Macro CH 1 Reading Quiz

Refer to the graph to the right. What is the value of the area of rectangle A​? A. ​$250,000 B. $125,000 C. ​$2.00 D. There is not enough information to determine the area.

A. $250,000 ($2.00*$125,000=$250,000)

Refer to the graph to the right. What is the value of the slope of this​ line? A. -1/5 B. -1 C. -5 D. There is insufficient information to compute the slope of this line.

A. -1/5

When does allocative efficiency​ occur? A. Allocative efficiency occurs when production is in accordance with consumer preferences. Your answer is correct. B. Allocative efficiency occurs when a good or service is produced at the lowest possible cost. C. Allocative efficiency occurs when an economy no longer relies on voluntary exchange. D. Allocative efficiency occurs when an economy achieves equity.

A. Allocative efficiency occurs when production is in accordance with consumer preferences.

Which of the following statements is​ correct? A. Economists use the terms​ firm, company, and business interchangeably. B. A company is owned by one​ person, while a firm is owned by more than one person. C. A business has multiple​ locations, while a company has only a single location. D. A business is always larger than a firm.

A. Economists use the terms​ firm, company, and business interchangeably.

In a market​ system, what determines how goods and services will be​ produced? A. Firms determine how goods and services will be produced. Your answer is correct. B. Consumers determine how goods and services will be produced. C. The government determines how goods and services will be produced. D. Consumers, firms, and the government determine together how goods and services will be produced.

A. Firms determine how goods and services will be produced.

Which of the following statements about microeconomics and macroeconomics is​ correct? A. Microeconomics involves the study of how households and firms make choices. B. All economic situations can be categorized as being microeconomics or macroeconomics. C. Microeconomics does not involve the analysis of economic policy. D. Macroeconomics does not involve the analysis of economic policy.

A. Microeconomics involves the study of how households and firms make choices.

Which of the following statements about positive analysis is​ correct? A. Positive analysis is concerned with what is. B. Positive analysis is concerned with what ought to be. C. Positive analysis involves value judgments. D. Positive analysis can be used to determine whether policies are good or bad.

A. Positive analysis is concerned with what is.

Which of the following statements about the idea that people are rational is​ correct? A. The idea assumes that consumers and firms use all available information as they act to achieve their goals. Your answer is correct. B. The idea assumes that consumers and firms take into account the costs of their actions but ignore the benefits. C. The idea assumes that consumers and firms take into account the benefits of their actions but ignore the costs. D. The idea assumes that consumers and firms always make correct decisions.

A. The idea assumes that consumers and firms use all available information as they act to achieve their goals.

The slope of a straight line equals the change in value on the​ ____________ axis​ ____________ by the change in the value on the other axis between any two points on the line. A. vertical; divided B. vertical; multiplied C. horizontal; divided D. horizontal; multiplied

A. vertical; divided

Refer to the new graph to the right. What is the value of the shaded​ area? A. $6,250 B. $62,500 C. $225,000 D. $300,000

A.$6,250 1/2(2-1.5)(150,000-125,000)=$6,250

Which of the following statements about an economic variable is​ correct? A. An economic variable must always be a positive number. B. An economic variable is something measurable that can have different values. C. An economic variable must either be the price of a good or service or the quantity of a good or service. D. An economic variable is always measured in dollars.

B. An economic variable is something measurable that can have different values.

Which of the following statements about economics as a social science is​ correct? A. Economics considers human behavior only in the context of business. B. Economics studies the actions of individuals. Your answer is correct. C. Economics uses normative analysis but not positive analysis. D. Economics is not useful in analyzing the effects of government policy.

B. Economics studies the actions of individuals.

Economists assume that the only reason people take the actions they do is in response to economic incentives. A. True B. False

B. Falso

Which of the following statements about microeconomics and macroeconomics is​ correct? A. All economic situations can be categorized as being microeconomics or macroeconomics. B. Macroeconomics is the study of the economy as a whole. C. Macroeconomics does not involve the analysis of economic policy. D. Microeconomics does not involve the analysis of economic policy.

B. Macroeconomics is the study of the economy as a whole.

Today, which of the following countries has a centrally planned​ economy? A. Germany B. North Korea C. United States D. Canada

B. North Korea

When does productive efficiency​ occur? A. Productive efficiency occurs when an economy achieves equity. B. Productive efficiency occurs when a good or service is produced at the lowest possible cost. Your answer is correct. C. Productive efficiency occurs when an economy no longer relies on voluntary exchange. D. Productive efficiency occurs when production is in accordance with consumer preferences.

B. Productive efficiency occurs when a good or service is produced at the lowest possible cost.

The relationship between two variables is positive when​ ________, and the relationship between two variables is negative when​ ________. A. one variable increases and the other​ decreases; one variable decreases and the other increases Your answer is not correct. B. one variable increases and the other​ increases; one variable increases and the other decreases This is the correct answer. C. one variable decreases and the other​ increases; one variable increases and the other increases D. one variable increases and the other​ increases; one variable decreases and the other decreases

B. one variable increases and the other​ increases; one variable increases and the other decreases

Which of the following statements about a hypothesis is​ correct? A. A hypothesis will always incorporate a value judgment. B. A hypothesis is another name for a model. C. A hypothesis is a statement that could in principle turn out to be incorrect. D. To be called a​ hypothesis, a statement must first be shown to be correct.

