Question 1

According to the Gates,Winfrey,and Rodriguez illustration:

Accepted Answer

A)   Gates,Winfrey,and Rodriguez made a mistake by not attending college.
B)   Gates,Winfrey,and Rodriguez did not weigh marginal benefits against marginal costs when making decisions.
C)   Opportunity costs vary greatly between individuals and matter in decision making.
D)   Attending college has little effect on lifetime earnings.E) C) and D)
F) All of the above

Question 2

The process of developing hypotheses,testing them against facts,and using the results to construct theories is called:

Accepted Answer

A)   opportunity cost calculation.
B)   the scientific method.
C)   marginal analysis.
D)   microeconomics.E) All of the above
F) None of the above

Question 3

The following economy produces two products.  Refer to the above table.The total opportunity cost of the three units of steel is:

Accepted Answer

A)   15 units of wheat.
B)   20 units of wheat.
C)   45 units of wheat.
D)   55 units of wheat.If this economy decides to produce three units of steel,it must give up 45 units of wheat (100 - 55 = 45) .E) A) and D)
F) A) and C)

Question 4

When a state government chooses to build more roads,the required resources are no longer available for spending on public education.This dilemma illustrates the concept of:

Accepted Answer

A)   marginal analysis.
B)   full employment.
C)   full production.
D)   opportunity cost.E) A) and B)
F) A) and C)

Question 5

Which would not be considered as capital by an economist?

Accepted Answer

A)   A share of corporate stock issued by General Motors
B)   An automobile used by a salesperson at General Electric
C)   A crane used by a building contractor
D)   A razor used by a barberE) A) and B)
F) None of the above

Question 6

When modeling consumer choice,the price ratio of the two products is the:

Accepted Answer

A)   equilibrium exchange rate.
B)   slope of the budget line.
C)   point of tangency for equilibrium.
D)   demand for the two products.E) A) and C)
F) A) and B)

Question 7

Assume that for Indy,one hour of study time in economics is perfectly substitutable for an hour of study time in calculus.Indy has exams in both subjects tomorrow and he determines that if spends all of his time studying economics,he will receive scores of 96 on his economics exam and 45 on his calculus exam.If he studies only calculus,his econ score will be 81 and his calculus score 90.Based on this information and assuming that Indy has no better alternative use of his time,what is the opportunity cost of improving his econ score by one (1) point?

Accepted Answer

A)   1 point on his calculus exam.
B)   1/3 point on his calculus exam.
C)   3 points on his calculus exam.
D)   The opportunity cost cannot be determined with the information given.E) B) and C)
F) A) and D)

Question 8

A point on the frontier of the production possibilities curve is:

Accepted Answer

A)   attainable and the economy is efficient.
B)   attainable,but the economy is inefficient.
C)   unattainable and the economy is inefficient.
D)   unattainable,but the economy is efficient.E) All of the above
F) A) and D)

Question 9

Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to:

Accepted Answer

A)   shift inward or to the left.
B)   shift outward or to the right.
C)   become horizontal.
D)   become vertical.E) B) and D)
F) A) and B) B

Question 10

The production possibilities table below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy.  Refer to the table above.What is the opportunity cost of producing the first two units of capital goods?

Accepted Answer

A)   4 units of consumer goods
B)   5 units of consumer goods
C)   9 units of consumer goods
D)   13 units of consumer goodsIncreasing capital goods from Point A to C requires giving up 9 (22 - 13 = 9) consumer goods.E) B) and D)
F) A) and D)

Question 11

The alternative combinations of two goods that a consumer can purchase with a given money income is:

Accepted Answer

A)   a production possibilities curve.
B)   a demand curve.
C)   consumer equilibrium.
D)   a budget line.E) A) and B)
F) None of the above

Question 12

Which question is an illustration of a macroeconomic question?

Accepted Answer

A)   Is a business unresponsive to the demands of consumers?
B)   Is a consumer boycott an effective means of reducing product prices?
C)   Is the level of employment in the economy sensitive to the level of consumer spending?
D)   Are oil companies engaging in a rip-off of consumers by charging exorbitantly high prices for gasoline?E) B) and D)
F) A) and D)

Question 13

Which is a factor of production?

Accepted Answer

A)   Money
B)   Interest
C)   Rent
D)   CapitalE) A) and D)
F) C) and D) D

Question 14

Microeconomics focuses on:

Accepted Answer

A)   the workings of the whole economy or large sectors of it.
B)   the individual units that make up the whole of the economy.
C)   issues such as unemployment and inflation.
D)   total output and the general level of prices.E) A) and B)
F) A) and C)

Question 15

All of the following would affect the position of a country's production possibilities curve,except:

Accepted Answer

A)   the quantity of labor.
B)   the level of unemployment.
C)   the amount of the capital stock.
D)   technological progress.E) A) and C)
F) A) and B)

Question 16

1 was unchanged,P2 increased,income decreased. B)  P1 decreased,P2 increased,income was unchanged. C)  P1 increased,P2 decreased,income was unchanged. D)  P1 decreased,P2 was unchanged,income increased." class="answers-bank-image d-inline" rel="preload" > In the graph above,A is the initial budget line and B is the new budget line.Which of the following changes might have occurred?

