1. What is the difference between microeconomics and macroeconomics?
a. Microeconomics examines the big picture while macroeconomics examines individual units
b. Microeconomics is the study of decision making undertaken by individuals while macroeconomics looks at the behavior of the economy as a whole.
c. Microeconomics deals with positive analysis while macroeconomics deals with normative analysis.
d. Microeconomics lends itself to empirical analysis while macroeconomics uses the concept of incentives.
2. Suppose a student is trying to decide whether or not to take another economic class. Which of the following is not an aspect of the economic way of thinking that would apply in this decision-making process?
c. Responding to incentives
d. Flipping a coin
3. What kind of relationship is shown in the graph?
a. An inverse relationship
b. A quadratic relationship
c. An exponential relationship
d. A direct relationship
4. Marissa is buying vegetables. She can choose between carrots, lettuce, and green beans. She doesn’t like green beans and after some thought she chooses carrots. What is the opportunity cost of this choice?
a. The lettuce and the green beans
b. The lettuce
c. The carrots, the lettuce and the green beans
d. The green beans
5. According to the law of increasing additional cost, the opportunity cost of producing
a. cotton is likely to remain constant as a society tries to produce more cotton.
b. cotton is likely to decrease as society tries to produce more cotton.
c. cotton is likely to increase as society tries to produce more lemons.
d. cotton is likely to decrease as society tries to produce more lemons.
e. cotton is likely to increase as society tries to produce more cotton.
6. A country produces oranges and corn.
i. Draw a representative PPC for this country. Label it PPC1.
ii. Suppose that a breakthrough in technology makes all agriculture more productive, draw a new PPC showing the effect of this change. Label it PPC2.
Carefully follow the instructions above, and only draw the required objects.
7. Tanya can make 3 loaves of bread or 1 apple pie in one hour. Jonathan can make 2 loaves of bread or 1 apple pie in one hour. Based on this information, which of the following is a true statement?
a. Tanya has comparative advantage in making bread.
b. Tanya has comparative advantage in making pies.
c. Jonathan has an absolute advantage in making bread.
d. Jonathan has a comparative advantage in making bread.
8. The existence of scarcity requires
a. that people must make choices and face trade-offs in using their resources.
b. greater scientific advancements occur to eliminate it.
c. that the government allocates resources.
d. having unfulfilled wants during times of economic depression.
|Hospital Room (1 day)||$250||$275|
|Hotel Suite ( 1 night)||$350||$375|
Based on the table above, which of the following is true?
a. The money prices of both goods increased, the relative price of hospital rooms increased, and the relative price of hotel suites decreased.
b. The money prices of both goods increased, the relative price of hospital rooms decreased, and the relative price of hotel suites increased.
c. The money prices of both goods increased and the relative prices of both goods decreased.
d. The money prices of both goods increased and the relative prices of both goods increased.