Question 1

Purposeful behavior implies that everyone will make identical choices.

Accepted Answer

A) True 
 B)False

Question 2

Microeconomics:

Accepted Answer

A)   is the basis for the "after this,therefore because of this" fallacy.
B)   is not concerned with details,but only with the overall big picture of the economy.
C)   is concerned with individual economic units and specific markets.
D)   describes the aggregate flows of output and income.E) C) and D)
F) B) and D)

Question 3

An economic hypothesis:

Accepted Answer

A)   has the same meaning as an economic principle or economic law.
B)   is usually a normative statement.
C)   is a possible explanation of cause and effect.
D)   is a stronger generalization than an economic law.E) All of the above
F) A) and D)

Question 4

(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) None of the above
F) B) and C)

Question 5

Any point inside the production possibilities curve indicates:

Accepted Answer

A)   the presence of technological change.
B)   that resources are imperfectly substitutable among alternative uses.
C)   the presence of inflationary pressures.
D)   that more output could be produced with the available resources.E) All of the above
F) A) and B)

Question 6

Which of the following is a capital resource?

Accepted Answer

A)   A computer programmer.
B)   A corporate bond issued by a computer manufacturer.
C)   Silicon (sand) used to make computer chips.
D)   A piece of software used by a firm.E) A) and B)
F) C) and D)

Question 7

All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve,except:

Accepted Answer

A)   emigration of skilled workers to other nations.
B)   a decline in the birth rate.
C)   an increase in the average skill level of all occupational groups.
D)   depletion and reduced availability of major energy resources.E) A) and D)
F) A) and C)

Question 8

(Last Word) Which of the following has to do with the problem of distinguishing cause and effect in economic reasoning?

Accepted Answer

A)   The law of large numbers.
B)   The law of averages.
C)   The post hoc,ergo propter hoc fallacy.
D)   The fallacy of composition.E) A) and C)
F) B) and C)

Question 9

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.  \quad \quad  (1)  \quad \quad \quad \quad  (2)  \quad \quad \quad \quad  (3)  \quad \quad \quad \quad  (4)  \quad \quad \quad \quad  (5) 
 \begin{array}{rl}{J} & K \\hline 0 & 10 \40 & 20 \80 & 30 \120 & 40 \160 & 50 \200 & 60\end{array}\begin{array}{rr}\mathrm{L} & \mathrm{M} \\hline 0 & -15 \30 & -5 \60 & 5 \90 & 15 \120 & 25 \150 & 35\end{array}\begin{array}{rl}\mathrm{N}& \mathrm{P} \\hline 100 & 40 \80 & 50 \60 & 60 \40 & 70 \20 & 80 \0 & 90\end{array}\begin{array}{rc}\mathrm{R}& \mathrm{T} \\hline 0 & -15 \20 & -25 \40 & -35 \60 & -45 \80 & -55 \100 & -65\end{array}\begin{array}{rr}\mathrm{U} & \mathrm{V }\\hline 0 & 0 \5 & 10 \10 & 20 \15 & 30 \20 & 40 \25 & 50\end{array}  Refer to the data sets.Which of the data sets would graph as an upsloping line?

Accepted Answer

A)   1 only.
B)   1,2,and 3 only.
C)   4 and 5 only.
D)   1,2,and 5 only. E) B) and C)
F) None of the above

Question 10

Which of the following will enable a nation to obtain a combination of consumer goods and capital goods outside its production possibilities curve?

Accepted Answer

A)   Full employment.
B)   International specialization and trade.
C)   Full production.
D)   Productive efficiency.E) A) and D)
F) All of the above

Question 11

The scientific method is:

Accepted Answer

A)   not applicable to economics because economics deals with human beings.
B)   also known as the economic perspective.
C)   analysis that moves from broad generalizations called laws to theories and then to hypotheses.
D)   used by economists and other social scientists,as well as by physical scientists and life scientists,to formulate and test hypotheses.E) A) and C)
F) All of the above

Question 12

The process by which capital goods are accumulated is known as investment.

