Question 1

Normative statements are expressions of facts.

Accepted Answer

A) True 
 B)False

Question 2

Tammie makes $150 a day as a bank clerk.She takes off two days of work without pay to fly to another city to attend the concert of her favourite music group.The cost of transportation for the trip is $250.The cost of the concert ticket is $50.The opportunity cost of Tammie's trip to the concert is:

Accepted Answer

A)  $300
B)  $450
C)  $500
D)  $600E) A) and D)
F) B) and C)

Question 3

Economic resources are also called:

Accepted Answer

A)  free gifts of nature.
B)  consumption goods.
C)  units of money capital.
D)  factors of production.E) A) and B)
F) A) and C)

Question 4

The basic difference between consumer goods and capital goods is that:

Accepted Answer

A)  consumer goods are produced in the private sector and capital goods are produced in the public sector.
B)  an economy that commits a relatively large proportion of its resources to capital goods must accept a lower growth rate.
C)  the production of capital goods is not subject to the law of increasing opportunity costs.
D)  consumer goods satisfy wants directly while capital goods satisfy wants indirectly.E) A) and C)
F) A) and B)

Question 5

The cost of the choice you make is what you give up for it, is which of the ten key concepts to retain for a lifetime?

Accepted Answer

A)  Facing trade-offs
B)  Opportunity cost
C)  Choosing a little more or a little less
D)  The influence of incentivesE) A) and B)
F) A) and C)

Question 6

Refer to the production possibilities curves.The movement from curve (a) to curve (c) indicates an improvement in civilian goods technology but not in war goods technology.

Accepted Answer

A) True 
 B)False

Question 7

Purposeful behaviour suggests that:

Accepted Answer

A)  everyone will make identical choices.
B)  resource availability exceeds material wants.
C)  individuals make decisions with some desired outcome in mind.
D)  an individual's economic goals cannot involve tradeoffs.E) A) and B)
F) C) and D)

Question 8

The negative slope of the production possibilities curve is a graphical way of indicating that:

Accepted Answer

A)  any economy "can have its cake and eat it too."
B)  to produce more of one product we must accept less of another.
C)  the principle of increasing opportunity costs does not apply to the economy as a whole.
D)  consumers buy more when prices are low than they do when prices are high.E) None of the above
F) A) and D)

Question 9

The society must also make choices under conditions of scarcity.This problem arises from the fact that:

Accepted Answer

A)  society's wants are limited but the resources are not.
B)  resources are scarce relative to society's wants.
C)  societies behave only in their self-interest.
D)  society's wants and resources are both unlimited.E) All of the above
F) C) and D)

Question 10

Refer to the above diagram.Which line(s)  show(s)  a negative relationship between x and y?

Accepted Answer

A)  A only
B)  both A and D
C)  A, B, and D
D)  both C and EE) B) and C)
F) B) and D)

Question 11

Marginal costs exist because:

Accepted Answer

A)  the decision to produce more of some product means the sacrifice of other products.
B)  wants are scarce relative to resources.
C)  households and businesses make rational decisions.
D)  most decisions do not involve sacrifices or tradeoffs.E) B) and D)
F) B) and C)

Question 12

If economic theories are solidly based on relevant facts, then there can be no question as to the character of appropriate economic policy.

Accepted Answer

A) True 
 B)False

Question 13

Markets usually do a good job of coordinating trade among individuals, groups, and nations.Is which of the ten key concepts to retain for a lifetime?

Accepted Answer

A)  Facing trade-offs
B)  Opportunity cost
C)  The effectiveness of markets
D)  The influence of incentivesE) A) and D)
F) None of the above

Question 14

Assume that if the interest rate that businesses must pay to borrow funds were 20 percent, it would be unprofitable for businesses to invest in new machinery and equipment so that investment would be zero.But if the interest rate were 16 percent, businesses would find it profitable to invest $10 billion.If the interest rate were 12 percent, $20 billion would be invested.Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate.Refer to the above information.Which of the following is the correct graphical presentation of the indicated relationship?

Accepted Answer

A)  line 4
B)  line 3
C)  line 2
D)  line 1E) B) and C)
F) None of the above

Question 15

In line (1)  on the above graph, the variables x and y are:

Accepted Answer

A)  nonlinearly related.
B)  positively related.
C)  negatively related.
D)  inversely related.E) C) and D)
F) All of the above

Question 16

Refer to the above diagram.Curve B is a:

Accepted Answer

A)  production possibilities curve indicating constant opportunity costs.
B)  production possibilities curve indicating increasing opportunity costs.
C)  demand curve indicating that the quantity of consumer goods demanded increases as the price of capital falls.
D)  technology frontier curve.E) C) and D)
F) B) and D)

Question 17

The institution that coordinates actions of consumers and producers to establish prices for goods and services is known as:

Accepted Answer

A)  a market.
B)  a monopoly.
C)  a production possibilities curve.
D)  consumer sovereignty.E) C) and D)
F) B) and D)

Question 18

The present choice of position on the production possibilities curve will not influence the future location of the curve.

