Question 1

Graphs are useful because of the way they

Accepted Answer

A)   facilitate interpretation and analysis of data.
B)   clarify interpretation and analysis of ideas.
C)   permit a person to easily see relationships.
D)   convey an idea that might otherwise take many words.
E)   All of these responses are correct.F) B) and E)
G) C) and D) E

Question 2

Economic efficiency and income equality are often conflicting goals in an economy.

Accepted Answer

A) True 
 B)False

Question 3

Even though international trade is undertaken voluntarily, a country that engages in trade may not benefit from it.

Accepted Answer

A) True 
 B)False

Question 4

The use of abstraction in economics is analogous to the use of a road map providing directions to a location.

Accepted Answer

A) True 
 B)False  True

Question 5

If Taiwanese workers can produce all goods at lower wages than American workers, then

Accepted Answer

A)   Americans can still gain by trading with Taiwan.
B)   Americans can only lose if they import from Taiwan.
C)   Taiwan can only lose if it trades with America.
D)   there are no gains from trade that are possible in this case.
E)   Americans should be self-sufficient.F) A) and E)
G) A) and C) A

Question 6

The word "theory" means the same to the scientist as it does to the man on the street.

Accepted Answer

A) True 
 B)False

Question 7

When controls over market prices are enacted, the consequences are always clear.

Accepted Answer

A) True 
 B)False

Question 8

A ray through the origin always has a slope of one.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following mathematical expressions represents the equation of a straight line with a slope of zero at all points on a graph with Y on the vertical axis and X on the horizontal axis?

Accepted Answer

A)   Y = a + X
B)   X = bY
C)   X = a
D)   Y = aE) B) and D)
F) B) and C)

Question 10

If an economic curve has a negative slope, then one variable

Accepted Answer

A)   falls as the other rises.
B)   changes at a slower rate than another.
C)   has a smaller value than another variable.
D)   changes after another variable.E) B) and C)
F) A) and D)

Question 11

A small increase in productivity growth can have a huge impact on a country's standard of living.

Accepted Answer

A) True 
 B)False

Question 12

If Japan is twice as good at producing cameras and three times as good at producing TV sets as the United States, Japan is said to have a comparative advantage in TV sets and the United States has a comparative advantage in cameras.

Accepted Answer

A) True 
 B)False

Question 13

The steepness of a curve is partially determined by the units of measurement.

Accepted Answer

A) True 
 B)False

Question 14

Jack, an outstanding high school baseball player, has to decide whether to sign a contract with a major league baseball organization or to go to college. If Jack is determining his opportunity costs to go to college instead, he would include

Accepted Answer

A)   just the tuition and fees he would pay.
B)   the tuition and fees he would pay and the costs of books he must purchase.
C)   the tuition and fees he would pay, the costs of the books he must purchase plus the costs of room and board.
D)   the tuition and fees he would pay, the costs of books he must purchase, the extra costs of room and board to live on campus minus the income he would receive from playing professional baseball.
E)   the tuition and fees he would pay, the costs of books he must purchase, the extra costs of room and board to live on campus plus the income he would receive from playing professional baseball.F) B) and D)
G) A) and E)

Question 15

Marginal analysis involves looking at the extra costs involved in a decision.

Accepted Answer

A) True 
 B)False

Question 16

How does correlation differ from causation? Give an example of each to illustrate your answer.

Accepted Answer

Correlation means that two (or more) var...

Question 17

The use of chlorofluorocarbons in refrigerators and air conditioners is alleged to cause the destruction of the ozone layer that surrounds the earth. This layer protects humans from ultraviolet radiation, which causes skin cancer. Industry has been prohibited from using these substances in aerosol cans, but the government has been reluctant to ban their use altogether because of the serious economic consequences. Economists analyze such problems and refer to them as

Accepted Answer

A)   issues of unfairness.
B)   examples of excess abstraction.
C)   externalities.
D)   comparative advantage issues.
E)   examples of trade-offs between output and equality.F) A) and C)
G) D) and E)

Question 18

If an airline company has several empty seats on a flight and the full price of an air ticket is $500 and the marginal cost per passenger is $100, then it will be profitable for the airline to

Accepted Answer

A)   charge a stand-by passenger no less than the full fare of $500.
B)   charge a stand-by passenger less than $100.
C)   charge a stand-by passenger more than $500.
D)   charge a stand-by passenger more than $100.
E)   fill the seats at the last minute for any price.F) None of the above
G) A) and B)

Question 19

If a decision maker uses marginal analysis, then the relevant costs are the

Accepted Answer

A)   full costs of a particular activity or product.
B)   fixed costs that do not vary with the extra activity or output.
C)   profits obtained on the activity or product.
D)   average costs for a particular activity or product.
E)   additional costs of a particular activity or product.F) All of the above
G) C) and D)

Question 20

How do markets respond to price ceilings and price floors? Do attempts to repeal the laws of supply and demand meet their objectives?

Accepted Answer

Attempts to repeal the laws of supply an...

