Microeconomics Quiz 1 – Flashcards

Temperature: 25, 30, 35, 40, 45, 50, 55 Hot chocolate sales: 100, 90, 80, 70, 60, 50, 40 A) a positive relationship between temperature and sales of hot chocolate B) a negative, nonlinear relationship between temperatures and sales of hot chocolate C) a negative relationship between temperature and sales of hot chocolate D) a positive, nonlinear relationship between temperature and sales of hot chocolate

Economics is a social science that involves the study of how individuals, firms, and societies: A) Choose among alternatives to satisfy their unlimited wants B) Maximum happiness C) Maximize incomes D) Develop their tastes and preferences

A pie chart is useful for business presentations but not for macroeconomic analysis A) True B) False

Microeconomics studies decision making by: A) Governments B) Business firms C) Individuals D) Individuals, business firms, and governments

The opportunity cost of undertaking and activity is defined as: A) The monetary benefit of undertaking that activity B) The cost foregone by not undertaking another activity C) The monetary cost of undertaking that activity D) The benefit foregone by not undertaking the next-best activity

Linear relationships show the same slope between any two points on a line A) True B) False

Another definition of opportunity costs is the next best alternative. A) True B) False

Scarcity exists because A) Technology has not advanced to the point where it can eliminate scarcity B) Human desires are greater than what can be produced with the limited resources available at zero cost C) People are far too greedy and do not share their wealth D) The world is not large enough

___ is the fairness of various issues and policies. A) Choice B) Scarcity C) Efficiency D) Equity

Suppose an economist discovers that the relationship between grades and hours of tutoring is Grade = 60 + 5(Hours). Based on the equation, which statement is true? A) Tutoring is not worthwhile because each hour raises grade by only 5 points. B) The relationship between tutoring and grades is weak. C) If no tutoring is done when the grade will be zero D) The expected grade with 5 hours of tutoring is 85

___ occur(s) when most goods are produced at the lowest possible cost and ___ occur(s) when individuals who desire a product the most receive those goods and services. A) Allocative efficiency; production efficiency B) Allocative possibilities; production possibilities C) Production possibilities; allocative possibilities D) Production efficiency; allocative efficiency

Economic analysis provides: A) a method to solve poverty B) The way a government can fix all prices C) A structure to help you make decisions in a rational manner D) A way to predict stock prices

Which of the following statements regarding macroeconomics and microeconomics is false? A) Microeconomics examines consumer behavior, whereas macroeconomics studies behavior B) Macroeconomics does not employ any of the analytical tools of microeconomics C) Neither macroeconomics nor microeconomics is concerned with prices D) Because it focuses on national economies, macroeconomics does not study international trade and finance

There is general agreement as to which economic policies are fair, or equitable A) True B) False

Markets provide an incentive structure to: A) Eliminate scarcity B) Maximize equity C) Maximize efficiency D) Maximize market information

The most important concept in economics is: A) profit maximization B) Efficiency C) Rationality D) Opportunity Cost

Information plays an important role in the market because it allows: A) Sellers to "pad" their sales pitch B) The media to grow in importance C) Managers to make more risky decisions D) Market participants to make good decisions based on cost-benefit analysis

Simple graphs never provide information about the relationship between variables A) True B) False