Question 1

Which of the following is true regarding this statement? "The president's decision to spend more money on national defense is smart."
A) This is a normative statement.
B) The federal government does not face scarcity.
C) This topic would be studied in microeconomics.
D) Social interest must always be more important than self-interest.
E) Ceteris paribus does not apply to the government.

Accepted Answer

This statement expresses an opinion about what the president should do, rather than a statement of fact. Therefore, it is a normative statement.

Question 2

-In the figure above, suppose the price of a pound of pecans is negatively related to the quantity of peanuts that farmers are willing to supply.If the price of pecans increases,
A) the curve will shift rightward.
B) the curve will shift leftward.
C) there is a movement along the curve.
D) the curve will be unaffected.
E) None of the above answers is correct because the graph assumes that the price of pecans does not change.

Accepted Answer

The answer of 
-In the figure above, suppose the price...

Question 3

What is the relationship between wants, resources, scarcity, and choices?
 Discuss the relationship for an individual and for a society.

Accepted Answer

The answer of What is the relationship between wants, resources,...

Question 4

1.5 Chapter Figures
 
-The relationship between distance traveled in 5 hours and speed shown in the figure above is
A) positive.
B) negative.
C) inverse.
D) cross-sectional.
E) multilateral.

Accepted Answer

The relationship between distance traveled and speed is positive because as speed increases, the distance traveled in a fixed amount of time (5 hours) also increases.

Question 5

-To graph a relationship that involves more than two variables, we use
A) a positive relationship.
B) a direct relationship.
C) a negative relationship.
D) ceteris paribus.
E) movement up along one of the lines showing the relationship between x and y.

Accepted Answer

Ceteris paribus, a Latin phrase meaning "all other things being equal," is used in economics to isolate the relationship between two variables by holding other influencing factors constant. This concept allows for the graphical representation of relationships involving more than two variables by focusing on how changes in one variable affect another, assuming all other variables remain unchanged.

Question 6

-In the figure above, ceteris paribus, an increase in x is associated with
A) an increase in y.
B) a decrease in y.
C) an increase in z.
D) a random change in z.
E) no change in either y or z.

Accepted Answer

The answer of 
-In the figure above, ceteris paribus, an...

Question 7

1.5 Chapter Figures
 
-The relationship between distance traveled in 5 hours and speed shown in the figure above is
A) direct , linear
B) inverse, linear
C) direct , non-linear
D) inverse, positive
E) direct, negative

Accepted Answer

The relationship between distance traveled and speed is direct and linear because as speed increases, the distance traveled in a given time period (5 hours, in this case) also increases proportionally.

Question 8

-What is the slope of the line in the figure above?
A) 0.75
B) -0.75
C) 1.33
D) -1.33
E) Zero

Accepted Answer

The answer of 
-What is the slope of the line...

Question 9

To help unscramble cause and effect, economists
A) use the concept of opportunity costs.
B) must use the ceteris paribus assumption.
C) answer the "what" question.
D) answer the "how" question.
E) must use normative statements.

Accepted Answer

Economists must use the ceteris paribus assumption to unscramble cause and effect because it holds all other variables constant except for the one being studied, allowing for a clearer understanding of the relationship between variables.

Question 10

Which of the following is true regarding a normative statement?
I.It uses the ceteris paribus assumption.
Ii. It is a value judgment.
Iii. It accounts for opportunity costs.
A) i and iii.
B) ii and iii.
C) i only.
D) ii only.
E) i, ii, and iii.

Accepted Answer

A normative statement is a statement that expresses a value judgment about whether a situation is desirable or undesirable. It is subjective and cannot be tested. Therefore, statement (ii) is true. Ceteris paribus assumption means "all else equal", which is a standard assumption in economics that simplifies economic models by assuming that all other variables are held constant. This assumption does not apply to normative statements, so statement (i) is false. Opportunity cost is the cost of foregone alternatives when making a choice, and it is a relevant consideration when making normative statements about economic decisions. Therefore, statement (iii) is true. Hence, the best choice is D, which is "ii only".

Question 11

-The figure above shows the relationship between distance sprinted and recovery time.The curve becomes steeper because as the distance sprinted increases,
A) the extra recovery time needed from sprinting another 100 yards increases.
B) the extra recovery time needed from sprinting another 100 yards decreases.
C) the recovery time increases.
D) the recovery time decreases.
E) the relationship between distance sprinted and recovery time becomes more inverse.

Accepted Answer

The curve becoming steeper indicates that for each additional 100 yards sprinted, the amount of recovery time needed increases at a greater rate. This means the extra recovery time required grows as the distance sprinted increases.

Question 12

Which of the following is true?
I.A rational choice is always made in the pursuit of social interest.
II.Economics is a social science.
III.Economists try to understand how the economic world works by testing positive statements.
A) II and III.
B) Only I.
C) Only II.
D) Only III.
E) I and II.

Accepted Answer

Economics is a social science, and economists use positive statements to understand how the economic world works. Rational choices are not always made in pursuit of social interest.

Question 13

Suppose you decide to attend summer school and that this is considered a rational choice.When making this choice,
A) you must ignore the problem of scarcity.
B) you considered the marginal cost and marginal benefit of your choice.
C) you have used the ceteris paribus assumption.
D) you have made a positive statement.
E) you must have considered the social interest.

