Question 1

When economic choice involves an adjustment to an existing situation,marginal analysis:

Accepted Answer

A) has no practical applications or real-world uses. 
B) eliminates incorrect decisions and bad choices. 
C) involves comparing the additional costs and additional benefits of an activity before deciding. 
D) involves examining only the total costs and total benefits of an activity before deciding. 
E) guarantees an incorrect decision. 
A) has no practical applications or real-world uses. 
B) eliminates incorrect decisions and bad choices. 
C) involves comparing the additional costs and additional benefits of an activity before deciding. 
D) involves examining only the total costs and total benefits of an activity before deciding. 
E) guarantees an incorrect decision.

Question 2

A good or service is considered scarce if:

Accepted Answer

A) any quantity of it can be consumed at a zero price. 
B) the amount people desire exceeds the amount available at a zero price. 
C) the amount people desire exceeds the amount available at any price. 
D) the amount people desire is less than the amount available at any price. 
E) the amount people desire is less than the amount available at a zero price. 
A) any quantity of it can be consumed at a zero price. 
B) the amount people desire exceeds the amount available at a zero price. 
C) the amount people desire exceeds the amount available at any price. 
D) the amount people desire is less than the amount available at any price. 
E) the amount people desire is less than the amount available at a zero price.

Question 3

Which of the following is the best definition of economics?

Accepted Answer

A) An investigation of the quantities and prices of the various goods produced by the nations of the world 
B) A study of why inflation and unemployment periodically plague the U.S.economy 
C) An analysis of how individuals and societies deal with the problem of scarcity 
D) An examination of the role that money plays in the economy 
E) A study of how goods and services are distributed throughout the world 
A) An investigation of the quantities and prices of the various goods produced by the nations of the world 
B) A study of why inflation and unemployment periodically plague the U.S.economy 
C) An analysis of how individuals and societies deal with the problem of scarcity 
D) An examination of the role that money plays in the economy 
E) A study of how goods and services are distributed throughout the world

Question 4

Someone who commits the fallacy of composition is likely to assume that:

Accepted Answer

A) the simplest model is the best predictor. 
B) event B,which followed event A,was caused by event A. 
C) event B,which followed event A,was not necessarily caused by event A. 
D) what is true for the individual is also true for the group. 
E) what is true for the individual is not necessarily true for the group. 
A) the simplest model is the best predictor. 
B) event B,which followed event A,was caused by event A. 
C) event B,which followed event A,was not necessarily caused by event A. 
D) what is true for the individual is also true for the group. 
E) what is true for the individual is not necessarily true for the group.

Question 5

Economics is the only social science and the only business discipline for which the Nobel Prize is awarded.

Accepted Answer

A) True 
 B)False

Question 6

A fallacy of composition involves assuming that:

Accepted Answer

A) you can determine the composition of a complex product just by examining its exterior properties. 
B) consumer durable goods today do not last as long as they did a generation ago. 
C) any mistakes made in producing a product using an assembly line technique will lead to a compounding of errors as the product moves down the line. 
D) what is true for any individual component in a group is true for the group as a whole. 
E) what was true when a person was younger will still be true today. 
A) you can determine the composition of a complex product just by examining its exterior properties. 
B) consumer durable goods today do not last as long as they did a generation ago. 
C) any mistakes made in producing a product using an assembly line technique will lead to a compounding of errors as the product moves down the line. 
D) what is true for any individual component in a group is true for the group as a whole. 
E) what was true when a person was younger will still be true today.

Question 7

In economics,marginal means:

Accepted Answer

A) incremental. 
B) unimportant. 
C) level or size. 
D) a borderline situation. 
E) a bad alternative. 
A) incremental. 
B) unimportant. 
C) level or size. 
D) a borderline situation. 
E) a bad alternative.

Question 8

Unlike a service,a good:

Accepted Answer

A) is desirable. 
B) uses resources to satisfy wants. 
C) is physical and tangible. 
D) is abundant and free. 
E) is a resource. 
A) is desirable. 
B) uses resources to satisfy wants. 
C) is physical and tangible. 
D) is abundant and free. 
E) is a resource.

