Question 1

A theory composed of a number of assumptions and facts boiled down to their basic relevant elements is called a:

Accepted Answer

A)   metaphor.
B)   model.
C)   conclusion.
D)   practice.E) B) and C)
F) C) and D)

Question 2

The assumption that people will act in a way to maximize their self-interest is a reasonable one for most cases that economists analyze.

Accepted Answer

A) True 
 B)False

Question 3

Scatter plots use time and one other variable to determine possible relationships.

Accepted Answer

A) True 
 B)False

Question 4

Which is the BEST example of a microeconomic issue?

Accepted Answer

A)   whether the Federal Reserve will raise interest rate this week
B)   whether the unemployment rate will exceed 6% this month
C)   whether the country's price level has increased last quarter
D)   whether the production of automobiles decreased last yearE) C) and D)
F) B) and D)

Question 5

Economists look for rational responses to incentives.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is NOT a key principle of economics?

Accepted Answer

A)   People follow incentives.
B)   Productivity determines our standard of living.
C)   Rational thinking requires perfect information.
D)   Government can sometimes correct market failure.E) All of the above
F) B) and C)

Question 7

Explain what is meant by economic efficiency.Does efficiency imply that the fastest production processes or the most powerful equipment must always be used? Explain.

Accepted Answer

Output is greater when people produce go...

Question 8

Correlation between two variables is not enough evidence to suggest that a causal relationship exists between the two variables.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

The ____________ of parking at school includes the amount of time I have to search for a parking space.

Accepted Answer

A)   opportunity cost
B)   equity concerns
C)   efficiency
D)   productivityE) B) and D)
F) B) and C)

Question 11

Macroeconomics focuses on:

Accepted Answer

A)   decisions made by individuals.
B)   decisions made by firms.
C)   the decision to purchase a new home for a family.
D)   decisions for the entire economy.E) B) and D)
F) A) and C)

Question 12

When two variables appear to be related according to a scatter plot,one must be causing the other to occur.

Accepted Answer

A) True 
 B)False

Question 13

International finance is generally studied in:

Accepted Answer

A)   microeconomics.
B)   macroeconomics.
C)   deductive logic.
D)   inductive logic.E) B) and C)
F) A) and C)

Question 14

A rich person does not experience scarcity.

Accepted Answer

A) True 
 B)False

Question 15

Use the following to answer question
Figure: Mileage and Speed by Car Weight 
-(Figure: Mileage and Speed by Car Weight) Which of the following statements about the graph is correct?

Accepted Answer

A)   Mileage is related only to speed,not car weight.
B)   Speed is related to mileage and car weight.
C)   Mileage is related to both speed and car weight.
D)   Mileage is unrelated to speed and car weight.E) None of the above
F) A) and C)

Question 16

There are no instances where efficient solutions to problems conflict with equity issues.

Accepted Answer

A) True 
 B)False

Question 17

_____ occur(s) when goods are produced at the lowest possible cost,and _____ occur(s) when individuals who desire a product the most receive those goods and services.

Accepted Answer

A)   Production efficiency;allocative efficiency
B)   Production possibilities;allocative possibilities
C)   Allocative possibilities;production possibilities
D)   Allocative efficiency;production efficiencyE) None of the above
F) B) and D)

Question 18

Which of the following questions is NOT an example involving marginal analysis?

Accepted Answer

A)   Should a university offer another section of a class?
B)   Should a restaurant stay open another hour?
C)   Should K-Mart convert all its stores to Sears stores?
D)   Should Boeing hire another assembly-line worker?E) C) and D)
F) B) and C)

Question 19

The opportunity cost of one good is the quantity of resources that could be used to purchase the next best choice.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is a key idea in economic thinking?

Accepted Answer

A)   Scarcity exists for the poor but not for the rich.
B)   Incentives matter.
C)   The value of a good can be objectively measured,and is the same for everyone.
D)   All of these are key ideas in economic thinking.E) A) and D)
F) C) and D)

Exam 1: Exploring Economics

The opportunity cost of one good is the quantity of resources that could be used to purchase the next best choice.

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Which of the following questions is NOT an example involving marginal analysis?

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Scatter plots use time and one other variable to determine possible relationships.

Correct AnswerverifiedShow Answer

Macroeconomics focuses on:

Correct AnswerverifiedShow Answer

Which of the following is NOT a key principle of economics?

Correct AnswerverifiedShow Answer

The ____________ of parking at school includes the amount of time I have to search for a parking space.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which is the BEST example of a microeconomic issue?

Correct AnswerverifiedShow Answer

Which of the following is a key idea in economic thinking?

Correct AnswerverifiedShow Answer

The assumption that people will act in a way to maximize their self-interest is a reasonable one for most cases that economists analyze.

Correct AnswerverifiedShow Answer

Explain what is meant by economic efficiency.Does efficiency imply that the fastest production processes or the most powerful equipment must always be used? Explain.

Correct AnswerverifiedOutput is greater when people produce go...View AnswerShow Answer

When two variables appear to be related according to a scatter plot,one must be causing the other to occur.

Correct AnswerverifiedShow Answer

Economists look for rational responses to incentives.

Correct AnswerverifiedShow Answer

There are no instances where efficient solutions to problems conflict with equity issues.

Correct AnswerverifiedShow Answer

International finance is generally studied in:

Correct AnswerverifiedShow Answer

_____ occur(s) when goods are produced at the lowest possible cost,and _____ occur(s) when individuals who desire a product the most receive those goods and services.

Correct AnswerverifiedShow Answer

Use the following to answer question Figure: Mileage and Speed by Car Weight -(Figure: Mileage and Speed by Car Weight) Which of the following statements about the graph is correct?

Correct AnswerverifiedShow Answer

A theory composed of a number of assumptions and facts boiled down to their basic relevant elements is called a:

Correct AnswerverifiedShow Answer

Correlation between two variables is not enough evidence to suggest that a causal relationship exists between the two variables.

Correct AnswerverifiedShow Answer

A rich person does not experience scarcity.

Correct AnswerverifiedShow Answer

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Output is greater when people produce go...
View Answer

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_ occur(s) when goods are produced at the lowest possible cost,and _ occur(s) when individuals who desire a product the most receive those goods and services.

Correct Answer
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