Question 1

If variable X rises as variable Y falls,then X and Y have an inverse relationship.

Accepted Answer

An inverse relationship between two variables means that when one variable increases, the other variable decreases. Therefore, if X rises as Y falls, X and Y have an inverse relationship.

Question 2

Here are three things you could do if you choose not to go to class one day next week: sleep later (you value this at $15),hang out with friends (you value this at $14),or go in to work (you could earn $12 during class).The opportunity cost of going to class is

Accepted Answer

The opportunity cost is the value of the next best alternative foregone, which in this case is sleeping later, valued at $15.

Question 3

The coordinates of point A are 300 units of X and 40 units of Y.The coordinates of point B are 280 units of X and 30 units of Y.With X on the horizontal axis and Y on the vertical axis,the slope of the line between points A and B is

Accepted Answer

The answer of The coordinates of point A are 300...

Question 4

A theory is an abstract representation of reality.This means a theory

Accepted Answer

The question defines a theory as an abstract representation of reality, which suggests that it is not a direct description of the way the world is (A) but rather a simplified version of it. This also implies that it may omit certain factors when trying to explain something (C). It is not necessarily unrealistic (B) or expressed in professional jargon (D), although it may be either of those things depending on the theory and its intended audience. Therefore, the best choice is C.

Question 5

If an economist says "the higher the price of oranges,the fewer oranges individuals will buy,ceteris paribus," this means that

Accepted Answer

The phrase "ceteris paribus" means "all other things being equal." Therefore, the economist is saying that if the price of oranges increases and nothing else changes (such as the quality of the oranges or the income of the consumers), individuals will buy fewer oranges. It does not necessarily mean that individuals don't like high-priced oranges (A) or that their preferences change (B). Option D is a close option, however, the assumption that people have economic motives is not as relevant here as the concept of "ceteris paribus."

Question 6

Which of the following is not one of the four broad categories of resources?

Accepted Answer

The four broad categories of resources are typically classified as land, labor, capital, and entrepreneurship. Money is not considered a separate category, but rather a tool used to acquire or exchange the other resources.

Question 7

The effect of a decrease in interest rates upon economic growth is an example of positive economics.

Accepted Answer

Positive economics deals with statements that can be tested and proven true or false using data and empirical evidence. The effect of a decrease in interest rates on economic growth is an example of a statement that can be tested and proven through data analysis. Therefore, it falls under the category of positive economics.

Question 8

The condition often used in economics to isolate the relationship between two variables is

Accepted Answer

Ceteris paribus means "all other things being equal," and is used in economics to isolate the relationship between two variables by holding all other possible variables constant.

Question 9

The branch of economics that studies the decisions made by individuals and firms is called macroeconomics.

Accepted Answer

The branch of economics that studies the decisions made by individuals and firms is called microeconomics, not macroeconomics. Macroeconomics deals with the economy as a whole, including issues such as inflation, recession, and economic growth.

Question 10

Macroeconomics deals with issues involving large corporations,while microeconomics exclusively deals with issues involving small businesses.

Accepted Answer

Macroeconomics deals with the overall functioning of the economy, including issues such as inflation, unemployment, and economic growth. It looks at the behavior of large economic agents such as governments, corporations, and international trade. Microeconomics, on the other hand, focuses on individual economic agents such as consumers, households, and small businesses and how they make decisions about production and consumption.

Question 11

Economists use the ceteris paribus assumption primarily in order to

Accepted Answer

The ceteris paribus assumption allows economists to isolate the relationship between two specific variables and determine the causal relationship between them, rather than allowing other factors to influence the analysis. This is done in order to designate what they believe is the correct relationship between two variables.

Question 12

Efficiency is consistent with

Accepted Answer

Efficiency is achieved when net benefits are maximized, which occurs when marginal benefits and marginal costs are equal. Therefore, both choices A and B are consistent with efficiency. Maximizing total benefits (Choice C) may not necessarily be efficient if the cost of achieving those benefits outweighs the benefits themselves. Minimizing total costs (Choice D) may also not necessarily be efficient if doing so leads to a reduction in benefits that outweighs the cost savings.

Question 13

The purpose of the ceteris paribus condition is to allow economists to

Accepted Answer

The ceteris paribus condition is used to isolate the relationship between two variables by holding other influencing factors constant, allowing economists to focus on the effect of one variable on another.

Question 14

Which statement uses the term ceteris paribus correctly?

Accepted Answer

Ceteris paribus is a Latin term that means "all other things being equal." In statement A, "ceteris paribus" is used correctly to suggest that regular exercise leads to better health, all other things being equal. Statements B, C, and D do not use the term correctly.

Question 15

Something that motivates or encourages people to take an action is referred to as a(n)

Accepted Answer

An incentive is something that motivates or encourages people to take an action. The other options are not related to motivation or encouragement.

Question 16

A three-word synonym for the term ceteris paribus is

Accepted Answer

"Nothing else changes" accurately captures the meaning of ceteris paribus, which is a Latin term meaning "all other things being equal." This phrase is often used in economics and other fields to describe a situation where the only variable being studied is changing, while all other conditions remain constant.

Question 17

The coordinates of point A are 50 units of X and 70 units of Y.The coordinates of point B are 46 units of X and 76 units of Y.With X on the horizontal axis and Y on the vertical axis,the slope of the line between points A and B is

Accepted Answer

The answer of The coordinates of point A are 50...

Question 18

In the text,economics is defined as the science of scarcity.

Accepted Answer

Economics is defined as the science of scarcity, as it deals with how society allocates its scarce resources to satisfy unlimited wants and needs.

Question 19

Economists use the word utility to describe the satisfaction one receives from a good.

Accepted Answer

Economists define utility as the satisfaction or happiness one receives from consuming a good or service.

Question 20

Which of the following statements uses the term ceteris paribus correctly?

Accepted Answer

Ceteris paribus is a Latin phrase that means "all other things being equal." Choice D uses ceteris paribus correctly by stating that the more ice cream you eat, the more weight you will gain, all other things being equal. This means that the statement assumes that nothing else changes, such as exercise or other dietary factors, which would affect weight gain. Choices A, B, and C do not use ceteris paribus correctly because they do not relate to the concept of "all other things being equal." Choice E is not applicable because there is at least one correct answer.

Quiz 1: What Economics Is About