Question 1

In drawing a budget line it is assumed that:

Accepted Answer

A)  consumer preferences are fixed.
B)  the prices of the two products are variable.
C)  money income is fixed.
D)  consumer willingness to substitute between the two products is fixed.E) None of the above
F) A) and B)

Question 2

Products and services are scarce because resources are scarce.

Accepted Answer

A) True 
 B)False

Question 3

In drawing the production possibilities curve we assume that:

Accepted Answer

A)  technology is fixed.
B)  unemployment exists.
C)  economic resources are unlimited.
D)  wants are limited.E) A) and D)
F) A) and B)

Question 4

Refer to the above production possibilities curves.Curve (a)  is the current curve for the economy.Other things being equal, society's current choice of point P on curve (a)  will:

Accepted Answer

A)  allow it to achieve more rapid economic growth than would the choice of point N.
B)  entail a slower rate of economic growth than would the choice of point N.
C)  entail the same rate of growth as would the choice of point N.
D)  be unobtainable because it exceeds the productive capacity of the economy.E) All of the above
F) A) and C)

Question 5

The following production possibilities table represents an economy which is producing two products, tanks and autos.Refer to the table, in moving from possibility C to D, the cost of a tank in terms of autos is:

Accepted Answer

A)  50
B)  100
C)  200
D)  300E) A) and B)
F) C) and D)

Question 6

1, then: A) society would consider additional units of shoes to be more valuable than alternative products. B) society would consider additional units of shoes to be less valuable than alternative products. C) society would experience a net loss by producing more shoes. D) resources are being allocated efficiently to the production of shoes." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram for athletic shoes.If the current output of shoes is Q1, then:

Accepted Answer

A)  society would consider additional units of shoes to be more valuable than alternative products.
B)  society would consider additional units of shoes to be less valuable than alternative products.
C)  society would experience a net loss by producing more shoes.
D)  resources are being allocated efficiently to the production of shoes.E) C) and D)
F) A) and D)

Question 7

Refer to the above diagram.Which line(s)  show(s)  a positive 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) A) and D)

Question 8

Refer to the above diagram.Which line(s)  show(s)  a positive vertical intercept?

Accepted Answer

A)  A and D only
B)  B and C only
C)  A, D, and E
D)  A, D, and BE) C) and D)
F) A) and D)

Question 9

Refer to the above diagram.The combination of computers and bicycles shown by point G is:

Accepted Answer

A)  attainable, but too costly.
B)  unattainable, given currently available resources and technology.
C)  attainable, but involves unemployment.
D)  irrelevant because it is inconsistent with consumer preferences.E) A) and D)
F) All of the above

Question 10

The economic concept that serves as the basis for the study of economics is:

Accepted Answer

A)  inflation.
B)  unemployment.
C)  money.
D)  scarcity.E) A) and D)
F) A) and C)

Question 11

Which of the following statements pertains to macroeconomics?

Accepted Answer

A)  Because the minimum wage was raised, Mrs.Beepath decided to enter the labour force.
B)  A decline in the price of soybeans caused farmer Wanek to plant more land in wheat.
C)  The national productivity rate grew by 1.4 percent last year.
D)  The Pumpkin Center Chartered Bank increased its interest rate on consumer loans by 1 percent.E) A) and D)
F) C) and D)

Question 12

If the production possibilities curve is a straight line:

Accepted Answer

A)  the two products will sell at the same market prices.
B)  economic resources are perfectly shiftable between the production of the two products.
C)  the two products are equally important to consumers.
D)  equal quantities of the two products will be produced at each possible point on the curve.E) A) and C)
F) All of the above

Question 13

Which of the following statements is correct?

Accepted Answer

A)  The value of the independent variable is determined by the value of the dependent variable.
B)  The value of the dependent variable is determined by the value of the independent variable.
C)  The dependent variable designates the "cause" and the independent variable the "effect."
D)  Dependent variables graph as upsloping lines; independent variables graph as downward sloping lines.E) B) and D)
F) B) and C)

Question 14

Macroeconomics approaches the study of economics from the viewpoint of:

Accepted Answer

A)  the entire economy.
B)  governmental units.
C)  the operation of specific product and resource markets.
D)  individual firms.E) A) and B)
F) A) and C)

Question 15

The term "other things equal" means that:

Accepted Answer

A)  the associated statement is normative.
B)  many variables affect the variable under consideration.
C)  the assumption that factors other than those being considered do not change.
D)  when variable X increases so does related variable Y.E) A) and D)
F) A) and B)

Question 16

Money is not considered to be an economic resource because:

Accepted Answer

A)  money, as such, is not productive.
B)  idle money balances do not earn interest income.
C)  the terms of trade can be determined in non-monetary terms.
D)  money is a free gift of nature.E) B) and C)
F) A) and B)

