Question 1

-The above figure shows how many pounds of peanuts farmers are willing to sell at different prices per pound of peanuts.If the price of a pound of peanuts is $1 and the price of a pound of pecans is $2,peanut farmers are willing to sell
A) no peanuts.
B) 1000 pounds of peanuts.
C) 2000 pounds of peanuts.
D) 4000 pounds of peanuts.
E) more than 4000 pounds of peanuts.

Accepted Answer

The answer of 
-The above figure shows how many pounds...

Question 2

When two variables in a graph are related to a third,changing the third causes
A) a movement along the curve.
B) a shift of the curve.
C) no change in the curve because the third variable isn't on the axes.
D) either a shift or a movement in the curve but more information is needed to determine which occurs.
E) None of the above answers is correct.

Accepted Answer

The answer of When two variables in a graph are...

Question 3

-In the figure above,an increase in z leads to a
A) movement up along one of the lines showing the relationship between x and y.
B) movement down along one of the lines showing the relationship between x and y.
C) rightward shift of the line showing the relationship between x and y.
D) leftward shift of the line showing the relationship between x and y.
E) trend change in both x and y.

Accepted Answer

The answer of 
-In the figure above,an increase in z...

Question 4

To help unscramble cause and effect,economists
A) use the concept of opportunity costs.
B) must use the ceteris paribus assumption.
C) answer the "what" question.
D) answer the "how" question.
E) must use normative statements.

Accepted Answer

Economists must use the ceteris paribus assumption to isolate the relationship between cause and effect. This assumption allows them to hold all other variables constant while examining the relationship between two specific variables.

Question 5

We are investigating the relationship among three variables.We have graphed two of them.Suppose that the variable that is not measured on the x-axis or the y-axis changes.Then,there is
A) a movement along the plotted curve.
B) a shift in the plotted curve.
C) no impact on the plotted curve because the variable is not measured on either of the axes.
D) an omitted variable.
E) a violation of the absence of trend assumption.

Accepted Answer

If the third variable that is not on the axes changes, it could result in a shift in the plotted curve. This is because the relationship between the two variables on the axes may change as a result of the third variable's influence.

Question 6

To graph a relationship among several variables,we hold all but ________ variable(s)constant and use the ________ assumption.
A) one; scarcity
B) two; ceteris paribus
C) three; scarcity
D) one; ceteris paribus
E) one; absence of trend

Accepted Answer

The answer of To graph a relationship among several variables,we...

Question 7

Which of the following is true regarding a normative statement?
i.It uses the ceteris paribus assumption.
ii.It is a value judgment.
iii.It accounts for opportunity costs.
A) i and iii
B) ii and iii
C) i only
D) ii only
E) i, ii, and iii

Accepted Answer

Normative statements are subjective judgments or opinions that cannot be proven true or false. Therefore, only statement ii is true regarding a normative statement as it is a value judgment. Statement i is false as ceteris paribus assumption is used in positive statements while statement iii is not necessarily true for normative statements.

Question 8

John decides to leave college early and play professional sports.Which of the following economic principles does John use?
i.personal economic policies
ii.marginal cost versus marginal benefit analysis
iii.normative versus positive economics
A) i and ii
B) i, ii and iii
C) ii only
D) i and iii
E) ii and iii

Accepted Answer

The answer of John decides to leave college early and...

Question 9

Ceteris paribus when graphing a relationship refers to
A) letting all the variables change at once.
B) changing the origin of the graph.
C) holding constant all but two variables.
D) rescaling the coordinates.
E) swapping the axes so that the x-axis is the vertical axis and the y-axis is the horizontal axis.

Accepted Answer

Ceteris paribus means "all other things being equal." Therefore, when graphing a relationship ceteris paribus, we hold constant all but two variables to analyze the relationship between those two variables while controlling for other factors.

