Question 1

Which of the following best defines economics?

Accepted Answer

The study of how individuals and societies allocate scarce resources to satisfy unlimited wants.

Question 2

Which of the following is a microeconomic topic?

Accepted Answer

The reasons why a consumer buys less honey.

Question 3

What is the opportunity cost of attending university if tuition is $$8,000, books cost 1$$,200, and you forgo a job that pays $20,000 per year?

Accepted Answer

$29,200

Question 4

Which of the following pairs does NOT match correctly?

Accepted Answer

Capital and profit

Question 5

Suppose you can spend the next hour either studying economics or watching a movie. If the marginal benefit of studying is higher than the marginal cost, what is the rational choice?

Accepted Answer

Spend the hour studying economics.

Question 6

Which of the following statements is a positive statement?

Accepted Answer

If the price of gasoline rises, people will drive less and use less gasoline.

Question 7

Apple Inc. decides to make iTunes freely available in unlimited quantities. Is this decision an example of a microeconomic or macroeconomic issue?

Accepted Answer

Microeconomic issue

Question 8

If you organize land, labor, and capital to produce goods and services, you are a(n):

Accepted Answer

Entrepreneur

Question 9

You plan to travel in Europe this summer. If you do, you won't be able to take your usual summer job that pays $$11,600, and you will spend 2$$,200 on transportation, $$350 on visas, and 1$$,400 on living expenses. What is your opportunity cost?

Accepted Answer

$15,550

Question 10

Which of the following best describes the slope of a straight line in economics?

Accepted Answer

The slope is constant and calculated as the 'rise' over the 'run.'

Question 11

Given the equation $$y = 20 + 4x$$, what is the slope of the relationship between $$x$$ and $$y$$?

Accepted Answer

$$4$$

Question 12

Refer to the graph of household expenditure versus household income. If household income increases from $$16,000 to 32$$,000 and expenditure increases from $$16,000 to 32$$,000, what is the slope of the line?

Accepted Answer

$$1$$

Question 13

Which of the following is an example of a normative statement?

Accepted Answer

The government should increase the minimum wage.

Question 14

If the marginal benefit of an activity is less than its marginal cost, what should a rational individual do?

Accepted Answer

Decrease the activity.

Question 15

Which of the following best describes the concept of opportunity cost?

Accepted Answer

The highest-valued alternative that must be given up to get something.

Question 16

Which of the following is NOT a key idea that defines the economic way of thinking?

Accepted Answer

All resources are unlimited.

Question 17

If a line on a graph has a slope of $$-2$$, what does this indicate about the relationship between the two variables?

Accepted Answer

The variables move in opposite directions.

Question 18

Which of the following best describes a situation where self-interest also promotes the social interest?

Accepted Answer

A business innovates to increase profits, leading to better products for consumers.

Question 19

If the equation for a line is $$y = 3x + 7$$, what is the y-intercept?

Accepted Answer

$$7$$

Question 20

Which of the following is NOT a way to describe the relationship between economic variables?

Accepted Answer

Using government policies

Chapter 1: Introduction to Microeconomics – Key Concepts and Graphical Analysis

Study Guide - Practice Questions

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