Question 1

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 equals 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 equals 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 2

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 in 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 in 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 3

One problem with rent control is that policymakers often ignore its secondary effects.

Accepted Answer

A) True 
 B)False

Question 4

Scarcity:

Accepted Answer

A)  applies to a brain surgeon but not to a cab driver. 
B)  is not a problem for politicians. 
C)  exists only in rich countries. 
D)  exists only in poor countries. 
E)  exists to a greater or lesser extent for everybody. 
A)  applies to a brain surgeon but not to a cab driver. 
B)  is not a problem for politicians. 
C)  exists only in rich countries. 
D)  exists only in poor countries. 
E)  exists to a greater or lesser extent for everybody.

Question 5

Economics is best defined as the study of how:

Accepted Answer

A)  people make decisions in a world of scarcity. 
B)  governments can influence the social structure. 
C)  to separate the executive from the legislature and the judiciary. 
D)  individuals can participate in electing their representatives to the government. 
E)  to change the class structure of an economy. 
A)  people make decisions in a world of scarcity. 
B)  governments can influence the social structure. 
C)  to separate the executive from the legislature and the judiciary. 
D)  individuals can participate in electing their representatives to the government. 
E)  to change the class structure of an economy.

Question 6

Exhibit 1.3
  
-Refer to Exhibit 1.3 of the Scientific Method: Step-by-Step. If Box A is 'Reject the hypothesis,' then Box B is:

Accepted Answer

A)  Formulate a hypothesis. 
B)  Modify the approach. 
C)  Reject the hypothesis 
D)  Use the hypothesis until a better one shows up. 
E)  Test the hypothesis. 
A)  Formulate a hypothesis. 
B)  Modify the approach. 
C)  Reject the hypothesis 
D)  Use the hypothesis until a better one shows up. 
E)  Test the hypothesis.

Question 7

Which of the following is the best definition of economics?

Accepted Answer

A)  An investigation of the evolutionary process of mankind 
B)  A study of society as a system of interconnected parts 
C)  A study of how people deal with the problem of scarcity 
D)  An examination of the structure and the role of the government in an economy 
E)  A study of how to conduct free and fair elections in a country 
A)  An investigation of the evolutionary process of mankind 
B)  A study of society as a system of interconnected parts 
C)  A study of how people deal with the problem of scarcity 
D)  An examination of the structure and the role of the government in an economy 
E)  A study of how to conduct free and fair elections in a country

Question 8

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 four hours instead of two hours?

Accepted Answer

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

Question 9

The "other-things-constant" assumption is also known as:

Accepted Answer

A)  ceteris paribus. 
B)  prediction. 
C)  normative. 
D)  variable. 
E)  positive. 
A)  ceteris paribus. 
B)  prediction. 
C)  normative. 
D)  variable. 
E)  positive.

Question 10

Labor is the physical and mental effort used to produce goods and services.

Accepted Answer

A) True 
 B)False

Question 11

The difference between a good and a service is that:

Accepted Answer

A)  a good helps satisfy unlimited wants, but a service does not. 
B)  a service helps satisfy unlimited wants, but a good does not. 
C)  a service is available in unlimited quantities, but a good is not. 
D)  a good is available in unlimited quantities, but a service is not. 
E)  a good is tangible, but a service is not. 
A)  a good helps satisfy unlimited wants, but a service does not. 
B)  a service helps satisfy unlimited wants, but a good does not. 
C)  a service is available in unlimited quantities, but a good is not. 
D)  a good is available in unlimited quantities, but a service is not. 
E)  a good is tangible, but a service is not.

Question 12

Economics is best described as the:

Accepted Answer

A)  study of choice when scarcity exists. 
B)  study of the development of human society. 
C)  study of the composition and structure of matter. 
D)  branch of science that uses the principles of sociology. 
E)  branch of science that is based on value judgments. 
A)  study of choice when scarcity exists. 
B)  study of the development of human society. 
C)  study of the composition and structure of matter. 
D)  branch of science that uses the principles of sociology. 
E)  branch of science that is based on value judgments.

Question 13

Sources of confusion in economic analysis include:

Accepted Answer

A)  fallacy of composition. 
B)  rational self-interest. 
C)  fallacy of segmentation. 
D)  mistake of ignoring primary effects. 
E)  making positive economic statements. 
A)  fallacy of composition. 
B)  rational self-interest. 
C)  fallacy of segmentation. 
D)  mistake of ignoring primary effects. 
E)  making positive economic statements.

Question 14

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. Sergio hires an assistant for $5 per hour. What is his marginal cost if he tutors 5 hours a week and also pays his assistant?

Accepted Answer

A)  $25 
B)  $20 
C)  $15 
D)  $10 
E)  $5 
A)  $25 
B)  $20 
C)  $15 
D)  $10 
E)  $5

Question 15

An economic model:

Accepted Answer

A)  omits critical elements. 
B)  must be presented in mathematical terms. 
C)  is used to make predictions about the real world. 
D)  can never be proven wrong if its assumptions are realistic. 
E)  produces poor predictions if it includes assumptions. 
A)  omits critical elements. 
B)  must be presented in mathematical terms. 
C)  is used to make predictions about the real world. 
D)  can never be proven wrong if its assumptions are realistic. 
E)  produces poor predictions if it includes assumptions.

