What is economics

The 3 key economic questions include all of the following EXCEPT

"where should these products be produced?"

If you work 4 extra hours, and the slope of the curve showing the relationship between your income and work hours is 8, your income will increase by

$32.

If the price of a 32GB memory card decreases from $25 to $20, the percentage change is

-20%.

If the variable on the vertical axis increases by 24 and the variable on the horizontal axis decreases by 3, the slope of the line is

-8.

To increase income by $120 when the slope of the curve showing the relationship between your income and work hours is 8, how many extra hours will you need to work?

15

If the price of monthly satellite TV service increases from $40 to $50, the percentage change is

25%.

If the variable on the vertical axis increases by 20 and the variable on the horizontal axis increases by 5, the slope of the line is

4.

According to the Texas Transportation Institute, the typical U.S. commuter wastes approximately how much time per year due to traffic congestion?

47 hours

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

Should Florida implement a state income tax to reduce its deficit?

Which of the following is a microeconomic question?

Should companies pay for employees' health insurance?

Which of the following is a question answered with normative economic reasoning?

Should the college increase tuition to fund its athletic programs?

Economic models explore decision making by individuals, firms and other organizations.

TRUE

Economists assume that individuals make informed decisions and act in their own self-interest.

TRUE

An economic model is a detailed version of an economic environment.

FALSE

Congestion taxes tend to cause an increase in traffic volume during rush hours.

FALSE

Economists will always reach the same conclusion in their positive analyses.

FALSE

In the 1980s and 1990s, average per capita income increased by a greater percentage in sub-Saharan Africa than it did in the rest of the world.

FALSE

In the past few centuries, choices have led to a substantial decline in the standards of living around the globe.

FALSE

Macroeconomics involves the study of the decision-making of individual firms or individuals.

FALSE

Microeconomics helps explain economic fluctuations, why the economy shrinks and expands and why some of the economy's resources are idle.

FALSE

Microeconomics is the study of aggregate behavior in the economy.

FALSE

Most modern economic analysis is normative in nature, but involves questions with positive aspects.

FALSE

One example of a microeconomic question is, "Should unemployment benefits be increased?"

FALSE

One of the key economic questions is "where should products be produced?"

FALSE

Positive economics answers the question, "What ought to be?" Normative economics predicts the consequences of alternative actions, answering the questions, "What is?" or "What will be?"

FALSE

Positive relationships are also referred to as inverse relationships.

FALSE

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

FALSE

Slope is calculated as a change in the variable on the horizontal axis divided by a change in the variable on the vertical axis.

FALSE

Macroeconomics helps explain economic fluctuations, why the economy shrinks and expands and why some of the economy's resources are idle.

TRUE

Negative relationships are also referred to as inverse relationships.

TRUE

Normative economics answers the question, "What ought to be?" Positive economics predicts the consequences of alternative actions, answering the questions, "What is?" or "What will be?"

TRUE

One example of a microeconomic question is, "How will prices in the clothing industry change if the government bans imports from China?"

TRUE

Which of the following is a question answered with positive economic analysis?

If the college increased its eligibility requirements for enrollment, will class sizes decline?

One of the key economic questions is "who consumes the products?"

TRUE

Slope is calculated as rise / run.

TRUE

Talking about alternatives is the first step in a process that helps us make better choices about how we use our resources.

TRUE

The congestion tax implemented in London reduced traffic volume and cut travel time for cars and buses in half.

TRUE

The origin of a graph is the intersection of the two axes, where the value of both variables is zero.

TRUE

To determine an appropriate congestion tax, an economist has to assume that people respond to incentives.

TRUE

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

TRUE

In the final two decades of the twentieth century, per capita income in sub-Saharan Africa

decreased by approximately 6%.

The physical and mental effort people use to produce goods and services is a description of which factor of production?

labor

The study of the choices made by individual households, firms, and government is called

microeconomics.

When economists assume that people are rational and respond to incentives, they mean

people act in their own self-interest.

Because resources are limited

people must make choices.

After the implementation of the congestion tax in London, traffic volume was reduced and travel time for cars and buses was cut in half. This is an example of

responding to incentives.

Tradeoff is

sacrificing one thing for another.

An economic model is a

simplified representation of an economic environment.

A variable measures

something that can take on different values.

The slope of a curve measures

the change in one variable in response to the change in the other variable.

Microeconomics is best described as the study of

the choices made by individual households, firms, and governments.

Economics is best defined as the study of

the choices made by people faced with scarcity.

14) Ceteris paribus means "Let the buyer beware."

FALSE

Who is associated with the following summary of the economic way of thinking: "The theory of economics does not furnish a body of settled conclusions immediately acceptable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique of thinking which helps its processer draw correct conclusions."

John Maynard Keynes

All of the following are considered natural resources EXCEPT

Labor

A small change in a variable is

a marginal change.

An arrangement that allows buyers and sellers to exchange things is called

a market.

When determining an appropriate congestion tax, economists would use which of the following elements of the economic way of thinking?

all of the above

The Latin phrase ceteris paribus means that when a relationship between two variables is being studied,

all other variables are held fixed.

Normative economics

answers the question "What ought to be?"

Slope is calculated as the

change in the vertical variable divided by the change in the horizontal variable.

The slope of a nonlinear curve

changes along the curve.

Prior to the financial crisis and recession which began in 2007, credit for mortgages was ________, creating a ________.

easily obtained; housing boom

The effort used to coordinate the factors of production is a description of

entrepreneurship.

Economic models are used to

explore decision making by individuals, firms and other organizations.

The financial crisis and recession which began in 2007

had a global impact.

To think at the margin means to consider

how a small change in one variable affects another variable.

Economics is the study of

how society uses limited resources.

The knowledge and skills acquired by a worker through education and experience is a description of which factor of production?

human capital

In the final two decades of the twentieth century, average per capita global income

increased by approximately 35%.

Adam Smith

is considered the founder of economics.

The slope of a straight line

is constant.

Macroeconomics is best described as the study of

the nation's economy as a whole.

Scarcity can best be defined as a situation in which

the resources we use to produce goods and services are limited.

There is a negative relationship between two variables if

they move in opposite directions.

There is a positive relationship between two variables if

they move in the same direction.

Jerome has a "C" average in his philosophy course and a "B" average in his economics course. He decides to study an extra hour for his philosophy exam. This is an example of

thinking at the margin.

We can use macroeconomic analysis to

understand why economies grow.

Resources are all of the following EXCEPT

unlimited and in abundance.

To make things simpler and focus attention on what really matters, economists would

use assumptions.

When deciding to implement a congestion tax, economists and the government would use the elements of the economic way of thinking to primarily determine

what tax amount should be charged.