Question 1

Which of the following sentences is the best example of scarcity of time?

Accepted Answer

A) Peter buys a hamburger. 
B) John-Michael wants to spend his money on a new hoverboard. 
C) Alexander is doing homework instead of going to the movies with his friends. 
D) Amanda,a geography teacher,is retired. 
E) Bill is unemployed. 
A) Peter buys a hamburger. 
B) John-Michael wants to spend his money on a new hoverboard. 
C) Alexander is doing homework instead of going to the movies with his friends. 
D) Amanda,a geography teacher,is retired. 
E) Bill is unemployed.

Question 2

In economics,the term marginal usually refers to:

Accepted Answer

A) a small change in an economic variable. 
B) a low-quality product or resource. 
C) an unimportant and irrelevant economic variable. 
D) an all-or-nothing economic decision. 
E) a footnote or minor point. 
A) a small change in an economic variable. 
B) a low-quality product or resource. 
C) an unimportant and irrelevant economic variable. 
D) an all-or-nothing economic decision. 
E) a footnote or minor point.

Question 3

Sara is considering the purchase of a new car.Rational self-interest demands that she do an exhaustive research study to acquire every bit of information possible about her potential options.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements regarding the basic economic problem of scarcity is correct?

Accepted Answer

A) The problem only exists in countries that are not highly industrialized. 
B) The problem is likely to disappear as production increases. 
C) The problem is sure to disappear as technology improves. 
D) The problem will exist as long as resources are available in limited amounts. 
E) The problem will disappear as a person's income falls. 
A) The problem only exists in countries that are not highly industrialized. 
B) The problem is likely to disappear as production increases. 
C) The problem is sure to disappear as technology improves. 
D) The problem will exist as long as resources are available in limited amounts. 
E) The problem will disappear as a person's income falls.

Question 5

Most economists consider a theory a good one if it predicts well.

Accepted Answer

A) True 
 B)False

Question 6

The fallacy of composition is the error of believing that a cause and effect relationship exists between two events that are associated in time.

Accepted Answer

A) True 
 B)False

Question 7

An economic model that sometimes makes incorrect predictions may be used by economic decision makers:

Accepted Answer

A) under no circumstances. 
B) only if its assumptions are detailed and realistic. 
C) if it is mathematical and computerized. 
D) if it is simple enough for a child to understand. 
E) until a better model is developed. 
A) under no circumstances. 
B) only if its assumptions are detailed and realistic. 
C) if it is mathematical and computerized. 
D) if it is simple enough for a child to understand. 
E) until a better model is developed.

Question 8

Most real economic choices involve small (or marginal)changes rather than all-or-nothing decisions.

Accepted Answer

A) True 
 B)False

Question 9

Households:

Accepted Answer

A) own and sell resources. 
B) play a very minor role in the economy. 
C) supply goods and services. 
D) are the largest purchasers of resources. 
E) set the price for goods. 
A) own and sell resources. 
B) play a very minor role in the economy. 
C) supply goods and services. 
D) are the largest purchasers of resources. 
E) set the price for goods.

Question 10

The ceteris paribus assumption is the other-things-constant assumption.

Accepted Answer

A) True 
 B)False

Question 11

Economics studies how decision makers use scarce resources to satisfy unlimited wants.

Accepted Answer

A) True 
 B)False

Question 12

"There should be less discrimination against the elderly." This is an example of a:

Accepted Answer

A) normative statement. 
B) positive statement. 
C) forecast. 
D) theory. 
E) prediction. 
A) normative statement. 
B) positive statement. 
C) forecast. 
D) theory. 
E) prediction.

Question 13

Elijah,a basketball fan,reasons that because his favorite team has three superstars on it,the team must be a great team and will win the championship.Elijah is committing the:

Accepted Answer

A) fallacy of composition. 
B) fallacy that association is causation. 
C) fallacy of segmentation. 
D) mistake of ignoring the secondary effects. 
E) mistake of ignoring the obvious. 
A) fallacy of composition. 
B) fallacy that association is causation. 
C) fallacy of segmentation. 
D) mistake of ignoring the secondary effects. 
E) mistake of ignoring the obvious.

Question 14

Goods and services are exchanged in:

Accepted Answer

A) product markets. 
B) resource markets. 
C) inventory markets. 
D) classified markets. 
E) government markets. 
A) product markets. 
B) resource markets. 
C) inventory markets. 
D) classified markets. 
E) government markets.