Question 16

"There should be less discrimination against the elderly." This is an example of a:

Accepted Answer

A)  normative statement. 
B)  positive statement. 
C)  forecast. 
D)  theory. 
E)  prediction. 
A)  normative statement. 
B)  positive statement. 
C)  forecast. 
D)  theory. 
E)  prediction.

Question 17

The incorrect idea that if two variables are associated in time, one must necessarily cause the other is known as:

Accepted Answer

A)  the association-is-causation fallacy. 
B)  the fallacy of composition. 
C)  a primary effect. 
D)  a secondary effect. 
E)  a behavioral assumption. 
A)  the association-is-causation fallacy. 
B)  the fallacy of composition. 
C)  a primary effect. 
D)  a secondary effect. 
E)  a behavioral assumption.

Question 18

The simple circular-flow model for households and firms is an economic model that focuses on the interaction between households and firms. Which of the following statements regarding the model is correct?

Accepted Answer

A)  As the model does not include the interaction between firms and resource markets, it does not predict correctly. 
B)  As the model does not include the interaction between households and product markets, it does not predict correctly. 
C)  The model has too many simplifying assumptions, and it cannot be used to make predictions about the real world. 
D)  The model is a simplification of the real world, and it can be used to make predictions about the real world. 
E)  As the model does not include the interaction between firms and product markets, it does not predict correctly. 
A)  As the model does not include the interaction between firms and resource markets, it does not predict correctly. 
B)  As the model does not include the interaction between households and product markets, it does not predict correctly. 
C)  The model has too many simplifying assumptions, and it cannot be used to make predictions about the real world. 
D)  The model is a simplification of the real world, and it can be used to make predictions about the real world. 
E)  As the model does not include the interaction between firms and product markets, it does not predict correctly.

Question 19

Which of the following would be a topic considered in the field of macroeconomics?

Accepted Answer

A)  The study of the growth of the Chinese economy 
B)  The study of the causes of the relocation of U.S. manufacturing firms to China 
C)  The study of the differences in wages between men and women in the United States 
D)  The study of the effect of rent control on the housing market in New York City 
E)  The study of the impact of environmental regulations on the production levels of firms 
A)  The study of the growth of the Chinese economy 
B)  The study of the causes of the relocation of U.S. manufacturing firms to China 
C)  The study of the differences in wages between men and women in the United States 
D)  The study of the effect of rent control on the housing market in New York City 
E)  The study of the impact of environmental regulations on the production levels of firms

Question 20

An economic model that sometimes makes incorrect predictions can be used by economic decision makers:

Accepted Answer

A)  under no circumstances. 
B)  only if it assumes a positive correlation between the variables being analyzed. 
C)  if it is mathematical. 
D)  if it is simple enough for a child to understand. 
E)  until a better model is developed. 
A)  under no circumstances. 
B)  only if it assumes a positive correlation between the variables being analyzed. 
C)  if it is mathematical. 
D)  if it is simple enough for a child to understand. 
E)  until a better model is developed.

A good or service is considered scarce if:

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

One problem with rent control is that policymakers often ignore its secondary effects.

Scarcity:

Economics is best defined as the study of how:

Exhibit 1.3 -Refer to Exhibit 1.3 of the Scientific Method: Step-by-Step. If Box A is 'Reject the hypothesis,' then Box B is:

Which of the following is the best definition of economics?

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 four hours instead of two hours?

The "other-things-constant" assumption is also known as:

Labor is the physical and mental effort used to produce goods and services.

The difference between a good and a service is that:

Economics is best described as the:

Sources of confusion in economic analysis include:

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. Sergio hires an assistant for $5 per hour. What is his marginal cost if he tutors 5 hours a week and also pays his assistant?

An economic model:

"There should be less discrimination against the elderly." This is an example of a:

The incorrect idea that if two variables are associated in time, one must necessarily cause the other is known as:

The simple circular-flow model for households and firms is an economic model that focuses on the interaction between households and firms. Which of the following statements regarding the model is correct?

Which of the following would be a topic considered in the field of macroeconomics?

An economic model that sometimes makes incorrect predictions can be used by economic decision makers:

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.

A good or service is considered scarce if:

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

One problem with rent control is that policymakers often ignore its secondary effects.

Scarcity:

Economics is best defined as the study of how:

Exhibit 1.3 -Refer to Exhibit 1.3 of the Scientific Method: Step-by-Step. If Box A is 'Reject the hypothesis,' then Box B is:

Which of the following is the best definition of economics?

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 four hours instead of two hours?

The "other-things-constant" assumption is also known as:

Labor is the physical and mental effort used to produce goods and services.

The difference between a good and a service is that:

Economics is best described as the:

Sources of confusion in economic analysis include:

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. Sergio hires an assistant for $5 per hour. What is his marginal cost if he tutors 5 hours a week and also pays his assistant?

An economic model:

"There should be less discrimination against the elderly." This is an example of a:

The incorrect idea that if two variables are associated in time, one must necessarily cause the other is known as:

The simple circular-flow model for households and firms is an economic model that focuses on the interaction between households and firms. Which of the following statements regarding the model is correct?

Which of the following would be a topic considered in the field of macroeconomics?

An economic model that sometimes makes incorrect predictions can be used by economic decision makers:

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. Sergio hires an assistant for $5 per hour. What is his marginal cost if he tutors 5 hours a week and also pays his assistant?