Question 1

Positive statements are expressions of value judgments.

Accepted Answer

A) True 
 B)False

Question 2

What does "there is no such thing as a free lunch" mean in economics?

Accepted Answer

A)   Scarce resources are used up to provide "freebies" and giveaways.
B)   Sometimes people may take friends out to lunch and pay for them.
C)   All items in the lunch menu have specific prices.
D)   Products only have value because people are willing to pay for them.E) None of the above
F) All of the above

Question 3

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. Which of the data sets would graph as an upsloping line?

Accepted Answer

A)   1 only
B)   1, 2, and 3 only
C)   4 and 5 only
D)   1, 2, and 5 onlyE) A) and D)
F) None of the above

Question 4

Which of the following is a positive statement?

Accepted Answer

A)   A humidity level of 90 percent is too high.
B)   It is too hot to run outside when the temperature exceeds 80 degrees.
C)   The temperature is 92 degrees today.
D)   Summer evenings are nice when it cools off to around 70 degrees.E) C) and D)
F) All of the above

Question 5

The slope of a straight line can be determined by

Accepted Answer

A)   comparing the absolute horizontal change to the absolute vertical change between two points on the line.
B)   comparing the absolute vertical change to the absolute horizontal change between two points on the line.
C)   taking the reciprocal of the vertical intercept.
D)   comparing the percentage vertical change to the percentage horizontal change between two points on the line.E) B) and D)
F) A) and B)

Question 6

The Latin term "ceteris paribus" means

Accepted Answer

A)   that if event A precedes event B, A has caused B.
B)   that economics deals with facts, not values.
C)   other things equal.
D)   prosperity inevitably follows recession.E) All of the above
F) A) and B)

Question 7

(Consider This)  An exception to the advice "go to college, stay in college, and earn a degree" occurs when

Accepted Answer

A)   tuition expenses are high and rising.
B)   the opportunity cost of attending college is extraordinarily high.
C)   the price of textbooks is high and rising.
D)   the economy is growing rapidly and jobs are plentiful.E) B) and D)
F) B) and C)

Question 8

Products and services are scarce because resources are scarce.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following illustrates a macroeconomic question?

Accepted Answer

A)   Should the salaries of financial executives be regulated by the government?
B)   Are increasing wage demands by workers contributing to price inflation?
C)   What is the least costly way to produce automobiles and trucks in the United States?
D)   Will the introduction of a new computer chip change the demand for computers?E) B) and D)
F) A) and B)

Question 10

(Last Word)  The post hoc fallacy and the correlation problem both relate to

Accepted Answer

A)   the calculation of marginal costs and marginal benefits of any economic activity.
B)   the issue of determining causation.
C)   the frequent inability of households and businesses to behave rationally.
D)   the trade-off problem associated with competing goals.E) A) and D)
F) B) and D)

Question 11

The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 - .02Qd, where Qd is the amount of pizzas purchased per week and P is the price of pizzas. On the basis of this information, we can say that

Accepted Answer

A)   if pizzas were free, people would consume 800 per week.
B)   more pizzas will be purchased at a high price than at a low price.
C)   if the price of pizzas is $6, then 150 will be purchased.
D)   50 fewer pizzas will be purchased per week for every $1 increase in price.E) B) and C)
F) B) and D)

Question 12

On a production possibilities curve, the single optimal or best combination of output for any society

Accepted Answer

A)   is at a point near the top of the curve.
B)   is at the precise midpoint of the curve.
C)   is at a point near the bottom of the curve.
D)   depends upon the preferences of society.E) B) and C)
F) A) and C)

Question 13

If A decreases, then B will also decrease. The graph relating the two variables A and B is

Accepted Answer

A)   vertical.
B)   downward-sloping.
C)   upward-sloping.
D)   horizontal.E) B) and C)
F) A) and B)

Question 14

An assumption is usually made in a two-axes (or two-dimensional) graph that, aside from the two variables under study, the influence of all other variables or factors is assumed to be constant.

Accepted Answer

A) True 
 B)False

Question 15

Kelly works at an ice cream shop and observes that the number of people buying ice cream varies greatly from day to day. For a couple of weeks, she has recorded the number of people at the shop each day, as well as the daily temperature. If Kelly is using the scientific method to better understand ice cream buying habits, her next step is to

Accepted Answer

A)   conclude definitively that people buy more ice cream when the temperature rises.
B)   state her findings as a well-tested economic principle.
C)   use the observed data to form a hypothesis about ice cream buying behavior.
D)   throw out the data if it does not show a perfect relationship between buying habits and the other information she has collected.E) A) and B)
F) B) and D)

Question 16

A well-tested economic theory is often called

Accepted Answer

A)   a hypothesis.
B)   a prototype.
C)   a principle.
D)   an anomaly.E) C) and D)
F) B) and C)

Question 17

Which of the following most closely relates to the idea of opportunity costs?

