Question 1

Which of the following is an example of a normative question?

Accepted Answer

A)   How will an increase in the minimum wage affect teenaged workers?
B)   How will an increase in the price of gasoline affect taxi drivers?
C)   Should the government provide free prescription drugs to senior citizens?
D)   What fraction of an income- tax cut will be spent on consumer goods?E) A) and B)
F) C) and D)

Question 2

Using assumptions to make things simpler and focus attention on what really matters is like using a road map to plan a trip.

Accepted Answer

A) True 
 B)False

Question 3

The recent experience of sub- Saharan Africa has taught economists that institutions such as the legal system and the regulatory environment play a key role in economic growth.

Accepted Answer

A) True 
 B)False

Question 4

A straight line graph shows

Accepted Answer

A)   the relationships among any number of variables.
B)   the constant relationship between two variable.
C)   one variable.
D)   none of the above.E) B) and C)
F) C) and D)

Question 5

Scarcity is a situation in which resources are limited in quantity and can be used in different ways.

Accepted Answer

A) True 
 B)False

Question 6

If a variable is 100 and then increases to 150, then using the initial value approach its percentage growth is:

Accepted Answer

A)   50 percent.
B)   15 percent.
C)   - 50 percent.
D)   40 percent.E) None of the above
F) All of the above

Question 7

A key assumption of most economic analysis is that people act rationally and in their own self- interest.

Accepted Answer

A) True 
 B)False

Question 8

The reason why spammers find it profitable to spam is because:

Accepted Answer

A)   it does not cost nor benefit the spammer anything to send a million emails.
B)   it does not benefit the spammer anything to send a million emails.
C)   it does not cost the spammer anything to send a million emails.
D)   it does not cost the spammer anything to receive a million emails.E) A) and B)
F) None of the above

Question 9

Unrealistic simplifying assumptions should be avoided because they cause the analysis that is based on the assumption to be incorrect.

Accepted Answer

A) True 
 B)False

Question 10

Figure 1.1
-Refer to Figure 1.1. The relationship between hours worked and income, as shown by the graph in Figure 1.1 is:

Accepted Answer

A)   exponential.
B)   nonlinear.
C)   negative.
D)   positive.E) A) and B)
F) A) and C)

Question 11

To think at the margin means to consider:

Accepted Answer

A)   how nothing remains constant over time.
B)   how people behave in their own self- interest.
C)   how a small change in one variable affects another variable.
D)   how people will decide what to purchase.E) B) and D)
F) None of the above

Question 12

Recall Application 1, "Responding to Production Rewards," to answer the following questions:
-Based on the application, does a reward provide more incentive to produce compared to punishment?

Accepted Answer

A)   No. The increase in the production by both the "reward" and the "punishment" groups were exactly the same.
B)   No. The production of the "punishment" group was higher by 1 percent.
C)   Yes. The production of the "reward" group was higher by 1 percent.
D)   No. There was no increase in the production by the "punishment" group or the "reward" group.E) None of the above
F) B) and C)

Question 13

If one variable falls the other variable falls, the two variables are positively related.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a microeconomic question?

Accepted Answer

A)   Should Congress and the president take action to reduce the unemployment rate?
B)   Is it sensible for the government to subsidize college education?
C)   Why do some countries grow faster than others?
D)   All of the above are microeconomic questions.E) C) and D)
F) A) and C)

Question 15

A student has a D grade average in her accounting course and a B grade average in her economics course. She decides to study an extra hour for her accounting exam and one less hour for her economics exam hoping to improve her accounting grade while not hurting her economics grade. This is an example of:

Accepted Answer

A)   using assumptions to simplify.
B)   thinking at the margin.
C)   ceteris paribus.
D)   caveat emptor.E) A) and B)
F) B) and D)

Question 16

Bill Gates, with his $53 billion fortune, does not experience scarcity.

Accepted Answer

A) True 
 B)False

Question 17

Because resources are limited:

Accepted Answer

A)   people must make choices.
B)   only the very wealthy can get everything they want.
C)   firms will be forced out of business.
D)   the availability of goods will be limited but the availability of services will not.E) None of the above
F) A) and B)

Question 18

Recall Application 1, "Responding to Production Rewards," to answer the following questions:
-Based on the application, do incentives increase the average worker productivity?

Accepted Answer

A)   Yes, but the increase in productivity was observed only in the "reward" group.
B)   Yes, but the increase in productivity was observed only in the "punishment" group.
C)   No. The control group produced 7% more than either "treatment" group.
D)   Yes, workers in the treatment groups (those with bonuses or punishment stated in their contracts)  produced 7% more than the control group.E) All of the above
F) C) and D)

Question 19

Money is an example of a scarce factor of production.

