Question 1

If an inverse relationship exists between two variables, then:

Accepted Answer

A)   As one variable increases, the other decreases
B)   As one variable increases, so does the other
C)   The two variables are close substitutes for each other
D)   Both variables increase over timeE) A) and B)
F) A) and C)

Question 2

Economic principles are value judgments about what the economy should be like or the way the economic world ought to be.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is considered an economic resource?

Accepted Answer

A)   The ice cream that kids buy at the ice cream parlor
B)   The HD-TV sets in people's homes
C)   The land that is designated as national parks by the government
D)   shoppers buying stuff at the mallE) B) and D)
F) All of the above

Question 4

In a constructing the demand graph to show how the price of a good price affects how much of it the buyers will buy, the convention that economists follow is to measure price on the:

Accepted Answer

A)   Horizontal axis because it is the independent variable
B)   Vertical axis because it is the dependent variable
C)   Vertical axis even though it is the independent variable
D)   Horizontal axis even though it is the dependent variableE) C) and D)
F) B) and C)

Question 5

When studying human behavior, economists assume rational self-interest. This means that:

Accepted Answer

A)   People make decisions based on some desired outcome
B)   People are quite selfish, and are not concerned about others
C)   People always make the right decisions
D)   People have all the information they need to make a decisionE) A) and B)
F) A) and C)

Question 6

Variables X and Y in the above table are:

Accepted Answer

A)   Positively related
B)   Negatively related
C)   Not directly related
D)   Independently relatedE) None of the above
F) A) and B)

Question 7

The quantity or supply of land resources available to a nation is pretty much fixed and cannot increase over time.

Accepted Answer

A) True 
 B)False

Question 8

One basic difference between "land" and "capital" resources is that land is:

Accepted Answer

A)   Manufactured while capital is man-made
B)   Unlimited while capital is limited
C)   Natural while capital is man-made
D)   Limited while capital is unlimitedE) None of the above
F) B) and C)

Question 9

If a nation is operating at a point inside the production possibilities curve, it indicates that the nation could:

Accepted Answer

A)   Increase its production of both goods X and Y simultaneously
B)   Increase its production of one good, but only at the expense of reducing the other good
C)   Not produce any more of one of the goods X or Y
D)   Not employ any more resources because all resources are now employedE) A) and B)
F) B) and D)

Question 10

Suppose that a consumer purchases just two goods, X and Y. The Y-intercept of the budget line in this case would indicate the:

Accepted Answer

A)   Maximum dollar amount of budget that the consumers has for good Y
B)   Price that the consumer has to pay for each unit of good Y
C)   Maximum quantity of good Y that the consumer could buy with a given budget
D)   Quantity of good Y that the consumer would want to buyE) A) and B)
F) A) and C)

Question 11

If economic resources were perfectly adaptable to alternative uses, then there would be constant opportunity costs along the production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)   Scarce
B)   Additional
C)   Basic
D)   MinorE) A) and B)
F) A) and C)

Question 13

Which of the following indicates an inverse relationship between x and y?

Accepted Answer

A)   y = -3 + 5x
B)   y = 6.2x
C)   y = 7 - 0.9x
D)   y = -50E) A) and D)
F) A) and B)

Question 14

The opportunity cost of doing or getting something is best and fully defined as:

Accepted Answer

A)   The difference between the marginal cost and benefit of doing something
B)   The materials used in doing or getting something
C)   The value of the best alternative that is given up in order to do or get something
D)   The money spent in doing or getting somethingE) A) and C)
F) A) and B)

Question 15

The role of the entrepreneur in society is to:

Accepted Answer

A)   Provide capital to the firm which the management combines with labor
B)   Bring the factors of production together and take the risks of producing
C)   Control the land upon which all production takes place to get the most rent
D)   Regulate what products are considered safe to marketE) B) and C)
F) A) and D)

Question 16

Refer to the above graph. The selection of which point on the production possibilities curve is most like to result in the largest increase in economic growth over time?

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) B) and C)
F) A) and D)

Question 17

The notion of "purposeful behavior" in the economic perspective suggests that:

Accepted Answer

A)   People will tend to stick with a particular choice for a long period of time
B)   Economic analysis will provide people with a single "right" way to behave
C)   Economists do not believe that people can sometimes behave impulsively
D)   One person's choice may differ from another's if their circumstances and information differE) B) and C)
F) A) and D)

Question 18

The following graph is the production possibilities curve of a nation:  Refer to the above graph. The total opportunity cost of nine drill presses is:

Accepted Answer

A)   1 unit of bread
B)   1 unit of drill presses
C)   3 units of bread
D)   10 units of drill pressesE) C) and D)
F) A) and C)

Question 19

Lauren makes $150 a day as a bank clerk. She takes two days off work without pay, to fly to another city to attend the concert of her favorite band. The cost of transportation and lodging for the trip is $250. The cost of the concert ticket is $50. The opportunity cost of Lauren's decision to attend the concert is:

Accepted Answer

A)   $600
B)   $450
C)   $300
D)   $250E) B) and D)
F) A) and D)

Question 20

What is the best economic explanation for why a person would drop out of college to take a job or start a business?

