Question 1

The statement "It is better to suffer a little more unemployment than a little lower price" is an example of normative economic analysis.

Accepted Answer

A) True 
 B)False

Question 2

Exhibit 1A-8 Straight line relationship  
-Which of the following would cause a shift in the relationship shown in Exhibit 1A-8?

Accepted Answer

A)  A fall in household incomes. 
B)  A fall in the price of pizza. 
C)  A fall in the quantity of pizza that people wish to purchase. 
D)  All of these would shift the line in the graph. 
A)  A fall in household incomes. 
B)  A fall in the price of pizza. 
C)  A fall in the quantity of pizza that people wish to purchase. 
D)  All of these would shift the line in the graph.

Question 3

A graph can be used to illustrate the relationship between the price of compact discs and the quantity of compact discs demanded. If there is evidence that buyers' income also influences the demand for compact discs, then a movement along the curve can be caused by a change in the price of compact discs.

Accepted Answer

A) True 
 B)False

Question 4

Economists most often disagree over positive rather than normative economic issues.

Accepted Answer

A) True 
 B)False

Question 5

An economic forecast:

Accepted Answer

A)  will always be true. 
B)  is more reliable than a weather forecast. 
C)  will never provide valuable information. 
D)  should not be relied upon to predict economic events. 
E)  is always based upon a Ceteris paribus condition. 
A)  will always be true. 
B)  is more reliable than a weather forecast. 
C)  will never provide valuable information. 
D)  should not be relied upon to predict economic events. 
E)  is always based upon a Ceteris paribus condition.

Question 6

All of the following are examples of capital except:

Accepted Answer

A)  the robot used to help produce your car. 
B)  a computer used by your professor to write this exam. 
C)  the factory that produces the costume jewelry you buy. 
D)  the inventory of unsold goods at your local hardware store. 
E)  an uncut diamond that you discover in your backyard. 
A)  the robot used to help produce your car. 
B)  a computer used by your professor to write this exam. 
C)  the factory that produces the costume jewelry you buy. 
D)  the inventory of unsold goods at your local hardware store. 
E)  an uncut diamond that you discover in your backyard.

Question 7

A graph is one method of expressing a model.​

Accepted Answer

A) True 
 B)False

Question 8

An economic model is defined as:

Accepted Answer

A)  a value judgment. 
B)  a presentation of all possible relevant real-world variables. 
C)  a simplified representation of the way in which facts are related. 
D)  data adjusted for irrational actions. 
A)  a value judgment. 
B)  a presentation of all possible relevant real-world variables. 
C)  a simplified representation of the way in which facts are related. 
D)  data adjusted for irrational actions.

Question 9

The condition of scarcity:

Accepted Answer

A)  cannot be eliminated. 
B)  prevails in poor economies. 
C)  prevails in rich economies. 
D)  All of these. 
A)  cannot be eliminated. 
B)  prevails in poor economies. 
C)  prevails in rich economies. 
D)  All of these.

Question 10

Economics is the study of decisions made necessary by the problem of unlimited wants and limited means to satisfy them.

Accepted Answer

A) True 
 B)False

Question 11

Entrepreneurs can delegate every one of the following tasks to labor except:

Accepted Answer

A)  hiring and training new employees. 
B)  assuming business risk and uncertainty. 
C)  supervision of the production process. 
D)  researching ideas for new products. 
E)  marketing the goods and services produced. 
A)  hiring and training new employees. 
B)  assuming business risk and uncertainty. 
C)  supervision of the production process. 
D)  researching ideas for new products. 
E)  marketing the goods and services produced.

Question 12

Microeconomics and macroeconomics use different types of analysis.

Accepted Answer

A) True 
 B)False

Question 13

A direct relationship is expressed graphically as a:

Accepted Answer

A)  positively sloped line or curve. 
B)  negatively sloped line or curve. 
C)  horizontal line. 
D)  vertical line. 
A)  positively sloped line or curve. 
B)  negatively sloped line or curve. 
C)  horizontal line. 
D)  vertical line.

