Econ - Week 1 Bell Ringer
The statement in a newspaper that "consumer prices rose last month by 1 percent, and if this trend continues, the annual rate of inflation will be 12 percent for the year" is an example of:
A positive economic statement
Assume that a consumer has a given budget or income of $12, and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. Refer to the information given above. If the consumer spent all of her budget on just apples or just bananas, how many apples or bananas maximum would she be able to buy?
8 apples or 16 bananas
Assume that a consumer has a given budget or income of $12, and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. Refer to the information given above. If the consumer decides to buy 4 apples, how many bananas can she also buy with the remainder of her budget?
8 bananas
A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule: Refer to the above table. If the nation uses all of its resources to produce only wheat, then its production combination will be:
A
Refer to the above graph. The selection of which point on the production possibilities curve is most like to result in the largest increase in economic growth over time?
A
Which of the following suggests a direct relationship between x and y?
A change in y = -2 coupled with a change in x = -4
Economists would classify all of the following as "land," except:
A hydroelectric dam
Refer to the above graph. All of the following development would allow a movement from point C to a point outside the production possibilities curve, except:
A reduction in unemployment of resources
Economic growth may be represented by:
A rightward shift of the production possibilities curve
Which of the following is considered to be an entrepreneur?
A self-employed person
If the opportunity cost of producing extra units of one good (expressed in terms of the amount of another good given up) remains constant, then the shape of the production possibilities curve is:
A straight downward-sloping line
Which of the following is a normative economic statement?
A trade surplus of 200 billion dollars should be our policy goal
Which of the following would not be considered a capital resource by economists?
A van used by a mother to transport the family around
Which of the following statements is an explanation for the law of increasing opportunity costs?
Many economic resources are better at producing one product rather than another
From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are too long, they have concluded that the:
Marginal cost of waiting is greater than the marginal benefit of being served
Suppose that a consumer purchases just two goods, X and Y. The Y-intercept of the budget line in this case would indicate the:
Maximum quantity of good Y that the consumer could buy with a given budget
Which of the following is not a factor of production?
Money
If a nation produces more consumer goods and less capital goods, then the nation will have:
More consumption now, but less consumption later
One basic difference between "land" and "capital" resources is that land is:
Natural while capital is man-made
Assume that a consumer purchases only two products. Suppose that the consumer's money income doubles, and the prices of the two products also double. These changes in income and prices will result in:
No change in the budget line
A nation can produce two products: tanks and autos. The table below is the nation's production possibilities: Refer to the above table. According to the production possibilities schedule, a combination of 4 tanks and 650 autos is:
Not attainable because the nation does not have sufficient resources
In line (2) on the above graph, the variables x and y are:
Not correlated
The notion of "purposeful behavior" in the economic perspective suggests that:
One person's choice may differ from another's if their circumstances and information differ
When a state government chooses to build more roads, the resources used are no longer available for public education programs. This dilemma illustrates the concept of:
Opportunity cost
Suppose that a consumer purchases just two goods, X and Y. The slope of the budget line would indicate the:
Opportunity cost of good X in terms of good Y given up for each unit of Y
Which one of the following is a normative economic statement?
The worsening balance of trade must be corrected if this nation is to remain competitive in the world economy
Economics is the social science concerned with the best use of scarce resources to achieve maximum satisfaction of economic wants.
True
If A decreases, then B will also decrease. The graph relating the two variables A and B is:
Upward-sloping
The opportunity cost of constructing a new public highway is the:
Value of other goods and services that are sacrificed in order to construct the new highway
In a constructing the demand graph to show how the price of a good price affects how much of it the buyers will buy, the convention that economists follow is to measure price on the:
Vertical axis even though it is the independent variable
Which of the following is the fallacy in the fallacy of composition?
What is true for the part is necessarily also true for the whole
Which of the following exemplifies a microeconomic question?
Will a new type of electronic reader or tablet increase the number of buyers?
After graduating from high school, Adam is thinking about going to college. The college tuition is $15,000 a year. Instead of going to college, Adam could take a full-time job that pays $25,000. What is Adam's opportunity cost of attending college for one year?
$40,000
Lauren makes $150 a day as a bank clerk. She takes two days off work without pay, to fly to another city to attend the concert of her favorite band. The cost of transportation and lodging for the trip is $250. The cost of the concert ticket is $50. The opportunity cost of Lauren's decision to attend the concert is:
$600
In a linear equation relating income and consumption, you know that the intercept is $1,000 and the slope of the line is .4. If income is $20,000, then consumption is:
$9,000
Assume that a consumer has a given budget or income of $12, and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. Refer to the information given above. What is the slope of the budget line, if the quantity of apples were measured on the horizontal axis and bananas on the vertical axis?
