Question 1

In an interview an economist states,"This problem should be of greater concern to the federal government." We can explicitly put this statement in the category of

Accepted Answer

The statement is an example of normative economics because it expresses a value judgment about what the government should do, rather than stating a fact or prediction that can be tested or validated.

Question 2

The absence of value judgments is the essence of

Accepted Answer

Positive economics is the study of what is, rather than what ought to be. It is based on empirical evidence and does not involve value judgments. Normative economics, on the other hand, is concerned with what ought to be and involves subjective value judgments. Microeconomics and macroeconomics are subfields of economics that deal with the behavior of individuals and firms in specific markets and the economy as a whole, respectively, but do not inherently involve value judgments.

Question 3

The concept that relates how much one variable changes as another variable changes is

Accepted Answer

The concept that relates how much one variable changes as another variable changes is known as slope.

Question 4

Why do societies need rationing devices?

Accepted Answer

Rationing devices are necessary in society because resources are scarce. This means that there are limited quantities of goods and services available in the economy, but people have unlimited wants and needs. Rationing devices help allocate these scarce resources in the most efficient way possible, ensuring that everyone in the society can have access to at least some of the goods and services they require, even if they cannot have unlimited access. Without rationing devices, some people may end up with too much of a particular item, while others may be unable to obtain any of that same item at all, leading to inequitable outcomes.

Question 5

The study of an economy's price level is explicitly a part of

Accepted Answer

The study of an economy's price level falls under the domain of macroeconomics, which deals with the analysis of aggregate economic activity, including inflation, economic growth, and employment. Microeconomics, on the other hand, focuses on individual economic behavior and decisions, such as how consumers choose to allocate their budget and how firms set prices. Positive economics is concerned with describing and explaining how the economy functions, while normative economics deals with the value judgments and policy prescriptions that should guide economic decision-making.

Question 6

In economics,something that provides utility is called a

Accepted Answer

In economics, a good is defined as any physical object, service, or commodity that can be bought, sold, or otherwise traded and provides utility or satisfaction to the consumer. Therefore, something that provides utility is considered a good. The other options are not necessarily related to utility, as a bad is something that provides disutility, a want is simply a desire for something, and a need is a necessity rather than necessarily something that provides utility.

Question 7

If variable X rises as result of variable Y falling,then X and Y are

Accepted Answer

Inverse relationship means that as one variable increases, the other variable decreases. Therefore, if X rises as result of Y falling, X and Y are inversely related.

Question 8

If people want more cars than there are cars available,then it must be true that

Accepted Answer

If there are more people who want cars than there are actual cars available, then it means that there is a high demand for cars and the supply of cars is not enough to fulfill this demand. This scarcity of cars makes them valuable and in high demand. Therefore, choice A is the best answer.

Question 9

A good provides __________ and a bad provides __________.

Accepted Answer

A good provides utility, which is a measure of the satisfaction or usefulness that a consumer derives from consuming a particular good or service. On the other hand, a bad provides disutility, which is the opposite of utility and measures the dissatisfaction or harm that a consumer experiences from consuming a particular good or service.

Question 10

In the textbook,economics is defined as the science of

Accepted Answer

Economics is the study of scarcity and how individuals, businesses, and governments make choices in the face of scarcity.

Question 11

Let X be the number of hours you spend studying for an exam on Wednesday afternoon and Y be your chances of winning the Wednesday night state lottery.What kind of a relationship do you most likely expect between X and Y?

Accepted Answer

There is likely no relationship between the number of hours spent studying and the chances of winning the lottery. These two variables are most likely independent of each other.

Question 12

Two variables are independent if as one variable __________,the other variable __________.

Accepted Answer

When two variables are independent, changes in one variable do not affect the other variable. Therefore, the second variable does not change with changes in the first variable.

Question 13

A person goes into a store and buys a computer for $1,210.In this case,price is acting as a

Accepted Answer

Price acts as a rationing device by determining who can and cannot afford to purchase goods or services based on their cost. In this scenario, the price of the computer ($1,210) determines whether the person can afford to buy it or not, effectively rationing the computer to those who have sufficient money.

Question 14

The primary reason why people cannot have everything they want is because

Accepted Answer

Scarcity exists because resources are limited, while human wants and needs are infinite. Therefore, people cannot have everything they want due to the shortage of resources required to fulfill their desires. Choice A is incorrect because while some individuals may be selfish, it is not the primary reason for scarcity. Choice C is also incorrect because economic growth does not necessarily eliminate scarcity, instead it may increase demand for resources leading to more scarcity.

Question 15

In economics,something that provides disutility is called a

Accepted Answer

Something that provides disutility is regarded as bad in economics.

Question 16

Which of the following statements is false?

Accepted Answer

Resource capital consists of produced goods that can be used to produce other goods, while unproduced goods are called natural resources and fall under the category of resource land.

Question 17

How is scarcity related to competition?

Accepted Answer

Scarcity refers to the limited availability of resources in the face of unlimited wants and needs. This creates competition among individuals and groups to obtain the scarce resources. Therefore, competition is an effect of scarcity.

Question 18

If variable X falls as a result of variable Y falling,then X and Y are

Accepted Answer

When two variables move in the same direction, they are directly related. If Y falls and causes X to fall, they are directly related.

Question 19

Opportunity cost is the __________ alternative forfeited when a choice is made.

Accepted Answer

Opportunity cost refers to the most highly-valued alternative that is forfeited when a choice is made. Choosing the best option means selecting the one that offers the greatest benefit or value, which is the option with the highest opportunity cost.

Question 20

Scarcity is defined as the condition in which

Accepted Answer

Scarcity is a fundamental economic problem of having seemingly unlimited human wants in a world of limited resources. It means that there are not enough resources to fulfill all wants and needs, leading to the necessity of making choices on how to allocate resources efficiently.

Quiz 1: What Economics Is About