Exam 1 Practice Quiz

Which of the following best explains why graphs are used to show relationships in economics?

• Graphs provide a visual representation of numerical data, making it easier to understand complex economic relationships.

• Graphs are used because they are easier to create than other forms of data representation.

• Graphs are only used in economics for historical data analysis.

• Graphs are not actually used in economics; they are more common in sciences like physics and chemistry.

Describe what it means to think about small changes in economics. Give examples of decisions people make about small changes in their lives.

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What are the things we need to make goods and services? Explain using simple language how land, workers, and money (capital) are important.

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Which of the following best describes Land, Labor, and Capital?

• Types of economic resources

• Varieties of political systems

• Categories of philosophical thought

• Forms of modern art

Which of the following best defines Comparative and Absolute Advantage and provides an example?

• Comparative Advantage occurs when a country can produce a good at a lower opportunity cost than another, while Absolute Advantage is when a country can produce more of a good with the same amount of resources. For example, if Country A can produce 10 cars or 5 trucks with the same resources, and Country B can produce 7 cars or 8 trucks, Country A has an absolute advantage in cars, and Country B has a comparative advantage in trucks.

• Comparative Advantage is when a country can produce all goods more efficiently than another country, and Absolute Advantage is when a country needs fewer resources to produce a good. For example, if Country A can produce both cars and trucks more efficiently than Country B, Country A has both comparative and absolute advantages.

• Comparative Advantage refers to the superior marketing skills of a country, while Absolute Advantage refers to the technological superiority in production. For example, if Country A has better technology for producing cars than Country B, Country A has an absolute advantage.

• Comparative Advantage and Absolute Advantage are terms related to international trade, where the former refers to the ability to produce goods at lower relative costs, and the latter refers to the ability to produce more goods with the same amount of resources. However, no specific examples are provided.

Answer explanation

Comparative Advantage occurs when a country can produce a good at a lower opportunity cost than another, while Absolute Advantage is when a country can produce more of a good with the same amount of resources. For example, if Country A can produce 10 cars or 5 trucks with the same resources, and Country B can produce 7 cars or 8 trucks, Country A has an absolute advantage in cars, and Country B has a comparative advantage in trucks.

What does it mean when someone does a lot of work in a short time?

• They are procrastinating

• They are efficient

• They are overworked

• They are underqualified

What is the productivity equation?

• Output divided by Input

• Input divided by Output

• Total work hours divided by number of employees

• Number of employees divided by total work hours

What happens when you choose to do one thing instead of another? Explain with examples, like if you spend money on a toy, you can't spend it on a book.

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What does the Law of Diminishing Marginal Utility describe?

• The increase in utility a consumer gains from consuming one additional unit of a good or service

• The decrease in utility a consumer gains from consuming one additional unit of a good or service

• The constant utility a consumer gains from consuming goods and services

• The utility a consumer gains from the first unit of consumption

Which of the following best describes economic goals?

• A set of guiding principles for a country's economic growth

• A detailed financial plan for an individual

• A list of luxury goods a country aims to produce

• The process of setting interest rates by a central bank