-2.0
Refer to the above graph. The slope of the line tangent to the curve at point A is:
0
The question below are based on the following four sets of data-pairs: (1) A and B, (2) C and D, (3) E and F, and (4) G and H. In each set, the independent variable is in the left column and the dependent variable is in the right column. Which of the four sets of data pairs shows an inverse relationship between the independent and dependent variable?
1 and 3
The question below are based on the following four sets of data-pairs: (1) A and B, (2) C and D, (3) E and F, and (4) G and H. In each set, the independent variable is in the left column and the dependent variable is in the right column. Which of the four sets of data pairs shows an inverse relationship between the independent and dependent variable?
1 and 3
Assume that a consumer has a given budget or income of $12, and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. Refer to the information given above. For this consumer, the opportunity cost of buying two bananas is
1 apple.
A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule: Refer to the above table. A change from combination C to B means that:
1 unit of steel is given up to get 15 more units of wheat
A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule: Refer to the above table. A change from combination C to B means that:
1 unit of steel is given up to get 15 more units of wheat
A nation can produce two products: tanks and autos. The table below is the nation's production possibilities:
1 unit of tanks
A nation can produce two products: tanks and autos. The table below is the nation's production possibilities: Refer to the above table. In moving from combination C to B, the opportunity cost of producing 100 more autos is:
1 unit of tanks
The question below are based on the following four sets of data-pairs: (1) A and B, (2) C and D, (3) E and F, and (4) G and H. In each set, the independent variable is in the left column and the dependent variable is in the right column. The slope of the linear graph that pictures data set 2 above is:
10
The following graph is the production possibilities curve of a nation: Refer to the above graph. Which of the following combinations would be unattainable?
10 drill presses and 4 bread
If you knew that the vertical intercept for a straight line was 15, that the slope was -.5, and that the independent variable had a value of 8, the value of the dependent variable would be:
11
The vertical intercept of line (3) on the above graph is:
16
Refer to the above graph. The slope of the line tangent to the curve at point B is:
2.0
A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule: The marginal opportunity cost of the third unit of steel is:
20 units of wheat
The question below are based on the following four sets of data-pairs: (1) A and B, (2) C and D, (3) E and F, and (4) G and H. In each set, the independent variable is in the left column and the dependent variable is in the right column. The vertical intercept is 12 in which of the above data sets?f
3
The following graph is the production possibilities curve of a nation: Refer to the above graph. The total opportunity cost of nine drill presses is:
3 units of bread
A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule:
30 units of wheat
A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule: Refer to the above table. In moving from combination E to F, the opportunity cost of an additional unit of steel is:
30 units of wheat
A nation can produce two products: tanks and autos. The table below is the nation's production possibilities: Refer to the above table. The marginal opportunity cost of the fourth unit of tanks is:
300 units of autos
A nation can produce two products: tanks and autos. The table below is the nation's production possibilities: Refer to the above table. The marginal opportunity cost of the fourth unit of tanks is:
300 units of autos
If a linear relation is described by the equation was C = 35 - 5D, then the vertical intercept of the graph (where C is on the vertical axis) is:
35
A nation can produce two products: tanks and autos. The table below is the nation's production possibilities: Refer to the above table. The total opportunity cost of three units of tanks is:
350 units of autos
A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule: Refer to the above table. Which of the following output-combinations is unattainable:
4 steel and 55 wheat
The following graph is the production possibilities curve of a nation: Refer to the above graph. The marginal opportunity cost of the fourth unit of bread is:
4 units of drill presses
Which of the following is the best synonym for "marginal" in economics?
Additional
The slope of a graph that shows a direct relationship is:
Always positive
In a graph with "crop yield" on the vertical axis and "rainfall" on the horizontal axis, the vertical intercept refers to the:
Amount of crop yield when "rainfall" is zero
Which of the following statements is not correct?
An increase in the quantity of a nation's resources will cause economic growth, but an increase in the quality of resources will not
Economic growth is a result of:
An increase in the supply of resources
Which of the following illustrates a macroeconomic question?
Are increasing wage demands by workers contributing to price inflation?
