Intro to Micro Ch 1

Scarcity requires that people must a. make choices. b. cooperate.c. compete.d. trade.

*a. make choices.

x variable 8, 10, 12 y variable 14, 18, 22 The above table gives data on two variables. If these data were graphed, the slope of the line would be a. 2. b. -4. c. 1. d. -2.

a. 2

Which of the following questions is a macroeconomic issue? a. What is the future growth prospect for an economy? b. How many more pounds of cookies will a consumer purchase if the price of cookies decreases? c. What effect would a cure for Mad Cow Disease have on the market for beef? d. How many workers should the owner of a business hire?

a. What is the future growth prospect for an economy?

Suppose Company A's profits increase by $10 million and nobody is made worse off. The CEO of Company A keeps all $10 million for herself. This situation a. is definitely efficient. b. is definitely fair. c. is definitely not in the social interest. d. is definitely not in the self-interest of Company A.

a. is definitely efficient.

Studying the effects choices have on the individual markets within the economy is part of a. microeconomics. b. incentives.c. macroeconomics. d. scarcity.

a. microeconomics

Scarcity is a. our inability to satisfy all our wants. b. eliminated by choices. c. a situation that exists during economic recessions but not during economic booms. d. an economic problem only for poor people.

a. our inability to satisfy all our wants

All economic questions arise because we a. want more than we can get. b. have limited wants that need to be satisfied. c. want more than we need. d. have an abundance of resources.

a. want more than we can get.

Marginal cost is the a. cost of all forgone alternatives. b. cost of an activity minus the benefits of the activity. c. total cost of an activity. d. cost of an increase in an activity.

d. cost of an increase in an activity.

If a large change in the variable measured on the x-axis is associated with a small change of the variable measured on the y-axis, the line is ________ and the slope is ________. a. downward-sloping; small b. upward-sloping; small c. downward-sloping; large d. either downward or upward-sloping; small

d. either downward or upward-sloping; small

The analysis of the behavior of individual decision-making units is the definition of a. positive economics. b. macroeconomics. c. normative economics. d. microeconomics.

d. microeconomics.

In part, microeconomics is concerned with the study of a. the Federal Reserve's policies. b. national output of goods and services. c. unemployment and economic growth. d. the effect government regulation has on the price of a product.

d. the effect government regulation has on the price of a product.

Which of the following is NOT a factor of production? a. the effort of farmers raising cattle. b. the water used to cool a nuclear power plant. c. the management skill of a small business owner. d. the wages paid to workers.

d. the wages paid to workers.

As the number of days without rain increases, the amount of wheat per acre grown declines. A graph showing this relationship would have a curve a. showing a positive relationship. b. that is a vertical line. c. that is a horizontal line. d. None of the above answers are correct.

d. None of the above answers are correct.

The slope of a line equals the a. change in the variable measured along the x-axis minus the change in the variable measured along the y-axis. b. change in the variable measured along the y-axis divided by the change in the variable measured along the x-axis. c. change in the variable measured along the x-axis multiplied by the change in the variable measured along the y-axis .d. change in the variable measured along the x-axis divided by the change in the variable measured along the y-axis.

b. change in the variable measured along the y-axis divided by the change in the variable measured along the x-axis.

Total household income (dollars) 30,000 40,000 50,000 Total consumption (dollars) 27,000 35,000 38,000 The data in the table above shows the relationship between the Joneses' total consumption and total household income. Based on these data, total consumption varies a. negatively with their income. b. directly with their total household income. c. inversely with their total household income. d. independently of their total household income.

b. directly with their total household income.

In broad terms the difference between microeconomics and macroeconomics is that a. they use different sets of tools and ideas. b. microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy. c. microeconomics studies the effects of government taxes on the national unemployment rate. d. macroeconomics studies the effects of government regulation and taxes on the price of individual goods and services whereas microeconomics does not.

b. microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy.

Marginal benefit is the benefit a. that your activity provides to someone else. b. that arises from an increase in an activity. c. of an activity that exceeds its cost. d. that arises from the secondary effects of an activity.

b. that arises from an increase in an activity.

When an economy produces more houses and fewer typewriters, it is answering the ________ part of one of the two big economic questions. a. "how" b. "for whom" c. "what" d. "where"

c. "what"

Along a straight line, when x equals 90, then y equals 30. When x equals 120, then y equals 40. The slope of the straight line is a. -1/3. b. 3. c. -3. d. 1/3.

c. 1/3

Jed had an exam score of 50 percentage points. There is an extra credit assignment that Jed can complete that will raise his exam score by 20 percentage points. Jed has determined that the extra credit assignment will take 10 hours of his time. Jed will complete the assignment he values the a. 70 percentage points more than the 10 hours of his time. b. wants a higher score. c. 20 percentage points more than the 10 hours of his time. d. 10 hours of his time more than the 20 percentage points.

c. 20 percentage points more than the 10 hours of his time.

A positive statement is a. about what ought to be. b. the result of a model's normative assumptions. c. about what is. d. valid only in the context of a model with simple assumptions.

c. about what is.

Because we face scarcity, every choice involves a. money. b. giving up something for nothing. c. an opportunity cost. d. the question "what."

c. an opportunity cost.

In the above figure, the curve has a slope that is ________. a. negative and becoming smaller in magnitude b. positive and becoming larger in magnitude c. negative and becoming larger in magnitude d. positive and becoming smaller in magnitude

c. negative and becoming larger in magnitude

Statements about what ought to be are called a. assumptions. b. implications. c. normative statements. d. positive statements.

c. normative statements.

A scatter diagram shows the a. change in one variable over time. b. evolution of a variable. c. relationship between two variables. d. level of one variable over time.

c. relationship between two variables.

If there is a direct relationship between two variables a. the graph of the relationship will be downward-sloping. b. the slope of the line (or the slope of a tangent line to the curve) will be negative. c. the graph of the relationship will be upward-sloping. d. Both answers A and C are correct.

c. the graph of the relationship will be upward-sloping.

You have the choice of going on vacation to Florida for one week, staying at work for the week, or spending the week doing fix-up projects around your house. If you decide to go to Florida, the opportunity cost of the trip is a. working, because you would be giving up income. b. working and doing fix-up projects. c. working or doing fix-up projects, depending on which you would have done otherwise. d. nothing because you will enjoy the trip to Florida

c. working or doing fix-up projects, depending on which you would have done otherwise.

Which of the following is an example of a microeconomic decision? a. an individual deciding how to allocate the time he or she has for work and leisure b. a multinational company deciding where to relocate its world headquarter c. a small shoe factory deciding how much leather to purchase for the next quarter's production need d. All of the above answers are correct

d. All of the above answers are correct

On the horizontal axis of a graph, generally a. values increase from left to right. b. values increase from right to left. c. values can be positive and/or negative. d. Both answers A and C are correct.

d. Both answers A and C are correct.

Which of the following is an example of a positive statement? a. Business firms ought to contribute more to charities. b. The foreign sector should be more tightly controlled. c. Government should not redistribute income. d. Households are the primary source of saving.

d. Households are the primary source of saving.