Question 1

The labor market is an example of a:

Accepted Answer

A) government market. 
B) classified market. 
C) communication market. 
D) resource market. 
E) product market. 
A) government market. 
B) classified market. 
C) communication market. 
D) resource market. 
E) product market.

Question 2

You want to sell your old iPad because you no longer use it,and your cousin wants to give you $200 for it.If you decide to sell your iPad to her,you'll have to pay the shipping fee to get the iPad to her.As a rational decision maker,you will sell your old iPad to your cousin when the shipping fee is:

Accepted Answer

A) $350. 
B) $250. 
C) $301. 
D) $299. 
E) $199. 
A) $350. 
B) $250. 
C) $301. 
D) $299. 
E) $199.

Question 3

An economic model is useful if it:

Accepted Answer

A) includes every detail of reality. 
B) involves no unproven assumptions. 
C) is expressed in equations. 
D) makes accurate predictions. 
E) is simple enough to be understood by a child. 
A) includes every detail of reality. 
B) involves no unproven assumptions. 
C) is expressed in equations. 
D) makes accurate predictions. 
E) is simple enough to be understood by a child.

Question 4

An economic model will produce poor predictions if it includes assumptions.

Accepted Answer

A) True 
 B)False

Question 5

When economists say that people act as rational decision makers,they mean that:

Accepted Answer

A) people gather all relevant information before making their purchases. 
B) once a pattern of behavior has been established,people tend to become set in their ways. 
C) people respond in predictable ways to changes in costs and benefits. 
D) people rarely make errors when permitted to make transactions. 
E) once made,decisions are never reversed. 
A) people gather all relevant information before making their purchases. 
B) once a pattern of behavior has been established,people tend to become set in their ways. 
C) people respond in predictable ways to changes in costs and benefits. 
D) people rarely make errors when permitted to make transactions. 
E) once made,decisions are never reversed.

Question 6

Which of the following is true about the resource market?

Accepted Answer

A) It facilitates the exchange of goods and services between buyers and sellers. 
B) It facilitates the exchange of resources between buyers and sellers. 
C) Firms are sellers in the resource market. 
D) Households are buyers in the resource markets. 
E) There is no flow of money in the resource market. 
A) It facilitates the exchange of goods and services between buyers and sellers. 
B) It facilitates the exchange of resources between buyers and sellers. 
C) Firms are sellers in the resource market. 
D) Households are buyers in the resource markets. 
E) There is no flow of money in the resource market.

Question 7

The other-things-constant assumption:

Accepted Answer

A) allows the economist to make useful predictions. 
B) is a prediction. 
C) applies only to consumers' decisions and not to those of firms. 
D) forces the economist to ignore reality,where things are constantly changing. 
E) implies rational self-interest on the part of all economic actors. 
A) allows the economist to make useful predictions. 
B) is a prediction. 
C) applies only to consumers' decisions and not to those of firms. 
D) forces the economist to ignore reality,where things are constantly changing. 
E) implies rational self-interest on the part of all economic actors.

Question 8

Alan is a retired economist who enjoys building toy trains for his grandkids.He uses a workbench and tools from his garage,lumber he bought from the lumber store for $10,and varnish and paint he had left over from another project last year.Since a retired economist is always an economist,which of the following statements does he make about building toy trains?

Accepted Answer

A)  I'm not paying for any resources,so the toy trains I'm building are a good example of free goods. 
B) I only paid $10 for the lumber,so the toy trains I'm building are a good example of free goods. 
C) I'm using scarce resources to build the toy trains. 
D) The resources I'm using to build the toy trains are not scarce. 
E) If I had used lumber that I cut from the tree in my backyard instead of buying it from the store,then the toy trains I'm building would be a good example of free goods. 
A)  I'm not paying for any resources,so the toy trains I'm building are a good example of free goods. 
B) I only paid $10 for the lumber,so the toy trains I'm building are a good example of free goods. 
C) I'm using scarce resources to build the toy trains. 
D) The resources I'm using to build the toy trains are not scarce. 
E) If I had used lumber that I cut from the tree in my backyard instead of buying it from the store,then the toy trains I'm building would be a good example of free goods.

