AP Eco Test 1 - m 1 TAKE-HOME 1 m Test Title: AP Macro,...

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Unformatted text preview: m 1 TAKE-HOME 1 m Test Title: AP Macro, Chapter 1 (Nature of Economics), Take-Home Test Format: Take-Home, 30 Questions 1. There is too little of a good thing when its marginal: A) benefit exceeds its marginal cost. B) cost exceeds its marginal benefit. C) cost equals its marginal benefit. D) benefit is still positive. 2. Economics may best be defined as the: A) interaction between macro and micro considerations. B) social science concerned with the efficient use of scarce resources to achieve maximum satisfaction of economic wants. C) empirical testing of value judgments through the use of logic. D) use of policy to refute facts and hypotheses. 3. Economics involves marginal analysis because: A) most decisions involve changes from the present situation. B) marginal benefits always exceed marginal costs. C) marginal costs always exceed marginal benefits. D) much economic behavior is irrational. 4. (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) usually are items nobody wants. 5. If we say that two variables are inversely related, this means that: A) the two graph as an upsloping line. B) an increase in one variable is associated with a decrease in the other. C) an increase in one variable is associated with an increase in the other. D) the resulting relationship can be portrayed by a straight line parallel to the horizontal axis. aECON-Ol-TH, Nature & Method Thursday, June 25, 2009 Page 1 6. The assertion that "There is no free lunch" means that: A) there are always tradeoffs between economic goals. B) all production involves the use of scarce resources and thus the sacrifice of alternative goods. C) marginal analysis is not used in economic reasoning. D) choices need not be made if behavior is rational. Use the following to answer questions 7—8: Y Y Y Y 1 2 3 4 7. Answer on the basis of the relationships shown in the above four figures. The amount of Y is directly related to the amount of X in: A) both 1 and 3. B) both 1 and 2. C) 2 only. D) 1 only. 8. Answer on the basis of the relationships shown in the above four figures. The amount of Y is unrelated to the amount of X in: A) both 2 and 4. B) 3 only. C) 2 only. D) l. 9. Macroeconomics can best be described as the: A) analysis of how a consumer tries to spend income. B) study of the large aggregates of the economy or the economy as a whole. C) analysis of how firms attempt to maximize their profits. D) study of how supply and demand determine prices in individual markets. 10. For economists, the word "utility" means: A) versatility and flexibility. B) rationality. C) pleasure and satisfaction. D) purposefulness. aECON-Ol-TH, Nature & Method Thursday, June 25, 2009 Page 2 ll. 12. 13. 14. 15. 16. According to economists, economic self-interest: A) is a reality that underlies economic behavior. B) has the same meaning as selfishness. C) is more characteristic of men than of women. D) is usually self-defeating. Suppose an economist says that "Other things equal, the lower the price of bananas, the greater the amount of bananas purchased." This statement indicates that: A) the quantity of bananas purchased determines the price of bananas. B) all factors other than the price of bananas (for example, consumer tastes and incomes) are assumed to be constant. economists can conduct controlled laboratory experiments. one cannot generalize about the relationship between the price of bananas and the quantity purchased. C) D) Consumers spend their incomes to get the maximum benefit or satisfaction from the goods and services they purchase. This is a reflection of: A) resource scarcity and the necessity of choice. B) rational behavior. C) marginal costs that exceed marginal benefits. D) the tradeoff problem that exists between competing goals. When economists say that people act rationally in their self interest, they mean that individuals: A) look for and pursue opportunities to increase their utility. B) generally disregard the interests of others. C) are mainly creatures of habit. D) are unpredictable. Microeconomics is concerned with: A) the aggregate or total levels of income, employment, and output. B) a detailed examination of specific economic units that make up the economic system. C) positive economics, but not normative economics. D) the establishing of an overall View of the operation of the economic system. Ideally, value judgments are involved at the: A) levels of facts, theory, and policy. B) levels of facts and theory only. C) level of facts only. D) level of policy only. aECON-Ol-TH, Nature & Method Thursday, June 25, 2009 Page 3 17. 18. 19. 20. A positive statement is one which is: A) derived by induction. B) derived by deduction. C) subjective and is based on a value judgment. D) objective and is based on facts. Ben says that "An increase in the tax on beer will raise its price." Holly argues that "Taxes should be increased on beer because college students drink too much." We can conclude that: A) Ben's statement is normative, but Holly's is positive. B) Holly's statement is normative, but Ben's is positive. C) Both statements are normative. D) Both statements are positive. If price (P) and quantity (Q) are directly related, this means that: A) a change in Q will alter P, but a change in P will not alter Q. B) if P increases, Q will decrease. C) if P increases, Q will also increase. D) an increase in P will cause Q to change, but the direction in which Q changes cannot be predicted. If there is a tradeoff between goals A and B: A) greater fulfillment of A means lesser fulfillment of B. B) goals A and B are positively correlated. C) causation exists between the two goals. D) greater fulfillment of A means greater fulfillment of B. aECON—Ol-TH, Nature & Method Thursday, June 25, 2009 Page 4 ...
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This note was uploaded on 11/08/2009 for the course ECO 496928 taught by Professor Aguirre,clelia during the Fall '09 term at Miami Dade College, Miami.

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AP Eco Test 1 - m 1 TAKE-HOME 1 m Test Title: AP Macro,...

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