Question 1

The production possibilities curve shows:

Accepted Answer

A)  the various combinations of two goods which can be produced when society uses its scarce resources efficiently.
B)  the minimum outputs of two goods which will sustain a society.
C)  the various combinations of two goods which can be produced when some resources are unemployed.
D)  the ideal, but unattainable, combinations of two goods which would maximize consumer satisfactions.E) A) and B)
F) All of the above

Question 2

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 D)

Question 3

Consumers might leave a fast-food restaurant without being served because:

Accepted Answer

A)  they are misinformed about the marginal cost and marginal benefits of the food being served.
B)  they conclude that the marginal cost (monetary plus time costs)  exceeds the marginal benefit.
C)  the environment is not conducive to a rational choice.
D)  the lines waiting for service are not of equal length.E) A) and B)
F) None of the above

Question 4

If a positive relationship exists between x and y:

Accepted Answer

A)  an increase in x will cause y to decrease.
B)  a decrease in x will cause y to increase.
C)  the relationship will graph as an upsloping line.
D)  the vertical intercept must be positive.E) B) and D)
F) All of the above

Question 5

Economists:

Accepted Answer

A)  always put the independent variable on the horizontal axis and the dependent variable on the vertical axis.
B)  always put the dependent variable on the horizontal axis and the independent variable on the vertical axis.
C)  are somewhat arbitrary in assigning independent and dependent variables to the horizontal and vertical axes.
D)  measure the slope of a line differently than do mathematicians.E) A) and B)
F) A) and D)

Question 6

Positive statements are expressions of value judgments.

Accepted Answer

A) True 
 B)False

Question 7

Slope of lines are especially important in economics because:

Accepted Answer

A)  they measure marginal changes.
B)  they always tell us something about profits.
C)  positive slopes are always preferred to negative slopes.
D)  they always relate to resource and output scarcity.E) A) and B)
F) All of the above

Question 8

The "economic perspective" refers to:

Accepted Answer

A)  macroeconomic phenomena, but not microeconomic phenomena.
B)  microeconomic phenomena, but not macroeconomic phenomena.
C)  the making of rational decisions in a context of marginal costs and marginal benefits.
D)  unlimited resources in a context of limited material wants.E) A) and B)
F) None of the above

Question 9

If we are considering the relationship between two variables and release the "other things equal" assumption, we would expect:

Accepted Answer

A)  the relationship to change from direct to inverse.
B)  the line representing that relationship on a graph to change locations.
C)  the data points representing the relationship to become more randomly scattered.
D)  the relationship to change from inverse to direct.E) All of the above
F) A) and B)

Question 10

s for quantity supplied and P for price, which of the following equations correctly states the supply of this product? A) P = 4 + .2Qs. B) P = 60/Qs. C) P = 10Qs - 2P. D) P = 2 + .2Qs." class="answers-bank-image d-inline" rel="preload" > Refer to the above graph.Using Qs for quantity supplied and P for price, which of the following equations correctly states the supply of this product?

Accepted Answer

A)  P = 4 + .2Qs.
B)  P = 60/Qs.
C)  P = 10Qs - 2P.
D)  P = 2 + .2Qs.E) A) and B)
F) A) and D)

Question 11

The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 -.02Qd, where Qd is the amount of pizzas purchased per week and P is the price of pizzas.On the basis of this information we can say that:

Accepted Answer

A)  if pizzas were free, people would consume 800 per week.
B)  more pizzas will be purchased at a high price than at a low price.
C)  if the price of pizzas is $6, then 150 will be purchased.
D)  50 fewer pizzas will be purchased per week for every $1 increase in price.E) None of the above
F) A) and C)

Question 12

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

Accepted Answer

A)  C only
B)  both C and E
C)  B, C, and E
D)  both B and CE) All of the above
F) A) and D)

Question 13

Rational individuals may make different choices because their information and circumstances differ.

