Question 1

Which of the following is a question that an economist would use to break down a problem?

Accepted Answer

A)   Will the average income per person for the society increase?
B)   Does the decision maker have a track record of being rational?
C)   Is there a scarce resource that will be allocated?
D)   How might one person feel about the solution to the problem?E) A) and C)
F) None of the above

Question 2

Which of the following is not a way we sometimes confuse correlation and causation?

Accepted Answer

A)   Correlation without causation
B)   Omitted variables
C)   Reverse causality
D)   Non-linear relationshipsE) B) and C)
F) All of the above

Question 3

The extra cost associated with producing or consuming the next unit is called the:

Accepted Answer

A)   variable cost.
B)   marginal cost.
C)   utility cost.
D)   sunk cost.E) A) and B)
F) B) and D)

Question 4

After purchasing a coffee cup from your local gas station for $5.00, you can always refill your cup for $0.50. The sunk cost of the coffee purchased at the gas station is:

Accepted Answer

A)   $0.50.
B)   $5.00.
C)   $10.00.
D)   $5.50.E) All of the above
F) None of the above

Question 5

Which of the following is a topic studied in macroeconomics?

Accepted Answer

A)   Gasoline price changes
B)   Unemployment rates over time
C)   Taxation strategies of major corporations
D)   Consumer participation in FacebookE) A) and D)
F) B) and D)

Question 6

The greatest constraint faced by banks considering the alternative of lending to Bangladeshi villagers is:

Accepted Answer

A)   not having qualified loan officers to make the loans.
B)   having limited funds available for loans.
C)   not being able to determine appropriate currency exchange rates.
D)   counterfeit Carfax reports that make it difficult to properly assess collateral.E) B) and D)
F) B) and C)

Question 7

Something is valuable if:

Accepted Answer

A)   it does not involve a trade-off.
B)   it is a good or a service.
C)   someone wants it.
D)   it was made using resources.E) A) and C)
F) C) and D)

Question 8

As corn prices rise, salsa sales tend to fall. This an example of:

Accepted Answer

A)   a positive correlation.
B)   inferior goods.
C)   two uncorrelated events.
D)   a negative correlation.E) A) and B)
F) A) and C)

Question 9

Both minivan sales and birth rates are on the rise. The conclusion that minivans cause people to have children is an example of making the mistake of:

Accepted Answer

A)   extrapolation.
B)   omitted variables.
C)   correlation without causation.
D)   reverse causality.E) B) and C)
F) A) and D)

Question 10

A movie costs you and your friend $15 each. After one hour of watching the movie, you have struggled to stay awake while your friend has been on Facebook and is also bored with the movie. You suggest that you and your friend leave the movie and go to the park. Your friend responds by stating that he is not going to waste his $15 that was previously spent on the movie. Your friend is considering:

Accepted Answer

A)   an opportunity cost of the movie.
B)   the sunk cost.
C)   the marginal benefit.
D)   Total costsE) A) and D)
F) B) and D)

Question 11

Which of the following is a positive incentive?

Accepted Answer

A)   Discover credit cards offer 0 percent balance transfer rates for someone to open a new account.
B)   McDonalds decides to offer a white chocolate mocha.
C)   A school teacher decides to retire and focus on gardening.
D)   A business decides to leave the industry.E) A) and D)
F) All of the above

Question 12

Which of the following statements best describes the study of economics?

Accepted Answer

A)   Economics studies how the Federal Reserve handles fluctuation in business cycles.
B)   Economics studies how individuals and groups manage scarce resources.
C)   Economics studies how people maximize returns in the stock market.
D)   Economics studies how governments determine appropriate tax rates.E) B) and C)
F) None of the above

Question 13

Trade-offs are:

Accepted Answer

A)   associated with every decision.
B)   do not exist if we receive something for free.
C)   always result in market-failure.
D)   can be avoided through economic planning.E) B) and C)
F) All of the above

Question 14

Which of the following is not considered an economic resource?

Accepted Answer

A)   Real estate
B)   A personal relationship
C)   Cash
D)   These are all examples of a resource.E) A) and B)
F) A) and C)

Question 15

Many theaters sell empty seats at a deep discount just before show time. What economic concept is displayed by this behavior?

Accepted Answer

A)   Consumer demand
B)   Sunk costs
C)   Price optimization
D)   Thinking at the marginE) A) and D)
F) A) and C)

Question 16

Economic analysis requires us to combine:

Accepted Answer

A)   unlimited resources with limited wants.
B)   theory with observations.
C)   developed and developing nations.
D)   republicans and democrats.E) C) and D)
F) All of the above

Question 17

The economic concept of scarcity refers to the fact that:

Accepted Answer

A)   the United States will always have a battle to fight hunger.
B)   resources are often wasted and shortages are often the result.
C)   income must be redistributed through taxation in order to address income disparity.
D)   limited resources require economies to make choices among production alternatives.E) A) and B)
F) A) and C)

Question 18

When speed boat sales rise, the city of Las Vegas takes in more revenue. The omitted common variable between these outcomes is likely to be:

Accepted Answer

A)   life jacket sales.
B)   prices of Las Vegas flights.
C)   childhood obesity.
D)   increased disposable income.E) None of the above
F) C) and D)

Question 19

Which actor in the simplified circular flow model is on the supply side of the factor market?

