Which of the following statements about the idea that people are rational is​ correct?
answer
The idea assumes that consumers and firms use all available information as they act to achieve their goals.
question
Economists assume that the only reason people take the actions they do is in response to economic incentives.
answer
False
question
What do economists mean by the word​ "marginal"?
Economists believe that an activity should be continued up to the point where
answer
extra or additional
the marginal benefit from the activity is equal to the marginal cost.
question
In a market​ system, how does society decide what goods and services will be​ produced?
answer
​Consumers, firms, and the government determine what goods and services will be produced by the choices they make.
question
In a market​ system, what determines how goods and services will be​ produced?
answer
Firms determine how goods and services will be produced.
question
In a market​ system, how does society decide who will receive the goods and services​ produced?
answer
Who receives the goods and services produced depends largely on how income is distributed.
question
​Today, which of the following countries has a centrally planned​ economy?
How are economic resources allocated in a market​ economy?
answer
North Korea
by the decisions of households and firms interacting in markets
question
Which of the following is a correct statement about a mixed​ economy?
answer
In a mixed​ economy, most economic decisions are made in markets but the government plays a significant role in the allocation of resources.
question
When does productive efficiency​ occur?
When does allocative efficiency​ occur?
answer
Productive efficiency occurs when a good or service is produced at the lowest possible cost.
Allocative efficiency occurs when production is in accordance with consumer preferences.
question
Why are models based on​ assumptions?
answer
Because models have to be simplified to be useful.
question
Which of the following statements about an economic variable is​ correct?
Which of the following statements about a hypothesis is​ correct?
answer
An economic variable is something measurable that can have different values.
A hypothesis is a statement that could in principle turn out to be incorrect.
question
Which of the following statements about positive analysis is​ correct?
which of the following statements about normative analysis is correct
answer
Positive analysis is concerned with what is.
normative analysis is concerned with what ought to be
question
Which of the following statements about economics as a social science is​ correct?
answer
economics studies the actions of individuals
question
Which of the following statements about microeconomics and macroeconomics is​ correct?
answer
Microeconomics involves the study of how households and firms make choices.
Macroeconomics is the study of the economy as a whole
question
Which of the following statements is correct?
answer
An innovation is the practical application of an invention.
Economists use the terms​ firm, company, and business interchangeably.
question
Which of the following is a graph of a single​ variable?
answer
All of the above
question
The slope of a straight line equals the change in value on the​ ____________ axis​ ____________ by the change in the value on the other axis between any two points on the line.
Refer to the graph to the right. What is the value of the slope of this​ line?
answer
vertical;divided
​-1/5
question
Suppose that there are three variables involved in the graph to the​ right: (1)​ quantity, (2)​ price, and​ (3) a third variable. Which of those variables causes the quantity to change from point C to point D in the​ graph?
answer
3rd variable
question
The relationship between two variables is positive when​ ________, and the relationship between two variables is negative when​ ________.
answer
one variable increases and the other​ increases; one variable increases and the other decreases
question
The prevalence of​ Alzheimer's dementia is very high among residents living in nursing homes. A student concludes that it is likely that living in a nursing home causes​ Alzheimer's dementia. What is the flaw in the​ student's reasoning?
​ ________ is a problem that occurs when someone concludes that a change in variable X caused a change in variable Y​ when, in​ fact, it is a change in variable Y that caused a change in variable X.
answer
The student is drawing a false​ conclusion; he is making the error of reverse causality.
reverse casualty
question
Which of the following statements is​ correct?
answer
The relationship between two variables is linear when it is represented by a straight line and nonlinear when it is represented by a curved line.
question
Refer to the graph to the right. How would you describe the value of the slope of this​ curve?
answer
The value of the slope is greater between points g and h than between points i and j.
question
Let V1 equal the value of a variable in period 1 and V2 equal the value of the same variable in period 2. What is the rate of growth between periods 1 and​ 2?
answer
[(V2 - V1)/V1] x 100
question
Refer to the graph to the right. What is the value of the area of rectangle A​?
Refer to the new graph to the right. What is the value of the shaded​ area?
answer
​$250,000
$6,250
question
Which of the following steps should you follow when using a​ formula?
answer
All of the above are steps you should follow when using a formula.
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