Question 14

Policies to increase the supply of money in the economy are primarily a concern of microeconomics.

Accepted Answer

A) True 
 B)False

Question 15

Human wants:

Accepted Answer

A)  are unfilled only in the poorer countries of the world. 
B)  can be completely satisfied by advancing technology. 
C)  can never be fully satisfied. 
D)  only apply to necessities. 
E)  exist only if we are selfish. 
A)  are unfilled only in the poorer countries of the world. 
B)  can be completely satisfied by advancing technology. 
C)  can never be fully satisfied. 
D)  only apply to necessities. 
E)  exist only if we are selfish.

Question 16

What is scarcity and why does it exist? How is scarcity related to the study of economics?

Accepted Answer

Scarcity exists because resources are li

Question 17

Two variables that are inversely related tend to move in opposite directions.

Accepted Answer

A) True 
 B)False

Question 18

An economic model is:

Accepted Answer

A)  a plastic scaled version of the economy. 
B)  a complete depiction of reality. 
C)  an abstraction from reality. 
D)  applicable to consumer behavior but not to producer behavior. 
E)  not an accepted tool of the economics profession. 
A)  a plastic scaled version of the economy. 
B)  a complete depiction of reality. 
C)  an abstraction from reality. 
D)  applicable to consumer behavior but not to producer behavior. 
E)  not an accepted tool of the economics profession.

Question 19

A positive economic statement is:

Accepted Answer

A)  an opinion of an action that should be taken. 
B)  an action that will have a positive effect on the economy. 
C)  a statement testable by facts. 
D)  a claim that the speaker is positive will occur. 
E)  always a microeconomic position. 
A)  an opinion of an action that should be taken. 
B)  an action that will have a positive effect on the economy. 
C)  a statement testable by facts. 
D)  a claim that the speaker is positive will occur. 
E)  always a microeconomic position.

Question 20

Scarcity means we are unable to have as much as we would like to have.

Accepted Answer

A) True 
 B)False

The statement "It is better to suffer a little more unemployment than a little lower price" is an example of normative economic analysis.

Exhibit 1A-8 Straight line relationship -Which of the following would cause a shift in the relationship shown in Exhibit 1A-8?

Economists most often disagree over positive rather than normative economic issues.

An economic forecast:

All of the following are examples of capital except:

A graph is one method of expressing a model.

An economic model is defined as:

The condition of scarcity:

Economics is the study of decisions made necessary by the problem of unlimited wants and limited means to satisfy them.

Entrepreneurs can delegate every one of the following tasks to labor except:

Microeconomics and macroeconomics use different types of analysis.

A direct relationship is expressed graphically as a:

Policies to increase the supply of money in the economy are primarily a concern of microeconomics.

Human wants:

What is scarcity and why does it exist? How is scarcity related to the study of economics?

Two variables that are inversely related tend to move in opposite directions.

An economic model is:

A positive economic statement is:

Scarcity means we are unable to have as much as we would like to have.

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 1: Introducing the Economic Way of Thinking

The statement "It is better to suffer a little more unemployment than a little lower price" is an example of normative economic analysis.

Exhibit 1A-8 Straight line relationship -Which of the following would cause a shift in the relationship shown in Exhibit 1A-8?

Economists most often disagree over positive rather than normative economic issues.

An economic forecast:

All of the following are examples of capital except:

A graph is one method of expressing a model.​

An economic model is defined as:

The condition of scarcity:

Economics is the study of decisions made necessary by the problem of unlimited wants and limited means to satisfy them.

Entrepreneurs can delegate every one of the following tasks to labor except:

Microeconomics and macroeconomics use different types of analysis.

A direct relationship is expressed graphically as a:

Policies to increase the supply of money in the economy are primarily a concern of microeconomics.

Human wants:

What is scarcity and why does it exist? How is scarcity related to the study of economics?

Two variables that are inversely related tend to move in opposite directions.

An economic model is:

A positive economic statement is:

Scarcity means we are unable to have as much as we would like to have.

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

A graph is one method of expressing a model.