Question 1

Which of the following is a microeconomics question?

Accepted Answer

A)   How much will be saved and how much will be produced in the entire economy?
B)   What will the level of economic growth be in the entire economy?
C)   What factors determine the price of carrots?
D)   What determines the average price level and inflation?E) B) and D)
F) All of the above

Question 2

Suppose that some teachers have decided that economic and financial uncertainty have made the prospect of retiring more risky,and therefore carry a higher cost than not retiring.By using all available information as they act to achieve their goals,these teachers are exemplifying the economic idea that

Accepted Answer

A)   people are rational.
B)   people respond to economic incentives.
C)   optimal decisions are made at the margin.
D)   equity is more important than efficiency.E) C) and D)
F) A) and C)

Question 3

Economic models do all of the following except

Accepted Answer

A)   answer economic questions.
B)   portray reality in all its minute details.
C)   make economic ideas explicit and concrete for use by decision makers.
D)   simplify some aspect of economic life.E) A) and B)
F) A) and C)

Question 4

Which of the following is a normative economic statement?

Accepted Answer

A)   The price of gasoline is too high.
B)   The current high price of gasoline is the result of strong worldwide demand.
C)   When the price of gasoline rises, the quantity of gasoline purchased falls.
D)   When the price of gasoline rises, transportation costs rise.E) B) and D)
F) A) and C)

Question 5

The decision about what goods and services will be produced made in a market economy is made by

Accepted Answer

A)   lawmakers in the government voting on what will be produced.
B)   workers deciding to produce only what the boss says must be produced.
C)   producers deciding what society wants most.
D)   consumers and firms choosing which goods and services to buy or produce.
E)   consumers dictating to firms what they need most.F) B) and D)
G) B) and C)

Question 6

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Accepted Answer

A)   collective
B)   cooperative
C)   market
D)   trade-offE) A) and B)
F) A) and C)

Question 7

List the five main factors of production.

Accepted Answer

The five main factors of produ...

Question 8

In 2010,Hooverville consumed 205,000 tons of sugar.In 2011,sugar consumption rose to 245,000 tons.Calculate the percentage change in sugar consumption.

Accepted Answer

A)   8.37%
B)   11.95%
C)   19.51%
D)   26.33%E) A) and B)
F) C) and D)

Question 9

Table 1-1
  
Lydia runs a small nail salon in the town of New Hope. She is debating whether she should extend her hours of operation. Lydia figures that her sales revenue will depend on the number of hours the nail salon is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $10 per hour.
-Refer to Table 1-1.Using marginal analysis,determine how many hours should Lydia extend her nail salon's hours of operations?

Accepted Answer

A)   2 hours
B)   3 hours
C)   4 hours
D)   5 hours
E)   6 hoursF) A) and B)
G) A) and C)

Question 10

Allocative efficiency best explains ________,and productive efficiency best explains ________.

Accepted Answer

A)   how something will be produced; when something will be produced
B)   when something will be produced; why something will be produced
C)   why something will be produced; what will be produced
D)   what will be produced; how something will be producedE) A) and D)
F) B) and D)

Question 11

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics? a.gasoline prices
B)unemployment
C)inflation
D)health care costs
E)air pollution
F)economic growth

Accepted Answer

B, C, and ...

Question 12

Which of the following statements is true about scarcity?

Accepted Answer

A)   Scarcity refers to the situation in which unlimited wants exceed limited resources.
B)   Scarcity is not a problem for the wealthy.
C)   Scarcity is only a problem when a country has too large a population.
D)   Scarcity arises when there is a wide disparity in income distribution.E) A) and C)
F) B) and D)

Question 13

Economists assume that rational behavior is useful in explaining choices people make

Accepted Answer

A)   because irrational people do not make economic choices.
B)   even though people may not behave rationally all the time.
C)   because individuals act rationally all the time in all circumstances.
D)   even though people rarely, if ever, behave in a rational manner.E) B) and D)
F) B) and C)

Question 14

Economists reason that the optimal decision is to continue any activity up to the point where the

Accepted Answer

A)   marginal benefit is zero.
B)   marginal benefit is greater than the marginal cost.
C)   marginal cost is zero.
D)   marginal benefit equals the marginal cost.E) B) and C)
F) A) and B)

Question 15

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes.A student concludes that it is likely that living in nursing home causes Alzheimer's dementia.What is the flaw in the student's reasoning?

Accepted Answer

A)   The student has failed to take into account other causes of Alzheimer's disease.
B)   The student is drawing a false conclusion; he is confusing cause and effect.
C)   The student is using an inadequate sample size.
D)   The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents.E) B) and D)
F) C) and D)

Question 16

The highest valued alternative that must be given up to engage in an activity is the definition of

Accepted Answer

A)   economic equity.
B)   marginal benefit.
C)   opportunity cost.
D)   marginal cost.E) A) and C)
F) A) and B)

Question 17

Which of the following is a normative economic statement?

Accepted Answer

A)   Rising global demand for coal has led to increases in the price of coal.
B)   With rising mortgage rates and rising unemployment rates, the number of unsold homes has increased.
C)   The state of Texas is considering increasing funds for light-rail development to promote the use of public transportation.
D)   Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable.E) None of the above
F) A) and B)

Question 18

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40,and he charges $75 for this service.For a total price of $90,DeShawn will also detail the car's engine,a service that adds an additional $20 to the total cost of the package.What is DeShawn's marginal benefit if he sells a basic detailing package?

Accepted Answer

A)   $35
B)   $75
C)   He makes a marginal loss of $15, not a marginal benefit.
D)   The marginal benefit cannot be determined.E) A) and D)
F) C) and D)

Question 19

According to census figures,between 1970 and 2007 the number of doctors who described themselves as self-employed

Accepted Answer

A)   fell by more than 50 percent.
B)   more than doubled.
C)   has remained fairly constant.
D)   fell to almost zero before rising back to its original level.E) A) and D)
F) None of the above

Question 20

Which of the following statements is true about profit?

Accepted Answer

A)   Profit refers to the revenue received from the sale of a quantity of goods.
B)   Profit is calculated by multiplying price and quantity sold.
C)   The terms "accounting profit" and "economic profit" can be used interchangeably.
D)   Profit is the difference between revenue and cost.E) None of the above
F) B) and C)

Exam 1: Economics: Foundations and Models

Which of the following statements is true about profit?

Correct Answer
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In 2010,Hooverville consumed 205,000 tons of sugar.In 2011,sugar consumption rose to 245,000 tons.Calculate the percentage change in sugar consumption.

Correct Answer
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List the five main factors of production.

Correct Answer
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The five main factors of produ...
View Answer

Which of the following statements is true about scarcity?

Correct Answer
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Correct Answer
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Which of the following is a normative economic statement?

Correct Answer
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Correct Answer
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According to census figures,between 1970 and 2007 the number of doctors who described themselves as self-employed

Correct Answer
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Economic models do all of the following except

Correct Answer
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Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics? a.gasoline prices B)unemployment C)inflation D)health care costs E)air pollution F)economic growth

Correct Answer
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B, C, and ...
View Answer

Correct Answer
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The prevalence of Alzheimer's dementia is very high among residents living in nursing homes.A student concludes that it is likely that living in nursing home causes Alzheimer's dementia.What is the flaw in the student's reasoning?

Correct Answer
verified

Economists assume that rational behavior is useful in explaining choices people make

Correct Answer
verified

Economists reason that the optimal decision is to continue any activity up to the point where the

Correct Answer
verified

Which of the following is a normative economic statement?

Correct Answer
verified

Which of the following is a microeconomics question?

Correct Answer
verified

The decision about what goods and services will be produced made in a market economy is made by

Correct Answer
verified

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Correct Answer
verified

Allocative efficiency best explains ,and productive efficiency best explains .

Correct Answer
verified

The highest valued alternative that must be given up to engage in an activity is the definition of

Correct Answer
verified

Exam 1: Economics: Foundations and Models

Which of the following statements is true about profit?

Correct AnswerverifiedShow Answer

In 2010,Hooverville consumed 205,000 tons of sugar.In 2011,sugar consumption rose to 245,000 tons.Calculate the percentage change in sugar consumption.

Correct AnswerverifiedShow Answer

List the five main factors of production.

Correct AnswerverifiedThe five main factors of produ...View AnswerShow Answer

Which of the following statements is true about scarcity?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is a normative economic statement?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

According to census figures,between 1970 and 2007 the number of doctors who described themselves as self-employed

Correct AnswerverifiedShow Answer

Economic models do all of the following except

Correct AnswerverifiedShow Answer

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics? a.gasoline prices B)unemployment C)inflation D)health care costs E)air pollution F)economic growth

Correct AnswerverifiedB, C, and ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes.A student concludes that it is likely that living in nursing home causes Alzheimer's dementia.What is the flaw in the student's reasoning?

Correct AnswerverifiedShow Answer

Economists assume that rational behavior is useful in explaining choices people make

Correct AnswerverifiedShow Answer

Economists reason that the optimal decision is to continue any activity up to the point where the

Correct AnswerverifiedShow Answer

Which of the following is a normative economic statement?

Correct AnswerverifiedShow Answer

Which of the following is a microeconomics question?

Correct AnswerverifiedShow Answer

The decision about what goods and services will be produced made in a market economy is made by

Correct AnswerverifiedShow Answer

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Correct AnswerverifiedShow Answer

Allocative efficiency best explains ________,and productive efficiency best explains ________.

Correct AnswerverifiedShow Answer

The highest valued alternative that must be given up to engage in an activity is the definition of

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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The five main factors of produ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B, C, and ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Allocative efficiency best explains ,and productive efficiency best explains .

Correct Answer
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Correct Answer
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