Quiz 1 - Economic Thinking

When creating a graph for your economics course, which axis is most commonly used to represent quantity (q)? 1) Quantity is most commonly represented on the y-axis. 2) Quantity is most commonly represented at the 0,0 intersection of the y and x-axis. 3) Quantity is most commonly represented on the x-axis.

Quantity is most commonly represented on the x-axis.

The ________ simplifies the economy into two groups, firms and households, and allows us to make predictions about economic behavior. 1) circular flow diagram 2) production possibilities graph 3) supply & demand framework

circular flow diagram

Macroeconomic policies that focus on government spending and taxes are considered 1) monetary policies. 2) federal policies. 3) fiscal policies.

fiscal policies.

If Stan's Shoemaker Shop practices the division of labor and employees concentrate on one step of the shoe-making process, this will likely result in 1) better quality shoes, but not as many will be made. 2) greater production output. 3) increased production time.

greater production output.

What is NOT included in economic capital?: 1) money 2) tools 3) buildings and equipment

money

If Kendrick decides to watch t.v. instead of go to the gym, the ________ is a missed workout. 1) output cost 2) opportunity cost 3) societal cost

opportunity cost

Financial capital, like money, is simply a tool. Once financial capital is converted to economic capital (invested), it produces a resource that is 1) profitable. 2) productive. 3) expensive.

productive.

The advantages that society gains through trade lie in the ability to 1) align output to reflect society's preferences. 2) attain absolute advantage in our trade with other nations. 3) specialize resources to the uses where opportunity cost is minimized.

specialize resources to the uses where opportunity cost is minimized.

In the case of an inverse relationship between two variables, all else remaining constant 1) the value of the two variables will move in opposite directions from each other. 2) the values of the two variables will move in the same direction. 3) graphically, the data line representing the relationship between the variables has a positive slope.

the value of the two variables will move in opposite directions from each other.

When decisions need to be made, economists assume a decision will be influenced by its 1) output costs. 2) societal demands. 3) trade-offs.

trade-offs.

Natural resources, or land, can include the fertility of the land, minerals below it, and what other aspects?: 1) human capital resources 2) climate 3) human resources

climate

If a graph data line indicates that there is a zero slope, this means there 1) are two variables that are negatively related. 2) is a constant relationship between x and y. 3) is no relationship between x and y.

is a constant relationship between x and y.

What are the factors of production? 1) labor, economic capital, ingenuity, money 2) land, labor, opportunity 3) land, economic capital, labor, entrepreneurship

land, economic capital, labor, entrepreneurship

Congress must vote whether to increase the government budget so as not to shut down the government this year. The vote passed and the budget ceiling has been increased to keep the government running. This is an example of what type of policy? 1) macroeconomic monetary policy 2) macroeconomic fiscal policy 3) microeconomic monetary policy

macroeconomic fiscal policy

In a world of scarcity, we will never: 1) meet all of society's wants. 2) satisfy all basic human needs. 3) use all economic resources such that we satisfy the maximum amount of wants.

meet all of society's wants.

Financial capital, like money, is simply a tool. Once financial capital is converted to economic capital (invested), it produces a resource that is: 1) productive 2) expensive 3) profitable

productive.

If a data line on a graph slopes down as it goes to the right, it is depicting that 1) as the value of one variable falls, the value of the other also falls (all else constant). 2) the relationship between the variables on the axes is direct. 3) the relationship between the variables on the axes is inverse.

the relationship between the variables on the axes is inverse.

In the case of a positive relationship between two variables, all else remaining constant: 1) the value of the two variables will move in opposite directions from each other. 2) the values of the two variables will move in the same direction. 3) graphically, the data line representing the relationship between the variables has a negative slope.

the values of the two variables will move in the same direction.

When picking up a rental car at an airport car rental agency, some travelers stand in line waiting to sign paperwork and pick up car keys at the rental desk while other travelers can go right to their rental car by using their rental car loyalty club card. In this example, the travelers who move quickly through to the parking lot pick up their car are probably: 1) experienced travelers that know that making online reservations is the best way to avoid long lines at the rental counter. 2) more important than travelers waiting in the longer lines at the rental car counter. 3) travelers who value convenience more than those waiting in line and are willing to pay additional club fees for the option of avoiding them.

travelers who value convenience more than those waiting in line and are willing to pay additional club fees for the option of avoiding them.

A nation that bans trade with other nations 1) will be unable to specialize in what they are good at and therefore end up consuming less. 2) can refine their ability to allocate resources and therefore raise consumption. 3) will more easily achieve specialization in production and end up consuming more.

will be unable to specialize in what they are good at and therefore end up consuming less.