Question 1

The Latin expression Ceteris paribus means:

Accepted Answer

A)  everything else being equal. 
B)  economic model. 
C)  economists are partly right. 
D)  partial scarcity is certain. 
A)  everything else being equal. 
B)  economic model. 
C)  economists are partly right. 
D)  partial scarcity is certain. A

Question 2

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)  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)  marketing the goods and services produced. B

Question 3

A factor of production is the same as:

Accepted Answer

A)  the amount of a good produced. 
B)  the price of a good. 
C)  an opportunity cost. 
D)  a resource. 
A)  the amount of a good produced. 
B)  the price of a good. 
C)  an opportunity cost. 
D)  a resource. D

Question 4

Which of the following is an example of scarcity?

Accepted Answer

A)  Adam has more than enough food to eat each day. 
B)  Benito is wealthy so he has everything he could ever want. 
C)  Camden would like to have more designer clothes than he can afford. 
D)  Dennis takes as many vacations as he would like since he won the lottery. 
A)  Adam has more than enough food to eat each day. 
B)  Benito is wealthy so he has everything he could ever want. 
C)  Camden would like to have more designer clothes than he can afford. 
D)  Dennis takes as many vacations as he would like since he won the lottery.

Question 5

To be valid, an economic model must:

Accepted Answer

A)  include every activity which occurs in the real world. 
B)  not be based on an abstraction of the real world. 
C)  be able to predict events occurring in the real world. 
D)  exclude any link to the real world. 
A)  include every activity which occurs in the real world. 
B)  not be based on an abstraction of the real world. 
C)  be able to predict events occurring in the real world. 
D)  exclude any link to the real world.

Question 6

When economists want to hold a number of factors constant, they are demonstrating which of the following expressions?

Accepted Answer

A)  Positive economics model. 
B)  Consumer sovereignty. 
C)  Ceteris paribus . 
D)  Normative economics. 
A)  Positive economics model. 
B)  Consumer sovereignty. 
C)  Ceteris paribus . 
D)  Normative economics.

Question 7

Suppose an economist collects the following data between May and December of a given year: gasoline prices rose sharply, consumer incomes remained constant, consumers purchased more fuel efficient vehicles than in the previous year, the size of the population did not change, sales of gasoline decreased by 15 percent. Which of the following theories could be tested with this information?

Accepted Answer

A)  When the price of gasoline rises, gasoline purchases fall. 
B)  When consumer incomes rise, gasoline purchases rise. 
C)  When the population increases, purchases of fuel efficient vehicles increase. 
D)  No economic theory could be tested with this information. 
A)  When the price of gasoline rises, gasoline purchases fall. 
B)  When consumer incomes rise, gasoline purchases rise. 
C)  When the population increases, purchases of fuel efficient vehicles increase. 
D)  No economic theory could be tested with this information.

Question 8

Determining the price of mobile phones is a concern of:

Accepted Answer

A)  macroeconomics. 
B)  microeconomics. 
C)  both macroeconomics and microeconomics. 
D)  neither macroeconomics nor microeconomics. 
A)  macroeconomics. 
B)  microeconomics. 
C)  both macroeconomics and microeconomics. 
D)  neither macroeconomics nor microeconomics.

Question 9

What is an economic theory or model? What constitutes a "good" economic theory or model?

Accepted Answer

An economic theory is a simplified versi

Question 10

Economics is the study of how people:

Accepted Answer

A)  vote for political leaders. 
B)  make choices to produce and consume goods and services. 
C)  establish social institutions that maximize well-being. 
D)  develop value systems. 
A)  vote for political leaders. 
B)  make choices to produce and consume goods and services. 
C)  establish social institutions that maximize well-being. 
D)  develop value systems.

Question 11

The subject of economics is primarily the study of:

Accepted Answer

A)  the government decision-making process. 
B)  how to operate a business successfully. 
C)  decision-making because of the problem of scarcity. 
D)  how to make money in the stock market. 
A)  the government decision-making process. 
B)  how to operate a business successfully. 
C)  decision-making because of the problem of scarcity. 
D)  how to make money in the stock market.

Question 12

Which of the following is included in the study of macroeconomics?

Accepted Answer

A)  wage rate of college students 
B)  prices of automobiles 
C)  unemployment in the nation 
D)  price of silver and gold 
A)  wage rate of college students 
B)  prices of automobiles 
C)  unemployment in the nation 
D)  price of silver and gold

Question 13

Which of the following is a normative statement?

