54.
A positive statement is concerned primarily with
A.
some goal that is desirable to society.
55.
“Economics is concerned with how individuals, institutions, and society make optimal
choices under conditions of scarcity.” This statement is
A. positive but incorrect.
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56.
Ben says that “an increase in the tax on beer will raise its price.” Holly argues that
“taxes should be increased on beer because college students drink too much.“ We can
conclude that
A. Ben’s statement is normative, but Holly’s is positive.
57.
“Macroeconomics is the part of economics concerned with individual units, such as a
person, a household, a firm, or an industry.” This statement is
C.
normative but incorrect.
D.
normative and correct.
58.
The economizing problem is
C.
that people’s means often exceed their wants.
D.
that people do not know how to rationally allocate resources.
59.
The economizing problem is one of deciding how to make the best use of
A. virtually unlimited resources to satisfy virtually unlimited wants.
60.
Scarcity
A. persists only because countries have failed to achieve continuous full employment.
61.
The alternative combinations of two goods that a consumer can purchase with a specific
1-24
money income is shown by
A.
a production possibilities curve.
B.
a demand curve.
62.
The budget line shows
A. the amount of product X that a consumer is willing to give up to obtain one more unit of
product Y.
D.
all possible combinations of two goods that yield the same level of utility to the
consumer.
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63.
Refer to the budget line shown in the diagram. If the consumer‘s money income is $50, the
A.
prices of C and D cannot be determined.
B.
price of C is $5 and the price of D is $10.
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64.
Refer to the budget line shown in the diagram. Which of the following combinations of
goods is unattainable for this consumer?
C.
1 unit of C and 8 units of D
D.
2 units of C and 6 units of D
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65.
Refer to the budget line shown in the diagram. The absolute value of the slope of the budget
line is
A.
MUC / MUD.
B.
one-half.
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66.
Refer to the budget line shown in the diagram. The absolute value of the slope of the budget
line is
C.
five.
D.
ten.
67.
In moving along a given budget line,
C.
money income varies, but the prices of the two goods are constant.
D.
the prices of both products are assumed to vary, but money income is constant.
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68.
An increase in money income
D.
has no effect on the budget line.
69.
The shift of the budget line from cd to ab in the figure is consistent with
A.
decreases in the prices of both M and N.
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70. Any combination of goods lying outside of the budget line
A.
implies that the consumer is not spending all of the consumer’s income.
B.
yields less utility than any point on the budget line.
71.
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Suppose you have a money income of $10, all of which you spend on Coke and popcorn. In
the diagram, the prices of Coke and popcorn, respectively, are
C. $1.00 and $2.00.
D. $.40 and $.50.
72.
Other things equal, an increase in a consumer‘s money income
A. increases the amount of utility a consumer receives from a given quantity of a good.
73.
The slope of a budget line reflects the
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To p i c :
Individuals Economizing Problem
74.
Suppose Elroy‘s budget line is as shown on the diagram. If his tastes change in favor of Coke
and against popcorn, the budget line will
A.
become steeper.
B.
become flatter.
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75. Assume the price of product Y (the quantity of which is on the vertical axis) is $15
and the price of product X (the quantity of which is on the horizontal axis) is $3.
Also
assume that money income is $60. The absolute value of the slope of the resulting budget
line is
A. 5.
76.
Refer to the graphs. Assume that pizza is measured in slices and beer in pints. In which of
the graphs is the opportunity cost of a pint of beer equal to one slice of pizza?
A.
graph A
77.
Refer to the graphs. Assume that pizza is measured in slices and beer in pints. In which of
the graphs is the opportunity cost of a pint of beer the lowest?
D.
graph D
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To p i c :
Individuals Economizing Problem
78.
Suppose that Julia receives a $20 gift card for the local coffee shop, where she only
buys lattes and muffins. If the price of a latte is $4 and the price of a muffin is $2,
then
we can conclude that Julia
A.
should only buy muffins.
B.
should only buy lattes.
79.
Camille is at the candy store with Grandma Mary, who offers to buy her $6 worth of
candy. If lollipops are $1 each and candy bars are $2 each, what combination of
candy
can Camille’s Grandma Mary buy her?
A. six lollipops and three candy bars
80.
Which of the following is a labor resource?
D.
software used by a firm
81.
Which of the following is a capital resource?
A.
a computer programmer
82.
The four factors of production are
A. land, labor, capital, and money.
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83.
Which of the following is a land resource?
A.
a farmer
B.
an oil drilling rig
84.
Which of the following lists includes only capital resources (and therefore no labor or
land resources)?
A.
an ice arena, a professional hockey player, hockey uniforms
B.
the owner of a new start-up firm, a chemistry lab, a researcher
85.
Money is not an economic resource because
D.
money is not a free gift of nature.
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86.
Economic resources are also called
A.
free gifts of nature.
B.
consumption goods.
87.
Which of the following do economists consider to be capital?
A. a pair of stockings
88.
The main function of the entrepreneur is to
A. make routine pricing decisions.
89.
Which of the following is not a main function of the entrepreneur?
D.
to make strategic business decisions
90.
The process of producing and accumulating capital goods is called
A.
money capital.
B.
depreciation.
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91.
Which of the following is not considered by economists to be an economic resource?
D.
a forest
92.
Which of the following would not be classified as an economic resource by economists?
A.
a professional soccer player
93.
The production possibilities curve illustrates the basic principle that
A.
the production of more of any one good will in time require smaller and smaller
sacrifices of other goods.
B.
an economy will automatically obtain full employment of its resources.