Exam 1: What Is Economics

Graphs are useful because of the way they

Correct Answer
verified
E

Economic efficiency and income equality are often conflicting goals in an economy.

Correct Answer
verified

Even though international trade is undertaken voluntarily, a country that engages in trade may not benefit from it.

Correct Answer
verified

The use of abstraction in economics is analogous to the use of a road map providing directions to a location.

Correct Answer
verified
True

If Taiwanese workers can produce all goods at lower wages than American workers, then

Correct Answer
verified
A

The word "theory" means the same to the scientist as it does to the man on the street.

Correct Answer
verified

When controls over market prices are enacted, the consequences are always clear.

Correct Answer
verified

A ray through the origin always has a slope of one.

Correct Answer
verified

Which of the following mathematical expressions represents the equation of a straight line with a slope of zero at all points on a graph with Y on the vertical axis and X on the horizontal axis?

Correct Answer
verified

If an economic curve has a negative slope, then one variable

Correct Answer
verified

A small increase in productivity growth can have a huge impact on a country's standard of living.

Correct Answer
verified

If Japan is twice as good at producing cameras and three times as good at producing TV sets as the United States, Japan is said to have a comparative advantage in TV sets and the United States has a comparative advantage in cameras.

Correct Answer
verified

The steepness of a curve is partially determined by the units of measurement.

Correct Answer
verified

Jack, an outstanding high school baseball player, has to decide whether to sign a contract with a major league baseball organization or to go to college. If Jack is determining his opportunity costs to go to college instead, he would include

Correct Answer
verified

Marginal analysis involves looking at the extra costs involved in a decision.

Correct Answer
verified

How does correlation differ from causation? Give an example of each to illustrate your answer.

Correct Answer
verified
Correlation means that two (or more) var...
View Answer

Correct Answer
verified

If an airline company has several empty seats on a flight and the full price of an air ticket is $500 and the marginal cost per passenger is $100, then it will be profitable for the airline to

Correct Answer
verified

If a decision maker uses marginal analysis, then the relevant costs are the

Correct Answer
verified

How do markets respond to price ceilings and price floors? Do attempts to repeal the laws of supply and demand meet their objectives?

Correct Answer
verified
Attempts to repeal the laws of supply an...
View Answer

Exam 1: What Is Economics

Graphs are useful because of the way they

Correct AnswerverifiedE

Economic efficiency and income equality are often conflicting goals in an economy.

Correct AnswerverifiedShow Answer

Even though international trade is undertaken voluntarily, a country that engages in trade may not benefit from it.

Correct AnswerverifiedShow Answer

The use of abstraction in economics is analogous to the use of a road map providing directions to a location.

Correct AnswerverifiedTrue

If Taiwanese workers can produce all goods at lower wages than American workers, then

Correct AnswerverifiedA

The word "theory" means the same to the scientist as it does to the man on the street.

Correct AnswerverifiedShow Answer

When controls over market prices are enacted, the consequences are always clear.

Correct AnswerverifiedShow Answer

A ray through the origin always has a slope of one.

Correct AnswerverifiedShow Answer

Which of the following mathematical expressions represents the equation of a straight line with a slope of zero at all points on a graph with Y on the vertical axis and X on the horizontal axis?

Correct AnswerverifiedShow Answer

If an economic curve has a negative slope, then one variable

Correct AnswerverifiedShow Answer

A small increase in productivity growth can have a huge impact on a country's standard of living.

Correct AnswerverifiedShow Answer

If Japan is twice as good at producing cameras and three times as good at producing TV sets as the United States, Japan is said to have a comparative advantage in TV sets and the United States has a comparative advantage in cameras.

Correct AnswerverifiedShow Answer

The steepness of a curve is partially determined by the units of measurement.

Correct AnswerverifiedShow Answer

Jack, an outstanding high school baseball player, has to decide whether to sign a contract with a major league baseball organization or to go to college. If Jack is determining his opportunity costs to go to college instead, he would include

Correct AnswerverifiedShow Answer

Marginal analysis involves looking at the extra costs involved in a decision.

Correct AnswerverifiedShow Answer

How does correlation differ from causation? Give an example of each to illustrate your answer.

Correct AnswerverifiedCorrelation means that two (or more) var...View AnswerShow Answer

Correct AnswerverifiedShow Answer

If an airline company has several empty seats on a flight and the full price of an air ticket is $500 and the marginal cost per passenger is $100, then it will be profitable for the airline to

Correct AnswerverifiedShow Answer

If a decision maker uses marginal analysis, then the relevant costs are the

Correct AnswerverifiedShow Answer

How do markets respond to price ceilings and price floors? Do attempts to repeal the laws of supply and demand meet their objectives?

Correct AnswerverifiedAttempts to repeal the laws of supply an...View AnswerShow Answer

Correct Answer
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E

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True

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A

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Correlation means that two (or more) var...
View Answer

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Correct Answer
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Correct Answer
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Attempts to repeal the laws of supply an...
View Answer