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.
