Question 1

Compared with physical sciences, economics is more practical-hence not so concerned with theory.

Accepted Answer

A) True 
 B)False

Question 2

These data reflect three possible combinations of food and nothing that can be produced from a given set of resources.  Refer to the above data.If both clothing and food always use all inputs in the same proportion, then X must be:

Accepted Answer

A)  25.
B)  more than 25.
C)  less than 25.
D)  50.
E)  cannot not be determined from the dataF) A) and E)
G) A) and D)

Question 3

Use the following to answer questions :
Figure 1-1 
-Of the following points, which point reflects the most efficient use of available resources in relation to frontier AE in Figure 1-1?

Accepted Answer

A)  F.
B)  G.
C)  C.
D)  H.
E)  Cannot tell from the information provided.F) A) and B)
G) A) and C)

Question 4

Without higher mathematics, you can't possibly understand economics.

Accepted Answer

A) True 
 B)False

Question 5

Use the following to answer questions :
Figure 1-1 
-Which point on the production-possibility frontiers drawn in Figure 1-1 indicates no consumption goods being produced?

Accepted Answer

A)  A.
B)  B.
C)  C.
D)  D.
E)  E.F) C) and D)
G) A) and B)

Question 6

Opportunity cost:

Accepted Answer

A)  is useful when discussing the allocation of resources.
B)  refers to a next-best alternative that is not chosen when making decisions.
C)  can be used to measure the cost of something without using monetary prices.
D)  is all of the above.
E)  statements 
A)  and 
B)  only.F) C) and D)
G) A) and C)

Question 7

These data reflect three possible combinations of food and clothing that can be produced from a given set of resources.  Refer to the above data.If the PPF has its normal bowed-out shape, X will be

Accepted Answer

A)  25.
B)  more than 25.
C)  less than 25.
D)  5.
E)  cannot be determined from the data givenF) None of the above
G) A) and D)

Question 8

Mass unemployment of resources means society operates inside its production-possibility frontier.

Accepted Answer

A) True 
 B)False

Question 9

Use the following to answer questions :
Figure 1-5 
-Figure 1-5 displays the production-possibilities of two countries.Given that both countries produce five units of x, which of the following best describes country B's production of y?

Accepted Answer

A)  Less than country A's production of y.
B)  The same as country A's production of y.
C)  More than country A's production of y.
D)  Cannot be determined from the graph.
E)  None of the above.F) C) and D)
G) A) and D)

Question 10

The PPF can be used to show the choice open to society between public goods and private goods.

Accepted Answer

A) True 
 B)False

Question 11

As society produces more and more of one good, more and more of the other goods must usually be given up.

Accepted Answer

A) True 
 B)False

Question 12

Use the following to answer questions :
Figure1-3 
-In Figure 1-3, what is the opportunity cost of producing 1 unit of x in terms of y?

Accepted Answer

A)  2/3 units of y.
B)  1 units of y.
C)  3/2 units of y.
D)  Cannot be determined from the given information.
E)  None of the above.F) B) and E)
G) A) and E)

Question 13

The twin themes that form the basis of the definition of economics are:

Accepted Answer

A)  supply and demand.
B)  inflation and unemployment.
C)  scarcity and efficiency.
D)  inputs and outputs.
E)  price and quantity.F) A) and B)
G) B) and E)

Question 14

For a theory to be useful, it must be confirmed in each test case.

Accepted Answer

A) True 
 B)False

Question 15

Economic analysis:

Accepted Answer

A)  involves some simplifications of reality.
B)  is only vaguely related to reality because if it did so coincide, it would not still be theory.
C)  is impossible, because of the impossibility of a controlled experiment.
D)  if it is good theory, involves no simplification of reality.
E)  involves so much distortion of reality as to be worthless.F) A) and C)
G) D) and E)

Question 16

Subjectivity cannot be completely eliminated in the study of any science.

Accepted Answer

A) True 
 B)False

Question 17

Use the following to answer questions :
Figure 1-5 
-Consult Figure 1-5.What is Country A's cost of producing 1 unit of Y in terms of X?

Accepted Answer

A)  1 unit of X.
B)  10 units of X.
C)  5 unit of X.
D)  1/2 unit of X.
E)  Cannot be determined from the information given.F) C) and D)
G) A) and D)

Question 18

Use the following to answer questions :
Figure 1-1 
-Given the lower production-possibility frontier AE drawn in Figure 1-1, movement from point G to which point would represent an increase in efficiency with a maximal effect on future economic growth?

Accepted Answer

A)  B.
B)  C.
C)  F.
D)  G.
E)  I.F) B) and C)
G) C) and D)

Question 19

A change in market structure can push an economy below its production-possibility frontier.

Accepted Answer

A) True 
 B)False

Question 20

Of the following, economics may best be defined as the study of:

Accepted Answer

A)  how to stretch the family dollar.
B)  how to make money in the stock market.
C)  the interpretation of scarce data.
D)  how scarce resources are used to produce various goods allocated among individuals in society.
E)  why resources are as scarce as they are.F) C) and E)
G) All of the above

Exam 1: The Central Concepts of Economics

Economic analysis:

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Use the following to answer questions : Figure 1-1 -Given the lower production-possibility frontier AE drawn in Figure 1-1, movement from point G to which point would represent an increase in efficiency with a maximal effect on future economic growth?

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Subjectivity cannot be completely eliminated in the study of any science.

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Of the following, economics may best be defined as the study of:

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Mass unemployment of resources means society operates inside its production-possibility frontier.

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Use the following to answer questions : Figure 1-1 -Of the following points, which point reflects the most efficient use of available resources in relation to frontier AE in Figure 1-1?

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The twin themes that form the basis of the definition of economics are:

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As society produces more and more of one good, more and more of the other goods must usually be given up.

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Use the following to answer questions : Figure 1-5 -Consult Figure 1-5.What is Country A's cost of producing 1 unit of Y in terms of X?

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Compared with physical sciences, economics is more practical-hence not so concerned with theory.

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Opportunity cost:

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These data reflect three possible combinations of food and clothing that can be produced from a given set of resources. Refer to the above data.If the PPF has its normal bowed-out shape, X will be

Correct AnswerverifiedShow Answer

For a theory to be useful, it must be confirmed in each test case.

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Use the following to answer questions : Figure1-3 -In Figure 1-3, what is the opportunity cost of producing 1 unit of x in terms of y?

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A change in market structure can push an economy below its production-possibility frontier.

Correct AnswerverifiedShow Answer

These data reflect three possible combinations of food and nothing that can be produced from a given set of resources. Refer to the above data.If both clothing and food always use all inputs in the same proportion, then X must be:

Correct AnswerverifiedShow Answer

Without higher mathematics, you can't possibly understand economics.

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Use the following to answer questions : Figure 1-1 -Which point on the production-possibility frontiers drawn in Figure 1-1 indicates no consumption goods being produced?

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Use the following to answer questions : Figure 1-5 -Figure 1-5 displays the production-possibilities of two countries.Given that both countries produce five units of x, which of the following best describes country B's production of y?

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The PPF can be used to show the choice open to society between public goods and private goods.

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