Question 1

The impact of carbon taxes on the energy usage of individual households and firms is studied under ________.

Accepted Answer

A)  microeconomics 
B)  macroeconomics 
C)  normative economics 
D)  positive economics 
A)  microeconomics 
B)  macroeconomics 
C)  normative economics 
D)  positive economics

Question 2

Which of the following statements is true of equilibrium?

Accepted Answer

A)  Economic agents have an incentive to divert from equilibrium. 
B)  Each economic agent can reach equilibrium irrespective of the actions of others. 
C)  In equilibrium, the opportunity cost of the choices made by each economic agent is zero. 
D)  In equilibrium, all economic agents are choosing the best feasible option simultaneously. 
A)  Economic agents have an incentive to divert from equilibrium. 
B)  Each economic agent can reach equilibrium irrespective of the actions of others. 
C)  In equilibrium, the opportunity cost of the choices made by each economic agent is zero. 
D)  In equilibrium, all economic agents are choosing the best feasible option simultaneously.

Question 3

Assume that a house is rented by four students.When it comes to keeping the house clean,each of the four roommates has an incentive to leave the cleaning to the others.As a result,the house is never clean.Which of the following is the best solution to this problem of free riding?

Accepted Answer

A)  Asking every roommate to clean the house if they dirty it 
B)  Requiring every roommate to contribute to a cleaning service 
C)  Requiring each roommate to pay more toward the house rent and groceries 
D)  Assigning one roommate the responsibility of watching over the other students 
A)  Asking every roommate to clean the house if they dirty it 
B)  Requiring every roommate to contribute to a cleaning service 
C)  Requiring each roommate to pay more toward the house rent and groceries 
D)  Assigning one roommate the responsibility of watching over the other students

Question 4

A student has two options: she can either surf the web or work part-time.Working part-time pays her $20 per hour.What is the student's opportunity cost of surfing the web for 5 hours?

Accepted Answer

A)  $4 
B)  $20 
C)  $50 
D)  $100 
A)  $4 
B)  $20 
C)  $50 
D)  $100

Question 5

Which of the following statements correctly highlights the difference between microeconomics and macroeconomics?

Accepted Answer

A)  Microeconomics is descriptive, whereas macroeconomics is advisory. 
B)  Microeconomics primarily deals with positive analysis, whereas macroeconomics primarily deals with normative analysis. 
C)  Microeconomics deals with a small part of the economy, whereas macroeconomics deals with aggregate economic performance. 
D)  Microeconomics describes what economic agents actually do, whereas macroeconomics describes what economic agents ought to do. 
A)  Microeconomics is descriptive, whereas macroeconomics is advisory. 
B)  Microeconomics primarily deals with positive analysis, whereas macroeconomics primarily deals with normative analysis. 
C)  Microeconomics deals with a small part of the economy, whereas macroeconomics deals with aggregate economic performance. 
D)  Microeconomics describes what economic agents actually do, whereas macroeconomics describes what economic agents ought to do.

Question 6

Empiricism is analysis that uses ________ to test theories.

Accepted Answer

A)  data 
B)  illustrations 
C)  philosophy 
D)  value judgments 
A)  data 
B)  illustrations 
C)  philosophy 
D)  value judgments

Question 7

Which of the following correctly identifies the trade-off that a budget constraint represents?

Accepted Answer

A)  The amount of income that must be given up to obtain an additional unit of a good 
B)  The maximum amount of two goods that a consumer can purchase given his income 
C)  The optimum combination of goods that a consumer with a given income should purchase 
D)  The amount of one good that has to be given up to purchase an additional unit of the other good 
A)  The amount of income that must be given up to obtain an additional unit of a good 
B)  The maximum amount of two goods that a consumer can purchase given his income 
C)  The optimum combination of goods that a consumer with a given income should purchase 
D)  The amount of one good that has to be given up to purchase an additional unit of the other good

Question 8

________ economics prescribes what an individual or society ought to do.

Accepted Answer

A)  Positive 
B)  Negative 
C)  Behavioral 
D)  Normative 
A)  Positive 
B)  Negative 
C)  Behavioral 
D)  Normative

Question 9

Which of the following is an example of a normative economic statement?

