Question 1

A normative economic statement:

Accepted Answer

A)  is a hypothesis used to test economic theory. 
B)  is a statement of fact. 
C)  is a statement of what ought to be, not what is. 
D)  indicates what will occur if certain assumptions are true. 
E)  enables economists to test hypotheses. 
A)  is a hypothesis used to test economic theory. 
B)  is a statement of fact. 
C)  is a statement of what ought to be, not what is. 
D)  indicates what will occur if certain assumptions are true. 
E)  enables economists to test hypotheses.

Question 2

The assumption of rational self-interest is an example of a(n):

Accepted Answer

A)  other-things-constant assumption. 
B)  behavioral assumption. 
C)  certainty. 
D)  variable. 
E)  incorrect decision. 
A)  other-things-constant assumption. 
B)  behavioral assumption. 
C)  certainty. 
D)  variable. 
E)  incorrect decision.

Question 3

When constructing an economic model, economists:

Accepted Answer

A)  rely mostly on their own value judgments and ignore the far more complex world of facts. 
B)  always try to duplicate reality by including all available information. 
C)  use assumptions that are true for the individual but never true for the whole economy. 
D)  must rely on assumptions for the sake of simplification. 
E)  are primarily concerned with making realistic assumptions. 
A)  rely mostly on their own value judgments and ignore the far more complex world of facts. 
B)  always try to duplicate reality by including all available information. 
C)  use assumptions that are true for the individual but never true for the whole economy. 
D)  must rely on assumptions for the sake of simplification. 
E)  are primarily concerned with making realistic assumptions.

Question 4

One might commit the fallacy of composition by concluding that:

Accepted Answer

A)  statements that are true during prosperity are not necessarily true during depression. 
B)  what is good for the individual is necessarily good for the group. 
C)  an event that precedes another is necessarily the cause of the latter. 
D)  intentions need not coincide with actions. 
E)  the composition of a complex product is not revealed by its exterior appearance. 
A)  statements that are true during prosperity are not necessarily true during depression. 
B)  what is good for the individual is necessarily good for the group. 
C)  an event that precedes another is necessarily the cause of the latter. 
D)  intentions need not coincide with actions. 
E)  the composition of a complex product is not revealed by its exterior appearance.

Question 5

Economic information:

Accepted Answer

A)  is usually scarce and costly to acquire. 
B)  is usually available free to any decision maker. 
C)  is usually not required for rational decision making. 
D)  must be complete before any decision is made. 
E)  is usually useful only to governments. 
A)  is usually scarce and costly to acquire. 
B)  is usually available free to any decision maker. 
C)  is usually not required for rational decision making. 
D)  must be complete before any decision is made. 
E)  is usually useful only to governments.

Question 6

Which of the following is not a part of the scientific method in economics?

Accepted Answer

A)  making normative statements 
B)  identifying the question 
C)  formulating a hypothesis 
D)  defining the relevant variables 
E)  specifying assumptions 
A)  making normative statements 
B)  identifying the question 
C)  formulating a hypothesis 
D)  defining the relevant variables 
E)  specifying assumptions

Question 7

Alicia makes the statement that every time she eats chocolate, it starts to rain. Alicia is committing the:

Accepted Answer

A)  fallacy of composition. 
B)  fallacy that association is causation. 
C)  fallacy of segmentation. 
D)  mistake of ignoring secondary effects. 
E)  mistake of rejecting a null hypothesis. 
A)  fallacy of composition. 
B)  fallacy that association is causation. 
C)  fallacy of segmentation. 
D)  mistake of ignoring secondary effects. 
E)  mistake of rejecting a null hypothesis.

Question 8

Exhibit 1.3
  
-Refer to Exhibit 1.3 of the Scientific Method: Step-by-Step. Step 2 is:

Accepted Answer

A)  Identify the question and define relevant variables. 
B)  Test the hypothesis. 
C)  Formulate a hypothesis. 
D)  Specify assumptions. 
E)  Use the hypothesis until a better one shows up. 
A)  Identify the question and define relevant variables. 
B)  Test the hypothesis. 
C)  Formulate a hypothesis. 
D)  Specify assumptions. 
E)  Use the hypothesis until a better one shows up.

Question 9

"There should be less discrimination against women" is an example of a positive economic statement.

Accepted Answer

A) True 
 B)False

Question 10

When economists say that people act as rational decision makers, they mean that:

Accepted Answer

A)  people act on the basis of their instincts. 
B)  once a pattern of behavior has been established, people tend to become set in their ways. 
C)  people respond in predictable ways to changes in costs and benefits. 
D)  people rarely make errors when permitted to make transactions. 
E)  once made, decisions are never reversed. 
A)  people act on the basis of their instincts. 
B)  once a pattern of behavior has been established, people tend to become set in their ways. 
C)  people respond in predictable ways to changes in costs and benefits. 
D)  people rarely make errors when permitted to make transactions. 
E)  once made, decisions are never reversed.

Question 11

A rational individual gives more to charity when such contributions receive favorable tax treatment.

Accepted Answer

A) True 
 B)False

Question 12

Economic theory allows economists to predict the behavior of a specific person or firm.

Accepted Answer

A) True 
 B)False

Question 13

The basic purpose of economic models is to:

Accepted Answer

A)  make simplifying assumptions about the real world. 
B)  explain reality in all its complexity. 
C)  collect empirical data to support facts. 
D)  construct situations where controlled experiments can be carried out. 
E)  explain and predict events. 
A)  make simplifying assumptions about the real world. 
B)  explain reality in all its complexity. 
C)  collect empirical data to support facts. 
D)  construct situations where controlled experiments can be carried out. 
E)  explain and predict events.

