Question 1

The production possibilities curve

Accepted Answer

A)   shows all of those levels of production that are consistent with a stable price level.
B)   indicates that any combination of goods lying outside the curve is economically inefficient.
C)   is a frontier between all combinations of two goods that can be produced and those combinations that cannot be produced.
D)   shows all of those combinations of two goods that are most preferred by society.E) C) and D)
F) All of the above

Question 2

An economic model is a purposeful simplification of reality, whose function includes

Accepted Answer

A)   understanding the full complexity of the real world.
B)   predicting the behavior of each and every individual or organization.
C)   analyzing the behavior of a typical or average consumer or firm.
D)   forecasting random economic events with a high level of accuracy.E) None of the above
F) All of the above

Question 3

When economists talk about the capital resources in the economy, they are referring to the amount of money circulating in the economy.

Accepted Answer

A) True 
 B)False

Question 4

In the graph for the linear equation S = 15 - 5T, with T on the horizontal axis, the vertical intercept of the graph is -5.

Accepted Answer

A) True 
 B)False

Question 5

A nation can increase its production possibilities by

Accepted Answer

A)   shifting resources to produce more consumer goods and less investment goods.
B)   shifting resources from private goods to public goods.
C)   improving labor productivity.
D)   eliminating unemployment.E) A) and D)
F) A) and C)

Question 6

A positive statement is concerned primarily with

Accepted Answer

A)   some goal that is desirable to society.
B)   what should be.
C)   what is.
D)   the formulation of economic policy.E) None of the above
F) B) and C)

Question 7

(Consider This)  The assertion by economists that "there is no free lunch"

Accepted Answer

A)   is contradicted by the presence of free goods offered by firms.
B)   applies to goods that have prices, not to goods given away free by firms.
C)   remains true even for goods given away free by firms.
D)   applies to agricultural goods but not to manufactured goods.E) All of the above
F) None of the above

Question 8

Answer the question on the basis of the data given in the following production possibilities table.  Refer to the table. As compared to production alternative D, the choice of alternative C would

Accepted Answer

A)   tend to generate a more rapid growth rate.
B)   be unattainable.
C)   entail unemployment.
D)   tend to generate a slower growth rate.E) B) and C)
F) None of the above

Question 9

The statement in a newspaper that "consumer prices rose last month by 1 percent, and if this trend continues, the annual rate of inflation will be 12 percent for the year" is an example of

Accepted Answer

A)   a normative economic statement.
B)   a positive economic statement.
C)   microeconomic analysis.
D)   rational self-interest.E) None of the above
F) A) and D)

Question 10

A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule.  A change from combination C to B means that

Accepted Answer

A)   1 unit of steel is given up to get 75 units of wheat.
B)   2 units of steel are given up to get 75 units of wheat.
C)   1 unit of steel is given up to get 15 more units of wheat.
D)   2 units of steel are given up to get 15 more units of wheat.E) A) and B)
F) B) and C)

Question 11

If the opportunity cost of producing extra units of one good (expressed in terms of the amount of another good given up)  remains constant, then the shape of the production possibilities curve is

Accepted Answer

A)   a straight horizontal line.
B)   a straight downward-sloping line.
C)   an upward-sloping line.
D)   a vertical line.E) A) and B)
F) A) and C)

Question 12

Macroeconomics explains the behavior of individual households and business firms; microeconomics is concerned with the behavior of aggregates or the economy as a whole.

Accepted Answer

A) True 
 B)False

Question 13

The marginal benefit curve is

Accepted Answer

A)   upsloping because of increasing marginal opportunity costs.
B)   upsloping because successive units of a specific product yield less and less extra benefit.
C)   downsloping because of increasing marginal opportunity costs.
D)   downsloping because successive units of a specific product yield less and less extra benefit.E) A) and B)
F) C) and D)

Question 14

The process by which economists test hypotheses against facts to develop theories, principles, and models is called

Accepted Answer

A)   the economic perspective.
B)   the scientific method.
C)   policy economics.
D)   microeconomics.E) A) and D)
F) A) and C)

Question 15

Answer the question on the basis of the following five data sets, wherein it is assumed that the variable shown on the left is the independent variable and the one on the right is the dependent variable. Assume in graphing these data that the independent variable is shown on the horizontal axis and the dependent variable on the vertical axis.  Refer to the data sets. The vertical intercept is negative for

Accepted Answer

A)   none of the data sets.
B)   data sets 1 and 3 only.
C)   data sets 2 and 4 only.
D)   data sets 1 and 5 only.E) A) and D)
F) All of the above

Question 16

If two variables are directly related, the relationship will have a graph that

Accepted Answer

A)   is a straight line.
B)   may either be upward-sloping or downward-sloping.
C)   is an upward-sloping line.
D)   is horizontal.E) None of the above
F) All of the above