Question 9

The scientific method is useful:

Accepted Answer

A) only in fields of science such as chemistry and physics. 
B) for testing the validity of theoretical predictions. 
C) for testing the validity of a model's assumptions. 
D) when no economic variables can be assumed to be constant. 
E) only if a theory has been proven to be true. 
A) only in fields of science such as chemistry and physics. 
B) for testing the validity of theoretical predictions. 
C) for testing the validity of a model's assumptions. 
D) when no economic variables can be assumed to be constant. 
E) only if a theory has been proven to be true.

Question 10

Which of the following is a positive statement?

Accepted Answer

A) The unemployment rate of 7 percent or higher is a national disgrace. 
B) Unemployment is a less important problem than inflation. 
C) When the national unemployment rate is 7 percent,the unemployment rate among inner-city youth is often close to 40 percent. 
D) Unemployment and inflation are equally important problems. 
E) An inflation rate of 7 percent is too high. 
A) The unemployment rate of 7 percent or higher is a national disgrace. 
B) Unemployment is a less important problem than inflation. 
C) When the national unemployment rate is 7 percent,the unemployment rate among inner-city youth is often close to 40 percent. 
D) Unemployment and inflation are equally important problems. 
E) An inflation rate of 7 percent is too high.

Question 11

Which of the following is the fundamental resource that is the basis of labor?

Accepted Answer

A) Capital 
B) Natural resources 
C) Time 
D) Money 
E) Entrepreneurial ability 
A) Capital 
B) Natural resources 
C) Time 
D) Money 
E) Entrepreneurial ability

Question 12

You want to sell your old iPad that you no longer use,and your cousin wants to give you $300 for it.If you decide to sell your iPad to your cousin,you'll have to pay $40 for shipping the iPad to your cousin.As a rational decision maker,you should:

Accepted Answer

A) sell it because the marginal benefit is smaller than the marginal cost. 
B) not sell it because the marginal benefit is smaller than the marginal cost. 
C) sell it because the marginal benefit is greater than the marginal cost. 
D) not sell it because the marginal benefit is greater than the marginal cost. 
E) sell it because the marginal benefit is equal to the marginal cost. 
A) sell it because the marginal benefit is smaller than the marginal cost. 
B) not sell it because the marginal benefit is smaller than the marginal cost. 
C) sell it because the marginal benefit is greater than the marginal cost. 
D) not sell it because the marginal benefit is greater than the marginal cost. 
E) sell it because the marginal benefit is equal to the marginal cost.

Question 13

Economists employ the scientific method.In part,this means that:

Accepted Answer

A) there is a single economic theory accepted by all economists. 
B) economic hypotheses are tested to determine their validity. 
C) all economic laws have been proven true by laboratory tests. 
D) personal values never enter into economic policy recommendations. 
E) assumptions are not necessary in economic science. 
A) there is a single economic theory accepted by all economists. 
B) economic hypotheses are tested to determine their validity. 
C) all economic laws have been proven true by laboratory tests. 
D) personal values never enter into economic policy recommendations. 
E) assumptions are not necessary in economic science.

Question 14

The assumption that individuals act rationally implies that:

Accepted Answer

A) people think only of themselves and disregard the well-being of others. 
B) people undertake all those activities that yield benefits to themselves. 
C) people only consider the costs of an activity to decide whether it is worthwhile. 
D) the greater the cost of a charitable deed to a benefactor,the more likely he or she is to perform that deed. 
E) people implicitly calculate the costs and benefits of an activity to decide if it is worthwhile. 
A) people think only of themselves and disregard the well-being of others. 
B) people undertake all those activities that yield benefits to themselves. 
C) people only consider the costs of an activity to decide whether it is worthwhile. 
D) the greater the cost of a charitable deed to a benefactor,the more likely he or she is to perform that deed. 
E) people implicitly calculate the costs and benefits of an activity to decide if it is worthwhile.

