Question 1

The MOST common way in which economists model a problem is by:

Accepted Answer

A)   making sure as many details and facts are included.
B)   simplifying the model down to its basic relevant elements.
C)   avoiding assumptions as much as possible in order to avoid misrepresenting reality.
D)   using case studies to analyze individual real-life examples of problems.

Question 2

When the _____ outweigh(s)  the _____ of the information, people will attempt to obtain the information.

Accepted Answer

A)   costs; benefits
B)   benefits; costs
C)   equity; efficiency
D)   efficiency; equity

Question 3

Suppose an economist discovers that the relationship between grades and hours of tutoring is Grade = 60 + 5(Hours) . Based on the equation, which statement is true?

Accepted Answer

A)   Tutoring is not worthwhile because each hour raises the grade by only 5 points.
B)   If no tutoring is done, then the grade will be zero.
C)   The expected grade with 5 hours of tutoring is 85.
D)   The relationship between tutoring and grades is weak.

Question 4

Because people make decisions at the margin, when deciding whether to purchase a second car, they would therefore compare:

Accepted Answer

A)   the dollar cost of having two cars with the potential income the two cars may generate.
B)   the additional benefits expected from a second car with the total cost of the two cars.
C)   the additional benefits expected from a second car with the additional costs of the second car.
D)   None of the answers is correct.

Question 5

Economists understand that people respond to:

Accepted Answer

A)   laws.
B)   incentives.
C)   threats more than rewards.
D)   positives but not negatives.

Question 6

Scarcity:

Accepted Answer

A)   is synonymous with poverty.
B)   is eliminated with greater technology.
C)   is faced by all individuals and societies.
D)   can be eliminated with adequate resources.

Question 7

Examining whether the country's price level has increased in last quarter is a macroeconomic topic.

Accepted Answer

A) True 
 B)False

Question 8

Consider the following statements. Which, if any, are positive statements? I. Main Street needs more coffee shops.
II)  A new parking garage on campus will reduce parking congestion.
III)  Last winter, the state should have spent more money on snow removal.

Accepted Answer

A)   I
B)   I and II
C)   II only
D)   I, II, and III

Question 9

Macroeconomics does NOT deal with:

Accepted Answer

A)   recessions.
B)   inflation.
C)   job creation rates.
D)   markets for semiconductor chips.

Question 10

When we analyze the relationship between inflation and the money supply, we assume that:

Accepted Answer

A)   all other factors that affect the rate of inflation remain constant.
B)   this relationship holds only in a democratic country.
C)   this relationship reflects a nonlinear relationship.
D)   the money supply is backed by gold alone.

Question 11

When specialization is used:

Accepted Answer

A)   society is more productive, while individuals are less productive.
B)   there are greater gains in material well-being.
C)   there is more emphasis on self-reliance.
D)   opportunity costs tend to be constant.

Question 12

It must be recognized that private markets:

Accepted Answer

A)   will always produce the most rational level of production.
B)   can fail.
C)   satisfy everyone.
D)   will never produce the most rational outcome.

Question 13

Which topic is a microeconomic topic?

Accepted Answer

A)   U.S. inflation rate in 2009
B)   the price of an iPad sold by Apple
C)   U.S. unemployment rate in March 2010
D)   U.S. rate of growth in GDP for the first quarter in 2010

Question 14

When goods are produced at the lowest possible cost, an economy is said to have achieved:

Accepted Answer

A)   production efficiency.
B)   allocative efficiency.
C)   cheap production.
D)   inferior quality goods.

Question 15

_____ is the fairness of various issues and policies.

Accepted Answer

A)   Equity
B)   Efficiency
C)   Choice
D)   Scarcity

Question 16

The height of the bars in a bar chart may depict the number of data points in each category.

Accepted Answer

A) True 
 B)False

Question 17

Assume that a student attends a four-year college with tuition costs of $20,000 per year, room and board costs of $5,000 per year, and books/entertainment costs of $1,000 per year. If the student did not go to college, she would work at a job that pays $25,000 per year but still face the same room and board and entertainment expenses. The opportunity cost of attending college for this student for four years is:

Accepted Answer

A)   $180,000
B)   $80,000
C)   $100,000
D)   $124,000

Question 18

Scarcity is BEST defined as when:

Accepted Answer

A)   the quantity demanded exceeds the quantity supplied.
B)   the quantity supplied exceeds the quantity demanded.
C)   unlimited resources exceed limited wants.
D)   unlimited wants exceed limited resources.

