1 ) A positive statement is

Select one:

a.can be shown to be correct or incorrect.

b.a value judgment.

Incorrect. Positive statements do not include value judgement.

c.reflects one's opinions.

d.based upon an optimistic judgment.

2) Economists would say that the decisions we make are influenced by

Select one:

a.potential revenue

b.trade-offs.

c.societal demands.

Incorrect. This is not a term usually associated with this concept.

d.output costs.

3) Which of the following statements is positive?

Select one:

a.I am absolutely positive that there is a better way.

b.There is a limit to the income each year to which the FICA tax applies, but that is fair, since there is a limit to social security benefits.

Incorrect. This statement reflects opinion rather than plain facts.

c.Social security benefits are not taxed.

d.Social security payments to retirees should not be taxed.

4) How would the equation where x=3 and y=4 be represented in a XY graph, and what does it say about the relationship between X and Y?

Select one:

a.The beginning point y=4 on the Y axis has a horizontal line straight to the right, X-axis has a vertical line straight up from x=3. With the two points on the graph, there is an intersection point where the x and y will cross each other.

b.The beginning point y=3 on the Y-axis has horizontal line to the right from that point, X also has a horizontal straight line from x=4. The lines for x and y will cross each other.

Incorrect. Revisit how the x-axis and y-axis are represented on the graph and the point where the lines would intersect each other.

c.There is a straight horizontal line on the X-axis beginning at the point x=3. A straight vertical line starts along the Y-axis originating at y=4. The relationship indicates that the value of X is not dependent on the value of Y.

d.The beginning point y=4 on the Y-axis has horizontal line to the right from that point, X also has a horizontal straight line from x=3. The lines for x and y will not cross but run in parallel with each other.

5) Advances in tax software such as TurboTax influenced the income tax preparer market in the following way:

Select one:

a.The supply for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, there are fewer tax preparer jobs.

b.The demand for income tax preparers (the person who calculates and prepares your income tax return) rose and as a result, the wages for tax preparer has increased

c.The demand for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, there are fewer tax preparer jobs.

d.The story does not mention a change in the supply of income tax preparer.

e.The demand for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, the wages for tax preparer has increased

Incorrect. If the demand for a type of worker falls, the equilibrium wage of those workers will not increase, other things equal.

6) How does a price floor set above the equilibrium price affect quantity demanded and quantity supplied?

Select one:

a.It results in a greater quantity supplied than the quantity demanded, otherwise known as a shortage.

b.It results in a smaller quantity supplied than the quantity demanded, otherwise known as a shortage.

c.It results in a smaller quantity supplied than the quantity demanded, otherwise known as excess supply.

Incorrect. At a price higher than the equilibrium price, the quantity supplied is not lower than the quantity demanded. A higher price is an incentive for suppliers to supply more and the opposite for buyers.

d.It results in a greater quantity supplied than the quantity demanded, otherwise known as excess supply.

7) Requiring that all employees get a minimum wage of $8.00 is an example of a

Select one:

a.rent control.

b.price ceiling.

c.Free market

Incorrect. A legal minimum wage may prevent the market from operating freely.

d.price floor.

8) Paul has two tickets to the next Texan game while Bella has two tickets to the next Rockets game. Bella values the Rockets tickets at $200 while she values the Texans tickets at $250. Paul values the Rockets tickets at $250 and the Texans tickets at $150. Allocative efficiency can be improved for Paul and Bella if

Select one:

a.Paul buys the Rockets tickets from Bella for $300 and Bella buys the Texan tickets from Paul for $350.

b.Paul buys the Rockets tickets from Bella and keeps the Texan tickets.

Incorrect. This would only benefit one party and therefore would not improve allocative efficiency overall.

c.Paul buys Rockets tickets from Bella and Bella buys Texan tickets from Paul at a price agreeable to both.

d.Bella buys the Texans tickets from Paul and keeps the Rockets tickets.

9) Suppose the local government is concerned about the health of local school children, and for that reason imposes a price ceiling of $3 on yogurt. Based on the graph below, which of the following is true?

Select one:

a.There will be a shortage of 5 yogurts.

Incorrect. Find on the graph the difference between the quantity demanded and supplied at a price of $3.

b.The quantity demanded will be 3 yogurts.

c.More yogurt will be consumed as a result.

d.The quantity supplied will be 3 yogurts.

10) If a data line on a graph slopes upward as it goes to the right, it is depicting that

Select one:

a.the relationship between the variables on the axes is positive.

b.as the value of one variable falls, the value of the other also falls (all else constant).

c.the relationship between the variables on the axes is inverse.

Incorrect. This would indicate a downwardly sloping line.

d.the relationship between the variables on the axes is negative.