Question 17

Refer to the table below.According to the production possibilities schedule for the economy which produces two products, a combination of four tanks and 650 autos is: Production Possibilities

Accepted Answer

A)  attainable, but involves an efficient use of society's resources.
B)  attainable, but would not be in the best interests of a strong national defence.
C)  not attainable because it is not listed in the schedule.
D)  not attainable because society does not have sufficient resources to produce this combination.E) A) and B)
F) A) and C)

Question 18

Production possibilities tables for two countries, North Cantina and South Cantina: North Cantina Production possibilities (alternatives) 
 South Cantina Production possibilities (alternatives) 
 Refer to the above tables.Suppose that resources in North Cantina and South Cantina are identical in quantity and quality.We can conclude that:

Accepted Answer

A)  South Cantina has better technology than North Cantina in producing both capital and consumer goods.
B)  North Cantina has better technology than South Cantina in producing both capital and consumer goods.
C)  North Cantina is growing more rapidly than South Cantina.
D)  North Cantina has better technology than South Cantina in producing consumer goods.E) A) and B)
F) None of the above

Question 19

How is the economic perspective reflected in lines for fast food?

Accepted Answer

A)  Customers select the shortest line because they have perfect information.
B)  Customers select the shortest line because they believe it will reduce their time cost of obtaining food.
C)  Lines will typically be of unequal length because of the inefficiencies in counter service.
D)  The set of food choices is often too complex for most customers and thus creates long lines.E) A) and B)
F) All of the above

Question 20

Choices entail marginal costs because resources are scarce.

Accepted Answer

A) True 
 B)False

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

The term "other things equal" means that:

Correct Answer
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Which of the following statements pertains to macroeconomics?

Correct Answer
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In drawing the production possibilities curve we assume that:

Correct Answer
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Macroeconomics approaches the study of economics from the viewpoint of:

Correct Answer
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Which of the following statements is correct?

Correct Answer
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The following production possibilities table represents an economy which is producing two products, tanks and autos.Refer to the table, in moving from possibility C to D, the cost of a tank in terms of autos is:

Correct Answer
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Refer to the above diagram for athletic shoes.If the current output of shoes is Q₁, then:

Correct Answer
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Refer to the above production possibilities curves.Curve (a) is the current curve for the economy.Other things being equal, society's current choice of point P on curve (a) will:

Correct Answer
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Products and services are scarce because resources are scarce.

Correct Answer
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Choices entail marginal costs because resources are scarce.

Correct Answer
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Money is not considered to be an economic resource because:

Correct Answer
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If the production possibilities curve is a straight line:

Correct Answer
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In drawing a budget line it is assumed that:

Correct Answer
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The economic concept that serves as the basis for the study of economics is:

Correct Answer
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Correct Answer
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Refer to the table below.According to the production possibilities schedule for the economy which produces two products, a combination of four tanks and 650 autos is: Production Possibilities

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

Correct Answer
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Refer to the above diagram.The combination of computers and bicycles shown by point G is:

Correct Answer
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Refer to the above diagram.Which line(s) show(s) a positive vertical intercept?

Correct Answer
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How is the economic perspective reflected in lines for fast food?

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

The term "other things equal" means that:

Correct AnswerverifiedShow Answer

Which of the following statements pertains to macroeconomics?

Correct AnswerverifiedShow Answer

In drawing the production possibilities curve we assume that:

Correct AnswerverifiedShow Answer

Macroeconomics approaches the study of economics from the viewpoint of:

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The following production possibilities table represents an economy which is producing two products, tanks and autos.Refer to the table, in moving from possibility C to D, the cost of a tank in terms of autos is:

Correct AnswerverifiedShow Answer

Refer to the above diagram for athletic shoes.If the current output of shoes is Q1, then:

Correct AnswerverifiedShow Answer

Refer to the above production possibilities curves.Curve (a) is the current curve for the economy.Other things being equal, society's current choice of point P on curve (a) will:

Correct AnswerverifiedShow Answer

Products and services are scarce because resources are scarce.

Correct AnswerverifiedShow Answer

Choices entail marginal costs because resources are scarce.

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Money is not considered to be an economic resource because:

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If the production possibilities curve is a straight line:

Correct AnswerverifiedShow Answer

In drawing a budget line it is assumed that:

Correct AnswerverifiedShow Answer

The economic concept that serves as the basis for the study of economics is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the table below.According to the production possibilities schedule for the economy which produces two products, a combination of four tanks and 650 autos is: Production Possibilities

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Refer to the above diagram.The combination of computers and bicycles shown by point G is:

Correct AnswerverifiedShow Answer

Refer to the above diagram.Which line(s) show(s) a positive vertical intercept?

Correct AnswerverifiedShow Answer

How is the economic perspective reflected in lines for fast food?

Correct AnswerverifiedShow Answer

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Refer to the above diagram for athletic shoes.If the current output of shoes is Q₁, then:

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