Question 1

Economic resources are also called:

Accepted Answer

A)   free gifts of nature.
B)   consumption goods.
C)   units of money capital.
D)   factors of production.E) A) and B)
F) B) and C)

Question 2

Rational individuals may make different choices because their information and circumstances differ.

Accepted Answer

A) True 
 B)False

Question 3

International specialization and trade:

Accepted Answer

A)   allow a nation to get more of a desired good at less sacrifice of some other good.
B)   can allow an economy to circumvent the output limits imposed by its domestic production possibilities curve.
C)   Has the same effect as having more and better resources.
D)   All of the above.E) B) and C)
F) A) and D)

Question 4

An economy cannot produce at a point outside of its production possibilities curve because human material wants are insatiable.

Accepted Answer

A) True 
 B)False

Question 5

As a consequence of the condition of scarcity:

Accepted Answer

A)   there is always enough of everything.
B)   production has to be centrally planned.
C)   things which are plentiful have relatively high prices.
D)   individuals and communities have to make choices among alternatives.E) B) and D)
F) A) and D)

Question 6

If we say that two variables are directly related,this means that:

Accepted Answer

A)   the relationship between the two is purely random.
B)   an increase in one variable is associated with a decrease in the other variable.
C)   an increase in one variable is associated with an increase in the other variable.
D)   the two graph as a downsloping line.E) B) and C)
F) A) and D)

Question 7

The term "other things equal" means that:

Accepted Answer

A)   the associated statement is normative.
B)   many variables affect the variable under consideration.
C)   the assumption that factors other than those being considered do not change.
D)   when variable X increases so does related variable Y.E) B) and D)
F) B) and C)

Question 8

Which of the following is a positive statement?

Accepted Answer

A)   The humidity is too high today.
B)   It is too hot to jog today.
C)   The temperature is 30 degrees today.
D)   I enjoy summer evenings when it cools off.E) B) and D)
F) None of the above

Question 9

In drawing a budget line it is assumed that:

Accepted Answer

A)   consumer preferences are fixed.
B)   the prices of the two products are variable.
C)   money income is fixed.
D)   consumer willingness to substitute between the two products is fixed.E) A) and B)
F) A) and C)

Question 10

Which of the following will not shift a nation's production possibilities curve?

Accepted Answer

A)   the acquisition of more education and training by its labour force
B)   the widespread application of irrigation to its agricultural land
C)   an increase in the rate of unemployment
D)   the discovery of new super-conductivity materials which makes manufacturing more efficientE) A) and B)
F) All of the above

Question 11

-Refer to the above table.As compared to production alternative D,the choice of alternative C would:

Accepted Answer

A)   tend to generate a more rapid growth rate.
B)   be unattainable.
C)   entail unemployment.
D)   tend to generate a slower growth rate.E) C) and D)
F) None of the above

Question 12

The present choice of position on the production possibilities curve will not influence the future location of the curve.

Accepted Answer

A) True 
 B)False

Question 13

-The slope of line (2) on the above graph is:

Accepted Answer

A)   0
B)   .66.
C)   .75.
D)   1.50.E) None of the above
F) C) and D)

Question 14

The future location of the economy's production possibilities curve will be affected by:

Accepted Answer

A)   the current division of domestic output between consumption and capital goods.
B)   the rate of technological progress.
C)   the growth of the economy's supplies of resources.
D)   all of the above.E) B) and D)
F) B) and C)

Question 15

Refer to the production possibilities curves.The movement from curve (a)to curve (c)indicates an improvement in civilian goods technology but not in war goods technology.

Accepted Answer

A) True 
 B)False

Question 16

In every economic system,choices must be made because resources are:

Accepted Answer

A)   infinite,but economic wants are finite.
B)   finite,but economic wants are insatiable.
C)   unlimited,but economic wants are limited.
D)   limited,and so are economic wants.E) A) and B)
F) A) and C)

Question 17

If we say that two variables are inversely related,this means that:

Accepted Answer

A)   the two graph as an upsloping line.
B)   an increase in one variable is associated with a decrease in the other.
C)   an increase in one variable is associated with an increase in the other.
D)   the resulting relationship can be portrayed by a straight line parallel to the horizontal axis.E) A) and B)
F) A) and D)

Question 18

In drawing a production possibilities curve we hold constant:

Accepted Answer

A)   the money supply.
B)   the consumer price index.
C)   both technology and resource supplies
D)   resource supplies only.E) B) and D)
F) B) and C)

Question 19

If the equation y = 5 + 6x was graphed,the:

Accepted Answer

A)   slope would be -5.
B)   slope would be +5.
C)   slope would be +6.
D)   vertical intercept would be +.6.E) C) and D)
F) All of the above

Question 20

Assume that if the interest rate that businesses must pay to borrow funds were 20 percent,it would be unprofitable for businesses to invest in new machinery and equipment so that investment would be zero.But if the interest rate were 16 percent,businesses would find it profitable to invest $10 billion.If the interest rate were 12 percent,$20 billion would be invested.Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate.
-Refer to the above information.Which of the following correctly expresses the indicated relationship as an equation?

Accepted Answer

A)   i = 20 - 4I.
B)   i = 20 - .4I.
C)   i = 24 - .4I.
D)   i = 20 - 10I.E) B) and C)
F) B) and D)

Exam 1: Limits, Alternatives, and Choices

-The slope of line (2) on the above graph is:

Correct Answer
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The future location of the economy's production possibilities curve will be affected by:

Correct Answer
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Correct Answer
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Rational individuals may make different choices because their information and circumstances differ.

Correct Answer
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As a consequence of the condition of scarcity:

Correct Answer
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The term "other things equal" means that:

Correct Answer
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In drawing a production possibilities curve we hold constant:

Correct Answer
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Economic resources are also called:

Correct Answer
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-Refer to the above table.As compared to production alternative D,the choice of alternative C would:

Correct Answer
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If the equation y = 5 + 6x was graphed,the:

Correct Answer
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If we say that two variables are directly related,this means that:

Correct Answer
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The present choice of position on the production possibilities curve will not influence the future location of the curve.

Correct Answer
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Which of the following will not shift a nation's production possibilities curve?

Correct Answer
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In every economic system,choices must be made because resources are:

Correct Answer
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International specialization and trade:

Correct Answer
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Which of the following is a positive statement?

Correct Answer
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If we say that two variables are inversely related,this means that:

Correct Answer
verified

Refer to the production possibilities curves.The movement from curve (a)to curve (c)indicates an improvement in civilian goods technology but not in war goods technology.

Correct Answer
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In drawing a budget line it is assumed that:

Correct Answer
verified

An economy cannot produce at a point outside of its production possibilities curve because human material wants are insatiable.

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

-The slope of line (2) on the above graph is:

Correct AnswerverifiedShow Answer

The future location of the economy's production possibilities curve will be affected by:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Rational individuals may make different choices because their information and circumstances differ.

Correct AnswerverifiedShow Answer

As a consequence of the condition of scarcity:

Correct AnswerverifiedShow Answer

The term "other things equal" means that:

Correct AnswerverifiedShow Answer

In drawing a production possibilities curve we hold constant:

Correct AnswerverifiedShow Answer

Economic resources are also called:

Correct AnswerverifiedShow Answer

-Refer to the above table.As compared to production alternative D,the choice of alternative C would:

Correct AnswerverifiedShow Answer

If the equation y = 5 + 6x was graphed,the:

Correct AnswerverifiedShow Answer

If we say that two variables are directly related,this means that:

Correct AnswerverifiedShow Answer

The present choice of position on the production possibilities curve will not influence the future location of the curve.

Correct AnswerverifiedShow Answer

Which of the following will not shift a nation's production possibilities curve?

Correct AnswerverifiedShow Answer

In every economic system,choices must be made because resources are:

Correct AnswerverifiedShow Answer

International specialization and trade:

Correct AnswerverifiedShow Answer

Which of the following is a positive statement?

Correct AnswerverifiedShow Answer

If we say that two variables are inversely related,this means that:

Correct AnswerverifiedShow Answer

Refer to the production possibilities curves.The movement from curve (a)to curve (c)indicates an improvement in civilian goods technology but not in war goods technology.

Correct AnswerverifiedShow Answer

In drawing a budget line it is assumed that:

Correct AnswerverifiedShow Answer

An economy cannot produce at a point outside of its production possibilities curve because human material wants are insatiable.

Correct AnswerverifiedShow Answer

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