If an inverse relationship exists between two variables, then:
As one variable increases, the other decreases
Money is not considered to be an economic resource because:
As such it is not productive
A point or combination that is on the production possibilities curve is:
Attainable and resources are fully employed
The question below are based on the following four sets of data-pairs: (1) A and B, (2) C and D, (3) E and F, and (4) G and H. In each set, the independent variable is in the left column and the dependent variable is in the right column. The linear equation for the relationship in data set 1 above is:
B = 6 - .14A
Economics is a social science that studies how individuals, institutions, and society may:
Best use resources to maximize satisfaction of economic wants
Suppose there are two economies, Alpha and Beta, which have the same production possibilities curves. If Beta devotes more resources to produce capital goods than consumer goods as compared to Alpha, then in the future:
Beta will experience greater economic growth than Alpha
Which pitfall to sound economic reasoning is illustrated when a person comments that "capitalists focus only on profits and don't care about their workers"?
Biases
The role of the entrepreneur in society is to:
Bring the factors of production together and take the risks of producing
Refer to the following table which shows the quantities of corn demanded at various levels of corn price (hypothetical data). Which curve in the graph shown above best represents the data in the table?
C
A nation that devotes more of its resources to the production of capital goods is likely to:
Cause its production possibilities curve to shift outward
In a relationship between two variables, the "independent variable" refers to the:
Cause or source variable
A person observes that consumer prices often fall when a nation experiences economic growth. The person then concludes that falling consumer prices leads to economic growth. This would be an example of:
Confusing correlation and causation
Specialization and international trade allows a nation to:
Consume a combination of goods that is beyond (or outside) its production possibilities
A budget line is a graph that shows the various combinations of two products that a:
Consumer can buy with a given amount of money income
Economists have difficulty applying the scientific method because:
Controlled laboratory experiments in economics are often not feasible
From an economic perspective, when a student decides to go to the movies instead of studying for a test, it indicates that in the student's thinking the marginal:
Cost of going to the movies is less than the marginal benefit of going to the movies
Refer to the above graph. Which point in the graph would allow a simultaneous increase in the production of both investment and consumer goods?
D
If a nation is initially on its production possibilities curve, then it can increase its production of one good only by:
Decreasing the production of the other good
A relationship illustrated by an upward-sloping graph means that an:
Decrease in the value of one variable causes the value of the other to decrease
Refer to the above graph. The slope of the tangent line at various points on the curve as the value of X increases (i.e., as we move to the right along the curve) is: (confusing)
Decreasing in algebraic value
Suppose that a nation can only make two products: defense goods and civilian goods. In a graph of the marginal benefit (MB) and marginal cost (MC) of defense goods, a leftward shift of the MB curve will cause the optimal quantity of:
Defense goods to decrease
On a production possibilities curve, the single optimal or best combination of output for any society:
Depends upon the preferences of society
The best output or the optimal production of the nation is:
Determined by equalizing the marginal benefits and marginal costs of each product
The graph above shows the production possibilities curve for an economy producing two goods, X and Y. Which of the points on the graph indicate unemployed resources?
E and A only
The economizing problem for individuals is a consequence of the fact that:
Economic wants are greater than economic means or incomes
The "other things equal" assumption is employed when:
Economists draw a two-dimensional (or two-axes) graph
If two variables are completely unrelated to each other, then graphing these two variables will yield a line that is:
Either vertical or horizontal
Consider an economy that is producing inside its production possibilities curve. This economy could move closer towards its production possibilities curve by:
Employing more of its available resources
The individual who brings together economic resources and assumes the risk of business ventures in a capitalist economy is called the:
Entrepreneur
Which of the following is another way of saying "marginal benefits of an action"?
Extra benefits resulting from the action
Increasing the share of your income that you save is good for you. Therefore it would be good for the whole economy if everyone saved more. This exemplifies the:
Fallacy of composition
"The role of government in the economy should be kept to a minimum" is an example of a positive economic statement.
False
Macroeconomics is concerned with the study of the nation-wide market for specific goods like oranges.
False
Marginal analysis is the valuation of insignificant or small benefits from doing things.
False
The purpose of the ceteris paribus assumption used in economic analysis is to:
Focus on the effect of a single factor on a certain variable
Refer to the above graph. Which of the following movements would indicate economic growth?
From point C to point D
Refer to the above graph. Which of the following movements would indicate a reduction in unemployment?