Accepted Answer

A)   Firms
B)   Households
C)   Market for goods and services
D)   GovernmentE) A) and C)
F) A) and D)

Question 20

Purchasing a smart phone data plan, premium movie channels, and University of Alabama football season tickets results in you having to drop your health insurance plan. This can be described as:

Accepted Answer

A)   home field advantage
B)   a trade-off
C)   irrational decision making
D)   healthy livingE) B) and C)
F) All of the above

Exam 1: Economics and Life

Which actor in the simplified circular flow model is on the supply side of the factor market?

Correct Answer
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Which of the following is a question that an economist would use to break down a problem?

Correct Answer
verified

The greatest constraint faced by banks considering the alternative of lending to Bangladeshi villagers is:

Correct Answer
verified

Which of the following statements best describes the study of economics?

Correct Answer
verified

After purchasing a coffee cup from your local gas station for $5.00, you can always refill your cup for $0.50. The sunk cost of the coffee purchased at the gas station is:

Correct Answer
verified

When speed boat sales rise, the city of Las Vegas takes in more revenue. The omitted common variable between these outcomes is likely to be:

Correct Answer
verified

Which of the following is a topic studied in macroeconomics?

Correct Answer
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Which of the following is not a way we sometimes confuse correlation and causation?

Correct Answer
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Which of the following is a positive incentive?

Correct Answer
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Which of the following is not considered an economic resource?

Correct Answer
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Trade-offs are:

Correct Answer
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Both minivan sales and birth rates are on the rise. The conclusion that minivans cause people to have children is an example of making the mistake of:

Correct Answer
verified

As corn prices rise, salsa sales tend to fall. This an example of:

Correct Answer
verified

Something is valuable if:

Correct Answer
verified

Purchasing a smart phone data plan, premium movie channels, and University of Alabama football season tickets results in you having to drop your health insurance plan. This can be described as:

Correct Answer
verified

Many theaters sell empty seats at a deep discount just before show time. What economic concept is displayed by this behavior?

Correct Answer
verified

The extra cost associated with producing or consuming the next unit is called the:

Correct Answer
verified

The economic concept of scarcity refers to the fact that:

Correct Answer
verified

Correct Answer
verified

Economic analysis requires us to combine:

Correct Answer
verified

Exam 1: Economics and Life

Which actor in the simplified circular flow model is on the supply side of the factor market?

Correct AnswerverifiedShow Answer

Which of the following is a question that an economist would use to break down a problem?

Correct AnswerverifiedShow Answer

The greatest constraint faced by banks considering the alternative of lending to Bangladeshi villagers is:

Correct AnswerverifiedShow Answer

Which of the following statements best describes the study of economics?

Correct AnswerverifiedShow Answer

After purchasing a coffee cup from your local gas station for $5.00, you can always refill your cup for $0.50. The sunk cost of the coffee purchased at the gas station is:

Correct AnswerverifiedShow Answer

When speed boat sales rise, the city of Las Vegas takes in more revenue. The omitted common variable between these outcomes is likely to be:

Correct AnswerverifiedShow Answer

Which of the following is a topic studied in macroeconomics?

Correct AnswerverifiedShow Answer

Which of the following is not a way we sometimes confuse correlation and causation?

Correct AnswerverifiedShow Answer

Which of the following is a positive incentive?

Correct AnswerverifiedShow Answer

Which of the following is not considered an economic resource?

Correct AnswerverifiedShow Answer

Trade-offs are:

Correct AnswerverifiedShow Answer

Both minivan sales and birth rates are on the rise. The conclusion that minivans cause people to have children is an example of making the mistake of:

Correct AnswerverifiedShow Answer

As corn prices rise, salsa sales tend to fall. This an example of:

Correct AnswerverifiedShow Answer

Something is valuable if:

Correct AnswerverifiedShow Answer

Purchasing a smart phone data plan, premium movie channels, and University of Alabama football season tickets results in you having to drop your health insurance plan. This can be described as:

Correct AnswerverifiedShow Answer

Many theaters sell empty seats at a deep discount just before show time. What economic concept is displayed by this behavior?

Correct AnswerverifiedShow Answer

The extra cost associated with producing or consuming the next unit is called the:

Correct AnswerverifiedShow Answer

The economic concept of scarcity refers to the fact that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economic analysis requires us to combine:

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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