Accepted Answer

A) True 
 B)False

Question 14

1/3x. B) y = 3 + 3/4x. C) y = 4 - 3/4x. D) y = 4 + 11/3x." class="answers-bank-image d-inline" rel="preload" > In the above diagram the equation for this line is:

Accepted Answer

A)  y = 4 - 11/3x.
B)  y = 3 + 3/4x.
C)  y = 4 - 3/4x.
D)  y = 4 + 11/3x.E) A) and C)
F) B) and C)

Question 15

Ben says that "An increase in the tax on beer will raise its price." Holly argues that "Taxes should be increased on beer because college students drink too much." We can conclude that:

Accepted Answer

A)  Ben's statement is normative, but Holly's is positive.
B)  Holly's statement is normative, but Ben's is positive.
C)  Both statements are normative.
D)  Both statements are positive.E) A) and D)
F) B) and D)

Question 16

The individual's limited income problem:

Accepted Answer

A)  persists only because countries have failed to achieve continuous full employment.
B)  exists because material wants are limited.
C)  has been solved in all industrialized nations.
D)  has been eliminated in affluent societies such as Canada and the United States.E) A) and C)
F) None of the above

Question 17

The marginal benefit curve is:

Accepted Answer

A)  upward sloping because of increasing marginal opportunity costs.
B)  upward sloping because successive units of a specific product yield less and less extra utility.
C)  downward sloping because of increasing marginal opportunity costs.
D)  downward sloping because successive units of a specific product yield less and less extra utility.E) None of the above
F) A) and D)

Question 18

Through specialization and international trade a nation:

Accepted Answer

A)  can achieve some combination of goods lying outside its production possibilities curve.
B)  can move from a high consumption-low investment to a high investment-low consumption point on its production possibilities curve.
C)  will achieve some combination of goods lying within its production possibilities curve.
D)  will cause its production possibilities curve to shift leftward.E) All of the above
F) None of the above

Question 19

The production possibilities curve represents:

Accepted Answer

A)  the maximum amount of labour and capital available for production.
B)  combinations of goods and services among which consumers are indifferent.
C)  maximum combinations of products available with fixed resources and technology.
D)  the maximum rate of growth of capital and labour in an economy.E) All of the above
F) A) and C)

Question 20

The economic perspective used in customer decision making at fast-food restaurants is reflected in:

Accepted Answer

A)  customers selecting the shortest line.
B)  customers leaving rather than waiting if all lines are long.
C)  all customer lines tending to be of equal length.
D)  all of the above.E) None of the above
F) All of the above

Exam 1: B: Limits, Alternatives, and Choices

Through specialization and international trade a nation:

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Money is not considered to be an economic resource because:

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Consumers might leave a fast-food restaurant without being served because:

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The production possibilities curve represents:

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Refer to the above graph.Using Qs for quantity supplied and P for price, which of the following equations correctly states the supply of this product?

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The marginal benefit curve is:

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Rational individuals may make different choices because their information and circumstances differ.

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Slope of lines are especially important in economics because:

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Economists:

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If a positive relationship exists between x and y:

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The individual's limited income problem:

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The "economic perspective" refers to:

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Ben says that "An increase in the tax on beer will raise its price." Holly argues that "Taxes should be increased on beer because college students drink too much." We can conclude that:

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The economic perspective used in customer decision making at fast-food restaurants is reflected in:

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

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The production possibilities curve shows:

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The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 -.02Qd, where Qd is the amount of pizzas purchased per week and P is the price of pizzas.On the basis of this information we can say that:

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Positive statements are expressions of value judgments.

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If we are considering the relationship between two variables and release the "other things equal" assumption, we would expect:

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In the above diagram the equation for this line is:

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Refer to the above graph.Using Q_s for quantity supplied and P for price, which of the following equations correctly states the supply of this product?

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The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 -.02Q_d, where Q_d is the amount of pizzas purchased per week and P is the price of pizzas.On the basis of this information we can say that:

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