Question 15

Rent is the payment received by resource owners for the use of their natural resources.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an example of a normative economic statement?

Accepted Answer

A) If the money supply falls,interest rates will rise. 
B) Teenage unemployment would be lower if there were no minimum wage. 
C) The quantity of shirts sold increases as the price of shirts decreases. 
D) The federal government's total spending should be reduced. 
E) If interest rates go up,then construction activity will fall. 
A) If the money supply falls,interest rates will rise. 
B) Teenage unemployment would be lower if there were no minimum wage. 
C) The quantity of shirts sold increases as the price of shirts decreases. 
D) The federal government's total spending should be reduced. 
E) If interest rates go up,then construction activity will fall.

Question 17

A marginal adjustment only refers to a minor change.

Accepted Answer

A) True 
 B)False

Question 18

Considering both product markets and resource markets,most economic decision makers participate in the economy as both buyers and sellers.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is an example of a normative economic statement?

Accepted Answer

A) Incomes increase when national production increases. 
B) Women should earn the same income as men. 
C) When the price of a good rises,people will buy more of it. 
D) The more time you spend studying,the higher your economics test scores will be. 
E) The more time you spend studying for chemistry,the higher your economics test score will be. 
A) Incomes increase when national production increases. 
B) Women should earn the same income as men. 
C) When the price of a good rises,people will buy more of it. 
D) The more time you spend studying,the higher your economics test scores will be. 
E) The more time you spend studying for chemistry,the higher your economics test score will be.

Question 20

A normative economic statement:

Accepted Answer

A) is a hypothesis used to test economic theory. 
B) is a statement of fact. 
C) is a statement of what ought to be,not what is. 
D) indicates what will occur if certain assumptions are true. 
E) enables economists to test hypotheses. 
A) is a hypothesis used to test economic theory. 
B) is a statement of fact. 
C) is a statement of what ought to be,not what is. 
D) indicates what will occur if certain assumptions are true. 
E) enables economists to test hypotheses.

The labor market is an example of a:

An economic model is useful if it:

An economic model will produce poor predictions if it includes assumptions.

When economists say that people act as rational decision makers,they mean that:

Which of the following is true about the resource market?

The other-things-constant assumption:

The scientific method is useful:

Which of the following is a positive statement?

Which of the following is the fundamental resource that is the basis of labor?

You want to sell your old iPad that you no longer use,and your cousin wants to give you $300 for it.If you decide to sell your iPad to your cousin,you'll have to pay $40 for shipping the iPad to your cousin.As a rational decision maker,you should:

Economists employ the scientific method.In part,this means that:

The assumption that individuals act rationally implies that:

Rent is the payment received by resource owners for the use of their natural resources.

Which of the following is an example of a normative economic statement?

A marginal adjustment only refers to a minor change.

Considering both product markets and resource markets,most economic decision makers participate in the economy as both buyers and sellers.

Which of the following is an example of a normative economic statement?

A normative economic statement:

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 1: The Art and Science of Economic Analysis

The labor market is an example of a:

An economic model is useful if it:

An economic model will produce poor predictions if it includes assumptions.

When economists say that people act as rational decision makers,they mean that:

Which of the following is true about the resource market?

The other-things-constant assumption:

The scientific method is useful:

Which of the following is a positive statement?

Which of the following is the fundamental resource that is the basis of labor?

You want to sell your old iPad that you no longer use,and your cousin wants to give you $300 for it.If you decide to sell your iPad to your cousin,you'll have to pay $40 for shipping the iPad to your cousin.As a rational decision maker,you should:

Economists employ the scientific method.In part,this means that:

The assumption that individuals act rationally implies that:

Rent is the payment received by resource owners for the use of their natural resources.

Which of the following is an example of a normative economic statement?

A marginal adjustment only refers to a minor change.

Considering both product markets and resource markets,most economic decision makers participate in the economy as both buyers and sellers.

Which of the following is an example of a normative economic statement?

A normative economic statement:

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters