satisfaction of economic wants.

Correct AnswerverifiedShow Answer

Which of the following is associated with macroeconomics?

Correct AnswerverifiedShow Answer

Assume a household would consume $100 worth of goods and services per week if its weekly income were zero and would spend an additional $80 per week for each $100 of additional income. Letting C represent consumption and Y represent income, the equation that summarizes this relationship is

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

Slopes of lines are especially important in economics because

Correct AnswerverifiedShow Answer

Which of the following is a land resource?

Correct AnswerverifiedShow Answer

Suppose an economist says that "other things equal, the lower the price of bananas, the greater the amount of bananas purchased." This statement indicates that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Another way of saying "ceteris paribus" is

Correct AnswerverifiedShow Answer

A reduction in the unemployment rate will cause the nation's production possibilities curve to shift outward.

Correct AnswerverifiedShow Answer

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities schedule. Given the production possibilities schedule above, a combination of 3 tanks and 350 autos

Correct AnswerverifiedShow Answer

The slope of a budget line reflects the

Correct AnswerverifiedShow Answer

Answer the question on the basis of the following production possibilities tables for two countries, North Cantina and South Cantina. Refer to the tables. If North Cantina is producing at production alternative B, the opportunity cost of the eleventh unit of consumer goods will be

Correct AnswerverifiedShow Answer

(Consider This) A direct cost of going to college is

Correct AnswerverifiedShow Answer

If economic theories are solidly based on relevant facts, then appropriate economic policy becomes obvious and uncontroversial.

Correct AnswerverifiedShow Answer

Which of the following is not a main function of the entrepreneur?

Correct AnswerverifiedShow Answer

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