Accepted Answer

A) True 
 B)False

Question 13

Suppose that a university decides to spend $1 million to upgrade personal computers and scientific equipment for faculty rather than spend $1 million to expand parking for students.This example illustrates:

Accepted Answer

A)   distorted priorities.
B)   opportunity costs.
C)   increasing opportunity costs.
D)   productive efficiency.E) A) and D)
F) B) and D)

Question 14

The study of economics is primarily concerned with:

Accepted Answer

A)   keeping private businesses from losing money.
B)   demonstrating that capitalistic economies are superior to socialistic economies.
C)   choices that are made in seeking the best use of resources.
D)   determining the most equitable distribution of society's output.E) B) and C)
F) A) and D)

Question 15

The four factors of production are:

Accepted Answer

A)   land,labor,capital,and money.
B)   land,labor,capital,and entrepreneurial ability.
C)   labor,capital,technology,and entrepreneurial ability.
D)   labor,capital,entrepreneurial ability,and money.E) C) and D)
F) None of the above

Question 16

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 D)
F) None of the above

Question 17

(Last Word) If variables X and Y are positively correlated,this means that:

Accepted Answer

A)   X is the cause of Y.
B)   Y is the cause of X.
C)   causation necessarily exists,but we don't know whether X or Y is the cause.
D)   causation may or may not exist between X and Y.E) None of the above
F) B) and C)

Question 18

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) B) and C)
F) None of the above

Question 19

Economists contend that most economic decisions are:

Accepted Answer

A)   random.
B)   chaotic.
C)   spontaneous.
D)   purposeful.E) A) and B)
F) None of the above

Question 20

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) A) and C)
F) C) and D)

Exam 1: Limits, Alternatives, and Choices

Microeconomics:

Correct Answer
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The process by which capital goods are accumulated is known as investment.

Correct Answer
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(Last Word) Which of the following has to do with the problem of distinguishing cause and effect in economic reasoning?

Correct Answer
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An economic hypothesis:

Correct Answer
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Economists contend that most economic decisions are:

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

Correct Answer
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Which of the following is a capital resource?

Correct Answer
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Suppose that a university decides to spend $1 million to upgrade personal computers and scientific equipment for faculty rather than spend $1 million to expand parking for students.This example illustrates:

Correct Answer
verified

Which of the following will enable a nation to obtain a combination of consumer goods and capital goods outside its production possibilities curve?

Correct Answer
verified

The four factors of production are:

Correct Answer
verified

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

Correct Answer
verified

(Last Word) If variables X and Y are positively correlated,this means that:

Correct Answer
verified

The scientific method is:

Correct Answer
verified

Purposeful behavior implies that everyone will make identical choices.

Correct Answer
verified

All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve,except:

Correct Answer
verified

Correct Answer
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The study of economics is primarily concerned with:

Correct Answer
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Any point inside the production possibilities curve indicates:

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

Microeconomics:

Correct AnswerverifiedShow Answer

The process by which capital goods are accumulated is known as investment.

Correct AnswerverifiedShow Answer

(Last Word) Which of the following has to do with the problem of distinguishing cause and effect in economic reasoning?

Correct AnswerverifiedShow Answer

An economic hypothesis:

Correct AnswerverifiedShow Answer

Economists contend that most economic decisions are:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is a capital resource?

Correct AnswerverifiedShow Answer

Suppose that a university decides to spend $1 million to upgrade personal computers and scientific equipment for faculty rather than spend $1 million to expand parking for students.This example illustrates:

Correct AnswerverifiedShow Answer

Which of the following will enable a nation to obtain a combination of consumer goods and capital goods outside its production possibilities curve?

Correct AnswerverifiedShow Answer

The four factors of production are:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

(Last Word) If variables X and Y are positively correlated,this means that:

Correct AnswerverifiedShow Answer

The scientific method is:

Correct AnswerverifiedShow Answer

Purposeful behavior implies that everyone will make identical choices.

Correct AnswerverifiedShow Answer

All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve,except:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The study of economics is primarily concerned with:

Correct AnswerverifiedShow Answer

Any point inside the production possibilities curve indicates:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow 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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