ECON 101 TEST BANK QUESTIONS
WITH COMPLETE SOLUTIONS
The condition often used in economics to isolate the relationship between two variables
is - Answer-ceteris paribus.
In all cases, macroeconomics deals with - Answer-the entire economy.
The higher the opportunity cost of attending college, - Answer-the less likely an
individual will go to college.
In economics, something that provides disutility is called a - Answer-bad
The need to make choices is most closely related to the economic concept of - Answer-
opportunity cost.
In general, there is a ______________ relationship between the number of hours spent
studying for a test and the grade earned on the test. - Answer-direct
In every economy people vie for the economy's rationing device, a process called -
Answer-competition
The study of an economy's price level is explicitly a part of - Answer-macroeconomics
In all cases, positive economics deals with - Answer-what is.
Which of the following statements uses the term ceteris paribus correctly? - Answer-The
more ice cream you eat, the more weight you will gain, ceteris paribus.
Which of the following statements is true? - Answer-Oil is classified as part of the
resource category land.
A good provides __________ and a bad provides __________. - Answer-utility; disutility
In economics, a synonym for satisfaction is - Answer-utility
The condition in an economy that makes a "rationing device" a necessity is: - Answer-
scarcity exists.
If an economist says "the higher the price of oranges, the fewer oranges individuals will
buy, ceteris paribus," this means that - Answer-as the price of oranges rises, individuals'
, preferences do not change, nor does anything else, but individuals buy fewer oranges in
response to the higher price of oranges.
The answer is, "This is principally used to exhibit changes in data over time." The
question is, - Answer-What is a line graph?
Which of the following is an example of a positive economic statement? - Answer-If you
drop a ball from the top of a building, it will fall to the ground.
Refer to Exhibit 1-1. If the student whose study habits are illustrated here is currently
studying for the 8th hour, she should - Answer-cut back on the number of hours she is
studying because the marginal benefit of studying for the 8th hour is less than the
marginal cost of doing so.
Which of the following is a normative macroeconomics statement? - Answer-The central
bank should increase the nation's money supply.
Which statement uses the term ceteris paribus correctly? - Answer-If you exercise
regularly, you will be healthier, ceteris paribus.
Which of the following is not one of the four broad categories of resources? - Answer-
government
In a two-variable diagram, there is a straight line which is parallel to the horizontal axis.
The slope of this line is - Answer-zero.
In a two-variable diagram, there is a straight line which is parallel to the vertical axis.
The slope of this line is - Answer-infinite.
Which of the following is a positive microeconomics statement? - Answer-Ford Motor
Company's new advertising campaign ended up hurting General Motors's sales.
A characteristic of a 45-degree line is that - Answer-any point on the line is equidistant
from the two axes.
The opportunity cost of attending college is - Answer-the highest valued alternative one
forfeits to attend college.
Is it possible for mandatory seatbelt laws to increase vehicle fatalities? - Answer-Yes, if
the number of accidents increases by a greater percentage than the number of deaths
per accident decreases.
Many people buy one newspaper per day, but rarely do they buy two of the same
newspapers on the same day. What is the economic justification for this behavior? -
Answer-The marginal cost of purchasing the second newspaper exceeds the marginal
benefit of purchasing that second paper.
WITH COMPLETE SOLUTIONS
The condition often used in economics to isolate the relationship between two variables
is - Answer-ceteris paribus.
In all cases, macroeconomics deals with - Answer-the entire economy.
The higher the opportunity cost of attending college, - Answer-the less likely an
individual will go to college.
In economics, something that provides disutility is called a - Answer-bad
The need to make choices is most closely related to the economic concept of - Answer-
opportunity cost.
In general, there is a ______________ relationship between the number of hours spent
studying for a test and the grade earned on the test. - Answer-direct
In every economy people vie for the economy's rationing device, a process called -
Answer-competition
The study of an economy's price level is explicitly a part of - Answer-macroeconomics
In all cases, positive economics deals with - Answer-what is.
Which of the following statements uses the term ceteris paribus correctly? - Answer-The
more ice cream you eat, the more weight you will gain, ceteris paribus.
Which of the following statements is true? - Answer-Oil is classified as part of the
resource category land.
A good provides __________ and a bad provides __________. - Answer-utility; disutility
In economics, a synonym for satisfaction is - Answer-utility
The condition in an economy that makes a "rationing device" a necessity is: - Answer-
scarcity exists.
If an economist says "the higher the price of oranges, the fewer oranges individuals will
buy, ceteris paribus," this means that - Answer-as the price of oranges rises, individuals'
, preferences do not change, nor does anything else, but individuals buy fewer oranges in
response to the higher price of oranges.
The answer is, "This is principally used to exhibit changes in data over time." The
question is, - Answer-What is a line graph?
Which of the following is an example of a positive economic statement? - Answer-If you
drop a ball from the top of a building, it will fall to the ground.
Refer to Exhibit 1-1. If the student whose study habits are illustrated here is currently
studying for the 8th hour, she should - Answer-cut back on the number of hours she is
studying because the marginal benefit of studying for the 8th hour is less than the
marginal cost of doing so.
Which of the following is a normative macroeconomics statement? - Answer-The central
bank should increase the nation's money supply.
Which statement uses the term ceteris paribus correctly? - Answer-If you exercise
regularly, you will be healthier, ceteris paribus.
Which of the following is not one of the four broad categories of resources? - Answer-
government
In a two-variable diagram, there is a straight line which is parallel to the horizontal axis.
The slope of this line is - Answer-zero.
In a two-variable diagram, there is a straight line which is parallel to the vertical axis.
The slope of this line is - Answer-infinite.
Which of the following is a positive microeconomics statement? - Answer-Ford Motor
Company's new advertising campaign ended up hurting General Motors's sales.
A characteristic of a 45-degree line is that - Answer-any point on the line is equidistant
from the two axes.
The opportunity cost of attending college is - Answer-the highest valued alternative one
forfeits to attend college.
Is it possible for mandatory seatbelt laws to increase vehicle fatalities? - Answer-Yes, if
the number of accidents increases by a greater percentage than the number of deaths
per accident decreases.
Many people buy one newspaper per day, but rarely do they buy two of the same
newspapers on the same day. What is the economic justification for this behavior? -
Answer-The marginal cost of purchasing the second newspaper exceeds the marginal
benefit of purchasing that second paper.