Accepted Answer

A)  An increase in government expenditure will lead to an increase in well-being. 
B)  An increase in the money supply will lead to an increase in the inflation rate. 
C)  An increase in income is accompanied by an increase in savings. 
D)  An increase in income is accompanied by an increase in consumption. 
A)  An increase in government expenditure will lead to an increase in well-being. 
B)  An increase in the money supply will lead to an increase in the inflation rate. 
C)  An increase in income is accompanied by an increase in savings. 
D)  An increase in income is accompanied by an increase in consumption.

Question 10

Define the three key principles of economics.

Accepted Answer

i)Optimization: optimization refers to t

Question 11

Maria has to choose between driving and taking a train to destination A. Traveling by train will cost her $400 and will take 4 hours. Driving to destination A takes 6 hours, and the required amount of gasoline costs $250. Her opportunity cost of time is $15 per hour.
-Refer to the scenario above.If Maria borrows her parents' car and pays for only the gasoline,what is her total cost of driving to destination A?

Accepted Answer

A)  $90 
B)  $250 
C)  $300 
D)  $340 
A)  $90 
B)  $250 
C)  $300 
D)  $340

Question 12

Which of the following best describes equilibrium?

Accepted Answer

A)  A situation where the government intervenes to allocate resources 
B)  A situation where only one individual or firm makes an optimal decision 
C)  A situation where no economic agent would benefit by changing his or her behavior 
D)  A situation where economic agents do not optimize as they do not have perfect information 
A)  A situation where the government intervenes to allocate resources 
B)  A situation where only one individual or firm makes an optimal decision 
C)  A situation where no economic agent would benefit by changing his or her behavior 
D)  A situation where economic agents do not optimize as they do not have perfect information

Question 13

The following table shows the various combinations of rugs and chairs that the consumer can buy with $100:
  
-Sam pays $600 for 30 days of guitar classes.He attends an hour-long class every day.If,instead of attending class,he works at a part-time job,he would be paid $5 an hour.Alternatively,he could work at a fast-food outlet and earn $9 per hour.Once he has already paid a nonrefundable fee of $600 to enroll in the class,what is his opportunity cost of attending each hour of class?

Accepted Answer

Sam's opportunity cost will measure the

Question 14

What is the rationale behind empiricism in economic analysis?

Accepted Answer

Empiricism refers to the use of data to

Question 15

Which of the following statements is true?

Accepted Answer

A)  Positive economics describes what people ought to do. 
B)  Normative economics describes what people actually do. 
C)  Positive economics generates objective descriptions that can be verified with data. 
D)  Normative economics is free from the value judgments, tastes, and preferences of economic agents. 
A)  Positive economics describes what people ought to do. 
B)  Normative economics describes what people actually do. 
C)  Positive economics generates objective descriptions that can be verified with data. 
D)  Normative economics is free from the value judgments, tastes, and preferences of economic agents.

Question 16

Economics is primarily the study of ________.

Accepted Answer

A)  the relationship between matter and its motion 
B)  agents' choices and their impact on society 
C)  events of the past and how these events affect present human behavior 
D)  the different types of governments and the impact of their policies on a nation 
A)  the relationship between matter and its motion 
B)  agents' choices and their impact on society 
C)  events of the past and how these events affect present human behavior 
D)  the different types of governments and the impact of their policies on a nation

Question 17

Which of the following is a topic studied by microeconomists?

Accepted Answer

A)  Energy consumption by a firm 
B)  Nationwide inflation rate 
C)  Economic growth as a means to alleviate poverty 
D)  Aggregate demand and aggregate supply in an economy 
A)  Energy consumption by a firm 
B)  Nationwide inflation rate 
C)  Economic growth as a means to alleviate poverty 
D)  Aggregate demand and aggregate supply in an economy

Question 18

Define economics.Who are economic agents?