Accepted Answer

A)   he has a good idea for starting a business
B)   he has to pay a higher tuition to attend college
C)   the expected future benefits from starting a business now are greater than the costs
D)   the opportunity cost of starting a business is high now, but will be low later in lifeE) C) and D)
F) A) and D)

Exam 1: Limits, Alternatives, and Choices

Which of the following is considered an economic resource?

Correct Answer
verified

The quantity or supply of land resources available to a nation is pretty much fixed and cannot increase over time.

Correct Answer
verified

The following graph is the production possibilities curve of a nation: Refer to the above graph. The total opportunity cost of nine drill presses is:

Correct Answer
verified

When studying human behavior, economists assume rational self-interest. This means that:

Correct Answer
verified

The notion of "purposeful behavior" in the economic perspective suggests that:

Correct Answer
verified

In a constructing the demand graph to show how the price of a good price affects how much of it the buyers will buy, the convention that economists follow is to measure price on the:

Correct Answer
verified

Which of the following indicates an inverse relationship between x and y?

Correct Answer
verified

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

Correct Answer
verified

If an inverse relationship exists between two variables, then:

Correct Answer
verified

The role of the entrepreneur in society is to:

Correct Answer
verified

Correct Answer
verified

Variables X and Y in the above table are:

Correct Answer
verified

Refer to the above graph. The selection of which point on the production possibilities curve is most like to result in the largest increase in economic growth over time?

Correct Answer
verified

What is the best economic explanation for why a person would drop out of college to take a job or start a business?

Correct Answer
verified

Suppose that a consumer purchases just two goods, X and Y. The Y-intercept of the budget line in this case would indicate the:

Correct Answer
verified

If economic resources were perfectly adaptable to alternative uses, then there would be constant opportunity costs along the production possibilities curve.

Correct Answer
verified

Economic principles are value judgments about what the economy should be like or the way the economic world ought to be.

Correct Answer
verified

One basic difference between "land" and "capital" resources is that land is:

Correct Answer
verified

The opportunity cost of doing or getting something is best and fully defined as:

Correct Answer
verified

If a nation is operating at a point inside the production possibilities curve, it indicates that the nation could:

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

Which of the following is considered an economic resource?

Correct AnswerverifiedShow Answer

The quantity or supply of land resources available to a nation is pretty much fixed and cannot increase over time.

Correct AnswerverifiedShow Answer

The following graph is the production possibilities curve of a nation: Refer to the above graph. The total opportunity cost of nine drill presses is:

Correct AnswerverifiedShow Answer

When studying human behavior, economists assume rational self-interest. This means that:

Correct AnswerverifiedShow Answer

The notion of "purposeful behavior" in the economic perspective suggests that:

Correct AnswerverifiedShow Answer

In a constructing the demand graph to show how the price of a good price affects how much of it the buyers will buy, the convention that economists follow is to measure price on the:

Correct AnswerverifiedShow Answer

Which of the following indicates an inverse relationship between x and y?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If an inverse relationship exists between two variables, then:

Correct AnswerverifiedShow Answer

The role of the entrepreneur in society is to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Variables X and Y in the above table are:

Correct AnswerverifiedShow Answer

Refer to the above graph. The selection of which point on the production possibilities curve is most like to result in the largest increase in economic growth over time?

Correct AnswerverifiedShow Answer

What is the best economic explanation for why a person would drop out of college to take a job or start a business?

Correct AnswerverifiedShow Answer

Suppose that a consumer purchases just two goods, X and Y. The Y-intercept of the budget line in this case would indicate the:

Correct AnswerverifiedShow Answer

If economic resources were perfectly adaptable to alternative uses, then there would be constant opportunity costs along the production possibilities curve.

Correct AnswerverifiedShow Answer

Economic principles are value judgments about what the economy should be like or the way the economic world ought to be.

Correct AnswerverifiedShow Answer

One basic difference between "land" and "capital" resources is that land is:

Correct AnswerverifiedShow Answer

The opportunity cost of doing or getting something is best and fully defined as:

Correct AnswerverifiedShow Answer

If a nation is operating at a point inside the production possibilities curve, it indicates that the nation could:

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

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

Correct Answer
verified

Correct Answer
verified