Accepted Answer

A) True 
 B)False

Question 20

When a student is thinking at the margin, he analyzes how many more points he would get on his economics final exam if he devotes one more hour for studying.

Accepted Answer

A) True 
 B)False

Exam 1: Introduction: What Is Economics

Bill Gates, with his $53 billion fortune, does not experience scarcity.

Correct Answer
verified

A straight line graph shows

Correct Answer
verified

If a variable is 100 and then increases to 150, then using the initial value approach its percentage growth is:

Correct Answer
verified

The reason why spammers find it profitable to spam is because:

Correct Answer
verified

Money is an example of a scarce factor of production.

Correct Answer
verified

Figure 1.1 -Refer to Figure 1.1. The relationship between hours worked and income, as shown by the graph in Figure 1.1 is:

Correct Answer
verified

Unrealistic simplifying assumptions should be avoided because they cause the analysis that is based on the assumption to be incorrect.

Correct Answer
verified

Recall Application 1, "Responding to Production Rewards," to answer the following questions: -Based on the application, do incentives increase the average worker productivity?

Correct Answer
verified

Which of the following is an example of a normative question?

Correct Answer
verified

Using assumptions to make things simpler and focus attention on what really matters is like using a road map to plan a trip.

Correct Answer
verified

The recent experience of sub- Saharan Africa has taught economists that institutions such as the legal system and the regulatory environment play a key role in economic growth.

Correct Answer
verified

When a student is thinking at the margin, he analyzes how many more points he would get on his economics final exam if he devotes one more hour for studying.

Correct Answer
verified

A key assumption of most economic analysis is that people act rationally and in their own self- interest.

Correct Answer
verified

Because resources are limited:

Correct Answer
verified

Scarcity is a situation in which resources are limited in quantity and can be used in different ways.

Correct Answer
verified

Recall Application 1, "Responding to Production Rewards," to answer the following questions: -Based on the application, does a reward provide more incentive to produce compared to punishment?

Correct Answer
verified

To think at the margin means to consider:

Correct Answer
verified

Which of the following is a microeconomic question?

Correct Answer
verified

Correct Answer
verified

If one variable falls the other variable falls, the two variables are positively related.

Correct Answer
verified

Exam 1: Introduction: What Is Economics

Bill Gates, with his $53 billion fortune, does not experience scarcity.

Correct AnswerverifiedShow Answer

A straight line graph shows

Correct AnswerverifiedShow Answer

If a variable is 100 and then increases to 150, then using the initial value approach its percentage growth is:

Correct AnswerverifiedShow Answer

The reason why spammers find it profitable to spam is because:

Correct AnswerverifiedShow Answer

Money is an example of a scarce factor of production.

Correct AnswerverifiedShow Answer

Figure 1.1 -Refer to Figure 1.1. The relationship between hours worked and income, as shown by the graph in Figure 1.1 is:

Correct AnswerverifiedShow Answer

Unrealistic simplifying assumptions should be avoided because they cause the analysis that is based on the assumption to be incorrect.

Correct AnswerverifiedShow Answer

Recall Application 1, "Responding to Production Rewards," to answer the following questions: -Based on the application, do incentives increase the average worker productivity?

Correct AnswerverifiedShow Answer

Which of the following is an example of a normative question?

Correct AnswerverifiedShow Answer

Using assumptions to make things simpler and focus attention on what really matters is like using a road map to plan a trip.

Correct AnswerverifiedShow Answer

The recent experience of sub- Saharan Africa has taught economists that institutions such as the legal system and the regulatory environment play a key role in economic growth.

Correct AnswerverifiedShow Answer

When a student is thinking at the margin, he analyzes how many more points he would get on his economics final exam if he devotes one more hour for studying.

Correct AnswerverifiedShow Answer

A key assumption of most economic analysis is that people act rationally and in their own self- interest.

Correct AnswerverifiedShow Answer

Because resources are limited:

Correct AnswerverifiedShow Answer

Scarcity is a situation in which resources are limited in quantity and can be used in different ways.

Correct AnswerverifiedShow Answer

Recall Application 1, "Responding to Production Rewards," to answer the following questions: -Based on the application, does a reward provide more incentive to produce compared to punishment?

Correct AnswerverifiedShow Answer

To think at the margin means to consider:

Correct AnswerverifiedShow Answer

Which of the following is a microeconomic question?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If one variable falls the other variable falls, the two variables are positively related.

Correct AnswerverifiedShow Answer

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