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Exam 1: Limits, Alternatives, and Choices

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Question 81

True/False

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An economic model is an ideal or utopian type of economy that society should strive to obtain through economic policy.

A) True
B) False

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Question 82

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(Consider This) Free products offered by firms:

A) may or may not be free to society but are never free to individuals.
B) may or may not be free to individuals but are never free to society.
C) are produced and distributed at no cost to society.
D) are usually items nobody wants.

E) A) and B)
F) A) and C)

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Question 83

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Consumers spend their incomes to get the maximum benefit or satisfaction from the goods and services they purchase.This is a reflection of:

Answer the question on the basis of the following five data sets wherein it is assumed that the variable shown on the left is the independent variable and the one on the right is the dependent variable.Assume in graphing these data that the independent variable is shown on the horizontal axis and the dependent variable on the vertical axis. $\quad$$\quad$ (1) $\quad$$\quad$$\quad$$\quad$ (2) $\quad$$\quad$$\quad$$\quad$ (3) $\quad$$\quad$$\quad$$\quad$ (4) $\quad$$\quad$$\quad$$\quad$ (5) \begin{array}{rl}{J} & K \\\hline 0 & 10 \\40 & 20 \\80 & 30 \\120 & 40 \\160 & 50 \\200 & 60\end{array}\begin{array}{rr}\mathrm{L} & \mathrm{M} \\\hline 0 & -15 \\30 & -5 \\60 & 5 \\90 & 15 \\120 & 25 \\150 & 35\end{array}\\begin{array}{rl}\mathrm{N}& \mathrm{P} \\\hline 100 & 40 \\80 & 50 \\60 & 60 \\40 & 70 \\20 & 80 \\0 & 90\end{array}\begin{array}{rc}\mathrm{R}& \mathrm{T} \\\hline 0 & -15 \\20 & -25 \\40 & -35 \\60 & -45 \\80 & -55 \\100 & -65\end{array}\begin{array}{rr}\mathrm{U} & \mathrm{V }\\\hline 0 & 0 \\5 & 10 \\10 & 20 \\15 & 30 \\20 & 40 \\25 & 50\end{array} Refer to the data sets.The variables are directly related in:

A positive statement is one that is:

The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that:

Answer the question on the basis of the following information.Assume that if the interest rate that businesses must pay to borrow funds were 20 percent,it would be unprofitable for businesses to invest in new machinery and equipment,so investment would be zero.But if the interest rate were 16 percent,businesses would find it profitable to invest $10 billion.If the interest rate were 12 percent,$20 billion would be invested.Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate. Refer to the information.Using i and I to indicate the interest rate and investment (in billions of dollars) respectively,which of the following is the correct tabular presentation of the described relationship? A. $\begin{array}{cc}\underline{{i}}&\underline{{I} }\\20&\$50\\16 & 40 \\12 & 30 \\8 & 20 \\4 & 10 \\0 & 0\end{array}$ B. $\begin{array}{cc}\underline{i} & \underline{I} \\24&\$10\\20 & 20 \\16 & 30 \\12 & 40 \\8 & 50 \\4 & 60\end{array}$ C. $\begin{array}{cc}\underline{i}& \underline{I} \\20&\$0\\16 & 10 \\12 & 20 \\8 & 30 \\4 & 40 \\0 & 50\end{array}$ D. $\begin{array}{cc}\underline{i} & \underline{I} \\ 20 & \$ 10 \\16 & 20 \\12 & 30 \\8 & 40 \\4 & 50 \\0 & 60\end{array}$

Macroeconomics approaches the study of economics from the viewpoint of:

Even though local newspapers are very inexpensive,people rarely buy more than one of them each day.This fact:

The scarcity problem:

If the production possibilities curve is a straight line:

Answer the question on the basis of the following data: $\begin{array}{cc}\underline{\text { After-Tax Income} } &\underline{ \text { Consumption }} \\\$ 1,000 & \$ 900 \\2,000 & 1,800 \\3,000 & 2,700 \\4,000 & 3,600 \\5,000 & 4,500\end{array}$ The data suggest that:

In economics,the pleasure,happiness,or satisfaction received from a product is called:

Camille is at the candy store with her grandmother,who offers to buy her $6 worth of candy.If lollipops are $1 each and candy bars are $2 each,what combination of candy can Camille's grandmother buy for her?

The negative slope of the production possibilities curve is a graphical way of indicating that:

Answer the question on the basis of the following five data sets wherein it is assumed that the variable shown on the left is the independent variable and the one on the right is the dependent variable.Assume in graphing these data that the independent variable is shown on the horizontal axis and the dependent variable on the vertical axis. $\quad$$\quad$ (1) $\quad$$\quad$$\quad$$\quad$ (2) $\quad$$\quad$$\quad$$\quad$ (3) $\quad$$\quad$$\quad$$\quad$ (4) $\quad$$\quad$$\quad$$\quad$ (5) \begin{array}{rl}{J} & K \\\hline 0 & 10 \\40 & 20 \\80 & 30 \\120 & 40 \\160 & 50 \\200 & 60\end{array}\begin{array}{rr}\mathrm{L} & \mathrm{M} \\\hline 0 & -15 \\30 & -5 \\60 & 5 \\90 & 15 \\120 & 25 \\150 & 35\end{array}\\begin{array}{rl}\mathrm{N}& \mathrm{P} \\\hline 100 & 40 \\80 & 50 \\60 & 60 \\40 & 70 \\20 & 80 \\0 & 90\end{array}\begin{array}{rc}\mathrm{R}& \mathrm{T} \\\hline 0 & -15 \\20 & -25 \\40 & -35 \\60 & -45 \\80 & -55 \\100 & -65\end{array}\begin{array}{rr}\mathrm{U} & \mathrm{V }\\\hline 0 & 0 \\5 & 10 \\10 & 20 \\15 & 30 \\20 & 40 \\25 & 50\end{array} Refer to the data sets.The vertical intercept is positive for:

Which of the following is assumed in constructing a typical production possibilities curve?

In recent years the economy of Japan has grown,despite the fact that the population of Japan has declined.Which of the following would best explain Japan's economic growth despite having a smaller population?

The economic perspective entails:

(Last Word) The post hoc,ergo propter hoc fallacy suggests that: