Question 1

By invoking the assumption of ceteris paribus, economists

Accepted Answer

A)  consider the impact of all relevant factors. 
B)  hold all variables constant when analyzing a model. 
C)  isolate the impact of one single variable while holding all other variables constant. 
D)  exclude irrelevant detail when analyzing a model. 
A)  consider the impact of all relevant factors. 
B)  hold all variables constant when analyzing a model. 
C)  isolate the impact of one single variable while holding all other variables constant. 
D)  exclude irrelevant detail when analyzing a model.

Question 2

Economists often refer to "good deals" as

Accepted Answer

A)  profit opportunities. 
B)  break-even propositions. 
C)  efficient market outcomes. 
D)  those with no opportunity cost. 
A)  profit opportunities. 
B)  break-even propositions. 
C)  efficient market outcomes. 
D)  those with no opportunity cost.

Question 3

As the variable on the Y-axis falls the variable on the X-axis falls. The relationship between X and Y is said to be positive.

Accepted Answer

A) True 
 B)False

Question 4

Refer to Scenario 1.2 below to answer the question(s) that follow.
SCENARIO 1.2: A scientist wants to understand the relationship between automobile emissions and the level of global warming. The scientist collects data on the volume of automobile emissions and the levels of global warming over time. The scientist concludes that a 1% increase in automobile emissions causes a 0.0003% increase in average global temperatures. From this information he concludes that the automobile emissions are harmful to the environment and should be reduced to stop the increase in global temperatures.
-Refer to Scenario 1.2. A graph of the volume of automobile emissions on one axis and the level of average global temperatures on the other axis is an example of

Accepted Answer

A)  an economic model. 
B)  an economic theory. 
C)  a variable theory. 
D)  inductive reasoning. 
A)  an economic model. 
B)  an economic theory. 
C)  a variable theory. 
D)  inductive reasoning.

Question 5

The reoccurrence of contagious diseases should be significantly lower in a technically advanced nation such as the United States. This statement is best described as

Accepted Answer

A)  a normative statement. 
B)  a positive statement. 
C)  a marginal statement. 
D)  an implication of an efficient market. 
A)  a normative statement. 
B)  a positive statement. 
C)  a marginal statement. 
D)  an implication of an efficient market.

Question 6

The unemployment rate was falling during all of the years that I was a student, but as soon as I graduated, the unemployment rate started to rise. Therefore, the job market was waiting until I started looking for employment to start to go bad. This statement is an example of

Accepted Answer

A)  fallacy of logic. 
B)  post hoc, ergo propter hoc fallacy. 
C)  ceteris paribus fallacy. 
D)  fallacy of inductive reasoning. 
A)  fallacy of logic. 
B)  post hoc, ergo propter hoc fallacy. 
C)  ceteris paribus fallacy. 
D)  fallacy of inductive reasoning.

Question 7

An efficient market is characterized by the fact that

Accepted Answer

A)  output is steady or growing and there is low inflation. 
B)  profit opportunities are eliminated almost instantaneously. 
C)  there are no opportunity costs. 
D)  wealth is distributed fairly. 
A)  output is steady or growing and there is low inflation. 
B)  profit opportunities are eliminated almost instantaneously. 
C)  there are no opportunity costs. 
D)  wealth is distributed fairly.

Question 8

The rate of economic growth is a topic of microeconomics.

Accepted Answer

A) True 
 B)False

Question 9

The amount of exercise that one gets is an important factor in the determination of his general state of health. This is best described as

Accepted Answer

A)  a positive statement. 
B)  an example of the fallacy of logic. 
C)  a normative statement. 
D)  an example of marginalism. 
A)  a positive statement. 
B)  an example of the fallacy of logic. 
C)  a normative statement. 
D)  an example of marginalism.

Question 10

A change in economic output is ________ if the value of the resulting gains exceeds the value of the resulting losses.

Accepted Answer

A)  potentially efficient 
B)  always efficient 
C)  always inefficient 
D)  irrelevant 
A)  potentially efficient 
B)  always efficient 
C)  always inefficient 
D)  irrelevant

Question 11

Which of the following statements is not correct?

Accepted Answer

A)  Economics is a behavioral science. 
B)  In large measure, economics is the study of how people make choices. 
C)  If poverty were eliminated, there would be no reason to study economics. 
D)  Economic analysis can be used to explain how both individuals and societies make decisions. 
A)  Economics is a behavioral science. 
B)  In large measure, economics is the study of how people make choices. 
C)  If poverty were eliminated, there would be no reason to study economics. 
D)  Economic analysis can be used to explain how both individuals and societies make decisions.

Question 12

The statement "the unemployment rate is 5.1%" is an example of a

Accepted Answer

A)  positive statement. 
B)  value judgement. 
C)  normative statement. 
D)  non-verifiable statement. 
A)  positive statement. 
B)  value judgement. 
C)  normative statement. 
D)  non-verifiable statement.

