Question 1

An entrepreneur:

Accepted Answer

A)  always makes a profit. 
B)  is appointed by the board of directors to manage the operations of a firm. 
C)  is a profit-seeking decision maker. 
D)  is a parasite that benefits by not paying other resources for their services. 
E)  is the manager who runs an enterprise and keeps the customers happy. 
A)  always makes a profit. 
B)  is appointed by the board of directors to manage the operations of a firm. 
C)  is a profit-seeking decision maker. 
D)  is a parasite that benefits by not paying other resources for their services. 
E)  is the manager who runs an enterprise and keeps the customers happy. C

Question 2

Exhibit 1.2
  
-Refer to the circular-flow model in Exhibit 1.2. Households supply ________ to firms through resource markets.

Accepted Answer

A)  goods and services 
B)  products 
C)  labor, capital, natural resources, and entrepreneurial ability 
D)  guidance 
E)  wages, interest, rent, and profit 
A)  goods and services 
B)  products 
C)  labor, capital, natural resources, and entrepreneurial ability 
D)  guidance 
E)  wages, interest, rent, and profit C

Question 3

Economic theories:

Accepted Answer

A)  express normative values. 
B)  invent imaginative and interesting stories. 
C)  use the fallacy of composition to validate hypotheses. 
D)  predict cause and effect in the real world. 
E)  use only perfect and complete information to formulate and test hypotheses. 
A)  express normative values. 
B)  invent imaginative and interesting stories. 
C)  use the fallacy of composition to validate hypotheses. 
D)  predict cause and effect in the real world. 
E)  use only perfect and complete information to formulate and test hypotheses. D

Question 4

Table 1.1
 Table $1.1$
$\begin{array}{|l|l|}
\hline \text { Hours } & \text { Revenue } \
\hline 1 & \$ 10 \
\hline 2 & \$ 20 \
\hline 3 & \$ 30 \
\hline 4 & \$ 40 \
\hline 5 & \$ 50 \
\hline
\end{array}$
Sergio tutors fellow students for $\$ 10$ an hour.
-Refer to Table 1.1. What is Sergio's marginal benefit if he tutors for five hours instead of three hours?

Accepted Answer

A)  $50 
B)  $40 
C)  $30 
D)  $20 
E)  $10 
A)  $50 
B)  $40 
C)  $30 
D)  $20 
E)  $10

Question 5

The payment in return for the use of natural resources is _____.

Accepted Answer

A)  profit 
B)  wages 
C)  rent 
D)  dividends 
E)  interest 
A)  profit 
B)  wages 
C)  rent 
D)  dividends 
E)  interest

Question 6

An economic model will produce poor predictions if it includes assumptions.

Accepted Answer

A) True 
 B)False

Question 7

Behavioral assumptions:

Accepted Answer

A)  make economic models more complex than if these assumptions were removed. 
B)  pertain only to consumers. 
C)  hold all other things constant. 
D)  are ways to test a hypothesis. 
E)  describe what motivates decision makers. 
A)  make economic models more complex than if these assumptions were removed. 
B)  pertain only to consumers. 
C)  hold all other things constant. 
D)  are ways to test a hypothesis. 
E)  describe what motivates decision makers.

Question 8

Exhibit 1.1
  
-Refer to the circular-flow model in Exhibit 1.1. If D represents firms and B represents resource markets, then the flow from D to B is:

Accepted Answer

A)  revenue. 
B)  expenditures. 
C)  labor, capital, and natural resources. 
D)  income and expenditures. 
E)  wages, interest, rent, and profit. 
A)  revenue. 
B)  expenditures. 
C)  labor, capital, and natural resources. 
D)  income and expenditures. 
E)  wages, interest, rent, and profit.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

In the simple circular flow model, the two markets are:

Accepted Answer

A)  capital goods and consumer goods markets. 
B)  goods and services markets. 
C)  product and resource markets. 
D)  households and firms markets. 
E)  domestic and foreign markets. 
A)  capital goods and consumer goods markets. 
B)  goods and services markets. 
C)  product and resource markets. 
D)  households and firms markets. 
E)  domestic and foreign markets.

Question 11

Which of the following is a positive statement?

Accepted Answer

A)  An unemployment rate of 7 percent or higher is a national disgrace. 
B)  Unemployment is a less important problem than inflation. 
C)  When the unemployment rate in an economy is 7 percent, the unemployment rate of the urban population is often close to 40 percent. 
D)  Unemployment and inflation are equally important problems. 
E)  An inflation rate of 7 percent is too high. 
A)  An unemployment rate of 7 percent or higher is a national disgrace. 
B)  Unemployment is a less important problem than inflation. 
C)  When the unemployment rate in an economy is 7 percent, the unemployment rate of the urban population is often close to 40 percent. 
D)  Unemployment and inflation are equally important problems. 
E)  An inflation rate of 7 percent is too high.

Question 12

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 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

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 15

The difference between a positive economic statement and a normative economic statement is that:

Accepted Answer

A)  a positive statement must be true, while a normative statement is often not true. 
B)  a normative statement must be true, while a positive statement is often not true. 
C)  a positive statement can be verified, while a normative statement cannot be verified. 
D)  a normative statement can be verified, while a positive statement cannot be verified. 
E)  a positive economic statement is a moral judgment, while a normative economic statement is not a moral judgment. 
A)  a positive statement must be true, while a normative statement is often not true. 
B)  a normative statement must be true, while a positive statement is often not true. 
C)  a positive statement can be verified, while a normative statement cannot be verified. 
D)  a normative statement can be verified, while a positive statement cannot be verified. 
E)  a positive economic statement is a moral judgment, while a normative economic statement is not a moral judgment.