Accepted Answer

A)   trade-offs
B)   economic growth
C)   technological change
D)   capitalismE) A) and C)
F) C) and D)

Question 18

Which of the following will not produce an outward shift of the production possibilities curve?

Accepted Answer

A)   upgrading the quality of a nation's human resources
B)   reducing unemployment
C)   increasing the quantity of a society's labor force
D)   improving a society's technological knowledgeE) None of the above
F) A) and D)

Question 19

Which of the following is one of the simplifying assumptions made in constructing a production possibilities curve?

Accepted Answer

A)   The state of technology is constantly changing.
B)   A wide variety of products are produced.
C)   Resources are fully employed and are used in least-cost methods of production.
D)   Quantities of available resources in the economy vary as we move from one point on the curve to another.E) All of the above
F) B) and D)

Question 20

Joe sold gold coins for $1,000 that he bought a year ago for $1,000. He says, "At least I didn't lose any money on my financial investment." His economist friend points out that in effect he did lose money because he could have received a 3 percent return on the $1,000 if he had bought a bank certificate of deposit instead of the coins. The economist's analysis in this case incorporates the idea of

Accepted Answer

A)   opportunity costs.
B)   marginal benefits that exceed marginal costs.
C)   imperfect information.
D)   normative economics.E) B) and C)
F) A) and C)

Exam 1: Limits, Alternatives, and Choices

Correct Answer
verified

Which of the following is a positive statement?

Correct Answer
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Which of the following illustrates a macroeconomic question?

Correct Answer
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If A decreases, then B will also decrease. The graph relating the two variables A and B is

Correct Answer
verified

A well-tested economic theory is often called

Correct Answer
verified

An assumption is usually made in a two-axes (or two-dimensional) graph that, aside from the two variables under study, the influence of all other variables or factors is assumed to be constant.

Correct Answer
verified

Which of the following is one of the simplifying assumptions made in constructing a production possibilities curve?

Correct Answer
verified

On a production possibilities curve, the single optimal or best combination of output for any society

Correct Answer
verified

The slope of a straight line can be determined by

Correct Answer
verified

Correct Answer
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Positive statements are expressions of value judgments.

Correct Answer
verified

What does "there is no such thing as a free lunch" mean in economics?

Correct Answer
verified

Which of the following will not produce an outward shift of the production possibilities curve?

Correct Answer
verified

Products and services are scarce because resources are scarce.

Correct Answer
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(Last Word) The post hoc fallacy and the correlation problem both relate to

Correct Answer
verified

Correct Answer
verified

The Latin term "ceteris paribus" means

Correct Answer
verified

Which of the following most closely relates to the idea of opportunity costs?

Correct Answer
verified

The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 - .02Q_d, where Q_dis the amount of pizzas purchased per week and P is the price of pizzas. On the basis of this information, we can say that

Correct Answer
verified

(Consider This) An exception to the advice "go to college, stay in college, and earn a degree" occurs when

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

Correct AnswerverifiedShow Answer

Which of the following is a positive statement?

Correct AnswerverifiedShow Answer

Which of the following illustrates a macroeconomic question?

Correct AnswerverifiedShow Answer

If A decreases, then B will also decrease. The graph relating the two variables A and B is

Correct AnswerverifiedShow Answer

A well-tested economic theory is often called

Correct AnswerverifiedShow Answer

An assumption is usually made in a two-axes (or two-dimensional) graph that, aside from the two variables under study, the influence of all other variables or factors is assumed to be constant.

Correct AnswerverifiedShow Answer

Which of the following is one of the simplifying assumptions made in constructing a production possibilities curve?

Correct AnswerverifiedShow Answer

On a production possibilities curve, the single optimal or best combination of output for any society

Correct AnswerverifiedShow Answer

The slope of a straight line can be determined by

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Positive statements are expressions of value judgments.

Correct AnswerverifiedShow Answer

What does "there is no such thing as a free lunch" mean in economics?

Correct AnswerverifiedShow Answer

Which of the following will not produce an outward shift of the production possibilities curve?

Correct AnswerverifiedShow Answer

Products and services are scarce because resources are scarce.

Correct AnswerverifiedShow Answer

(Last Word) The post hoc fallacy and the correlation problem both relate to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Latin term "ceteris paribus" means

Correct AnswerverifiedShow Answer

Which of the following most closely relates to the idea of opportunity costs?

Correct AnswerverifiedShow Answer

The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 - .02Qd, where Qd is the amount of pizzas purchased per week and P is the price of pizzas. On the basis of this information, we can say that

Correct AnswerverifiedShow Answer

(Consider This) An exception to the advice "go to college, stay in college, and earn a degree" occurs when

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 - .02Q_d, where Q_dis the amount of pizzas purchased per week and P is the price of pizzas. On the basis of this information, we can say that

Correct Answer
verified

Correct Answer
verified