Question 17

The economizing problem is

Accepted Answer

A)   the need to make choices because economic wants exceed economic means.
B)   how to distribute resources equally among all members of society.
C)   that people's means often exceed their wants.
D)   that people do not know how to rationally allocate resources.E) None of the above
F) A) and D)

Question 18

The role of an assumption in an economic theory is to

Accepted Answer

A)   add realism.
B)   prove the theory.
C)   cover special cases.
D)   simplify the complex reality.E) All of the above
F) B) and D)

Question 19

Economics is a social science that studies how individuals, institutions, and society may

Accepted Answer

A)   expand the amount of resources available to them.
B)   attain a minimum level of production.
C)   best use resources to maximize satisfaction of economic wants.
D)   reduce the amount of goods and services they need.E) A) and B)
F) A) and D)

Question 20

Which of the following suggests a direct relationship between x and y?

Accepted Answer

A)   a change in y = -2 coupled with a change in x = -4
B)   a change in y = 2 coupled with a change in x = 0
C)   a change in y =
D)   a change in y = 6 coupled with a change in x =E) A) and B)
F) All of the above

Exam 1: Limits, Alternatives, and Choices

Economics is a social science that studies how individuals, institutions, and society may

Correct Answer
verified

A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule. A change from combination C to B means that

Correct Answer
verified

A positive statement is concerned primarily with

Correct Answer
verified

The statement in a newspaper that "consumer prices rose last month by 1 percent, and if this trend continues, the annual rate of inflation will be 12 percent for the year" is an example of

Correct Answer
verified

Correct Answer
verified

In the graph for the linear equation S = 15 - 5T, with T on the horizontal axis, the vertical intercept of the graph is -5.

Correct Answer
verified

The economizing problem is

Correct Answer
verified

Which of the following suggests a direct relationship between x and y?

Correct Answer
verified

The process by which economists test hypotheses against facts to develop theories, principles, and models is called

Correct Answer
verified

If two variables are directly related, the relationship will have a graph that

Correct Answer
verified

If the opportunity cost of producing extra units of one good (expressed in terms of the amount of another good given up) remains constant, then the shape of the production possibilities curve is

Correct Answer
verified

(Consider This) The assertion by economists that "there is no free lunch"

Correct Answer
verified

An economic model is a purposeful simplification of reality, whose function includes

Correct Answer
verified

Macroeconomics explains the behavior of individual households and business firms; microeconomics is concerned with the behavior of aggregates or the economy as a whole.

Correct Answer
verified

The marginal benefit curve is

Correct Answer
verified

Answer the question on the basis of the data given in the following production possibilities table. Refer to the table. As compared to production alternative D, the choice of alternative C would

Correct Answer
verified

The role of an assumption in an economic theory is to

Correct Answer
verified

When economists talk about the capital resources in the economy, they are referring to the amount of money circulating in the economy.

Correct Answer
verified

A nation can increase its production possibilities by

Correct Answer
verified

The production possibilities curve

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

Economics is a social science that studies how individuals, institutions, and society may

Correct AnswerverifiedShow Answer

A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule. A change from combination C to B means that

Correct AnswerverifiedShow Answer

A positive statement is concerned primarily with

Correct AnswerverifiedShow Answer

The statement in a newspaper that "consumer prices rose last month by 1 percent, and if this trend continues, the annual rate of inflation will be 12 percent for the year" is an example of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the graph for the linear equation S = 15 - 5T, with T on the horizontal axis, the vertical intercept of the graph is -5.

Correct AnswerverifiedShow Answer

The economizing problem is

Correct AnswerverifiedShow Answer

Which of the following suggests a direct relationship between x and y?

Correct AnswerverifiedShow Answer

The process by which economists test hypotheses against facts to develop theories, principles, and models is called

Correct AnswerverifiedShow Answer

If two variables are directly related, the relationship will have a graph that

Correct AnswerverifiedShow Answer

If the opportunity cost of producing extra units of one good (expressed in terms of the amount of another good given up) remains constant, then the shape of the production possibilities curve is

Correct AnswerverifiedShow Answer

(Consider This) The assertion by economists that "there is no free lunch"

Correct AnswerverifiedShow Answer

An economic model is a purposeful simplification of reality, whose function includes

Correct AnswerverifiedShow Answer

Macroeconomics explains the behavior of individual households and business firms; microeconomics is concerned with the behavior of aggregates or the economy as a whole.

Correct AnswerverifiedShow Answer

The marginal benefit curve is

Correct AnswerverifiedShow Answer

Answer the question on the basis of the data given in the following production possibilities table. Refer to the table. As compared to production alternative D, the choice of alternative C would

Correct AnswerverifiedShow Answer

The role of an assumption in an economic theory is to

Correct AnswerverifiedShow Answer

When economists talk about the capital resources in the economy, they are referring to the amount of money circulating in the economy.

Correct AnswerverifiedShow Answer

A nation can increase its production possibilities by

Correct AnswerverifiedShow Answer

The production possibilities curve

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified