Question 1

The opportunity cost of going to the movies is always the same for everyone.

Accepted Answer

A) True 
 B)False

Question 2

According to the text, why are some countries rich and others very poor?

Accepted Answer

A)   Some countries have no oil.
B)   People have no property rights.
C)   Access to education is very limited.
D)   High tariffs prevent international trade.
E)   All of these.

Question 3

Figure 1.2
 
-The PPC in Figure 1.2 indicates a student who

Accepted Answer

A)   is better at economics than English.
B)   is better at English than economics.
C)   is equally proficient in economics and English.
D)   prefers economics over English.
E)   prefers English over economics.

Question 4

Figure 1.3
 
-In Figure 1.3, underutilization of resources is represented by point

Accepted Answer

A)   A.
B)   B.
C)   C.
D)   D.
E)   E.

Question 5

Which of the following is a reason to study economics?

Accepted Answer

A)   Economic analysis explains daily events.
B)   It helps us understand why people, firms and government behave in a certain way.
C)   We need to understand relevant economic applications and policy issues.
D)   It provides useful logic for solving complex problems.
E)   All of these

Question 6

An economy's resources

Accepted Answer

A)   are limited in quantity.
B)   are always efficiently utilized.
C)   consist of land, labor, capital, and money.
D)   are unrelated to its standard of living.
E)   are unlimited when we use the latest technology.

Question 7

Because of scarcity, we attempt to utilize our resources as efficiently as possible.

Accepted Answer

A) True 
 B)False

Question 8

Economics is

Accepted Answer

A)   concerned with the problem of scarce resources combined with unlimited wants.
B)   the study of how to make money in the stock market.
C)   highly theoretical and has little practical application.
D)   primarily concerned with day-to-day business decision making.
E)   a decision making process involving individuals and firms rather than governments.

Question 9

-According to Table 1.3, the opportunity cost of producing 1 gallon of grape juice in Maine is

Accepted Answer

A)   5 gallons of apple juice.
B)   1/5 gallon of apple juice.
C)   5 gallons of grape juice.
D)   6 gallons of apple juice.
E)   1/8 gallon of apple juice.

Question 10

Scenario 1.1
Alan and Brian work at a baseball and softball manufacturing plant. Alan can produce either 10 baseballs or 4 softballs in an hour. Brian can produce either 8 baseballs or 2 softballs in an hour.
-According to Scenario 1.1, the opportunity cost for Alan to produce 1 baseball is

Accepted Answer

A)   1/4 softball.
B)   2/5 softball.
C)   less than the opportunity cost of Brian to produce 1 baseball.
D)   2 1/2 softballs.
E)   4 softballs.

Question 11

The total cost of attending college is the sum of the cost of tuition, books, housing, and meals.

Accepted Answer

A) True 
 B)False

Question 12

Figure 1.2
 
-The production possibilities curve illustrates

Accepted Answer

A)   the tradeoffs facing a society.
B)   that more of one product can be produced only by reducing the quantity of other products that are being produced, assuming that resources are being used efficiently.
C)   the maximum output that can be produced with a limited amount of resources.
D)   the opportunity cost of alternative choices.
E)   all of these.

Question 13

It can be said that ____ laid the foundation for the Industrial Revolution.

Accepted Answer

A)   the discovery of the Americas
B)   private property rights
C)   the invention of the cotton gin
D)   the discovery of gold
E)   the development of a strong judicial system

Question 14

Which of the following statements is false?

Accepted Answer

A)   Economists look at the factors that lead an individual to decide that a particular idea is in his or her best interest.
B)   Economists do not ask whether a particular decision is in the individual's best interest.
C)   Choices must be made because of scarcity.
D)   A particular choice is made because that choice provides the individual making the choice with the greatest satisfaction.
E)   None of these statements is false-they are all true.

Question 15

-According to the data in Table 1.1, if trade were to occur, what would be the most Ohio would be willing to pay for 1 chili?

Accepted Answer

A)   4 cookies
B)   8 cookies
C)   1/4 of a cookie
D)   1/8 of a cookie
E)   6 cookies

Question 16

Diamonds are more expensive than water because diamonds are a necessity of life.

Accepted Answer

A) True 
 B)False

Question 17

-According to the data in Table 1.1, the opportunity cost of chili in Ohio is

Accepted Answer

A)   the same as in Iowa.
B)   1/4 cookie.
C)   4 cookies.
D)   1/8 cookie.
E)   8 cookies.

Question 18

Ronnie waits one hour in line to buy a ticket to a rock concert. The opportunity cost of buying the $28 ticket

Accepted Answer

A)   is Ronnie's best alternative use of the $28.
B)   is Ronnie's best alternative use of the one hour it took to wait in line.
C)   is the value of the $28 to the ticket agent.
D)   is Ronnie's best alternative use of both the $28 and the one hour spent in line.
E)   cannot be measured because there is no opportunity cost associated with consumption.

Question 19

Oil found underground in Texas is an example of

Accepted Answer

A)   a labor resource.
B)   land or a natural resource.
C)   an entrepreneur.
D)   human capital.
E)   a capital resource.

Question 20

Figure 1.1
 
-Suppose that points A and B in Figure 1.1 represent pre-trade positions. If each country specializes according to comparative advantage, what are the potential gains to trade?

Accepted Answer

A)   6 cars
B)   6 cars and 6 units of food
C)   6 units of food
D)   4 units of food
E)   12 cars

Exam 1: Economics and the World Around You

Ronnie waits one hour in line to buy a ticket to a rock concert. The opportunity cost of buying the $28 ticket

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Which of the following statements is false?

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Scenario 1.1 Alan and Brian work at a baseball and softball manufacturing plant. Alan can produce either 10 baseballs or 4 softballs in an hour. Brian can produce either 8 baseballs or 2 softballs in an hour. -According to Scenario 1.1, the opportunity cost for Alan to produce 1 baseball is

Correct AnswerverifiedShow Answer

Figure 1.2 -The PPC in Figure 1.2 indicates a student who

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Oil found underground in Texas is an example of

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The total cost of attending college is the sum of the cost of tuition, books, housing, and meals.

Correct AnswerverifiedShow Answer

Figure 1.1 -Suppose that points A and B in Figure 1.1 represent pre-trade positions. If each country specializes according to comparative advantage, what are the potential gains to trade?

Correct AnswerverifiedShow Answer

-According to the data in Table 1.1, the opportunity cost of chili in Ohio is

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It can be said that ____ laid the foundation for the Industrial Revolution.

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Diamonds are more expensive than water because diamonds are a necessity of life.

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Figure 1.3 -In Figure 1.3, underutilization of resources is represented by point

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Economics is

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According to the text, why are some countries rich and others very poor?

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-According to Table 1.3, the opportunity cost of producing 1 gallon of grape juice in Maine is

Correct AnswerverifiedShow Answer

Which of the following is a reason to study economics?

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The opportunity cost of going to the movies is always the same for everyone.

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Figure 1.2 -The production possibilities curve illustrates

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Because of scarcity, we attempt to utilize our resources as efficiently as possible.

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-According to the data in Table 1.1, if trade were to occur, what would be the most Ohio would be willing to pay for 1 chili?

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An economy's resources

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