Question 13

We can use macroeconomic analysis to

Accepted Answer

A)  learn how to balance a checkbook. 
B)  study the choices made by households. 
C)  understand marginal changes in the macroeconomy. 
D)  understand why economies grow. 
A)  learn how to balance a checkbook. 
B)  study the choices made by households. 
C)  understand marginal changes in the macroeconomy. 
D)  understand why economies grow.

Question 14

Whenever the Democrats gain control of the Congress, spending on social programs increases; whenever Republicans gain control of the Congress, spending on defense increases. Hence, we know what the next party in control will do. This statement is an example of the

Accepted Answer

A)  fallacy of inductive reasoning. 
B)  post hoc, ergo propter hoc fallacy. 
C)  fallacy of stability. 
D)  ceteris paribus fallacy. 
A)  fallacy of inductive reasoning. 
B)  post hoc, ergo propter hoc fallacy. 
C)  fallacy of stability. 
D)  ceteris paribus fallacy.

Question 15

There is great concern over the idea that citizens should have to provide specific identification to be able to vote in elections. A study of the costs and benefits of implementing a voter identification program is an example of

Accepted Answer

A)  laissez-faire economics. 
B)  positive economics. 
C)  labor economics. 
D)  normative economics. 
A)  laissez-faire economics. 
B)  positive economics. 
C)  labor economics. 
D)  normative economics.

Question 16

Equity is synonymous with fairness.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is a normative question?

Accepted Answer

A)  Why do gasoline prices increase between Memorial Day and Labor Day? 
B)  What will happen to gasoline consumption if the federal tax on gasoline is eliminated? 
C)  To reduce the regressive nature of the gasoline excise tax, should the portion of the gasoline excise tax paid by high-income individuals be increased? 
D)  How will oil exploration be affected if the government subsidizes oil producers? 
A)  Why do gasoline prices increase between Memorial Day and Labor Day? 
B)  What will happen to gasoline consumption if the federal tax on gasoline is eliminated? 
C)  To reduce the regressive nature of the gasoline excise tax, should the portion of the gasoline excise tax paid by high-income individuals be increased? 
D)  How will oil exploration be affected if the government subsidizes oil producers?

Question 18

That which we forgo, or give up, when we make a choice or a decision is known as

Accepted Answer

A)  equity. 
B)  causation. 
C)  correlation. 
D)  opportunity cost. 
A)  equity. 
B)  causation. 
C)  correlation. 
D)  opportunity cost.

Question 19

An approach to economics that applies statistical techniques and data to economic problems is called

Accepted Answer

A)  Ockham's razor. 
B)  laissez-faire economics. 
C)  empirical economics. 
D)  normative economics. 
A)  Ockham's razor. 
B)  laissez-faire economics. 
C)  empirical economics. 
D)  normative economics.

Question 20

The reason that opportunity costs arise is that

Accepted Answer

A)  an economy relies on money to facilitate exchange of goods and services. 
B)  resources are scarce. 
C)  there are no alternative decisions that could be made. 
D)  people have limited wants. 
A)  an economy relies on money to facilitate exchange of goods and services. 
B)  resources are scarce. 
C)  there are no alternative decisions that could be made. 
D)  people have limited wants.

Exam 1: The Scope and Method of Economics

By invoking the assumption of ceteris paribus, economists

Economists often refer to "good deals" as

As the variable on the Y-axis falls the variable on the X-axis falls. The relationship between X and Y is said to be positive.

The reoccurrence of contagious diseases should be significantly lower in a technically advanced nation such as the United States. This statement is best described as

The unemployment rate was falling during all of the years that I was a student, but as soon as I graduated, the unemployment rate started to rise. Therefore, the job market was waiting until I started looking for employment to start to go bad. This statement is an example of

An efficient market is characterized by the fact that

The rate of economic growth is a topic of microeconomics.

The amount of exercise that one gets is an important factor in the determination of his general state of health. This is best described as

A change in economic output is ________ if the value of the resulting gains exceeds the value of the resulting losses.

Which of the following statements is not correct?

The statement "the unemployment rate is 5.1%" is an example of a

We can use macroeconomic analysis to

Whenever the Democrats gain control of the Congress, spending on social programs increases; whenever Republicans gain control of the Congress, spending on defense increases. Hence, we know what the next party in control will do. This statement is an example of the

There is great concern over the idea that citizens should have to provide specific identification to be able to vote in elections. A study of the costs and benefits of implementing a voter identification program is an example of

Equity is synonymous with fairness.

Which of the following is a normative question?

That which we forgo, or give up, when we make a choice or a decision is known as

An approach to economics that applies statistical techniques and data to economic problems is called

The reason that opportunity costs arise is that

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: the Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing Economies

Critical Thinking About Research

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