Accepted Answer

A)  A decrease in price leads to an increase in quantity consumed. 
B)  Incomes grow more rapidly in high-tax states than low-tax states. 
C)  People would be better off if government expenditures were higher. 
D)  People will buy less butter at $1.50 per pound than they will at $1 per pound. 
A)  A decrease in price leads to an increase in quantity consumed. 
B)  Incomes grow more rapidly in high-tax states than low-tax states. 
C)  People would be better off if government expenditures were higher. 
D)  People will buy less butter at $1.50 per pound than they will at $1 per pound.

Question 14

Relate the term scarcity to the action(s) it causes.

Accepted Answer

A)  Scarcity causes developed nations to have more material goods than developing nations. 
B)  Scarcity causes fewer technological advances. 
C)  Scarcity forces people to want more material goods. 
D)  Scarcity forces everyone to make choices. 
A)  Scarcity causes developed nations to have more material goods than developing nations. 
B)  Scarcity causes fewer technological advances. 
C)  Scarcity forces people to want more material goods. 
D)  Scarcity forces everyone to make choices.

Question 15

People are forced to make choices because of:

Accepted Answer

A)  unlimited wants and unlimited resources. 
B)  limited wants and unlimited resources. 
C)  unlimited wants and limited resources. 
D)  limited wants and limited resources. 
A)  unlimited wants and unlimited resources. 
B)  limited wants and unlimited resources. 
C)  unlimited wants and limited resources. 
D)  limited wants and limited resources.

Question 16

The question "why do national economies grow" would be a macroeconomic, rather than a microeconomic topic, because it

Accepted Answer

A)  relates to the economy as a whole. 
B)  studies a single market. 
C)  considers the decisions of one industry. 
D)  depends on the actions of suppliers. 
A)  relates to the economy as a whole. 
B)  studies a single market. 
C)  considers the decisions of one industry. 
D)  depends on the actions of suppliers.

Question 17

All of the following are examples of capital except :

Accepted Answer

A)  the robot used to help produce your car. 
B)  the classroom in which you learn. 
C)  the factory that produces the costume jewelry you buy. 
D)  an uncut diamond that you discover in your backyard. 
A)  the robot used to help produce your car. 
B)  the classroom in which you learn. 
C)  the factory that produces the costume jewelry you buy. 
D)  an uncut diamond that you discover in your backyard.

Question 18

Select the positive statement that completes the sentence: If wages rise more rapidly than productivity:

Accepted Answer

A)  profits will fall. 
B)  workers will earn 3/4 of GDP. 
C)  the rate of inflation increases. 
D)  policymakers should impose a wage ceiling. 
A)  profits will fall. 
B)  workers will earn 3/4 of GDP. 
C)  the rate of inflation increases. 
D)  policymakers should impose a wage ceiling.

Question 19

The central question in economics is how to:

Accepted Answer

A)  deal with the problem of scarcity. 
B)  change government economic policy. 
C)  change people's wants to match their needs. 
D)  manage money and become wealthy. 
A)  deal with the problem of scarcity. 
B)  change government economic policy. 
C)  change people's wants to match their needs. 
D)  manage money and become wealthy.

Question 20

The price of milk would be of particular interest to

Accepted Answer

A)  a microeconomist. 
B)  a macroeconomist. 
C)  neither a microeconomist nor a macroeconomist. 
D)  both a microeconomist and a macroeconomist. 
A)  a microeconomist. 
B)  a macroeconomist. 
C)  neither a microeconomist nor a macroeconomist. 
D)  both a microeconomist and a macroeconomist.

Exam 1: Introducing the Economic Way of Thinking

The Latin expression Ceteris paribus means:

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

A factor of production is the same as:

Which of the following is an example of scarcity?

To be valid, an economic model must:

When economists want to hold a number of factors constant, they are demonstrating which of the following expressions?

Determining the price of mobile phones is a concern of:

What is an economic theory or model? What constitutes a "good" economic theory or model?

Economics is the study of how people:

The subject of economics is primarily the study of:

Which of the following is included in the study of macroeconomics?

Which of the following is a normative statement?

Relate the term scarcity to the action(s) it causes.

People are forced to make choices because of:

The question "why do national economies grow" would be a macroeconomic, rather than a microeconomic topic, because it

All of the following are examples of capital except :

Select the positive statement that completes the sentence: If wages rise more rapidly than productivity:

The central question in economics is how to:

The price of milk would be of particular interest to

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

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits Surpluses and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less Developed Countries

Understanding Direct and Inverse Relationships between Variables

Filters