From point F to point H
One major part of the opportunity costs of one's decision to go to college after high-school graduation is the:
Full-time job that one could have gotten instead of going to college
A recurring theme in economics is that people:
Have unlimited economic wants, but limited resources
Imagine an ideal scenario where world peace prevails and all nations are led by peace-minded leaders. In such a world, the:
MB for defense goods would shift left
A nation can increase its production possibilities by:
Improving labor productivity
A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule: Refer to the above table. In moving stepwise from possibility A to B to C ... to F, the opportunity cost of a unit of steel in terms of wheat:
Increases
A nation can produce two products: tanks and autos. The table below is the nation's production possibilities: Refer to the above table. If the nation produces more and more tanks, the opportunity cost of each additional tank in terms of autos:
Increases
The law of increasing opportunity costs states that:
Increases in the production of one good require larger and larger sacrifices of the other good
As a consequence of the problem of scarcity:
Individuals have to make choices from among alternatives
The post hoc, ergo propter hoc fallacy consists of:
Inferring causality from chronological sequence
Which of the following statements regarding people's wants is true?
Intangible serves, like tangible goods, may satisfy people's wants
A society can consume a combination of goods outside its production possibilities if there is:
International specialization and trade
A nation can produce two products: tanks and autos. The table below is the nation's production possibilities: Given the production possibilities schedule above, a combination of 3 tanks and 350 autos:
Is attainable but entails some unemployment or inefficient use of society's resources
A point or product-combination to the left of and inside a budget line:
Is attainable, but a combination or point to the right of the line is unattainable
A point outside (to the right of) the production possibilities curve of a nation:
Is not attainable for this nation
A reduction in the level of unemployment would have which effect with respect to the nation's production possibilities curve?
It would not shift the curve; it would be represented by a movement from a point inside the curve toward a point on the curve
The economizing problem is essentially one of deciding how to make the best use of:
Limited resources to satisfy unlimited economic wants
Which pitfall to sound economic reasoning is reflected in a person's view that "pharmaceutical and oil companies are price-gouging the consumers"?
Loaded terminology
Which of the following is a positive economic statement?
Stock prices rose to a new record last month for the fourth month in a row
Another way of saying " ceteris paribus" is:
Other things equal
When studying human behavior, economists assume rational self-interest. This means that:
People make decisions based on some desired outcome
In analyzing human decision and action, economists assume that:
People's behavior reflects rational self-interest
Refer to the above production possibilities curves. Curve (a) is the initial curve for the economy. If the economy's production possibilities then shift to curve (b), then:
Point N would indicate some unemployment or underemployment of resources
Variables X and Y in the above table are:
Positively related
Refer to the above graph. From the economists' perspective, which is the independent variable and which is the dependent variable?
Price is the independent variable and quantity demanded is the dependent variable
The opportunity cost to a consumer who smokes cigarettes consists of the:
Products that the consumer could have bought instead of cigarettes
In a graph of the production possibilities curve, the two axes of the graph indicate the:
Quantities of the two products that a nation can produce
Which of the following is one of the simplifying assumptions made in constructing a production possibilities curve?
Resources are fully employed and are used in least-cost methods of production
The basic truth that underlies the study of economics is the fact that we all face:
Scarcity
Economic models do not reflect the full complexity of reality, but instead are based on:
Simplifications
The role of an assumption in an economic theory is to:
Simplify the complex reality
A movement from one point to another along the production possibilities curve would imply that:
Society is producing a different combination of outputs
The following graph is the production possibilities curve of a nation: Refer to the above graph. The combination "5 drill presses and 2 bread" indicates:
Some resources in the nation are unemployed
What does "there is no such thing as a free lunch" mean in economics?
That scarce resources are used up to provide "freebies" and giveaways
Economic analysis assumes "purposeful behavior", which means that people will pursue decisions or actions:
That will increase their well-being
What is a major opportunity cost of going to college on a full-time basis?
The foregone income that could be earned working full-time job
All of the following would affect the position and shape of a nation's production possibilities curve, except:
The level of unemployment
Mia wants to buy a book. The economic perspective suggests that Mia will buy the book if:
The marginal benefit of the book is greater than its marginal cost
The production possibilities curve is a graph of:
The maximum combinations of products that can be produced
Refer to the above graph. Which of the following statements about combination G is true?
The nation may not be able to produce combination G, but it can consume that combination if it specializes and trades
Which of the following is considered a firm's "factor of production"?
The office building occupied by the firm
If economic resources are perfectly interchangeable between the two products shown on a production possibilities graph:
The production possibilities curve would be a straight line
The opportunity cost of doing or getting something is best and fully defined as:
The value of the best alternative that is given up in order to do or get something