C. A hypothesis is a statement that could in principle turn out to be incorrect.

Why are models based on​ assumptions? A. Because models are very different from theories. B. Because models are only concerned about questions of​ equity, not question of efficiency. C. Because models have to be simplified to be useful. Your answer is correct. D. Because models are not intended to analyze​ real-world events.

C. Because models have to be simplified to be useful.

Which of the following is a correct statement about a mixed​ economy? A. In a mixed​ economy, all economic decisions are made in markets. B. In a mixed​ economy, most economic decisions are made by the government but markets plays a significant role in the allocation of resources. C. In a mixed​ economy, most economic decisions are made in markets but the government plays a significant role in the allocation of resources. D. In a mixed​ economy, the government makes all economic decisions.

C. In a mixed​ economy, most economic decisions are made in markets but the government plays a significant role in the allocation of resources.

Which of the following statements about normative analysis is​ correct? A. Normative analysis measures the costs and benefits of different courses of action. B. Normative analysis should not involve value judgments. C. Normative analysis is concerned with what ought to be. Your answer is correct. D. Normative analysis is concerned with what is.

C. Normative analysis is concerned with what ought to be.

​ ________ is a problem that occurs when someone concludes that a change in variable X caused a change in variable Y​ when, in​ fact, it is a change in variable Y that caused a change in variable X. A. The​ positive-to-negative relationship B. Nonlinear slope C. Reverse causality D. The omitted variable

C. Reverse causality

Refer to the graph to the right. How would you describe the value of the slope of this​ curve? A. The value of the slope is greater between points i and j than between points g and h. B. The value of the slope is the same between any two points along the curve. C. The value of the slope is greater between points g and h than between points i and j. Your answer is correct. D. We cannot determine whether the slope is greater between g and h or i and j because the relationship between​ "Points on​ exam" and​ "Study time" is not linear.

C. The value of the slope is greater between points g and h than between points i and j.

How are economic resources allocated in a market​ economy? A. by firms acting alone B. by consumers acting alone C. by the decisions of households and firms interacting in markets D. by the government

C. by the decisions of households and firms interacting in markets

Economists believe that an activity should be continued up to the point where A. the marginal benefit from the activity is greater than the marginal cost. B. the marginal benefit from the activity is less than the marginal cost. C. the marginal benefit from the activity is equal to the marginal cost. D. the marginal benefit from the activity plus the marginal cost equals zero.

C. the marginal benefit from the activity is equal to the marginal cost.

Suppose that there are three variables involved in the graph to the​ right: (1)​ quantity, (2)​ price, and​ (3) a third variable. Which of those variables causes the quantity to change from point C to point D in the​ graph? A. the first​ variable, quantity B. the second​ variable, price C. the third variable D. Either​ (a) or​ (b).

C. the third variable

Let V1 equal the value of a variable in period 1 and V2 equal the value of the same variable in period 2. What is the rate of growth between periods 1 and​ 2? A. V2−V1 B. ((V1+V2)/2)*100 C. (V2−V1)/(V1+V2) D. ((V2-V1)/V1)*100

D. ((V2-V1)/V1)*100

Which of the following steps should you follow when using a​ formula? A. Make sure the number you calculate using the formula is economically reasonable. B. Make sure you are using the correct formula for the problem you are solving. C. Make sure you understand the economic concept the formula represents. D. All of the above are steps you should follow when using a formula.

D. All of the above are steps you should follow when using a formula.

Which of the following is a graph of a single​ variable? A. Graph A B. Graph B C. Graph C D. All of the above.

D. All of the above.

Which of the following statements is​ correct? A. An invention is the practical application of an innovation. B. The word​ "technology" and the word​ "innovation" have the same meaning. C. The word​ "technology" and the word​ "invention" have the same meaning. D. An innovation is the practical application of an invention

D. An innovation is the practical application of an invention.

In a market​ system, how does society decide what goods and services will be​ produced? A. Firms alone determine what goods and services will be produced. B. What goods and services will be produced is determined by a vote of consumers. C. The government decides what goods and services will be produced. D. Consumers, firms, and the government determine what goods and services will be produced by the choices they make.

D. Consumers, firms, and the government determine what goods and services will be produced by the choices they make.

Which of the following statements is​ correct? A. The relationship between two variables is linear when it is represented by a curved line and nonlinear when it is represented by a straight line. B. The relationship between two variables is linear whether it is represented by a straight line or by a curved line. C. The relationship between two variables is nonlinear whether it is represented by a straight line or by a curved line. D. The relationship between two variables is linear when it is represented by a straight line and nonlinear when it is represented by a curved line.

D. The relationship between two variables is linear when it is represented by a straight line and nonlinear when it is represented by a curved line.

The prevalence of​ Alzheimer's dementia is very high among residents living in nursing homes. A student concludes that it is likely that living in a nursing home causes​ Alzheimer's dementia. What is the flaw in the​ student's reasoning? A. The student has failed to take into account other causes of​ Alzheimer's disease. B. The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents. C. The student is using an inadequate sample size. D. The student is drawing a false​ conclusion; he is making the error of reverse causality

D. The student is drawing a false​ conclusion; he is making the error of reverse causality.

In a market​ system, how does society decide who will receive the goods and services​ produced? A. The government determines the goods and services produced. B. Firms determine who receives the goods and services produced. C. Consumers determine who receives the goods and services produced. D. Who receives the goods and services produced depends largely on how income is distributed.

D. Who receives the goods and services produced depends largely on how income is distributed.

What do economists mean by the word​ "marginal"? A. first B. unimportant C. small D. extra or additional

D. extra or additional