Question 10

When analyzing graphically the relationship between more than two variables,which of the following must be used?
A) positive slope assumption
B) assumption of little change
C) ceteris paribus
D) negative slope assumption
E) the assumption that only relevant factors change

Accepted Answer

When analyzing the relationship between more than two variables, it is important to hold all other variables constant, meaning that the assumption of ceteris paribus must be used. This allows for a clearer understanding of the relationship between the variables being analyzed without the influence of other factors. The other options mentioned (positive/negative slope assumption, little change assumption, only relevant factors change assumption) may or may not be relevant depending on the specific analysis being done, but the assumption of ceteris paribus should always be used.

Question 11

On a graph showing the relationship between x and y,the ceteris paribus condition implies that
A) no other variables are related to x and y.
B) the value of x is held constant.
C) the value of y is held constant.
D) other variables not shown are held constant.
E) the value of x and the value of y are held constant.

Accepted Answer

The ceteris paribus condition means "all other things being equal" or that other variables not shown on the graph are held constant while examining the relationship between x and y.

Question 12

Which of the following is true?
i.A rational choice is always made in the pursuit of social interest.
ii.Economics is a social science.
iii.Economists try to understand how the economic world works by testing positive statements.
A) ii and iii
B) only i
C) only ii
D) only iii
E) i and ii

Accepted Answer

ii. Economics is indeed a social science that studies how individuals, governments, firms, and nations make choices on allocating resources to satisfy their wants and needs. iii. Economists use positive statements, which are objective and fact-based, to understand and explain the economic world through testing and observation.

Question 13

Three variables are related and two of them are plotted in a figure.If the variable that is not measured on either the x-axis or the y-axis changes,then there is
A) a movement along the drawn curve.
B) a shift in the curve.
C) no impact on the curve because the variable is not measured on either of the axes.
D) either a shift in the curve or a movement along the curve, but more information is needed to determine which.
E) None of the above answers is correct.

Accepted Answer

A change in the variable that is not plotted on either the x-axis or y-axis will cause a shift in the curve, as the relationship between the two plotted variables remains the same but the overall values of the curve change.

Question 14

Which of the following is true?
i.A rational choice is made on the margin.
ii.Microeconomics is the study of the national economy while macroeconomics is the study of the global economy.
iii.Economists try to understand how the economic world works by testing normative statements.
A) only i
B) i and iii
C) only ii
D) only iii
E) i and ii

Accepted Answer

i. A rational choice is made on the margin, meaning decisions are made by comparing the additional benefits and costs of that choice. ii. Microeconomics actually studies individual and business decisions, while macroeconomics focuses on the national and global economy. iii. Economists test positive statements to understand the economic world, not normative statements, which are opinions on how the world ought to be.

Question 15

-In the figure above,suppose the price of a pound of pecans is negatively related to the quantity of peanuts that farmers are willing to supply.If the price of pecans increases,
A) the curve will shift rightward.
B) the curve will shift leftward.
C) there is a movement along the curve.
D) the curve will be unaffected.
E) None of the above answers is correct because the graph assumes that the price of pecans does not change.

Accepted Answer

The answer of 
-In the figure above,suppose the price of...

Question 16

Suppose you decide to attend summer school and that this is considered a rational choice.When making this choice,
A) you must ignore the problem of scarcity.
B) you considered the marginal cost and marginal benefit of your choice.
C) you have used the ceteris paribus assumption.
D) you have made a positive statement.
E) you must have considered the social interest.

Accepted Answer

When making a rational choice, one must consider the marginal cost and marginal benefit. This means weighing the additional cost and benefit of attending summer school against the alternatives, such as not attending summer school and having more free time. Ignoring the problem of scarcity (A) is not possible as it is a central concept in economics. The ceteris paribus assumption (C) may be used to simplify analysis, but it is not necessary for making a rational choice. Making a positive statement (D) implies making a factual statement about the world, but choosing to attend summer school is a normative decision based on personal values and goals. Considering the social interest (E) is not necessary for making a rational choice, although it may be a factor in some cases.