Accepted Answer

A) True 
 B)False

Question 19

The study of economics is primarily concerned with:

Accepted Answer

A)  keeping private businesses from losing money.
B)  demonstrating that capitalistic economies are superior to socialistic economies.
C)  choices which are made in seeking to use scarce resources efficiently.
D)  determining the most equitable distribution of society's output.E) A) and C)
F) All of the above

Question 20

An economy will always operate at some point on its production possibilities curve.

Accepted Answer

A) True 
 B)False

Exam 1: Part B: Limits, Alternatives, and Choices

The society must also make choices under conditions of scarcity.This problem arises from the fact that:

Correct Answer
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The present choice of position on the production possibilities curve will not influence the future location of the curve.

Correct Answer
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Economic resources are also called:

Correct Answer
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The negative slope of the production possibilities curve is a graphical way of indicating that:

Correct Answer
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Purposeful behaviour suggests that:

Correct Answer
verified

The study of economics is primarily concerned with:

Correct Answer
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The basic difference between consumer goods and capital goods is that:

Correct Answer
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An economy will always operate at some point on its production possibilities curve.

Correct Answer
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Normative statements are expressions of facts.

Correct Answer
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In line (1) on the above graph, the variables x and y are:

Correct Answer
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Marginal costs exist because:

Correct Answer
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Tammie makes $150 a day as a bank clerk.She takes off two days of work without pay to fly to another city to attend the concert of her favourite music group.The cost of transportation for the trip is $250.The cost of the concert ticket is $50.The opportunity cost of Tammie's trip to the concert is:

Correct Answer
verified

The institution that coordinates actions of consumers and producers to establish prices for goods and services is known as:

Correct Answer
verified

Correct Answer
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Refer to the production possibilities curves.The movement from curve (a) to curve (c) indicates an improvement in civilian goods technology but not in war goods technology.

Correct Answer
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Markets usually do a good job of coordinating trade among individuals, groups, and nations.Is which of the ten key concepts to retain for a lifetime?

Correct Answer
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Refer to the above diagram.Curve B is a:

Correct Answer
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The cost of the choice you make is what you give up for it, is which of the ten key concepts to retain for a lifetime?

Correct Answer
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Refer to the above diagram.Which line(s) show(s) a negative relationship between x and y?

Correct Answer
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If economic theories are solidly based on relevant facts, then there can be no question as to the character of appropriate economic policy.

Correct Answer
verified

Exam 1: Part B: Limits, Alternatives, and Choices

The society must also make choices under conditions of scarcity.This problem arises from the fact that:

Correct AnswerverifiedShow Answer

The present choice of position on the production possibilities curve will not influence the future location of the curve.

Correct AnswerverifiedShow Answer

Economic resources are also called:

Correct AnswerverifiedShow Answer

The negative slope of the production possibilities curve is a graphical way of indicating that:

Correct AnswerverifiedShow Answer

Purposeful behaviour suggests that:

Correct AnswerverifiedShow Answer

The study of economics is primarily concerned with:

Correct AnswerverifiedShow Answer

The basic difference between consumer goods and capital goods is that:

Correct AnswerverifiedShow Answer

An economy will always operate at some point on its production possibilities curve.

Correct AnswerverifiedShow Answer

Normative statements are expressions of facts.

Correct AnswerverifiedShow Answer

In line (1) on the above graph, the variables x and y are:

Correct AnswerverifiedShow Answer

Marginal costs exist because:

Correct AnswerverifiedShow Answer

Tammie makes $150 a day as a bank clerk.She takes off two days of work without pay to fly to another city to attend the concert of her favourite music group.The cost of transportation for the trip is $250.The cost of the concert ticket is $50.The opportunity cost of Tammie's trip to the concert is:

Correct AnswerverifiedShow Answer

The institution that coordinates actions of consumers and producers to establish prices for goods and services is known as:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the production possibilities curves.The movement from curve (a) to curve (c) indicates an improvement in civilian goods technology but not in war goods technology.

Correct AnswerverifiedShow Answer

Markets usually do a good job of coordinating trade among individuals, groups, and nations.Is which of the ten key concepts to retain for a lifetime?

Correct AnswerverifiedShow Answer

Refer to the above diagram.Curve B is a:

Correct AnswerverifiedShow Answer

The cost of the choice you make is what you give up for it, is which of the ten key concepts to retain for a lifetime?

Correct AnswerverifiedShow Answer

Refer to the above diagram.Which line(s) show(s) a negative relationship between x and y?

Correct AnswerverifiedShow Answer

If economic theories are solidly based on relevant facts, then there can be no question as to the character of appropriate economic policy.

Correct AnswerverifiedShow Answer

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