Pennsylvania State UniversityECON 102 Exam 1| Comprehensive for Grade A+

Homework 1

1.
Which of the following best describes sunk costs?
A) Only recurring fixed costs
B) Costs associated with hiring labor each year
C) Previous costs that once made are non-recoverable
D) Only costs in the future
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Points Scored: 2.0/2.0
Correct Answer(s): C


2.
Which of the following shows the fallacy of composition?
A) Barbara likes chocolate, so all women must like chocolate
B) Big Mining Company believes all of its costs are sunk costs
C) Carol only buys cheese when it’s on sale at a discount price
D) The sun rose after the rooster crowed, so the rooster crowingmust have
caused the sunrise
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Points Scored: 2.0/2.0
Correct Answer(s): A


3.
Consider the equation Y = 14 – 2X. With Y on the vertical axis and Xon
the horizontal axis, the horizontal intercept of this line is
A) 14
B) – 2
C) 7
D) – (1/7)
E) – (1/2)
Table for Individual Question Feedback

,Points Scored: 4.0/4.0
Correct Answer(s): C


4.
Consider the equation Y = 14 – 2X. With Y on the vertical axis and Xon
the horizontal axis, the vertical intercept of this line is
A) 14
B) – 2
C) -7
D) – (1/7)
E) – (1/2)
Table for Individual Question Feedback
Points Scored: 4.0/4.0
Correct Answer(s): A


5.
Economics is the study of how
A) people make money.
B) preferences are determined.
C) psychology influences preferences..
D) people make choices.
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Points Scored: 2.0/2.0
Correct Answer(s): D



6.
Economics is concerned with choices
A) that involve the wants of individuals.
B) that involve the political goals of professional associations.
C) made by individuals only when they are consuming goods or

,services.
D) that involve making money.
Table for Individual Question Feedback
Points Scored: 0.0/2.0
Correct Answer(s): A



7.
Economics is a part of the
A) social sciences.
B) natural sciences.
C) biological sciences.
D) organizational sciences.
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Points Scored: 2.0/2.0
Correct Answer(s): A



8.
One topic of study for a microeconomist would be the
A) causes of inflation.
B) causes of aggregate unemployment.
C) effects of a gasoline price increase on consumer behavior.
D) effects of an increase in government spending on overall
economic activity.
Table for Individual Question Feedback
Points Scored: 2.0/2.0
Correct Answer(s): C



9.
Macroeconomics deals with

, A) aggregates within the economy.
B) specific sectors within the economy.
C) the retail industry only.
D) decisions made by firms. Table
for Individual Question Feedback
Points Scored: 2.0/2.0
Correct Answer(s): A



10.
A macroeconomist would study
A) the price changes at K-Mart.
B) the cost problems at several airlines.
C) the economy's unemployment level.
D) none of the above.
Table for Individual Question Feedback
Points Scored: 2.0/2.0
Correct Answer(s): C



11.
Which of the following is an example of an application of the ceteris
paribus assumption?
A) An analysis of how price changes affect how much of a goodpeople
will purchase when all other factors are held constant
B) An analysis of how people purchase more goods when pricesdecline
and income increases
C) After reading an article on the dangers of high-fat diets, anindividual
buys less red meat when prices increase
D) An analysis of how worker productivity increases when a firm
invests in new machines and training programs
Table for Individual Question Feedback
Points Scored: 2.0/2.0
Correct Answer(s): A