Question 1

Which of the following is a macroeconomic decision or concept?

Accepted Answer

A)   the price of oil
B)   how many television sets to produce
C)   the unemployment rate for the entire economy
D)   the unemployment rate for each firmE) A) and B)
F) None of the above

Question 2

-The relationship between income and consumption illustrated in the figure above is

Accepted Answer

A)   positive and linear.
B)   positive and nonlinear.
C)   negative and linear.
D)   negative and nonlinear.E) B) and C)
F) A) and B)

Question 3

The economic resource that organizes the use of other economic resources is called

Accepted Answer

A)   labor.
B)   capital.
C)   entrepreneurship.
D)   land.E) None of the above
F) B) and D)

Question 4

-What does the slope of the line shown in the above figure equal?

Accepted Answer

The slope equals the change in...

Question 5

The United States produces more services than goods.

Accepted Answer

A) True 
 B)False

Question 6

Marginal cost is the

Accepted Answer

A)   cost of an increase in an activity.
B)   total cost of an activity.
C)   cost of an activity minus the benefits of the activity.
D)   cost of all forgone alternatives.E) A) and B)
F) B) and D)

Question 7

When firms in an economy start producing more computers and fewer televisions,they are answering the ________ part of one of the two big economic questions.

Accepted Answer

A)   "when"
B)   "for whom"
C)   "what"
D)   "where"E) A) and D)
F) A) and C)

Question 8

If Taco Bell decides to produce more tacos and fewer burritos,Taco Bell is answering the ________ part of one of the two big economic questions.

Accepted Answer

A)   "what"
B)   "why"
C)   "when"
D)   "scarcity"E) A) and D)
F) A) and C)

Question 9

"When OPEC increases the supply of oil to the market,the price of gasoline falls." This is an example of

Accepted Answer

A)   a normative statement.
B)   the failure of opportunity cost to determine prices.
C)   a positive statement.
D)   a macroeconomic statement.E) A) and B)
F) All of the above

Question 10

What is the difference between positive and normative statements?

Accepted Answer

Positive statements tell what is and nor...

Question 11

When a textile company keeps track of its inventory using a computer and its competitor uses a pad of paper and a pencil,they are both answering the ________ part of one of the two big economic questions.

Accepted Answer

A)   "what"
B)   "how"
C)   "for whom"
D)   "where"E) A) and C)
F) None of the above

Question 12

In economics,the term "land" means

Accepted Answer

A)   only land that is used in agricultural production.
B)   land, mineral resources, and nature's other bounties.
C)   land that is devoted to economic pursuits.
D)   land used for agricultural and urban purposes.E) A) and C)
F) C) and D)

Question 13

Suppose that you are spending two hours a day studying economics,and your grade is 85 percent.You want a higher grade and decide to study for an extra hour a day.As a result,your grade rises to 90 percent.Your marginal benefit is the

Accepted Answer

A)   5 point increase in your grade minus the opportunity cost to you of spending the hour studying.
B)   extra hour per day you spend on studying.
C)   5 point increase in your grade.
D)   three hours per day you spend on studying.E) A) and D)
F) A) and C)

Question 14

As an economic concept,scarcity applies to

Accepted Answer

A)   both money and time.
B)   money but not time.
C)   time but not money.
D)   neither time nor money.E) None of the above
F) A) and B)

Question 15

The relationship in the above figure suggests that when the interest rate is 5 percent,

Accepted Answer

A)   a decrease in income will be associated with a decrease in expenditures.
B)   a decrease in income will be associated with an increase in expenditures.
C)   an increase in income will be associated with a decrease in expenditures.
D)   there is no relationship between expenditures and income.E) B) and C)
F) A) and C)

Question 16

Which of the following is a macroeconomic issue?

Accepted Answer

A)   How a rise in the price of sugar affects the market for sodas.
B)   How federal government budget deficits affect interest rates.
C)   What determines the amount a firm will produce.
D)   The cause of a decline in the price of peanut butter.E) A) and B)
F) A) and C)

Question 17

-"As you devote more hours to studying,your GPA increases." A graph of this relationship would show

Accepted Answer

A)   a positive relationship.
B)   a direct relationship.
C)   an inverse relationship.
D)   Both answers A and B are correct.E) None of the above
F) A) and D)

Question 18

Which of the following is an example of a positive statement?

Accepted Answer

A)   Government should not redistribute income.
B)   Business firms ought to contribute more to charities.
C)   Households are the primary source of saving.
D)   The foreign sector should be more tightly controlled.E) B) and C)
F) A) and D)

Question 19

Explain what entrepreneurship is and why it is considered a factor of production.

Accepted Answer

Entrepreneurship is the resource (the pe...

Question 20

On a graph showing the relationship between x and y,the ceteris paribus condition implies that

Accepted Answer

A)   no other variables are related to x and y.
B)   the value of x is held constant.
C)   the value of y is held constant.
D)   other variables not shown are held constant.E) C) and D)
F) B) and C)

Exam 1: What Is Economics

Which of the following is an example of a positive statement?

Correct AnswerverifiedShow Answer

-"As you devote more hours to studying,your GPA increases." A graph of this relationship would show

Correct AnswerverifiedShow Answer

The United States produces more services than goods.

Correct AnswerverifiedShow Answer

Suppose that you are spending two hours a day studying economics,and your grade is 85 percent.You want a higher grade and decide to study for an extra hour a day.As a result,your grade rises to 90 percent.Your marginal benefit is the

Correct AnswerverifiedShow Answer

When firms in an economy start producing more computers and fewer televisions,they are answering the ________ part of one of the two big economic questions.

Correct AnswerverifiedShow Answer

Explain what entrepreneurship is and why it is considered a factor of production.

Correct AnswerverifiedEntrepreneurship is the resource (the pe...View AnswerShow Answer

What is the difference between positive and normative statements?

Correct AnswerverifiedPositive statements tell what is and nor...View AnswerShow Answer

-What does the slope of the line shown in the above figure equal?

Correct AnswerverifiedThe slope equals the change in...View AnswerShow Answer

As an economic concept,scarcity applies to

Correct AnswerverifiedShow Answer

Which of the following is a macroeconomic issue?

Correct AnswerverifiedShow Answer

The relationship in the above figure suggests that when the interest rate is 5 percent,

Correct AnswerverifiedShow Answer

The economic resource that organizes the use of other economic resources is called

Correct AnswerverifiedShow Answer

When a textile company keeps track of its inventory using a computer and its competitor uses a pad of paper and a pencil,they are both answering the ________ part of one of the two big economic questions.

Correct AnswerverifiedShow Answer

"When OPEC increases the supply of oil to the market,the price of gasoline falls." This is an example of

Correct AnswerverifiedShow Answer

-The relationship between income and consumption illustrated in the figure above is

Correct AnswerverifiedShow Answer

In economics,the term "land" means

Correct AnswerverifiedShow Answer

If Taco Bell decides to produce more tacos and fewer burritos,Taco Bell is answering the ________ part of one of the two big economic questions.

Correct AnswerverifiedShow Answer

On a graph showing the relationship between x and y,the ceteris paribus condition implies that

Correct AnswerverifiedShow Answer

Marginal cost is the

Correct AnswerverifiedShow Answer

Which of the following is a macroeconomic decision or concept?

Correct AnswerverifiedShow Answer

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Entrepreneurship is the resource (the pe...
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Positive statements tell what is and nor...
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The slope equals the change in...
View Answer

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