Exam 1: Introducing the Economic Way of Thinking

"As soon as a mayor announced his/her 'get tough on crime' policy on New Year's day, criminals got scared and the crime rate went down." Suppose that the lower crime rate was actually caused by freezing cold temperatures in January ⎯ it was just too cold for anybody to be out robbing other people. Which fundamental hazard of the economic way of thinking did the mayor make?

Wealthy families wanting finer homes and nicer vacations exemplify

Which one of the following is a positive economic statement?

Which of the following is most likely to represent causality rather than  association?

Scarcity is a problem:

If the price of a textbook rises and then students purchase fewer textbooks, an economic model can show a cause-and-effect relationship only if which of the following conditions holds:

When building a model, an economist must:

An entrepreneur is a(n):

Complete the following analogy: A criminal is to a police artist's sketch as the economy is to:

The services of farmers are an example of:

Which of the following is the best example of a microeconomics topic?

The study of microeconomics and macroeconomics differ in that:

The statement, "John buys more of good X as his income increases, Ceteris paribus ," means:

Labor resources:

Scarcity:

Human wants:

What is the difference between positive and normative economics? How can knowledge of positive economics be useful in normative economics?

When economists say scarcity, they mean:

Macroeconomics deals with the analysis of all of the following questions except:

Which of the following statements best illustrates the form of an economic theory?