ECON 1580 Final Exam | 58 Actual Questions & Answers | 2025 Latest Update | 100% Correct

ECON 1580 Final Exam | 58 Actual Questions & Answers | 2025 Latest Update | 100% Correct 1. According to the textbook, economics is a: Select one: l science. of business decisions, not social decisions. of operations and management science. of humanities. - ANSWERl science 2. A/an _______ does not pose the problem of scarcity; one use of the good is not an alternative to another use. Select one: good e good mic good ary good - ANSWER good 3. Water is considered a scarce good rather than a free good because: Select one: has alternative uses. does not have alternative uses. e goods are less expensive than free goods. goods are more expensive than scarce goods. - ANSWER has alternative uses 4. The Case in Point on the oil extraction suggests that one reason oil may become more costly is that: Select one: will have to give up more and more valuable alternatives to extract oil. lation is likely to drive up oil prices. producers are likely to become more greedy in the future. lly, the Case suggests that oil extraction is likely to become less costly and the future. - ANSWER will have to give up more and more valuable alternatives to extract oil 5. The opportunity cost of something is: Select one: er during periods of rising prices. to the money cost. during periods of falling prices. is given up to acquire it. - ANSWER is given up to acquire it. 6. The BEST example of making a choice at the margin is: Select one: g a new car. ing your job. c.a coffee drinker drinking another cup of coffee. ding college. - ANSWERc.a coffee drinker drinking another cup of coffee 7. The study of a single firm and how it determines prices would fall under: Select one: economics. economics. study of inflation. tive economics. - ANSWEReconomics 8. Each of the following statements about the use of models in the study of economics is true EXCEPT: Select one: s fit the observed facts exactly. s are sometimes revised in light of new research findings. s are easier to manipulate than the reality they represent. s contain the essential features of the economic behavior being studied. - ANSWERs fit the observed facts exactly 9. Suppose you observe that the sun sets every evening after the six o'clock business report. If you conclude that the six o'clock business report makes the sun set, you are guilty of the fallacy of: Select one: ion. sition. cause. ce. - ANSWER cause 10. An example of a normative statement is: Select one: a.The rate of unemployment is 4 percent. b.A high rate of economic growth creates more jobs for the country. c.The federal government spends half of its budget on national defense. d.Everyone in the country needs to be covered by national health insurance. - ANSWERd.Everyone in the country needs to be covered by national health insurance 11. Resources from nature that can be used to to produce other goods and services are called: Select one: . al resources. . al. - ANSWERal resources 12. Increasing the level of education in the United States will: Select one: the production possibilities curve to the left. ve the level of technology. to increased natural resource use. to workers possessing greater human capital. - ANSWER to workers possessing greater human capital 13. Technology is: Select one: edge that can be applied to the production of goods and services. ally unlimited in modern economies. c.a graphical illustration of the alternative combinations of goods and services an economy can produce. resources the economy has available to produce goods and services. - ANSWERedge that can be applied to the production of goods and services 14. A person who seeks to earn profits by finding ways to organize factors of production is called a/an: Select one: an ce capitalist. preneur. er. - ANSWERpreneur 15. In this exhibit (Guns and Butter), the combination of guns and butter at point H: Select one: be obtained, but would cost too much. t be attained given the level of technology and the factors of production available. no meaning since it does not relate to the preferences of consumers. d.Is attainable but would increase unemployment. - ANSWERt be attained given the level of technology and the factors of production available 16. If the production possibilities curve were a straight line sloping down from left to right, this would suggest that: Select one: of both goods could be produced moving along the curve. two products must have the same price. factor of production has any particular comparative advantage over other resources. utility of the two goods must be equal to consumers. - ANSWER factor of production has any particular comparative advantage over other resources 17. When moving along a production possibilities curve, the opportunity cost to society of getting more of the good on the horizontal axis: Select one: constant. measured in dollar terms. measured by the amount of the other good that must be given up. ly decreases. - ANSWER measured by the amount of the other good that must be given up. 18. Efficient production implies that it is: Select one: ble to produce more of all goods and services. is possible to produce more of one good without producing less of another. possible to produce more of one good without producing less of another good. cing at a combination of goods which lies between the production possibilities curve and the origin. - ANSWER possible to produce more of one good without producing less of another good 19. In market capitalism: Select one: rs of production are privately owned and decisions are made privately. rs of production are owned by the government but decisions are made privately. is no role for government. consumer has few choices to make. - ANSWERrs of production are privately owned and decisions are made privately 20. Government's role of taxing some citizens and transferring income to others is considered: Select one: cing a legal system. ding certain goods and services. tributing income. aining the money supply. - ANSWERtributing income The law of demand implies that: Select one: mers are not responsive to price changes. mers will, all other things unchanged, buy more at lower prices. rs will, all other things unchanged, offer more on the market at higher prices. rs will, all other things unchanged, offer less on the market at lower prices. - ANSWERmers will, all other things unchanged, buy more at lower prices A decrease in the price of eggs, all other things unchanged, will result in a/an: Select one: ase in the demand for eggs. ase in the supply of eggs. er quantity of eggs supplied. er quantity of eggs demanded. - ANSWERer quantity of eggs demanded The price of oranges falls. What happens in the market for apples, which are a substitute for oranges? Select one: a.The equilibrium price falls and the equilibrium quantity rises. b.The equilibrium price rises and the equilibrium quantity falls. c.The equilibrium price and quantity rise. d.The equilibrium price and quantity fall. - ANSWERd.The equilibrium price and quantity fall. The cross price elasticity of demand for Coke with respect to the price of Pepsi has been estimated to be 0.61. If the price of Pepsi falls by 10 percent in a period, how will that affect the demand for Coke in that period, all other things unchanged? Select one: a.The demand for Coke will increase but by less than 6.1 percent. b.The demand for Coke will increase by 6.1 percent. c.The demand for Coke will not change because many people prefer Coke over Pepsi. d.The demand for Coke will fall - ANSWERd.The demand for Coke will fall Although in most cases the price elasticity of labor supply is ________ , for some individuals it may be ________ . Select one: ive; zero ive; positive ive; negative ; negative - ANSWERive; negative Which of the following statements is false? Select one: a.The income effect of normal goods counters the substitution effect so the demand curve is upsloping. b.The income effect and the substitution effect reinforce each other when there are price changes for a normal good. c.The income effect represents the decrease in quantity demanded caused by the implicit change in income due to a fall in the price of an inferior good but not for a normal good. d.The substitution effect represents the change in quantity demanded solely due to a change in the relative price of a good. - ANSWERa.The income effect of normal goods counters the substitution effect so the demand curve is upsloping For a/an _______ good, an increase in income will lead to an increase in _______ . Select one: ior; consumption l; supply l; consumption ior; supply - ANSWERl; consumption Assume that the total utilities for the fifth and sixth units of a good consumed are 83 and 97, respectively. The marginal utility for the sixth unit is: Select one: a.-14. b.14. c.83. d.97. - ANSWERb.14 In this exhibit (Consumer Equilibrium 1), assume that the price of good X is $2 per unit and the price of good Y is $1 per unit, and you consume 3 units of good X and 3 units of good Y. To maximize utility, assuming that the goods are divisible, you would consume: Select one: of both X and Y. of both X and Y. of X and more of Y. of X and less of Y. - ANSWER of X and more of Y. If the price of apples falls and the price of oranges remains constant: Select one: s are now relatively cheaper. fall in the price of apples made consumers richer. fall in the price of apples, ceteris paribus, makes the marginal utility of apples divided by their price exceed the marginal utility of oranges divided by their price. of the above statements are true. - ANSWER of the above statements are true The textbook states that the law of demand: Select one: difficult to verify. confirmed by our real-world experience. not valid in theory. - ANSWER confirmed by our real-world experience An indifference curve shows combinations of two goods that yield: Select one: prices. money income. satisfaction. asing prices. - ANSWER satisfaction. A curve that represents combinations of two goods that yield equal levels of satisfaction is a/an: Select one: ference curve. t curve. nal utility curve. -consumption curve. - ANSWERference curve The marginal rate of substitution assumes that: Select one: s remain unchanged. income remains unchanged. faction remains unchanged. quantities of both goods remain unchanged. - ANSWERfaction remains unchanged