Question 1

The study of global businesses such as Apple Inc is one major focus of macroeconomic analysis.

Accepted Answer

A) True 
 B)False

Question 2

A normative statement is one that

Accepted Answer

A)   is based on the law of averages.
B)   applies only to microeconomics.
C)   applies only to macroeconomics.
D)   is based on value judgments.E) None of the above
F) B) and C)

Question 3

Which of the following will shift the production possibilities curve to the right?

Accepted Answer

A)   an increase in the unemployment rate from 6 to 8 percent
B)   a decline in the efficiency with which the present labor force is allocated
C)   a decrease in the unemployment rate from 8 to 6 percent
D)   a technological advance that allows farmers to produce more output from given inputsE) C) and D)
F) A) and C)

Question 4

If we say that two variables are inversely related, this means that

Accepted Answer

A)   the two graph as an upsloping line.
B)   an increase in one variable is associated with a decrease in the other.
C)   an increase in one variable is associated with an increase in the other.
D)   the resulting relationship can be portrayed by a straight line parallel to the horizontal axis.E) A) and B)
F) A) and C)

Question 5

Any combination of goods lying outside of the budget line

Accepted Answer

A)   implies that the consumer is not spending all of the consumer's income.
B)   yields less utility than any point on the budget line.
C)   yields less utility than any point inside the budget line.
D)   is unattainable, given the consumer's income.E) All of the above
F) B) and C)

Question 6

(Last Word)  The fallacy of composition states that

Accepted Answer

A)   because economic systems are composed of so many diverse economic units, economic laws are necessarily inexact.
B)   the anticipation of a particular event can affect the composition of that event when it occurs.
C)   what is true for the individual must necessarily be true for the group.
D)   because event A precedes event B, A is necessarily the cause of B.E) B) and C)
F) None of the above

Question 7

The economizing problem is one of deciding how to make the best use of

Accepted Answer

A)   virtually unlimited resources to satisfy virtually unlimited wants.
B)   limited resources to satisfy virtually unlimited wants.
C)   unlimited resources to satisfy limited wants.
D)   limited resources to satisfy limited wants.E) All of the above
F) C) and D)

Question 8

Which of the following do economists consider to be capital?

Accepted Answer

A)   a pair of stockings
B)   a construction crane
C)   a savings account
D)   a share of IBM stockE) B) and C)
F) All of the above

Question 9

The comment that "taxes must be reduced for the good of the economy" is an example of a normative economic statement.

Accepted Answer

A) True 
 B)False

Question 10

Which pitfall to sound economic reasoning is illustrated when a person comments that "capitalists focus only on profits and don't care about their workers"?

Accepted Answer

A)   abstraction
B)   biases
C)   the fallacy of composition
D)   confusing correlation and causationE) B) and D)
F) All of the above

Question 11

The concept of opportunity cost

Accepted Answer

A)   is irrelevant in socialistic economies because of central planning.
B)   suggests that the use of resources in any particular line of production means that alternative outputs must be forgone.
C)   is irrelevant if the production possibilities curve is shifting to the right.
D)   suggests that insatiable wants can be fulfilled.E) A) and D)
F) A) and B)

Question 12

A production possibilities curve shows

Accepted Answer

A)   that resources are unlimited.
B)   that people prefer one of the goods more than the other.
C)   the maximum amounts of two goods that can be produced, assuming the full use of available resources.
D)   combinations of capital and labor necessary to produce specific levels of output.E) A) and B)
F) C) and D)

Question 13

The law of increasing opportunity costs is reflected in a production possibilities curve that is

Accepted Answer

A)   an upsloping straight line.
B)   a downsloping straight line.
C)   bowed out from the origin.
D)   bowed in toward the origin.E) A) and D)
F) A) and C)

Question 14

Macroeconomics can best be described as the

Accepted Answer

A)   analysis of how a consumer tries to spend income.
B)   study of the large aggregates of the economy or the economy as a whole.
C)   analysis of how firms attempt to maximize their profits.
D)   study of how supply and demand determine prices in individual markets.E) C) and D)
F) A) and B)

Question 15

Because of increasing opportunity costs, the production possibilities curve

Accepted Answer

A)   is bowed out from (or concave to)  the origin.
B)   can be either downward- or upward-sloping.
C)   at first rises, then falls eventually.
D)   is a straight downward-sloping line.E) All of the above
F) B) and C)

Question 16

Which question is an example of a macroeconomic question?

Accepted Answer

A)   What is the level of industrial concentration in the U.S. automobile industry?
B)   What economic incentives can be used to reduce the cost of health care in the nation?
C)   What policies would be recommended for stimulating national economic growth?
D)   What market conditions are expected for milk in the nation this year?E) C) and D)
F) A) and C)

Question 17

The question below is based on the following four sets of data-pairs: (1)  A and B, (2)  C and D, (3)  E and F, and (4)  G and H. In each set, the independent variable is in the left column and the dependent variable is in the right column.  Which of the four sets of data pairs show an inverse relationship between the independent and dependent variable?

Accepted Answer

A)   1 and 3
B)   2 and 3
C)   3 and 4
D)   2 and 4E) B) and C)
F) A) and D)

Question 18

Which of the following is not correct? A typical production possibilities curve

Accepted Answer

A)   indicates how much of two products society can produce.
B)   reveals how much each additional unit of one product will cost in terms of the other product.
C)   specifies how much of each product a society will want to produce.
D)   indicates that to produce more of one product, a society must forgo larger and larger amounts of the other product.E) None of the above
F) C) and D)

Question 19

Which one of the following is a normative economic statement?

Accepted Answer

A)   The unemployment rate fell for the fourth straight month, reflecting the effects from stronger economic growth in the second quarter.
B)   The worsening balance of trade must be corrected if this nation is to remain competitive in the world economy.
C)   Consumer prices are rising at a faster rate than in past months, indicating a renewal of inflationary pressures on the economy.
D)   To help balance the Federal budget, Congress increased the tax on gasoline to its highest level in the past 10 years.E) None of the above
F) B) and D)

Question 20

The question below is based on the following four sets of data-pairs: (1)  A and B, (2)  C and D, (3)  E and F, and (4)  G and H. In each set, the independent variable is in the left column and the dependent variable is in the right column.  The linear equation for the relationship in data set 3 above is

Accepted Answer

A)   F = 12E.
B)   F = 12 - 2E.
C)   E = 12F.
D)   E = 12 −2 F.E) A) and B)
F) A) and C)

Exam 1: Limits, Alternatives, and Choices

Any combination of goods lying outside of the budget line

Correct Answer
verified

Which of the following is not correct? A typical production possibilities curve

Correct Answer
verified

The law of increasing opportunity costs is reflected in a production possibilities curve that is

Correct Answer
verified

Because of increasing opportunity costs, the production possibilities curve

Correct Answer
verified

(Last Word) The fallacy of composition states that

Correct Answer
verified

The concept of opportunity cost

Correct Answer
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Which question is an example of a macroeconomic question?

Correct Answer
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Which of the following will shift the production possibilities curve to the right?

Correct Answer
verified

If we say that two variables are inversely related, this means that

Correct Answer
verified

Macroeconomics can best be described as the

Correct Answer
verified

Which pitfall to sound economic reasoning is illustrated when a person comments that "capitalists focus only on profits and don't care about their workers"?

Correct Answer
verified

The question below is based on the following four sets of data-pairs: (1) A and B, (2) C and D, (3) E and F, and (4) G and H. In each set, the independent variable is in the left column and the dependent variable is in the right column. The linear equation for the relationship in data set 3 above is

Correct Answer
verified

The comment that "taxes must be reduced for the good of the economy" is an example of a normative economic statement.

Correct Answer
verified

Which one of the following is a normative economic statement?

Correct Answer
verified

Correct Answer
verified

A production possibilities curve shows

Correct Answer
verified

The economizing problem is one of deciding how to make the best use of

Correct Answer
verified

Which of the following do economists consider to be capital?

Correct Answer
verified

A normative statement is one that

Correct Answer
verified

The study of global businesses such as Apple Inc is one major focus of macroeconomic analysis.

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

Any combination of goods lying outside of the budget line

Correct AnswerverifiedShow Answer

Which of the following is not correct? A typical production possibilities curve

Correct AnswerverifiedShow Answer

The law of increasing opportunity costs is reflected in a production possibilities curve that is

Correct AnswerverifiedShow Answer

Because of increasing opportunity costs, the production possibilities curve

Correct AnswerverifiedShow Answer

(Last Word) The fallacy of composition states that

Correct AnswerverifiedShow Answer

The concept of opportunity cost

Correct AnswerverifiedShow Answer

Which question is an example of a macroeconomic question?

Correct AnswerverifiedShow Answer

Which of the following will shift the production possibilities curve to the right?

Correct AnswerverifiedShow Answer

If we say that two variables are inversely related, this means that

Correct AnswerverifiedShow Answer

Macroeconomics can best be described as the

Correct AnswerverifiedShow Answer

Which pitfall to sound economic reasoning is illustrated when a person comments that "capitalists focus only on profits and don't care about their workers"?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The comment that "taxes must be reduced for the good of the economy" is an example of a normative economic statement.

Correct AnswerverifiedShow Answer

Which one of the following is a normative economic statement?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A production possibilities curve shows

Correct AnswerverifiedShow Answer

The economizing problem is one of deciding how to make the best use of

Correct AnswerverifiedShow Answer

Which of the following do economists consider to be capital?

Correct AnswerverifiedShow Answer

A normative statement is one that

Correct AnswerverifiedShow Answer

The study of global businesses such as Apple Inc is one major focus of macroeconomic analysis.

Correct AnswerverifiedShow Answer

Correct Answer
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