Question 19

Which statement about incentives is TRUE?

Accepted Answer

A)   Each of us is motivated by the same incentive.
B)   Each of us is motivated by different incentives.
C)   Incentives can be manipulated with precision.
D)   Price is the only relevant economic incentive.

Question 20

Government intervention in the market is helpful when:

Accepted Answer

A)   consumers are free to buy from a number of different firms.
B)   consumers and firms have good information.
C)   firms face increasing competition from new entrants into the market.
D)   firms engage in production activities that pollute the air and water.

Exam 1: Exploring Economics

It must be recognized that private markets:

Correct Answer
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Macroeconomics does NOT deal with:

Correct Answer
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The height of the bars in a bar chart may depict the number of data points in each category.

Correct Answer
verified

Consider the following statements. Which, if any, are positive statements? I. Main Street needs more coffee shops. II) A new parking garage on campus will reduce parking congestion. III) Last winter, the state should have spent more money on snow removal.

Correct Answer
verified

When we analyze the relationship between inflation and the money supply, we assume that:

Correct Answer
verified

When goods are produced at the lowest possible cost, an economy is said to have achieved:

Correct Answer
verified

_____ is the fairness of various issues and policies.

Correct Answer
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The MOST common way in which economists model a problem is by:

Correct Answer
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Scarcity:

Correct Answer
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Which statement about incentives is TRUE?

Correct Answer
verified

Economists understand that people respond to:

Correct Answer
verified

Examining whether the country's price level has increased in last quarter is a macroeconomic topic.

Correct Answer
verified

Because people make decisions at the margin, when deciding whether to purchase a second car, they would therefore compare:

Correct Answer
verified

Correct Answer
verified

Suppose an economist discovers that the relationship between grades and hours of tutoring is Grade = 60 + 5(Hours) . Based on the equation, which statement is true?

Correct Answer
verified

Government intervention in the market is helpful when:

Correct Answer
verified

When specialization is used:

Correct Answer
verified

Which topic is a microeconomic topic?

Correct Answer
verified

When the _ outweigh(s) the _ of the information, people will attempt to obtain the information.

Correct Answer
verified

Scarcity is BEST defined as when:

Correct Answer
verified

Exam 1: Exploring Economics

It must be recognized that private markets:

Correct AnswerverifiedShow Answer

Macroeconomics does NOT deal with:

Correct AnswerverifiedShow Answer

The height of the bars in a bar chart may depict the number of data points in each category.

Correct AnswerverifiedShow Answer

Consider the following statements. Which, if any, are positive statements? I. Main Street needs more coffee shops. II) A new parking garage on campus will reduce parking congestion. III) Last winter, the state should have spent more money on snow removal.

Correct AnswerverifiedShow Answer

When we analyze the relationship between inflation and the money supply, we assume that:

Correct AnswerverifiedShow Answer

When goods are produced at the lowest possible cost, an economy is said to have achieved:

Correct AnswerverifiedShow Answer

_____ is the fairness of various issues and policies.

Correct AnswerverifiedShow Answer

The MOST common way in which economists model a problem is by:

Correct AnswerverifiedShow Answer

Scarcity:

Correct AnswerverifiedShow Answer

Which statement about incentives is TRUE?

Correct AnswerverifiedShow Answer

Economists understand that people respond to:

Correct AnswerverifiedShow Answer

Examining whether the country's price level has increased in last quarter is a macroeconomic topic.

Correct AnswerverifiedShow Answer

Because people make decisions at the margin, when deciding whether to purchase a second car, they would therefore compare:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose an economist discovers that the relationship between grades and hours of tutoring is Grade = 60 + 5(Hours) . Based on the equation, which statement is true?

Correct AnswerverifiedShow Answer

Government intervention in the market is helpful when:

Correct AnswerverifiedShow Answer

When specialization is used:

Correct AnswerverifiedShow Answer

Which topic is a microeconomic topic?

Correct AnswerverifiedShow Answer

When the _____ outweigh(s) the _____ of the information, people will attempt to obtain the information.

Correct AnswerverifiedShow Answer

Scarcity is BEST defined as when:

Correct AnswerverifiedShow Answer

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When the _ outweigh(s) the _ of the information, people will attempt to obtain the information.

Correct Answer
verified

Correct Answer
verified