Question 9

Your best friend buys you lunch on your birthday.You think this was not a free lunch because:

Accepted Answer

A) even if you didn't pay dollars for it,you paid for it in extra calories. 
B) the resources used to produce the lunch were not available to satisfy other wants. 
C) you disagree with the expression "The best things in life are free." 
D) you can eat only if you work out first. 
E) neither sea water nor air is free. 
A) even if you didn't pay dollars for it,you paid for it in extra calories. 
B) the resources used to produce the lunch were not available to satisfy other wants. 
C) you disagree with the expression "The best things in life are free." 
D) you can eat only if you work out first. 
E) neither sea water nor air is free.

Question 10

As resources are scarce,_____.

Accepted Answer

A) opportunity costs are zero. 
B) people must make choices among alternatives. 
C) all human wants and desires can be satisfied. 
D) resource prices are fixed. 
E) commodities are free. 
A) opportunity costs are zero. 
B) people must make choices among alternatives. 
C) all human wants and desires can be satisfied. 
D) resource prices are fixed. 
E) commodities are free.

Question 11

You currently subscribe to two magazines and are trying to decide whether you should subscribe to a third.What should determine your decision if you are economically rational?

Accepted Answer

A) The total cost of the magazines compared to the total satisfaction you would receive 
B) The total amount of satisfaction you would get from the magazines 
C) The enjoyment you would get from the third magazine 
D) The cost of the third magazine including the time it takes to read it 
E) The cost of the third magazine compared to the additional enjoyment you would get from it 
A) The total cost of the magazines compared to the total satisfaction you would receive 
B) The total amount of satisfaction you would get from the magazines 
C) The enjoyment you would get from the third magazine 
D) The cost of the third magazine including the time it takes to read it 
E) The cost of the third magazine compared to the additional enjoyment you would get from it

Question 12

To say that people make decisions at the margin means that:

Accepted Answer

A) they usually wait until the last minute before making a decision to buy. 
B) they weigh the additional costs and the additional benefits of various activities before they make a decision. 
C) most people just barely get by on the incomes they earn and live from day-to-day on the very edge of subsistence. 
D) if given a choice,most people would prefer to make their own decisions concerning the things that affect their lives. 
E) they consider the total cost and the total benefit of various activities before they make a purchase. 
A) they usually wait until the last minute before making a decision to buy. 
B) they weigh the additional costs and the additional benefits of various activities before they make a decision. 
C) most people just barely get by on the incomes they earn and live from day-to-day on the very edge of subsistence. 
D) if given a choice,most people would prefer to make their own decisions concerning the things that affect their lives. 
E) they consider the total cost and the total benefit of various activities before they make a purchase.

Question 13

Rational choice by an individual implies:

Accepted Answer

A) the use of a mathematical model when solving a problem. 
B) making decisions aimed at achieving some predetermined goal. 
C) that only monetary costs and benefits are weighed. 
D) that scarcity can be eliminated for that individual. 
A) the use of a mathematical model when solving a problem. 
B) making decisions aimed at achieving some predetermined goal. 
C) that only monetary costs and benefits are weighed. 
D) that scarcity can be eliminated for that individual.

Question 14

The basic purpose of economic models is to:

Accepted Answer

A) construct simplifying assumptions about the real world. 
B) explain reality in all its complexity. 
C) collect empirical data to support the facts. 
D) construct situations where controlled experiments can be carried out. 
E) explain and predict economic events. 
A) construct simplifying assumptions about the real world. 
B) explain reality in all its complexity. 
C) collect empirical data to support the facts. 
D) construct situations where controlled experiments can be carried out. 
E) explain and predict economic events.

Question 15

Economics:

Accepted Answer

A) studies human behavior when scarcity exists and choices must be made. 
B) provides the only reasonable explanation of how people make decisions. 
C) can accurately explain all human behavior since it is based on the assumption of rationality. 
D) is better at showing the way things ought to be than the other social sciences. 
E) is the only social science that can explain the existence and behavior of public institutions. 
A) studies human behavior when scarcity exists and choices must be made. 
B) provides the only reasonable explanation of how people make decisions. 
C) can accurately explain all human behavior since it is based on the assumption of rationality. 
D) is better at showing the way things ought to be than the other social sciences. 
E) is the only social science that can explain the existence and behavior of public institutions.

