ECON 252 Exam 1 - 9/30 Questions With
Correct Answers
1. Economics involves marginal analysis because:
A. most decisions involve changes from the present situation.
B. marginal benefits always exceed marginal costs.
C. marginal costs always exceed marginal benefits.
D. much economic behavior is irrational - ANSWER A. most decisions involve
changes from the present situation.
Opportunity costs exist because:
A. the decision to engage in one activity means forgoing some other activity.
B. wants are scarce relative to resources.
C. households and businesses make rational decisions.
D. most decisions do not involve sacrifices or trade-offs - ANSWER A. the
decision to engage in one activity means forgoing some other activity.
Economics may best be defined as the:
A. interaction between macro and micro considerations.
B. social science concerned with how individuals, institutions, and society make
optimal choices under
conditions of scarcity.
C. empirical testing of value judgments through the use of logic.
D. study of why people are rational - ANSWER B. social science concerned with
how individuals, institutions, and society make optimal choices under
conditions of scarcity.
The term "ceteris paribus, or "other things equal" means that:
A. the associated statement is normative.
B. many variables affect the variable under consideration.
C. a number of relevant variables are assumed to be constant.
D. when variable X increases, so does related variable Y. - ANSWER C. a
number of relevant variables are assumed to be constant.
Which of the following is associated with
macroeconomics, as opposed to
microeconomics?
A. an examination of the incomes of professional athletes
B. an investigation of the inflation and unemployment rates since 1990
C. a study of the trend of pecan prices
, D. a case study of pricing and production in the textbook industry - ANSWER B.
an investigation of the inflation and unemployment rates since 1990
Which of the following is a
microeconomic
statement?
A. GDP increased by 3 percent last year.
B. Unemployment was 4 percent of the labor force last year.
C. The price of smartphones declined 3 percent last year.
D. The inflation rate was 2 percent last year. - ANSWER C. The price of
smartphones declined 3 percent last year.
When resources are unemployment (e.g., unemployed workers, idle factories),
A. causes the production possibilities curve to shift outward.
B. can exist at any point on a production possibilities curve.
C. is illustrated by a point outside the production possibilities curve.
D. is illustrated by a point inside the production possibilities curve - ANSWER D.
is illustrated by a point inside the production possibilities curve
A production possibilities curve illustrates:
A. scarcity.
B. market prices.
C. consumer preferences.
D. the distribution of income - ANSWER A. scarcity.
A production possibilities curve shows:
A. that resources are unlimited.
B. that people prefer one of the goods more than the other.
C. the maximum amounts of two goods that can be produced, assuming the full
use of available resources.
D. combinations of capital and labor necessary to produce specific levels of
output. - ANSWER C. the maximum amounts of two goods that can be produced,
assuming the full use of available resources.
A nation's production possibilities curve
is bowed out
(concave) from the origin because:
A. resources are not generally equally efficient in producing every good.
B. opportunity costs of producing a good tend to fall as more of the good is
produced.
C. resources are scarce.
D. wants are virtually unlimited - ANSWER A. resources are not generally
equally efficient in producing every good.
When an economy is operating under conditions of full employment, the
production of more of good
Correct Answers
1. Economics involves marginal analysis because:
A. most decisions involve changes from the present situation.
B. marginal benefits always exceed marginal costs.
C. marginal costs always exceed marginal benefits.
D. much economic behavior is irrational - ANSWER A. most decisions involve
changes from the present situation.
Opportunity costs exist because:
A. the decision to engage in one activity means forgoing some other activity.
B. wants are scarce relative to resources.
C. households and businesses make rational decisions.
D. most decisions do not involve sacrifices or trade-offs - ANSWER A. the
decision to engage in one activity means forgoing some other activity.
Economics may best be defined as the:
A. interaction between macro and micro considerations.
B. social science concerned with how individuals, institutions, and society make
optimal choices under
conditions of scarcity.
C. empirical testing of value judgments through the use of logic.
D. study of why people are rational - ANSWER B. social science concerned with
how individuals, institutions, and society make optimal choices under
conditions of scarcity.
The term "ceteris paribus, or "other things equal" means that:
A. the associated statement is normative.
B. many variables affect the variable under consideration.
C. a number of relevant variables are assumed to be constant.
D. when variable X increases, so does related variable Y. - ANSWER C. a
number of relevant variables are assumed to be constant.
Which of the following is associated with
macroeconomics, as opposed to
microeconomics?
A. an examination of the incomes of professional athletes
B. an investigation of the inflation and unemployment rates since 1990
C. a study of the trend of pecan prices
, D. a case study of pricing and production in the textbook industry - ANSWER B.
an investigation of the inflation and unemployment rates since 1990
Which of the following is a
microeconomic
statement?
A. GDP increased by 3 percent last year.
B. Unemployment was 4 percent of the labor force last year.
C. The price of smartphones declined 3 percent last year.
D. The inflation rate was 2 percent last year. - ANSWER C. The price of
smartphones declined 3 percent last year.
When resources are unemployment (e.g., unemployed workers, idle factories),
A. causes the production possibilities curve to shift outward.
B. can exist at any point on a production possibilities curve.
C. is illustrated by a point outside the production possibilities curve.
D. is illustrated by a point inside the production possibilities curve - ANSWER D.
is illustrated by a point inside the production possibilities curve
A production possibilities curve illustrates:
A. scarcity.
B. market prices.
C. consumer preferences.
D. the distribution of income - ANSWER A. scarcity.
A production possibilities curve shows:
A. that resources are unlimited.
B. that people prefer one of the goods more than the other.
C. the maximum amounts of two goods that can be produced, assuming the full
use of available resources.
D. combinations of capital and labor necessary to produce specific levels of
output. - ANSWER C. the maximum amounts of two goods that can be produced,
assuming the full use of available resources.
A nation's production possibilities curve
is bowed out
(concave) from the origin because:
A. resources are not generally equally efficient in producing every good.
B. opportunity costs of producing a good tend to fall as more of the good is
produced.
C. resources are scarce.
D. wants are virtually unlimited - ANSWER A. resources are not generally
equally efficient in producing every good.
When an economy is operating under conditions of full employment, the
production of more of good