Question 14

The determination of price and output in specific markets is studied in:

Accepted Answer

A)  econometrics. 
B)  normative economics. 
C)  positive economics. 
D)  microeconomics. 
E)  macroeconomics. 
A)  econometrics. 
B)  normative economics. 
C)  positive economics. 
D)  microeconomics. 
E)  macroeconomics.

Question 15

The interaction of economic decision makers:

Accepted Answer

A)  is not based on marginal analysis. 
B)  determines how an economy's resources are allocated. 
C)  is not important in economic analysis. 
D)  occurs infrequently. 
E)  does not involve ordinary citizens. 
A)  is not based on marginal analysis. 
B)  determines how an economy's resources are allocated. 
C)  is not important in economic analysis. 
D)  occurs infrequently. 
E)  does not involve ordinary citizens.

Question 16

A good economic theory brings clarity to chaos.

Accepted Answer

A) True 
 B)False

Question 17

If the marginal cost of adding a new line of products is $10 million, then Amazon should add the product

Accepted Answer

A)  if marginal costs fall. 
B)  if marginal benefits fall. 
C)  if marginal benefits are less than $10 million. 
D)  if marginal benefits are more than $10 million. 
E)  if Amazon does not operate at a loss. 
A)  if marginal costs fall. 
B)  if marginal benefits fall. 
C)  if marginal benefits are less than $10 million. 
D)  if marginal benefits are more than $10 million. 
E)  if Amazon does not operate at a loss.

Question 18

Sara is considering the purchase of a new car. Rational self-interest demands that she do exhaustive research to acquire every bit of information possible about her potential options.

Accepted Answer

A) True 
 B)False

Question 19

_____ are unintended consequences of economic actions that may develop slowly over time as people react to events.

Accepted Answer

A)  Association-is-causation fallacies 
B)  Fallacies of composition 
C)  Primary effects 
D)  Secondary effects 
E)  Behavioral assumptions 
A)  Association-is-causation fallacies 
B)  Fallacies of composition 
C)  Primary effects 
D)  Secondary effects 
E)  Behavioral assumptions

Question 20

Economists generally believe that:

Accepted Answer

A)  a rational individual will pursue an activity if the average cost of the activity is equal to the total benefit from it. 
B)  a rational individual will pursue an activity if the total benefit of the activity is more than the total cost of the activity. 
C)  a rational individual will pursue an activity if the total cost of the activity is more than the total benefit from it. 
D)  economic decisions result from random behavior. 
E)  decision makers never make mistakes. 
A)  a rational individual will pursue an activity if the average cost of the activity is equal to the total benefit from it. 
B)  a rational individual will pursue an activity if the total benefit of the activity is more than the total cost of the activity. 
C)  a rational individual will pursue an activity if the total cost of the activity is more than the total benefit from it. 
D)  economic decisions result from random behavior. 
E)  decision makers never make mistakes.

A normative economic statement:

The assumption of rational self-interest is an example of a(n):

When constructing an economic model, economists:

One might commit the fallacy of composition by concluding that:

Economic information:

Which of the following is not a part of the scientific method in economics?

Alicia makes the statement that every time she eats chocolate, it starts to rain. Alicia is committing the:

Exhibit 1.3 -Refer to Exhibit 1.3 of the Scientific Method: Step-by-Step. Step 2 is:

"There should be less discrimination against women" is an example of a positive economic statement.

When economists say that people act as rational decision makers, they mean that:

A rational individual gives more to charity when such contributions receive favorable tax treatment.

Economic theory allows economists to predict the behavior of a specific person or firm.

The basic purpose of economic models is to:

The determination of price and output in specific markets is studied in:

The interaction of economic decision makers:

A good economic theory brings clarity to chaos.

If the marginal cost of adding a new line of products is $10 million, then Amazon should add the product

Sara is considering the purchase of a new car. Rational self-interest demands that she do exhaustive research to acquire every bit of information possible about her potential options.

_____ are unintended consequences of economic actions that may develop slowly over time as people react to events.

Economists generally believe that:

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 normative economic statement:

The assumption of rational self-interest is an example of a(n):

When constructing an economic model, economists:

One might commit the fallacy of composition by concluding that:

Economic information:

Which of the following is not a part of the scientific method in economics?

Alicia makes the statement that every time she eats chocolate, it starts to rain. Alicia is committing the:

Exhibit 1.3 -Refer to Exhibit 1.3 of the Scientific Method: Step-by-Step. Step 2 is:

"There should be less discrimination against women" is an example of a positive economic statement.

When economists say that people act as rational decision makers, they mean that:

A rational individual gives more to charity when such contributions receive favorable tax treatment.

Economic theory allows economists to predict the behavior of a specific person or firm.

The basic purpose of economic models is to:

The determination of price and output in specific markets is studied in:

The interaction of economic decision makers:

A good economic theory brings clarity to chaos.

If the marginal cost of adding a new line of products is $10 million, then Amazon should add the product

Sara is considering the purchase of a new car. Rational self-interest demands that she do exhaustive research to acquire every bit of information possible about her potential options.

_____ are unintended consequences of economic actions that may develop slowly over time as people react to events.

Economists generally believe that:

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