Question 1

Economists assume that individuals

Accepted Answer

A)  behave in unpredictable ways.
B)  will never take action to help others.
C)  prefer to live in a society that values fairness above all else.
D)  are rational and respond to incentives.E) B) and C)
F) A) and B)

Question 2

What is a mixed economy?

Accepted Answer

A mixed economy is an economy in which m...

Question 3

Which of the following generates productive efficiency?

Accepted Answer

A)  competition among sellers
B)  competition among buyers
C)  government inspectors
D)  government production rules and regulationsE) A) and B)
F) None of the above

Question 4

Suppose that to increase sales of hybrid vehicles,auto manufacturers are offering large cash incentives.This is an example of a macroeconomics topic.

Accepted Answer

A) True 
 B)False

Question 5

'An increase in the price of petrol will increase the demand for hybrid vehicles.' This statement is an example of a positive economic statement.

Accepted Answer

A) True 
 B)False

Question 6

All economic questions arise from the fact that resources are unlimited.

Accepted Answer

A) True 
 B)False

Question 7

The highest valued alternative that must be given up to engage in an activity is the definition of

Accepted Answer

A)  economic equity.
B)  marginal benefit.
C)  opportunity cost.
D)  marginal cost.E) C) and D)
F) None of the above

Question 8

Which of the following is a normative economic statement?

Accepted Answer

A)  The price of petrol is too high.
B)  The current high price of petrol is the result of strong worldwide demand.
C)  When the price of petrol rises,the quantity of petrol purchased falls.
D)  When the price of petrol rises,transportation costs rise.E) B) and D)
F) B) and C)

Question 9

Positive analysis is concerned with 'what ought to be,' while normative analysis is concerned with 'what is.'

Accepted Answer

A) True 
 B)False

Question 10

Marginal benefit refers to the additional benefit that your activity provides to you.

Accepted Answer

A) True 
 B)False

Question 11

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40,and he charges $75 for this service.For a total price of $90,DeShawn will also detail the car's engine,a service that adds an additional $20 to the total cost of the package.What is the marginal cost of adding the engine detailing to the basic detailing package?

Accepted Answer

A)  $20
B)  $30
C)  $60
D)  $60 plus the value of his timeE) C) and D)
F) A) and B)

Question 12

Examining the conditions that could lead to unemployment in an economy is an example of a microeconomics topic.

Accepted Answer

A) True 
 B)False

Question 13

Examining the conditions that could lead to a recession in an economy is an example of a macroeconomics topic.

Accepted Answer

A) True 
 B)False

Question 14

The relationship between consumer spending and disposable personal income is

Accepted Answer

A)  an inverse relationship.
B)  a direct relationship.
C)  a negative relationship.
D)  independent.E) A) and C)
F) B) and C)

Question 15

Allison's Auto Art is a company that applies pinstripes to vehicles.Allison's cost for a basic 1-colour pinstriping job is $35,and she charges $95 for this service.For a total price of $175,Allison will apply a fancier 3-colour pinstripe application to an automobile,a service that adds an additional $40 to the total cost of the package.What is the marginal cost of moving up from the 1-colour application to the 3-colour application?

Accepted Answer

A)  $35
B)  $40
C)  $80
D)  $175E) A) and C)
F) A) and B)

Question 16

The idea that because of scarcity,producing more of one good or service means producing less of another good or service refers to the economic concept of

Accepted Answer

A)  optimization.
B)  efficiency.
C)  trade-off.
D)  equity.E) A) and B)
F) A) and C)

Question 17

Suppose when the price of laptops falls,university students buy more laptops.This implies that

Accepted Answer

A)  there is a positive relationship between laptop prices and quantities purchased by university students.
B)  there is a negative relationship between laptop prices and quantities purchased by university students.
C)  there is a direct relationship between laptop prices and quantities purchased by university students.
D)  there is a one-to-one relationship between laptop prices and quantities purchased by university students.E) A) and B)
F) B) and C)

Question 18

Allocative efficiency is achieved when firms produce goods and services

Accepted Answer

A)  at the lowest possible cost.
B)  that consumers value most.
C)  at the lowest opportunity cost.
D)  at a marginal cost of zero.E) A) and B)
F) A) and D)

Question 19

What is equity,and how does it differ from efficiency?

Accepted Answer

Equity refers to the fair distribution o...

Question 20

Microeconomics is the study of

Accepted Answer

A)  how households and firms make choices.
B)  the economy as a whole.
C)  the global economy.
D)  topics such as unemployment,inflation,and economic growth.E) A) and C)
F) B) and D)

Exam 1: Economics: Foundations and Models

Examining the conditions that could lead to a recession in an economy is an example of a macroeconomics topic.

Correct Answer
verified

'An increase in the price of petrol will increase the demand for hybrid vehicles.' This statement is an example of a positive economic statement.

Correct Answer
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Correct Answer
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What is equity,and how does it differ from efficiency?

Correct Answer
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Equity refers to the fair distribution o...
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Correct Answer
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Which of the following is a normative economic statement?

Correct Answer
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Suppose when the price of laptops falls,university students buy more laptops.This implies that

Correct Answer
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Which of the following generates productive efficiency?

Correct Answer
verified

Economists assume that individuals

Correct Answer
verified

The relationship between consumer spending and disposable personal income is

Correct Answer
verified

Suppose that to increase sales of hybrid vehicles,auto manufacturers are offering large cash incentives.This is an example of a macroeconomics topic.

Correct Answer
verified

The highest valued alternative that must be given up to engage in an activity is the definition of

Correct Answer
verified

Marginal benefit refers to the additional benefit that your activity provides to you.

Correct Answer
verified

The idea that because of scarcity,producing more of one good or service means producing less of another good or service refers to the economic concept of

Correct Answer
verified

Positive analysis is concerned with 'what ought to be,' while normative analysis is concerned with 'what is.'

Correct Answer
verified

All economic questions arise from the fact that resources are unlimited.

Correct Answer
verified

Allocative efficiency is achieved when firms produce goods and services

Correct Answer
verified

What is a mixed economy?

Correct Answer
verified
A mixed economy is an economy in which m...
View Answer

Microeconomics is the study of

Correct Answer
verified

Examining the conditions that could lead to unemployment in an economy is an example of a microeconomics topic.

Correct Answer
verified

Exam 1: Economics: Foundations and Models

Examining the conditions that could lead to a recession in an economy is an example of a macroeconomics topic.

Correct AnswerverifiedShow Answer

'An increase in the price of petrol will increase the demand for hybrid vehicles.' This statement is an example of a positive economic statement.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is equity,and how does it differ from efficiency?

Correct AnswerverifiedEquity refers to the fair distribution o...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Which of the following is a normative economic statement?

Correct AnswerverifiedShow Answer

Suppose when the price of laptops falls,university students buy more laptops.This implies that

Correct AnswerverifiedShow Answer

Which of the following generates productive efficiency?

Correct AnswerverifiedShow Answer

Economists assume that individuals

Correct AnswerverifiedShow Answer

The relationship between consumer spending and disposable personal income is

Correct AnswerverifiedShow Answer

Suppose that to increase sales of hybrid vehicles,auto manufacturers are offering large cash incentives.This is an example of a macroeconomics topic.

Correct AnswerverifiedShow Answer

The highest valued alternative that must be given up to engage in an activity is the definition of

Correct AnswerverifiedShow Answer

Marginal benefit refers to the additional benefit that your activity provides to you.

Correct AnswerverifiedShow Answer

The idea that because of scarcity,producing more of one good or service means producing less of another good or service refers to the economic concept of

Correct AnswerverifiedShow Answer

Positive analysis is concerned with 'what ought to be,' while normative analysis is concerned with 'what is.'

Correct AnswerverifiedShow Answer

All economic questions arise from the fact that resources are unlimited.

Correct AnswerverifiedShow Answer

Allocative efficiency is achieved when firms produce goods and services

Correct AnswerverifiedShow Answer

What is a mixed economy?

Correct AnswerverifiedA mixed economy is an economy in which m...View AnswerShow Answer

Microeconomics is the study of

Correct AnswerverifiedShow Answer

Examining the conditions that could lead to unemployment in an economy is an example of a microeconomics topic.

Correct AnswerverifiedShow Answer

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Equity refers to the fair distribution o...
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A mixed economy is an economy in which m...
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Correct Answer
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Correct Answer
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