Question 16

Table 1.1
 $$\begin{array}{l}
\text { Table } 1.1\
\begin{array} { | l | l | } 
\hline \text { Hours } & \text { Revenue } \
\hline 1 & 10 \
\hline 2 & 20 \
\hline 3 & 30 \
\hline 4 & 40 \
\hline 5 & 50 \
\hline
\end{array}
\end{array}$$
-Refer to Table 1.1. What is Sergio's marginal benefit if he tutors for two hours instead of one hour?

Accepted Answer

A)  $50 
B)  $40 
C)  $30 
D)  $20 
E)  $10 
A)  $50 
B)  $40 
C)  $30 
D)  $20 
E)  $10

Question 17

A marginal adjustment refers only to a minor change.

Accepted Answer

A) True 
 B)False

Question 18

You want to sell your old iPad to your cousin, who wants to give you $200 for it. You will have to pay to ship the iPad to your cousin. As a rational decision maker, you should sell your iPad if the shipping fee is:

Accepted Answer

A)  $350. 
B)  $250. 
C)  $301. 
D)  $299. 
E)  $199. 
A)  $350. 
B)  $250. 
C)  $301. 
D)  $299. 
E)  $199.

Question 19

Economic choice results from scarcity.

Accepted Answer

A) True 
 B)False

Question 20

Rational decision makers continue to acquire information as long as the additional benefit expected from that information _____ the additional cost of gathering it.

Accepted Answer

A)  is less than 
B)  exceeds 
C)  is equal to 
D)  is the same as 
E)  is different from 
A)  is less than 
B)  exceeds 
C)  is equal to 
D)  is the same as 
E)  is different from

An entrepreneur:

Exhibit 1.2 -Refer to the circular-flow model in Exhibit 1.2. Households supply ________ to firms through resource markets.

Economic theories:

Table 1.1 Table $1.1$ Hours Revenue 1 \ 10 2 \ 20 3 \ 30 4 \ 40 5 \ 50 Sergio tutors fellow students for $\$ 10$ an hour. -Refer to Table 1.1. What is Sergio's marginal benefit if he tutors for five hours instead of three hours?

The payment in return for the use of natural resources is _____.

An economic model will produce poor predictions if it includes assumptions.

Behavioral assumptions:

Exhibit 1.1 -Refer to the circular-flow model in Exhibit 1.1. If D represents firms and B represents resource markets, then the flow from D to B is:

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

In the simple circular flow model, the two markets are:

Which of the following is a positive statement?

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

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:

Unlike a service, a good:

The difference between a positive economic statement and a normative economic statement is that:

Table 1.1 Table 1.1 Hours Revenue 1 10 2 20 3 30 4 40 5 50 -Refer to Table 1.1. What is Sergio's marginal benefit if he tutors for two hours instead of one hour?

A marginal adjustment refers only to a minor change.

You want to sell your old iPad to your cousin, who wants to give you $200 for it. You will have to pay to ship the iPad to your cousin. As a rational decision maker, you should sell your iPad if the shipping fee is:

Economic choice results from scarcity.

Rational decision makers continue to acquire information as long as the additional benefit expected from that information _____ the additional cost of gathering it.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

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.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters

Exam 1: The Art and Science of Economic Analysis.

An entrepreneur:

Exhibit 1.2 -Refer to the circular-flow model in Exhibit 1.2. Households supply ________ to firms through resource markets.

Economic theories:

Table 1.1 Table 1.11.11.1 Hours Revenue 1 \ 10 2 \ 20 3 \ 30 4 \ 40 5 \ 50 Sergio tutors fellow students for $10\$ 10$10 an hour. -Refer to Table 1.1. What is Sergio's marginal benefit if he tutors for five hours instead of three hours?

The payment in return for the use of natural resources is _____.

An economic model will produce poor predictions if it includes assumptions.

Behavioral assumptions:

Exhibit 1.1 -Refer to the circular-flow model in Exhibit 1.1. If D represents firms and B represents resource markets, then the flow from D to B is:

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

In the simple circular flow model, the two markets are:

Which of the following is a positive statement?

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

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:

Unlike a service, a good:

The difference between a positive economic statement and a normative economic statement is that:

Table 1.1 Table 1.1 Hours Revenue 1 10 2 20 3 30 4 40 5 50 -Refer to Table 1.1. What is Sergio's marginal benefit if he tutors for two hours instead of one hour?

A marginal adjustment refers only to a minor change.

You want to sell your old iPad to your cousin, who wants to give you $200 for it. You will have to pay to ship the iPad to your cousin. As a rational decision maker, you should sell your iPad if the shipping fee is:

Economic choice results from scarcity.

Rational decision makers continue to acquire information as long as the additional benefit expected from that information _____ the additional cost of gathering it.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

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.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters

Table 1.1 Table $1.1$ Hours Revenue 1 \ 10 2 \ 20 3 \ 30 4 \ 40 5 \ 50 Sergio tutors fellow students for $\$ 10$ an hour. -Refer to Table 1.1. What is Sergio's marginal benefit if he tutors for five hours instead of three hours?