Question 17

-In the figure above,ceteris paribus,an increase in x is associated with
A) an increase in y.
B) a decrease in y.
C) an increase in z.
D) a random change in z.
E) no change in either y or z.

Accepted Answer

The answer of 
-In the figure above,ceteris paribus,an increase in...

Question 18

Will,Bill,and Phil decide to study an extra hour for an exam.Instead of studying,they could have gone out to eat,played football,or watched TV.Which of the following statements is correct?
A) The benefit the three students receive must be the same because they all make the same choice.
B) The students made a rational choice as long as they face no scarcity.
C) The students could each have different opportunity costs.
D) The marginal cost of the decision is the same if they make the same score on the exam.
E) Going out to eat, playing football, and watching TV are all called sunk costs.

Accepted Answer

The opportunity cost of a decision is what is given up to make that decision. Since Will, Bill, and Phil each had different alternatives (going out to eat, playing football, or watching TV), the value they place on those activities could be different, leading to different opportunity costs for each student.

Question 19

-In the above figure,while drawing the line showing the relationship between the price of a pound of peanuts and the quantity sold,the
A) price of a pound of pecans does not change.
B) price of a pound of peanuts does not change.
C) the quantity of peanuts that farmers supply does not change.
D) Both answers A and B are correct.
E) Both answers B and C are correct.

Accepted Answer

The answer of 
-In the above figure,while drawing the line...

Question 20

To graph a relationship that involves more than two variables,we use
A) a positive relationship.
B) a direct relationship.
C) a negative relationship.
D) ceteris paribus.
E) movement up along one of the lines showing the relationship between x and y.

Accepted Answer

When graphing a relationship with more than two variables, we use the principle of ceteris paribus, meaning that we hold all other variables constant while examining the relationship between two variables. This allows us to see the unique relationship between the two variables of interest without the influence of the other variables.

Quiz 1: Getting Started

-The above figure shows how many pounds of peanuts farmers are willing to sell at different prices per pound of peanuts.If the price of a pound of peanuts is $1 and the price of a pound of pecans is $2,peanut farmers are willing to sell

When two variables in a graph are related to a third,changing the third causes

-In the figure above,an increase in z leads to a

To help unscramble cause and effect,economists

We are investigating the relationship among three variables.We have graphed two of them.Suppose that the variable that is not measured on the x-axis or the y-axis changes.Then,there is

To graph a relationship among several variables,we hold all but variable(s) constant and use the assumption.

Which of the following is true regarding a normative statement? i.It uses the ceteris paribus assumption. ii.It is a value judgment. iii.It accounts for opportunity costs.

John decides to leave college early and play professional sports.Which of the following economic principles does John use? i.personal economic policies ii.marginal cost versus marginal benefit analysis iii.normative versus positive economics

Ceteris paribus when graphing a relationship refers to

When analyzing graphically the relationship between more than two variables,which of the following must be used?

On a graph showing the relationship between x and y,the ceteris paribus condition implies that

Which of the following is true? i.A rational choice is always made in the pursuit of social interest. ii.Economics is a social science. iii.Economists try to understand how the economic world works by testing positive statements.

Three variables are related and two of them are plotted in a figure.If the variable that is not measured on either the x-axis or the y-axis changes,then there is

Which of the following is true? i.A rational choice is made on the margin. ii.Microeconomics is the study of the national economy while macroeconomics is the study of the global economy. iii.Economists try to understand how the economic world works by testing normative statements.

-In the figure above,suppose the price of a pound of pecans is negatively related to the quantity of peanuts that farmers are willing to supply.If the price of pecans increases,

Suppose you decide to attend summer school and that this is considered a rational choice.When making this choice,

-In the figure above,ceteris paribus,an increase in x is associated with

Will,Bill,and Phil decide to study an extra hour for an exam.Instead of studying,they could have gone out to eat,played football,or watched TV.Which of the following statements is correct?

-In the above figure,while drawing the line showing the relationship between the price of a pound of peanuts and the quantity sold,the

To graph a relationship that involves more than two variables,we use