Accepted Answer

When making a rational choice, it is important to consider the marginal cost and marginal benefit of the choice. By attending summer school, you would have considered the additional cost (such as tuition, time, effort) compared to the additional benefit (such as gaining knowledge, improving grades, accelerating your education). This is what economists describe as thinking at the margin, which is the key aspect of rational decision-making.

Question 14

-The figure above shows the relationship between study time and the number of problems worked.The curve becomes less steep because as you study more,
A) study time becomes less effective.
B) study time becomes more effective.
C) the number of problems worked increases.
D) the number of problems worked decreases.
E) the relationship between study time and the number of problems worked changes from direct to inverse.

Accepted Answer

The answer of 
-The figure above shows the relationship between...

Question 15

-In the figure above, what is the slope of the curve at point A?
A) 0.75
B) -0.75
C) 1.33
D) -1.33
E) Zero

Accepted Answer

The answer of 
-In the figure above, what is the...

Question 16

Will, Bill, and Phil decide to study an extra hour for an exam.Instead of studying, they could have gone out to eat, played football, or watched TV.Which of the following statements is correct?
A) The benefit the three students receive must be the same because they all make the same choice.
B) The students made a rational choice as long as they face no scarcity.
C) The students could each have different opportunity costs.
D) The marginal cost of the decision is the same if they make the same score on the exam.
E) Going out to eat, playing football, and watching TV are all called sunk costs.

Accepted Answer

Each student may have different opportunity costs for studying an extra hour. For example, Will may have a social event he is missing out on, while Bill may have a part-time job that he needs to attend to. The decision to study an extra hour has different trade-offs for each student. Therefore, option C is the correct statement. The other options are incorrect: A is incorrect because the students could have different opportunity costs; B is incorrect because scarcity is not mentioned in the scenario; D is incorrect because the marginal cost depends on the outcome of the exam, and E is incorrect because sunk costs are costs that have already been incurred and cannot be recovered, which is not the case in this scenario.

Question 17

-The figure above shows the relationship between the journey length and the cost of trip per mile.The curve becomes flatter because as the journey length increases,
A) the fall in the cost per mile becomes smaller.
B) the fall in the cost per mile becomes greater.
C) the cost per mile decreases.
D) the cost per mile increases.
E) the cost per mile remains unchanged.

Accepted Answer

The curve flattening indicates that the rate at which the cost per mile decreases slows down, meaning the fall in the cost per mile becomes smaller as the journey length increases.

Question 18

-In the figure above, an increase in z leads to a
A) movement up along one of the lines showing the relationship between x and y.
B) movement down along one of the lines showing the relationship between x and y.
C) rightward shift of the line showing the relationship between x and y.
D) leftward shift of the line showing the relationship between x and y.
E) trend change in both x and y.

Accepted Answer

The answer of 
-In the figure above, an increase in...

Question 19

Which of the following is true?
I.A rational choice is made on the margin.
II.Microeconomics is the study of the national economy while macroeconomics is the study of the global economy.
III.Economists try to understand how the economic world works by testing normative statements.
A) Only I
B) I and III
C) Only II
D) Only III
E) I and II

Accepted Answer

A rational choice is made on the margin, considering the additional benefits and costs of a decision. Microeconomics studies individual and business decisions, while macroeconomics focuses on national and global economies. Economists test positive, not normative, statements.

Question 20

-What is the slope of the line in the figure above?
A) 0.75
B) -0.75
C) 1.33
D) -1.33
E) Zero

Accepted Answer

The answer of 
-What is the slope of the line...

Quiz 1: Getting Started

Which of the following is true regarding this statement? "The president's decision to spend more money on national defense is smart."

-In the figure above, suppose the price of a pound of pecans is negatively related to the quantity of peanuts that farmers are willing to supply.If the price of pecans increases,

What is the relationship between wants, resources, scarcity, and choices? Discuss the relationship for an individual and for a society.

1.5 Chapter Figures -The relationship between distance traveled in 5 hours and speed shown in the figure above is

-To graph a relationship that involves more than two variables, we use

-In the figure above, ceteris paribus, an increase in x is associated with

1.5 Chapter Figures -The relationship between distance traveled in 5 hours and speed shown in the figure above is

-What is the slope of the line in the figure above?

To help unscramble cause and effect, economists

Which of the following is true regarding a normative statement? I.It uses the ceteris paribus assumption. Ii. It is a value judgment. Iii. It accounts for opportunity costs.

-The figure above shows the relationship between distance sprinted and recovery time.The curve becomes steeper because as the distance sprinted increases,

Which of the following is true? I.A rational choice is always made in the pursuit of social interest. II.Economics is a social science. III.Economists try to understand how the economic world works by testing positive statements.

Suppose you decide to attend summer school and that this is considered a rational choice.When making this choice,

-The figure above shows the relationship between study time and the number of problems worked.The curve becomes less steep because as you study more,

-In the figure above, what is the slope of the curve at point A?

Will, Bill, and Phil decide to study an extra hour for an exam.Instead of studying, they could have gone out to eat, played football, or watched TV.Which of the following statements is correct?

-The figure above shows the relationship between the journey length and the cost of trip per mile.The curve becomes flatter because as the journey length increases,

-In the figure above, an increase in z leads to a

Which of the following is true? I.A rational choice is made on the margin. II.Microeconomics is the study of the national economy while macroeconomics is the study of the global economy. III.Economists try to understand how the economic world works by testing normative statements.

-What is the slope of the line in the figure above?