Question 16

Economics is best defined as the study of how individuals decide to use limited resources in an attempt to satisfy unlimited wants.

Accepted Answer

A) True 
 B)False

Question 17

Economists believe that:

Accepted Answer

A) people who choose to promote the interests of others cannot be acting rationally in their own self-interest. 
B) people show concern only for those whom they know personally. 
C) charitable donations would disappear if tax deductions for charitable giving were eliminated. 
D) the notion of self-interest rules out concern for others. 
E) concern for the welfare of others is consistent with the concept of self-interest. 
A) people who choose to promote the interests of others cannot be acting rationally in their own self-interest. 
B) people show concern only for those whom they know personally. 
C) charitable donations would disappear if tax deductions for charitable giving were eliminated. 
D) the notion of self-interest rules out concern for others. 
E) concern for the welfare of others is consistent with the concept of self-interest.

Question 18

Michigan has an abundant supply of fresh water.However,an economist would consider it a scarce resource because:

Accepted Answer

A) water is necessary for human survival. 
B) pollution will eventually destroy all life in the Great Lakes. 
C) water is limited relative to people's unlimited wants. 
D) water commands a very high price. 
E) nature can destroy water as well as create it. 
A) water is necessary for human survival. 
B) pollution will eventually destroy all life in the Great Lakes. 
C) water is limited relative to people's unlimited wants. 
D) water commands a very high price. 
E) nature can destroy water as well as create it.

Question 19

A rational decision maker compares the expected marginal cost to the expected marginal benefit of any activity.

Accepted Answer

A) True 
 B)False

Question 20

Secondary effects are consequences of economic actions that develop slowly over time as people react to events.

Accepted Answer

A) True 
 B)False

When economic choice involves an adjustment to an existing situation,marginal analysis:

A good or service is considered scarce if:

Which of the following is the best definition of economics?

Someone who commits the fallacy of composition is likely to assume that:

Economics is the only social science and the only business discipline for which the Nobel Prize is awarded.

A fallacy of composition involves assuming that:

In economics,marginal means:

Unlike a service,a good:

Your best friend buys you lunch on your birthday.You think this was not a free lunch because:

As resources are scarce,_____.

You currently subscribe to two magazines and are trying to decide whether you should subscribe to a third.What should determine your decision if you are economically rational?

To say that people make decisions at the margin means that:

Rational choice by an individual implies:

The basic purpose of economic models is to:

Economics:

Economics is best defined as the study of how individuals decide to use limited resources in an attempt to satisfy unlimited wants.

Economists believe that:

Michigan has an abundant supply of fresh water.However,an economist would consider it a scarce resource because:

A rational decision maker compares the expected marginal cost to the expected marginal benefit of any activity.

Secondary effects are consequences of economic actions that develop slowly over time as people react to events.

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

When economic choice involves an adjustment to an existing situation,marginal analysis:

A good or service is considered scarce if:

Which of the following is the best definition of economics?

Someone who commits the fallacy of composition is likely to assume that:

Economics is the only social science and the only business discipline for which the Nobel Prize is awarded.

A fallacy of composition involves assuming that:

In economics,marginal means:

Unlike a service,a good:

Your best friend buys you lunch on your birthday.You think this was not a free lunch because:

As resources are scarce,_____.

You currently subscribe to two magazines and are trying to decide whether you should subscribe to a third.What should determine your decision if you are economically rational?

To say that people make decisions at the margin means that:

Rational choice by an individual implies:

The basic purpose of economic models is to:

Economics:

Economics is best defined as the study of how individuals decide to use limited resources in an attempt to satisfy unlimited wants.

Economists believe that:

Michigan has an abundant supply of fresh water.However,an economist would consider it a scarce resource because:

A rational decision maker compares the expected marginal cost to the expected marginal benefit of any activity.

Secondary effects are consequences of economic actions that develop slowly over time as people react to events.

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