Chapter 2—Production Possibilities, Opportunity Cost, and Economic Growth MULTIPLE CHOICE
1.
2.
Which of the following correctly lists the three fundamental economic questions?
a. If to produce? Why to produce? When to produce?
b. If to produce? What to produce? How to produce?
c. Why to p...
,Appendix to Chapter 1—Applying Graphs to Economics
MULTIPLE CHOICE
1. A direct relationship exists when:
a. there is no association between two variables.
b. one variable increases and there is no change in the other variable.
c. one variable increases and the other variable increases.
d. one variable increases and the other variable decreases.
ANS: C PTS: 1 DIF: Easy REF: Full: 21 | Mic: 21
TOP: Direct relationship TYP: RE
2. An upward-sloping line or curve is used to illustrate:
a. a direct relationship.
b. an inverse relationship.
c. two unrelated variables.
d. the ceteris paribus assumption.
ANS: A PTS: 1 DIF: Medium REF: Full: 21 | Mic: 21
TOP: Direct relationship TYP: SA
3. Suppose two variables are directly related. If one variable rises, then the other variable:
a. also rises.
b. falls.
c. remains unchanged.
d. reacts unpredictably.
ANS: A PTS: 1 DIF: Easy REF: Full: 21 | Mic: 21
TOP: Direct relationship TYP: RE
4. Which of the following pairs is the most likely to exhibit a direct relationship?
a. The price of gasoline and the amount of gasoline that people purchase.
b. Cholesterol levels and the likelihood of developing heart disease.
c. Outdoor temperature and heating oil sales.
d. Annual income and weekly pawn shop visits.
ANS: B PTS: 1 DIF: Medium REF: Full: 21 | Mic: 21
TOP: Direct relationship TYP: SA
5. A direct relationship is expressed graphically as a:
a. positively sloped line or curve.
b. negatively sloped line or curve.
c. horizontal line.
d. vertical line.
ANS: A PTS: 1 DIF: Easy REF: Full: 21 | Mic: 21
TOP: Direct relationship TYP: RE
6. An inverse relationship exists when:
a. there is no association between two variables.
b. one variable increases and there is no change in the other variable.
c. one variable increases and the other variable increases.
d. one variable increases and the other variable decreases.
, ANS: D PTS: 1 DIF: Easy REF: Full: 24 | Mic: 24
TOP: Inverse relationship TYP: RE
7. Which of the following pairs is the most likely to exhibit an inverse relationship?
a. The amount of time you study and your grade point average.
b. People's annual income and their expenditure on personal computers.
c. Baseball players' salaries and their batting averages.
d. The price of a concert and the number of tickets people purchase.
ANS: D PTS: 1 DIF: Medium REF: Full: 24 | Mic: 24
TOP: Inverse relationship TYP: SA
8. When an inverse relationship is graphed, the resulting line or curve is:
a. horizontal.
b. vertical.
c. upward-sloping.
d. downward-sloping.
ANS: D PTS: 1 DIF: Easy REF: Full: 24 | Mic: 24
TOP: Inverse relationship TYP: RE
9. Measured between two points on a curve, the ratio of the change in the variable on the vertical axis to
the change in the variable on the horizontal axis is the:
a. axis.
b. slope.
c. dependent curve.
d. independent curve.
ANS: B PTS: 1 DIF: Easy REF: Full: 24 | Mic: 24
TOP: Slope of a line TYP: RE
10. Which of the following statements is correct?
a. Slope is the ratio of the vertical change (the rise or fall) to the horizontal change (the run).
b. A direct relationship is one in which two variables change in the same direction.
c. An inverse relationship is one in which two variables change in opposite directions.
d. An independent relationship is one in which two variables are unrelated.
e. All of these.
ANS: E PTS: 1 DIF: Difficult REF: Full: 24 | Mic: 24
TOP: Slope of a line TYP: CA
11. Which of the following is used to illustrate an independent relationship between two variables?
a. An upward-sloping curve
b. A downward-sloping curve
c. A hill-shaped curve
d. A horizontal or vertical line
ANS: D PTS: 1 DIF: Medium REF: Full: 25 | Mic: 25
TOP: Independent relationship TYP: SA
12. A line that has a different slope at each point is a:
a. curve.
b. straight line.
c. vertical line.
d. horizontal line.
, ANS: A PTS: 1 DIF: Easy REF: Full: 26 | Mic: 26
TOP: Slope of a curve TYP: RE
Exhibit 1A-1 Straight line
13. In Exhibit 1A-1, as X increases along the horizontal axis, corresponding to points A-B on the line, the
Y values increase. The relationship between the X and Y variables is:
a. direct.
b. inverse.
c. independent.
d. variable.
ANS: A PTS: 1 DIF: Medium REF: Full: 21 | Mic: 21
TOP: Direct relationship TYP: SA
14. Straight line AB in Exhibit 1A-1 shows that:
a. increasing values for X will decrease the values of Y.
b. decreasing values for X will increase the values of Y.
c. there is a direct relationship between X and Y.
d. all of these.
ANS: C PTS: 1 DIF: Easy REF: Full: 21 | Mic: 21
TOP: Direct relationship TYP: RE
15. In Exhibit 1A-1, the slope of straight line AB is:
a. positive.
b. zero.
c. negative.
d. variable.
ANS: A PTS: 1 DIF: Easy REF: Full: 24 | Mic: 24
TOP: Slope of a line TYP: SA
16. In Exhibit 1A-1, the slope of straight line AB is:
a. 1.
b. 5.
c. 1/2.
d. ï€1.
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