Accepted Answer

Economics is the study of how

Question 19

Which of the following is an example of a positive economic statement?

Accepted Answer

A)  The pricing policies followed in single-producer markets should be strictly supervised. 
B)  Unemployment is more harmful than inflation. 
C)  Higher interest rates will encourage more savings. 
D)  Pollution is one of the most serious economic problems. 
A)  The pricing policies followed in single-producer markets should be strictly supervised. 
B)  Unemployment is more harmful than inflation. 
C)  Higher interest rates will encourage more savings. 
D)  Pollution is one of the most serious economic problems.

Question 20

Which of the following statements is true?

Accepted Answer

A)  Data help establish whether theories match reality. 
B)  Data are not an integral part of optimization analysis. 
C)  Empiricism is not an integral part of optimization analysis. 
D)  Empiricism refers to the testing of ideas without using data. 
A)  Data help establish whether theories match reality. 
B)  Data are not an integral part of optimization analysis. 
C)  Empiricism is not an integral part of optimization analysis. 
D)  Empiricism refers to the testing of ideas without using data.

The impact of carbon taxes on the energy usage of individual households and firms is studied under ________.

Which of the following statements is true of equilibrium?

Assume that a house is rented by four students.When it comes to keeping the house clean,each of the four roommates has an incentive to leave the cleaning to the others.As a result,the house is never clean.Which of the following is the best solution to this problem of free riding?

A student has two options: she can either surf the web or work part-time.Working part-time pays her $20 per hour.What is the student's opportunity cost of surfing the web for 5 hours?

Which of the following statements correctly highlights the difference between microeconomics and macroeconomics?

Empiricism is analysis that uses ________ to test theories.

Which of the following correctly identifies the trade-off that a budget constraint represents?

________ economics prescribes what an individual or society ought to do.

Which of the following is an example of a normative economic statement?

Define the three key principles of economics.

Which of the following best describes equilibrium?

What is the rationale behind empiricism in economic analysis?

Which of the following statements is true?

Economics is primarily the study of ________.

Which of the following is a topic studied by microeconomists?

Define economics.Who are economic agents?

Which of the following is an example of a positive economic statement?

Which of the following statements is true?

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, supply, and Equilibrium

Consumers and Incentives

Sellers and Incentives

Perfect Competition and the Invisible Hand

Trade

Externalities and Public Goods

The Government in the Economy: Taxation and Regulation

Markets for Factors of Production

Monopoly

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk

The Economics of Information

Auctions and Bargaining

Social Economics

Filters

Exam 1: The Principles and Practice of Economics

The impact of carbon taxes on the energy usage of individual households and firms is studied under ________.

Which of the following statements is true of equilibrium?

Assume that a house is rented by four students.When it comes to keeping the house clean,each of the four roommates has an incentive to leave the cleaning to the others.As a result,the house is never clean.Which of the following is the best solution to this problem of free riding?

A student has two options: she can either surf the web or work part-time.Working part-time pays her $20 per hour.What is the student's opportunity cost of surfing the web for 5 hours?

Which of the following statements correctly highlights the difference between microeconomics and macroeconomics?

Empiricism is analysis that uses ________ to test theories.

Which of the following correctly identifies the trade-off that a budget constraint represents?

________ economics prescribes what an individual or society ought to do.

Which of the following is an example of a normative economic statement?

Define the three key principles of economics.

Which of the following best describes equilibrium?

What is the rationale behind empiricism in economic analysis?

Which of the following statements is true?

Economics is primarily the study of ________.

Which of the following is a topic studied by microeconomists?

Define economics.Who are economic agents?

Which of the following is an example of a positive economic statement?

Which of the following statements is true?

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, supply, and Equilibrium

Consumers and Incentives

Sellers and Incentives

Perfect Competition and the Invisible Hand

Trade

Externalities and Public Goods

The Government in the Economy: Taxation and Regulation

Markets for Factors of Production

Monopoly

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk

The Economics of Information

Auctions and Bargaining

Social Economics

Filters