$$\frac{21.97 - 15}{15} \times 100 \approx 46.5\%$$

Question 1

Which of the following best defines economics?

Accepted Answer

The study of how agents make choices among scarce resources and how those choices affect society.

Question 2

What is the opportunity cost of spending one hour watching Netflix if your best alternative is studying for an exam?

Accepted Answer

The benefit you would have received from studying for the exam.

Question 3

Suppose the opportunity cost of your time is $13/hour. If you spend 1 hour per day on social media for a year, what is the total opportunity cost?

Accepted Answer

$4,745

Question 4

Which of the following is NOT a key idea in economics?

Accepted Answer

Maximizing government spending

Question 5

A model in economics is best described as:

Accepted Answer

A simplified description of reality used to generate predictions.

Question 6

Which of the following statements is an example of positive economics?

Accepted Answer

A higher gasoline price reduces the quantity of gasoline consumers purchase.

Question 7

If a line passes through the points $$(2, 17)$$ and $$(6, 23)$$, what is the slope $$m of $$the line?

Accepted Answer

$$m = 1.5$$

Question 8

Suppose a triangle has a base of $$8$$ and a height of $$6. $$What is its area $$A$$?

Accepted Answer

$$A = 24$$

Question 9

A used textbook originally sells for $$120. Later, its price falls to 90. $$What is the percentage change in price?

Accepted Answer

$$-25\%$$

Question 10

Which of the following best explains why correlation does not imply causation?

Accepted Answer

There may be omitted variables or reverse causality.

Question 11

In a randomized controlled trial (RCT), why is random assignment important?

Accepted Answer

It makes the groups similar before treatment, so differences afterward can be interpreted as causal effects.

Question 12

Which of the following is an example of a trade-off?

Accepted Answer

Choosing to study instead of going to a party.

Question 13

If a model predicts that four additional years of education increase earnings from $$15/hour to 21.97/$$hour, what is the percentage increase?

Accepted Answer

$$\frac{21.97 - 15}{15} 	imes 100 \approx 46.5\%$$

Question 14

Which of the following is a reason why economists use models?

Accepted Answer

To generate predictions that can be tested with data.

Question 15

A study finds that cows given names produce more milk than cows without names. What is the best interpretation?

Accepted Answer

Farmers who name cows may also care for them differently.

Question 16

Which of the following is an example of an omitted variable problem?

Accepted Answer

Assuming ice cream sales cause sunburns without considering hot weather.

Question 17

Which of the following is a characteristic of microeconomics?

Accepted Answer

It focuses on how individuals, firms, and governments make choices.

Question 18

If $$y = 3x + 2$$, what is the value of $$y$$ when $$x = 4$$?

Accepted Answer

$$y = 14$$

Question 19

Which formula correctly calculates the area $$A of a $$trapezoid with bases $$b_1$$ and $$b_2$$ and height $$h$$?

Accepted Answer

$$A = \frac{1}{2}(b_1$ + b_2$)h$$

Question 20

Which of the following best describes equilibrium in economics?

Accepted Answer

A situation where everyone is optimizing and no one would benefit from changing their behavior given what others are doing.

Introduction to Microeconomics: Principles, Methods, and Mathematical Tools

Study Guide - Practice Questions