econ questions
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Consider two statements based on analysis of a proposed increase tax on wages:
I. An increased tax on wages will reduce the number of hours worked and reduce the take-home income of workers.
II. An increased tax on wages should not be implemented because it will harm both firms and workers.
Statement I and II are both examples of positive economics.
Statement I and II are both examples of normative economics.
Statement I is an example of positive economics; statement II is an example of normative economics.
Statement I is an example of normative economics; statement II is an example of positive economics.
1 points
Question 4
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Economics _______ limitations. Most ethical considerations are _______ of economic theory.
has; left out
has; not left out
does not have; left out
does not have; not left out
1 points
Question 5
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Many objections exist to standard economic reasoning. Economics either ignores or inadequately treats all of the following, EXCEPT:
problem of exploitation.
private market goods.
cultural goods.
poverty and inequality.
1 points
Question 6
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Suppose someone is arguing against a particular market transaction by claiming that it exploits individuals. It may be reasonable to ban this market transaction if it can be established that the people involved _______ rationally or that they __________ all of the risks involved.
are acting; understand
are acting; do not understand
are not acting; understand
are not acting; do not understand
1 points
Question 7
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Billy is said to have meddlesome preferences if:
he has preferences over other people
econ questions
-
Consider two statements based on analysis of a proposed increase tax on wages:
I. An increased tax on wages will reduce the number of hours worked and reduce the take-home income of workers.
II. An increased tax on wages should not be implemented because it will harm both firms and workers.Statement I and II are both examples of positive economics.
Statement I and II are both examples of normative economics.
Statement I is an example of positive economics; statement II is an example of normative economics.
Statement I is an example of normative economics; statement II is an example of positive economics.
1 points
Question 4
-
Economics _______ limitations. Most ethical considerations are _______ of economic theory.
has; left out
has; not left out
does not have; left out
does not have; not left out
1 points
Question 5
-
Many objections exist to standard economic reasoning. Economics either ignores or inadequately treats all of the following, EXCEPT:
problem of exploitation.
private market goods.
cultural goods.
poverty and inequality.
1 points
Question 6
-
Suppose someone is arguing against a particular market transaction by claiming that it exploits individuals. It may be reasonable to ban this market transaction if it can be established that the people involved _______ rationally or that they __________ all of the risks involved.
are acting; understand
are acting; do not understand
are not acting; understand
are not acting; do not understand
1 points
Question 7
-
Billy is said to have meddlesome preferences if:
he has preferences over other people
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Related textbook solutions
Related questions
Suppose that, instead of taking this test, you could either have worked and earned income or partied and had a pleasurable time. Your opportunity cost of taking the test is the
| a. | forgone working or partying, depending on which was your next best choice. | |
| b. | forgone work. | |
| c. | forgone working and partying. | |
| d. | test because you are taking it. |
1 points
QUESTION 2
A trend is
| a. | a measure of closeness on a scatter diagram. | |
| b. | a general tendency for a variable to rise or fall. | |
| c. | the maximum value of a variable. | |
| d. | the difference between the maximum value of a variable and the minimum value of the variable. |
1 points
QUESTION 3
A time-series graph measures
| a. | time on the y-axis and the variable or variables in which we are interested on the x-axis. | |
| b. | time on the x-axis and the variable or variables in which we are interested on the y-axis. | |
| c. | the value of one variable against the value of another variable. | |
| d. | the value of an economic variable for different groups in a population at a point in time. |
1 points
QUESTION 4
Canada has nationalized health care, so that everyone, regardless of their ability to pay, has some access to health care. Based on this observation, Canada has decided that "everyone, regardless of their ability to pay" is the answer to what microeconomic question?
| a. | Why will we offer health care? | |
| b. | How will health care be produced? | |
| c. | For whom will health care be produced? | |
| d. | What type of health care will be produced and in what quantity? |
1 points
QUESTION 5
As a shoe factory adds more workers, shoe production grows, reaches a maximum, and then shrinks. In a diagram that has the number of workers on the horizontal axis and the number of shoes on the vertical axis, the relationship between the number of workers and the number of shoes starts as ________ and then, after the maximum point, is ________.
| a. | positive; negative | |
| b. | negative; positive | |
| c. | linear; negative | |
| d. | positive; linear |
1 points
QUESTION 6
Microeconomics includes the study of the
| a. | choices made by individuals and businesses. | |
| b. | recessions and inflation in the global economy. | |
| c. | aggregate effects on the national economy. | |
| d. | reasons why the government changes interest rates. |
1 points
QUESTION 7
When Fresh Express Salads decides to mechanically pick all of its lettuce, it directly answers the ________ question.
| a. | when | |
| b. | for whom | |
| c. | how | |
| d. | what |
1 points
QUESTION 8
Proponents of cuts in income tax rates argue that when income tax rates are cut, workers have an incentive to increase their work hours. This argument is based on the assumption that
| a. | the opportunity cost of working is negative. | |
| b. | the marginal cost of each additional work hour is not important to most workers. | |
| c. | workers are irrational. | |
| d. | workers make decisions based on the marginal benefit of each hour worked compared to the marginal cost of work. |
1 points
QUESTION 9
A choice made by comparing all relevant alternatives systematically and incrementally is
| a. | an opportunity cost. | |
| b. | a benefit. | |
| c. | a sunk cost. | |
| d. | a choice on the margin. |
1 points
QUESTION 10
A normative statement
i. can be tested as to whether it is true or false.
ii. is considered negative.
iii. depends on a person's values.
| a. | i, ii, and iii | |
| b. | iii only | |
| c. | i and iii | |
| d. | ii and iii |
1 points
QUESTION 11
Normative statements
i. describe how the world is.
ii. describe how the world ought to be.
iii. depend on people's values and cannot be tested.
| a. | iii only. | |
| b. | i only. | |
| c. | ii and iii. | |
| d. | ii only. |
1 points
QUESTION 12
In order to determine whether to major in economics, a rational individual compares the ________ of the decision.
| a. | positive benefits and normative costs | |
| b. | normative benefits and positive costs | |
| c. | marginal benefit and marginal cost | |
| d. | opportunity cost and the sunk cost |
1 points
QUESTION 13
If x increases whenever y decreases, then x and y are
| a. | positively related. | |
| b. | negatively related. | |
| c. | not related. | |
| d. | related but whether positively or negatively related depends on whether the x variable or the y variable is plotted on the vertical axis. |
1 points
QUESTION 14
Rational choice
| a. | is what you must give up get what you want. | |
| b. | is made by comparing different incentives. | |
| c. | making the choice. | |
| d. | provides the answer to only the "how" question. |
1 points
QUESTION 15
Scarcity results from the fact that
| a. | choices made in self-interest rare not always in the social interest. | |
| b. | not all goals are desirable. | |
| c. | people's wants exceed the resources available to satisfy them | |
| d. | we cannot answer the major economic questions. |
1 points
QUESTION 16
When Delta decides to quit flying to Lithuania, it directly answers the ________ question.
| a. | what | |
| b. | why | |
| c. | for whom | |
| d. | how |
1 points
QUESTION 17
A normative statement
| a. | says what is currently believed about the way the world operates. | |
| b. | depends on someone's values. | |
| c. | cannot use the word "should." | |
| d. | must be tested to determine if it is correct. |
1 points
QUESTION 18
Which of the following statements best describes the study of economics? Economics studies how
| a. | to organize production so that scarcity does not occur. | |
| b. | to create incentives so that scarcity does not exist. | |
| c. | firms make profits. | |
| d. | we make choices in the face of scarcity. |
1 points
QUESTION 19
Which of the following best defines economics?
| a. | Economics teaches how to limit our wants. | |
| b. | Economics is concerned with prices and quantities of goods and services, both at the individual level and at the industry level. | |
| c. | Economics helps you earn as much money as possible. | |
| d. | Economics studies how to choose the best alternative when coping with scarcity. |
1 points
QUESTION 20
In economics, cost is ________, and benefit is ________.
| a. | the amount of money that you pay for something; the amount of money that someone else is willing to pay you | |
| b. | what you are willing to pay on the margin; what the government pays you when you are unemployed or retired | |
| c. | what you must give up to get something; what you are willing to give up to get it | |
| d. | the amount of money that you pay on the margin; the amount of money that you receive on the margin |
1 points
QUESTION 21
If Jessie studies economics for two hours instead of going to the movies with her friends, then
| a. | the opportunity cost of studying is the missed movie. | |
| b. | Jessie is ignoring a sunk cost | |
| c. | Jessie is not responding to any incentives. | |
| d. | Jesse definitely is making a rational choice. |
1 points
QUESTION 22
Going skiing will cost Adam $80 a day. He also loses $40 per day in wages because he has to take time off from work. Adam still decides to go skiing.
| a. | The $80 price of skiing is a sunk cost and so did not affect Adam's decision. | |
| b. | He loses a total of $120 per day, so his decision is irrational. | |
| c. | His decision is rational if Adam's marginal benefit of spending a day skiing is greater than his marginal cost. | |
| d. | Adam's lost $40 per day in wages is a sunk cost and so did not affect his decision. |
1 points
QUESTION 23
If a curve falls and then rises, it
| a. | has a maximum. | |
| b. | has a linear relationship. | |
| c. | has a minimum. | |
| d. | has a constant slope relationship. |
1 points
QUESTION 24
In 2003, Michael Jordan decided to retire from professional basketball. Which of the following was an opportunity cost of his decision?
| a. | the avoidance of pain and injury from playing one more year | |
| b. | the time he could spend with his family while retired | |
| c. | the lost salary from playing one more year | |
| d. | the value of new employment opportunities that would await him |
1 points
QUESTION 25
Which of the following statements is a normative statement?
| a. | Military spending as a percent of government spending decreased by 5 percent in the 1990s. | |
| b. | Every American household should have health care insurance coverage. | |
| c. | Welfare reform has decreased the amount the government spends on welfare. | |
| d. | The price of computers fell last year. |
QUESTION 1
Assume there are two basic goods produced in a nation, consumer goods and capital goods. The production possibilities graph for these two goods is bowed out from the origin. This reason for this shape of the graph is because of:
| A. | the other-things-equal assumption. | |
| B. | the law of increasing opportunity costs. | |
| C. | diminishing marginal utility. | |
| D. | present choices and future possibilities. |
1 points
QUESTION 2
From an economic perspective, when a student decides to attend another year of college, the student has concluded that the:
| A. | marginal costs of attending college are reduced by the availability of grants and subsidies. | |
| B. | marginal benefits of attending college have increased because the future is brighter. | |
| C. | marginal benefits of attending college are greater than the marginal costs. | |
| D. | marginal costs of attending college have decreased to make college affordable. |
1 points
QUESTION 3
A person observes that as consumer prices fall, economic growth increases. The person concludes that fall consumer prices leads to economic growth. This conclusion would be an example of:
| A. | confusing correlation with causation. | |
| B. | the fallacy of composition. | |
| C. | trade-offs among economic goals. | |
| D. | the other-things-equal assumption. |
1 points
QUESTION 4
The problem of unlimited wants and limited income is known as
| A. | the scientific method. | |
| B. | unequal wealth distribution. | |
| C. | normative economics. | |
| D. | the economizing problem. |
1 points
QUESTION 5
A point outside the production possibilities curve is:
| A. | unattainable without economic growth. | |
| B. | attainable and the economy is efficient. | |
| C. | unattainable without inflation. | |
| D. | attainable, but the economy is inefficient. |
1 points
QUESTION 6
Which one of the following would be an example of loaded terminology?
| A. | market forces | |
| B. | tentative hypothesis | |
| C. | entrepreneurial functions | |
| D. | creeping socialism |
1 points
QUESTION 7
Suppose there are two economies, Alpha and Beta, both of which have the same production possibilities curves. If Beta devotes more resources to produce investment goods than consumer goods as compared to Alpha, then in the future:
| A. | Alpha will not be able to achieve full employment. | |
| B. | Beta will not be able to achieve full employment. | |
| C. | Alpha will experience greater economic growth than Beta. | |
| D. | Beta will experience greater economic growth than Alpha. |
1 points
QUESTION 8
Macroeconomics, as opposed to microeconomics, is concerned with
| A. | individual businesses. | |
| B. | new computer technology. | |
| C. | the stock market. | |
| D. | the economy as a whole. |
1 points
QUESTION 9
Which one of the following is an example of a positive economic statement?
| A. | The size of the Federal government should be reduced. | |
| B. | Midwest states affected by drought should be given more federal disaster aid. | |
| C. | Education and income are highly correlated. | |
| D. | The minimum wage for workers should be raised to help low-income workers. |
1 points
QUESTION 10
Economics is primarily concerned with
| A. | interactions between the government and market participants. | |
| B. | how scarce resources are used. | |
| C. | the production and distribution of capital goods. | |
| D. | how income is divided among individuals. |
1 points
QUESTION 11
The production possibilities table below shows the hypothetical relationship between the production of guns (national defense) and butter (social goods) in an economy.
A B C D E
Guns 0 4 7 9 10
Butter 4 3 2 1 0
If the economy is producing at alternative C, what is the opportunity cost of producing another unit of butter?
| A. | 3 units of guns. | |
| B. | 1 units of guns. | |
| C. | 2 units of guns. | |
| D. | 4 units of guns. |
1 points
QUESTION 12
Assume that a consumer can buy only two goods X and Y, and has an income of $120. The price of X is $10 and the price of Y is $20. If the consumer spends all of her money on X and Y, which of the following would be a possible combination:
| A. | 4X and 2Y | |
| B. | 5X and 3Y | |
| C. | 6X and 3Y | |
| D. | 8X and 1Y |
1 points
QUESTION 13
In the production possibilities model of an economy, when there is full employment of resources
| a nation will be operating at an interior point within its production possibilities curve. | ||
| a nation will be operating on the production possibilities curve. | ||
| the production possibilities curve will shift outward to the right. | ||
| the production possibilies curve will shift inward to the left. |
1 points
QUESTION 14
In economics the concept that there is "no free lunch" means
| A. | scarce resources were used to produce these "free" goods so there is an opportunity cost to producing them. | |
| B. | consumers are irrational when they ask for a free lunch unless they can make the case that the free lunch benefits business. | |
| C. | the marginal cost of the "lunch" is greater than the marginal benefit. | |
| D. | businesses could not make a profit if they gave away free goods to consumers. |
1 points
QUESTION 15
Assume that a consumer can only purchase two goods with her income. A straight-line budget constraint indicates that the opportunity cost of obtaining an additional unit of one good is:
| A. | negative. | |
| B. | constant. | |
| C. | increasing. | |
| D. | decreasing. |
