ECON 2010 Midterm 1 Exam Questions and Answers Fully Solved
In exhibit 1-2, at x=8, the - Answers value of y is smaller on curve a then curve b
In exhibit 1-2, curve a has a ________ slope that is _______ at every point - Answers positive, constant
Which of the following must be true of line D in exhibit 1-4? - Answers There is an inverse relationship
between P and Q
The slope of a horizontal straight line is infinity - Answers False
A line is tangent to a curve if it - Answers Touches the curve at one point, without crossing it
The problem of scare resources - Answers is that there are not enough resources to satisfy people's
unlimited wants
Economics is the study of - Answers how people use limited resources to try and satisfy unlimited wants
Which of the following would an economist classify as capital? - Answers A lawyer's personal computer
Resources are divided into the following broad categories - Answers Natural resources, labor, capital,
and entrepreneurial ability
Goods and services are exchanged in - Answers product markets
It is always rational to acquire more information before making a decision - Answers false
in economics, marginal means - Answers incremental or decremental
Microeconomics is the study of - Answers the economic behavior of individual decision makers
the basic purpose of economic models is to - Answers provide explanations for, and predictions of,
economic events
Ceteris paribus means "other things constant" - Answers true
"there should be less discrimination against women" is an example of a positive statement - Answers
false
Which of the following is an example of a positive statement? - Answers an increase in the price of
gasoline will cause a reduction in the amount purchased
The association-causation fallacy is the error of assuming that what is true for one member of a group
must be true for the group - Answers false
The fallacy of composition is the error of believing a cause-effect relationship exists between two events
that associated in time - Answers false
In a circular flow model, households supply all of the following except - Answers goods and services
, Opportunity costs exist because - Answers resources are scarce but wants are unlimited
expenses for room and board - Answers are not usually part of the opportunity cost of attending college,
because you would have to live somewhere and eat something even if you didn't attend college
Opportunity cost is defined - Answers as the value of the best alternative not chosen
A university should not disband its football team in consideration of the existence of the cost of the
stadium if it has already paid for the stadium - Answers True
It is possible to one person to have a comparative advantage in the production of all products? -
Answers false
The law of comparative advantage says that - Answers the individual with the lowest opportunity cost of
a producing a particular good should produce it
If robin has an absolute advantage in both gardening and baking when compared to Robert, then -
Answers Robin and Robert may benefit from trading, but there is insufficient information to determine
who should specialize in what
According to Exhibit 2-1, Hans opportunity cost of doing a load of laundry is - Answers 1 1/2 Pages
According to exhibit 2-1, in any given amount of time, - Answers Maria has an absolute and comparative
advantage in doing laundry
Barter occurs when - Answers one product is exchanged directly for another product
the division of labor facilitates productivity increases for all the following reasons, except one. Which is
the exception? - Answers The more experience workers gain be specializing in a task, the more likely
they will enjoy that task
On a given production possibilities frontier, which of the following is not assumed to be fixed? - Answers
production of each item
Each point of a production possibilities frontier requires full employment of resources - Answers True
In exhibit 2-3, if resources are used fully and efficiently, then the economy can produce at point(s) -
Answers g, h, or i
The bowed-out shape of the production possibilities frontier indicates increasing opportunity costs -
Answers True
Which of the following would shift the production possibilities frontier outward? - Answers an increase
in the size of the labor force
An outward shift of the production possibilities frontier - Answers reflects economic growth
In exhibit 1-2, at x=8, the - Answers value of y is smaller on curve a then curve b
In exhibit 1-2, curve a has a ________ slope that is _______ at every point - Answers positive, constant
Which of the following must be true of line D in exhibit 1-4? - Answers There is an inverse relationship
between P and Q
The slope of a horizontal straight line is infinity - Answers False
A line is tangent to a curve if it - Answers Touches the curve at one point, without crossing it
The problem of scare resources - Answers is that there are not enough resources to satisfy people's
unlimited wants
Economics is the study of - Answers how people use limited resources to try and satisfy unlimited wants
Which of the following would an economist classify as capital? - Answers A lawyer's personal computer
Resources are divided into the following broad categories - Answers Natural resources, labor, capital,
and entrepreneurial ability
Goods and services are exchanged in - Answers product markets
It is always rational to acquire more information before making a decision - Answers false
in economics, marginal means - Answers incremental or decremental
Microeconomics is the study of - Answers the economic behavior of individual decision makers
the basic purpose of economic models is to - Answers provide explanations for, and predictions of,
economic events
Ceteris paribus means "other things constant" - Answers true
"there should be less discrimination against women" is an example of a positive statement - Answers
false
Which of the following is an example of a positive statement? - Answers an increase in the price of
gasoline will cause a reduction in the amount purchased
The association-causation fallacy is the error of assuming that what is true for one member of a group
must be true for the group - Answers false
The fallacy of composition is the error of believing a cause-effect relationship exists between two events
that associated in time - Answers false
In a circular flow model, households supply all of the following except - Answers goods and services
, Opportunity costs exist because - Answers resources are scarce but wants are unlimited
expenses for room and board - Answers are not usually part of the opportunity cost of attending college,
because you would have to live somewhere and eat something even if you didn't attend college
Opportunity cost is defined - Answers as the value of the best alternative not chosen
A university should not disband its football team in consideration of the existence of the cost of the
stadium if it has already paid for the stadium - Answers True
It is possible to one person to have a comparative advantage in the production of all products? -
Answers false
The law of comparative advantage says that - Answers the individual with the lowest opportunity cost of
a producing a particular good should produce it
If robin has an absolute advantage in both gardening and baking when compared to Robert, then -
Answers Robin and Robert may benefit from trading, but there is insufficient information to determine
who should specialize in what
According to Exhibit 2-1, Hans opportunity cost of doing a load of laundry is - Answers 1 1/2 Pages
According to exhibit 2-1, in any given amount of time, - Answers Maria has an absolute and comparative
advantage in doing laundry
Barter occurs when - Answers one product is exchanged directly for another product
the division of labor facilitates productivity increases for all the following reasons, except one. Which is
the exception? - Answers The more experience workers gain be specializing in a task, the more likely
they will enjoy that task
On a given production possibilities frontier, which of the following is not assumed to be fixed? - Answers
production of each item
Each point of a production possibilities frontier requires full employment of resources - Answers True
In exhibit 2-3, if resources are used fully and efficiently, then the economy can produce at point(s) -
Answers g, h, or i
The bowed-out shape of the production possibilities frontier indicates increasing opportunity costs -
Answers True
Which of the following would shift the production possibilities frontier outward? - Answers an increase
in the size of the labor force
An outward shift of the production possibilities frontier - Answers reflects economic growth
