Chapter 1 Macro

C

. Refer to the above graph. Which of the following schedules correctly reflects "supply"? A. B. C. D.

C. pleasure and satisfaction

For economists, the word "utility" means A. versatility and flexibility. B. rationality. C. pleasure and satisfaction. D. purposefulness.

B. an increase in one variable is associated with a decrease in the other

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

Extra

Marginal means

D. in data sets 1,2, and 5 only

Refer to the above data sets. The variables are directly related in: A. all five data sets. B. in none of the data sets. C. in data sets 1, 2, and 3 only. D. in data sets 1, 2, and 5 only.

B. combinations of bicycles and computers that society can produce by using its resources efficiently

Refer to the above diagram. Points A, B, C, D, and E show: A. that the opportunity cost of bicycles increases, while that of computers is constant. B. combinations of bicycles and computers that society can produce by using its resources efficiently. C. that the opportunity cost of computers increases, while that of bicycles is constant. D. that society's demand for computers is greater than its demand for bicycles.

A. Y=50 + 1/4X

Refer to the above diagram. The equation that shows the relationship between Y and X is: A. Y = 50 + 1/4 X. B. X = 1/4 Y. C. Y = .4X. D. Y = 1/4 X 50.

B. is +1/4

Refer to the above diagram. The slope of the line: A. is 1/4. B. is + 1/4. C. is .40. D. cannot be determined from the information given.

B. Graph B

Refer to the above graphs. Assume that pizza is measured in slices and beer in pints. In which of the graphs is the opportunity cost of a pint of beer the lowest? A. graph A B. graph B C. graph C D. graph D

A. allow one to reason about the relationship

The basic purpose of the other-things-equal assumption is to: A. allow one to reason about the relationship between variables X and Y without the intrusion of variable Z. B. allow one to focus upon micro variables by ignoring macro variables . C. allow one to focus upon macro variables by ignoring micro variables . D. determine whether X causes Y or vice versa.

A. zero

The slope of a line parallel to the horizontal axis is: A. zero. B. one. C. infinite. D. one-half.

C. There is no such thing as free lunch

Which one of the following expressions best states the idea of opportunity cost? A. "A penny saved is a penny earned. " B. "He who hesitates is lost." C. "There is no such thing as a free lunch." D. "All that glitters is not gold."

C. is a possible explanation of cause and effect

An economic hypothesis: A. has the same meaning as an economic principal 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.

A. Opportunity cost

Joe sold gold coins for $1000 that he bought a year ago for $1000. He says, "At least I didn't lose any money on my financial investment." His economist friend points out that in effect he did lose money, because he could have received a 3 percent return on the $1000 if he had bought a bank certificate of deposit instead of the coins. The economist's analysis in this case incorporates the idea of: A. opportunity costs. B. marginal benefits that exceed marginal costs. C. imperfect information. D. normative economics.

D. 1/3 of a unit of capital goods

Refer to the above table. If the economy is producing at production alternative C, the opportunity cost of the tenth unit of consumer goods will be: A. 4 units of capital goods. B. 2 units of capital goods. C. 3 units of capital goods. D. 1/3 of a unit of capital goods.

A. 4 units of C, and 6 units of D

Refer to the budget line shown in the diagram above. If the consumer's money income is $20, which of the following combinations of goods is unattainable? A. 4 units of C, and 6 units of D. B. 5 units of C, and no units of D. C. 1 unit of C, and 8 units of D. D. 2 units of C, and 6 units of D.