Accepted Answer

A)   P1 was unchanged,P2 increased,income decreased.
B)   P1 decreased,P2 increased,income was unchanged.
C)   P1 increased,P2 decreased,income was unchanged.
D)   P1 decreased,P2 was unchanged,income increased.E) B) and C)
F) All of the above

Question 17

Which situation would most likely shift the production possibilities curve for a nation in an outward direction?

Accepted Answer

A)   A decrease in the quality of products
B)   An increase in the supply of resources
C)   A decrease in the state of technology
D)   An increase in the amount of discriminationE) A) and B)
F) B) and D)

Question 18

The "war on terror" waged by the United States:

Accepted Answer

A)   shifted the production possibilities curve to the right.
B)   shifted the production possibilities curve inward.
C)   caused the United States to shift from "defense goods" to "civilian goods."
D)   caused the perceived marginal benefit curve for "defense goods" to shift out.E) B) and D)
F) A) and B)

Question 19

From an economic perspective,when a consumer decides to buy more life insurance,the consumer has most likely concluded that the:

Accepted Answer

A)   marginal costs of more insurance coverage have increased.
B)   marginal benefits of more insurance coverage have decreased.
C)   marginal benefits of more insurance coverage are greater than the marginal costs.
D)   opportunity costs of more insurance coverage are greater than the payment for more insurance coverage.E) All of the above
F) C) and D) C

Question 20

Henry wants to buy a book.The economic perspective suggests that Henry will buy the book if:

Accepted Answer

A)   the book will give him utility.
B)   his income is high.
C)   the marginal cost of the book is greater than its marginal benefit.
D)   the marginal benefit of the book is greater than its marginal cost.E) A) and B)
F) A) and C)

Exam 1: Limits, Alternatives, and Choices

According to the Gates,Winfrey,and Rodriguez illustration:

Correct Answer
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The process of developing hypotheses,testing them against facts,and using the results to construct theories is called:

Correct Answer
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The following economy produces two products. Refer to the above table.The total opportunity cost of the three units of steel is:

Correct Answer
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When a state government chooses to build more roads,the required resources are no longer available for spending on public education.This dilemma illustrates the concept of:

Correct Answer
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Which would not be considered as capital by an economist?

Correct Answer
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When modeling consumer choice,the price ratio of the two products is the:

Correct Answer
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Correct Answer
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A point on the frontier of the production possibilities curve is:

Correct Answer
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Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to:

Correct Answer
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B

The production possibilities table below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the table above.What is the opportunity cost of producing the first two units of capital goods?

Correct Answer
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The alternative combinations of two goods that a consumer can purchase with a given money income is:

Correct Answer
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Which question is an illustration of a macroeconomic question?

Correct Answer
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Which is a factor of production?

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D

Microeconomics focuses on:

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All of the following would affect the position of a country's production possibilities curve,except:

Correct Answer
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In the graph above,A is the initial budget line and B is the new budget line.Which of the following changes might have occurred?

Correct Answer
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Which situation would most likely shift the production possibilities curve for a nation in an outward direction?

Correct Answer
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The "war on terror" waged by the United States:

Correct Answer
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From an economic perspective,when a consumer decides to buy more life insurance,the consumer has most likely concluded that the:

Correct Answer
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C

Henry wants to buy a book.The economic perspective suggests that Henry will buy the book if:

Correct Answer
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Exam 1: Limits, Alternatives, and Choices

According to the Gates,Winfrey,and Rodriguez illustration:

Correct AnswerverifiedShow Answer

The process of developing hypotheses,testing them against facts,and using the results to construct theories is called:

Correct AnswerverifiedShow Answer

The following economy produces two products. Refer to the above table.The total opportunity cost of the three units of steel is:

Correct AnswerverifiedShow Answer

When a state government chooses to build more roads,the required resources are no longer available for spending on public education.This dilemma illustrates the concept of:

Correct AnswerverifiedShow Answer

Which would not be considered as capital by an economist?

Correct AnswerverifiedShow Answer

When modeling consumer choice,the price ratio of the two products is the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A point on the frontier of the production possibilities curve is:

Correct AnswerverifiedShow Answer

Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to:

Correct AnswerverifiedB

The production possibilities table below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the table above.What is the opportunity cost of producing the first two units of capital goods?

Correct AnswerverifiedShow Answer

The alternative combinations of two goods that a consumer can purchase with a given money income is:

Correct AnswerverifiedShow Answer

Which question is an illustration of a macroeconomic question?

Correct AnswerverifiedShow Answer

Which is a factor of production?

Correct AnswerverifiedD

Microeconomics focuses on:

Correct AnswerverifiedShow Answer

All of the following would affect the position of a country's production possibilities curve,except:

Correct AnswerverifiedShow Answer

In the graph above,A is the initial budget line and B is the new budget line.Which of the following changes might have occurred?

Correct AnswerverifiedShow Answer

Which situation would most likely shift the production possibilities curve for a nation in an outward direction?

Correct AnswerverifiedShow Answer

The "war on terror" waged by the United States:

Correct AnswerverifiedShow Answer

From an economic perspective,when a consumer decides to buy more life insurance,the consumer has most likely concluded that the:

Correct AnswerverifiedC

Henry wants to buy a book.The economic perspective suggests that Henry will buy the book if:

Correct AnswerverifiedShow Answer

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B

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D

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C

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