Question 15

The fact that people have unlimited wants means that:

Accepted Answer

A) they always want more of at least one good. 
B) each person has an unlimited desire for every good. 
C) labor unions demand wage increases. 
D) selfish people are not concerned about others. 
E) people buy goods without regard to what they can afford. 
A) they always want more of at least one good. 
B) each person has an unlimited desire for every good. 
C) labor unions demand wage increases. 
D) selfish people are not concerned about others. 
E) people buy goods without regard to what they can afford.

Question 16

Natural resources:

Accepted Answer

A) include bodies of water,trees,oil reserves,and minerals. 
B) are not scarce. 
C) are exhaustible as long as they are managed properly. 
D) are the result of human effort. 
E) are machines used in the production process. 
A) include bodies of water,trees,oil reserves,and minerals. 
B) are not scarce. 
C) are exhaustible as long as they are managed properly. 
D) are the result of human effort. 
E) are machines used in the production process.

Question 17

Economists classify all of the following as physical capital,except one.Which one is not capital?

Accepted Answer

A) A $20 bill in a firm's petty cash drawer 
B) The building where an economics class meets 
C) A plumber's wrench 
D) A railroad car 
E) A factory 
A) A $20 bill in a firm's petty cash drawer 
B) The building where an economics class meets 
C) A plumber's wrench 
D) A railroad car 
E) A factory

Question 18

In economics,money is an example of capital.

Accepted Answer

A) True 
 B)False

Question 19

As a scientist,an economist's main professional objective is to become wealthy.

Accepted Answer

A) True 
 B)False

Question 20

Profit is the payment received by resource owners for the use of their capital.

Accepted Answer

A) True 
 B)False

Which of the following sentences is the best example of scarcity of time?

In economics,the term marginal usually refers to:

Sara is considering the purchase of a new car.Rational self-interest demands that she do an exhaustive research study to acquire every bit of information possible about her potential options.

Which of the following statements regarding the basic economic problem of scarcity is correct?

Most economists consider a theory a good one if it predicts well.

The fallacy of composition is the error of believing that a cause and effect relationship exists between two events that are associated in time.

An economic model that sometimes makes incorrect predictions may be used by economic decision makers:

Most real economic choices involve small (or marginal)changes rather than all-or-nothing decisions.

Households:

The ceteris paribus assumption is the other-things-constant assumption.

Economics studies how decision makers use scarce resources to satisfy unlimited wants.

"There should be less discrimination against the elderly." This is an example of a:

Elijah,a basketball fan,reasons that because his favorite team has three superstars on it,the team must be a great team and will win the championship.Elijah is committing the:

Goods and services are exchanged in:

The fact that people have unlimited wants means that:

Natural resources:

Economists classify all of the following as physical capital,except one.Which one is not capital?

In economics,money is an example of capital.

As a scientist,an economist's main professional objective is to become wealthy.

Profit is the payment received by resource owners for the use of their capital.

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

Which of the following sentences is the best example of scarcity of time?

In economics,the term marginal usually refers to:

Sara is considering the purchase of a new car.Rational self-interest demands that she do an exhaustive research study to acquire every bit of information possible about her potential options.

Which of the following statements regarding the basic economic problem of scarcity is correct?

Most economists consider a theory a good one if it predicts well.

The fallacy of composition is the error of believing that a cause and effect relationship exists between two events that are associated in time.

An economic model that sometimes makes incorrect predictions may be used by economic decision makers:

Most real economic choices involve small (or marginal)changes rather than all-or-nothing decisions.

Households:

The ceteris paribus assumption is the other-things-constant assumption.

Economics studies how decision makers use scarce resources to satisfy unlimited wants.

"There should be less discrimination against the elderly." This is an example of a:

Elijah,a basketball fan,reasons that because his favorite team has three superstars on it,the team must be a great team and will win the championship.Elijah is committing the:

Goods and services are exchanged in:

The fact that people have unlimited wants means that:

Natural resources:

Economists classify all of the following as physical capital,except one.Which one is not capital?

In economics,money is an example of capital.

As a scientist,an economist's main professional objective is to become wealthy.

Profit is the payment received by resource owners for the use of their capital.

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