Question 1

Scarcity is:

Accepted Answer

A)  a fact of life.
B)  not a problem for Bill Gates because he is a billionaire.
C)  can be eliminated by rational decision making.
D)  is a problem studied in microeconomics but is not a macroeconomic concern.E) B) and D)
F) A) and B)

Question 2

People frequently confuse facts with judgments that are based on beliefs.This means that people have trouble making the distinction between:

Accepted Answer

A)  political statements and non-political statements.
B)  rational statements and irrational statements.
C)  macroeconomics and microeconomics.
D)  positive statements and normative statements.E) B) and C)
F) A) and D)

Question 3

Making a decision "on the margin" involves comparing:

Accepted Answer

A)  additional benefits against additional costs.
B)  total benefits against total costs,which include benefits and costs from past decisions.
C)  sunk costs against opportunity costs.
D)  All of these are true.E) A) and B)
F) None of the above

Question 4

Economics is the study of:

Accepted Answer

A)  the government's decision making process.
B)  why state and federal governments disagree.
C)  the study of how people manage resources.
D)  All of these are true.E) A) and B)
F) A) and C)

Question 5

The extra cost associated with producing or consuming the next unit is called the:

Accepted Answer

A)  variable cost.
B)  marginal cost.
C)  utility cost.
D)  sunk cost.E) A) and B)
F) C) and D)

Question 6

When speed boat sales rise,the city of Las Vegas takes in more revenue.The omitted common variable between these outcomes is likely to be:

Accepted Answer

A)  life jacket sales.
B)  prices of Las Vegas flights.
C)  childhood obesity.
D)  increased disposable income.E) A) and B)
F) A) and C)

Question 7

A normative statement is generally based upon:

Accepted Answer

A)  data that can be tested.
B)  a factual claim.
C)  moral beliefs.
D)  scientific fact.E) B) and D)
F) None of the above

Question 8

Which of the following could be an example of a question that would be studied in microeconomics?

Accepted Answer

A)  Why did our economic growth rate slow down during the 2000s?
B)  How did the recession end in 2009 if unemployment continued to rise?
C)  How will the legalization of marijuana affect the market for cigarettes?
D)  When should Congress raise taxes in order to tackle the debt crisis?E) All of the above
F) B) and D)

Question 9

"There is no such thing as a free lunch." This is an example of which economic concept?

Accepted Answer

A)  Maximization
B)  Trade-offs
C)  Basic necessities
D)  Income effectE) None of the above
F) B) and C)

Question 10

A resource is anything that:

Accepted Answer

A)  can be touched and can be used to produce something of value.
B)  is a natural gift from nature,excluding human talents.
C)  has been used to create a good or service.
D)  can be used to make something of value.E) A) and B)
F) B) and D)

Question 11

In the early 1990s,before pay at the pump was an option,a gas station decides to force people to pre-pay due to drive-offs.The opportunity cost of this decision may include:

Accepted Answer

A)  the value of the gas that is no longer stolen.
B)  not having to look outside for people waving at you to turn on the pump.
C)  the revenue lost because people will "low ball" how much they think their tank will hold in an effort to avoid having to come back into the store to get change from overpayment.
D)  a loss of snack sales because people are coming into the store to pay for gas before pumping versus after pumping.E) B) and C)
F) None of the above

Question 12

Having a goal that does not include making a profit can often explain why the nonprofitable idea has not been implemented.These types of ideas may include:

Accepted Answer

A)  helping the poor.
B)  making great art.
C)  promoting social justice.
D)  All of these.E) All of the above
F) None of the above

Question 13

An incentive is:

Accepted Answer

A)  the marginal cost of engaging in a course of action.
B)  the marginal benefit of engaging in a course of action.
C)  something that causes people to behave in a certain way by changing the trade-offs they face.
D)  rational behavior that involves thinking on the margin.E) A) and D)
F) B) and C)

Question 14

The greatest constraint faced by banks considering the alternative of lending to Bangladeshi villagers is:

Accepted Answer

A)  not having qualified loan officers.
B)  having limited funds available for loans.
C)  not being able to determine appropriate currency exchange rates.
D)  counterfeit Carfax reports that make it difficult to properly assess collateral.E) B) and D)
F) A) and B)

Question 15

Scarcity requires that we:

Accepted Answer

A)  make sure we only want things that we are capable of consuming and producing.
B)  change our fiscal policy until the situation of scarcity is eliminated.
C)  make decisions in order to arrange our resources rationally.
D)  adopt economic policies that will lead to unlimited resources.E) B) and D)
F) A) and C)

Question 16

A factual claim about how the world actually works is a ______________ statement.

Accepted Answer

A)  positive
B)  marginal
C)  irrational
D)  normativeE) A) and C)
F) None of the above

Question 17

Which of the following questions would a macroeconomist most likely try to answer?

Accepted Answer

A)  What stage of the business cycle is our economy currently in?
B)  Why do broadway musicals and airlines have different price discrimination strategies?
C)  How much would marijuana consumption change if the market became legal?
D)  Should the 5-Hour Energy firm increase its distribution from nationally to internationally?E) A) and D)
F) B) and C)

Question 18

The Widgetville County Woolfpack has won 90 percent of their last 20 games played under a full moon.This means:

Accepted Answer

A)  the weather affects how they play.
B)  there is a correlation between their play and the occurrence of a full moon.
C)  that full moons cause the team to play better.
D)  that causation can be found between the two events.E) A) and B)
F) A) and C)

Question 19

Which of the following could be considered microeconomic issue?

Accepted Answer

A)  The local university decides to raise tuition for online course offerings.
B)  Zimbabwe has experienced a decline in inflation.
C)  The economic growth rate was reported at 2.4 percent in the first quarter of 2013 for the United States.
D)  The unemployment rate in Greece is 22.8 percent.E) B) and C)
F) A) and D)

Question 20

Which broad field of economics would most likely study how consumers respond to a hike in cigarette taxes?

Accepted Answer

A)  Microeconomics
B)  Marginal economics
C)  Macroeconomics
D)  Monetary economicsE) C) and D)
F) All of the above

Exam 1: Economics and Life

People frequently confuse facts with judgments that are based on beliefs.This means that people have trouble making the distinction between:

Correct AnswerverifiedShow Answer

Having a goal that does not include making a profit can often explain why the nonprofitable idea has not been implemented.These types of ideas may include:

Correct AnswerverifiedShow Answer

Which of the following could be considered microeconomic issue?

Correct AnswerverifiedShow Answer

In the early 1990s,before pay at the pump was an option,a gas station decides to force people to pre-pay due to drive-offs.The opportunity cost of this decision may include:

Correct AnswerverifiedShow Answer

Which of the following could be an example of a question that would be studied in microeconomics?

Correct AnswerverifiedShow Answer

A normative statement is generally based upon:

Correct AnswerverifiedShow Answer

A factual claim about how the world actually works is a ______________ statement.

Correct AnswerverifiedShow Answer

A resource is anything that:

Correct AnswerverifiedShow Answer

Scarcity is:

Correct AnswerverifiedShow Answer

When speed boat sales rise,the city of Las Vegas takes in more revenue.The omitted common variable between these outcomes is likely to be:

Correct AnswerverifiedShow Answer

The Widgetville County Woolfpack has won 90 percent of their last 20 games played under a full moon.This means:

Correct AnswerverifiedShow Answer

Economics is the study of:

Correct AnswerverifiedShow Answer

Which of the following questions would a macroeconomist most likely try to answer?

Correct AnswerverifiedShow Answer

Making a decision "on the margin" involves comparing:

Correct AnswerverifiedShow Answer

The extra cost associated with producing or consuming the next unit is called the:

Correct AnswerverifiedShow Answer

Which broad field of economics would most likely study how consumers respond to a hike in cigarette taxes?

Correct AnswerverifiedShow Answer

"There is no such thing as a free lunch." This is an example of which economic concept?

Correct AnswerverifiedShow Answer

An incentive is:

Correct AnswerverifiedShow Answer

Scarcity requires that we:

Correct AnswerverifiedShow Answer

The greatest constraint faced by banks considering the alternative of lending to Bangladeshi villagers is:

Correct AnswerverifiedShow Answer

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