Question 1

Which of the following statements is true?

Accepted Answer

A)  A budget constraint remains the same for a consumer at all levels of income. 
B)  A budget constraint quantifies the trade-offs that economic agents face while making decisions. 
C)  A budget constraint is a function of the income of the consumer and not of the prices of the goods and services available for consumption. 
D)  A budget constraint is based on the minimum amount of money that an economic agent can spend on goods and services. 
A)  A budget constraint remains the same for a consumer at all levels of income. 
B)  A budget constraint quantifies the trade-offs that economic agents face while making decisions. 
C)  A budget constraint is a function of the income of the consumer and not of the prices of the goods and services available for consumption. 
D)  A budget constraint is based on the minimum amount of money that an economic agent can spend on goods and services.

Question 2

Students in a class are discussing how a firm that does not face any competition in a market should decide how many units of output to supply in the market.Would this discussion be considered microeconomic or macroeconomic analysis?

Accepted Answer

Microeconomics is the study of how indiv

Question 3

In economics,scarcity refers to the situation of ________.

Accepted Answer

A)  making the best use of limited information 
B)  having more wants than the amount of available resources 
C)  the government rationing available goods and services 
D)  sellers setting the prices of their products too high for people to be able to afford them 
A)  making the best use of limited information 
B)  having more wants than the amount of available resources 
C)  the government rationing available goods and services 
D)  sellers setting the prices of their products too high for people to be able to afford them

Question 4

Feasible options are options that are ________.

Accepted Answer

A)  available and affordable 
B)  available but not affordable 
C)  affordable but not available 
D)  optimal for an economic agent 
A)  available and affordable 
B)  available but not affordable 
C)  affordable but not available 
D)  optimal for an economic agent

Question 5

Classify the following as positive economics statements or normative economics statements.
a)An increase in an individual's income increases consumption,but by an amount less than the increase in income.
b)The government should undertake the responsibility of providing healthcare to all its citizens.
c)The government should fund infrastructure projects to foster economic development.
d)An increase in net exports has a positive effect on a country's national income.
e)The gross domestic product of India is increasing at 5 percent annually.

Accepted Answer

a)Positive economic statement

Question 6

Economic reasoning allows economic agents to make decisions ________.

Accepted Answer

A)  by random selection 
B)  by comparing the costs and benefits of various options 
C)  by replicating the choices made by other economic agents 
D)  solely on the basis of tastes and preferences for various options 
A)  by random selection 
B)  by comparing the costs and benefits of various options 
C)  by replicating the choices made by other economic agents 
D)  solely on the basis of tastes and preferences for various options

Question 7

When a market is in equilibrium,both buyers and sellers do not perceive a benefit from changing their behavior.Why?

Accepted Answer

In most economic situations,an economic

Question 8

Which of the following is a topic studied by macroeconomists?

Accepted Answer

A)  Aggregate demand in an economy 
B)  Price determination by a firm 
C)  The consumption choice of a single household 
D)  The production decision of a firm 
A)  Aggregate demand in an economy 
B)  Price determination by a firm 
C)  The consumption choice of a single household 
D)  The production decision of a firm

Question 9

Which of the following statements is true?

Accepted Answer

A)  Optimization requires individuals to foresee the future perfectly. 
B)  An optimizing individual need not consider the risks involved in various choices. 
C)  An optimizing individual is also likely to exhibit rationality. 
D)  The less information that is available, the easier it is to make optimal decisions. 
A)  Optimization requires individuals to foresee the future perfectly. 
B)  An optimizing individual need not consider the risks involved in various choices. 
C)  An optimizing individual is also likely to exhibit rationality. 
D)  The less information that is available, the easier it is to make optimal decisions.

Question 10

A budget constraint represents the ________.

Accepted Answer

A)  total money income that an agent earns in different time periods 
B)  goods and services an economic agent can choose given her limited income 
C)  inequality in the incomes earned by various economic agents 
D)  aggregate income earned by all firms in an economy 
A)  total money income that an agent earns in different time periods 
B)  goods and services an economic agent can choose given her limited income 
C)  inequality in the incomes earned by various economic agents 
D)  aggregate income earned by all firms in an economy

Question 11

Which of the following statements is true?

Accepted Answer

A)  Testing with data is essential to developing a good theory. 
B)  The knowledge of economics complicates decision making. 
C)  Cost-benefit analysis can be applied only to limited economic decisions. 
D)  Economics is more of a theoretical subject with limited applications in the real world. 
A)  Testing with data is essential to developing a good theory. 
B)  The knowledge of economics complicates decision making. 
C)  Cost-benefit analysis can be applied only to limited economic decisions. 
D)  Economics is more of a theoretical subject with limited applications in the real world.

Question 12

Who among the following is an example of a free rider?

Accepted Answer

A)  An individual who sneaks into a music concert 
B)  A consumer who buys her groceries from a nearby store 
C)  A taxpayer who exercises in the public park near his house 
D)  A club member who makes voluntary contributions to the club 
A)  An individual who sneaks into a music concert 
B)  A consumer who buys her groceries from a nearby store 
C)  A taxpayer who exercises in the public park near his house 
D)  A club member who makes voluntary contributions to the club

Question 13

Explain the term "free riders."

Accepted Answer

Free riders are people who do not contri

Question 14

A consumer has $40 that he wants to spend.He faces four choices: a camera that costs $60,a cell phone that costs $150,a book that costs $10,and a Bluetooth speaker that costs $45.Which of the following is a feasible option for the consumer?

Accepted Answer

A)  The book 
B)  The camera 
C)  The cell phone 
D)  The Bluetooth speaker 
A)  The book 
B)  The camera 
C)  The cell phone 
D)  The Bluetooth speaker

Question 15

Which of the following statements is true?

Accepted Answer

A)  Rational economic agents maximize more than just monetary income. 
B)  An individual does not require information to make optimal decisions. 
C)  The principle of optimization is only accurate when it comes to making monetary decisions. 
D)  It is not necessary to consider the risks of alternatives while making an optimal decision. 
A)  Rational economic agents maximize more than just monetary income. 
B)  An individual does not require information to make optimal decisions. 
C)  The principle of optimization is only accurate when it comes to making monetary decisions. 
D)  It is not necessary to consider the risks of alternatives while making an optimal decision.

Question 16

Economics is primarily the study of ________.

Accepted Answer

A)  the mental functions and behavior of individuals and groups 
B)  the state, nation, government, and politics and policies of governments 
C)  the problems related to the existence and evolution of society 
D)  how agents choose to allocate scarce resources and how these choices affect society 
A)  the mental functions and behavior of individuals and groups 
B)  the state, nation, government, and politics and policies of governments 
C)  the problems related to the existence and evolution of society 
D)  how agents choose to allocate scarce resources and how these choices affect society

Question 17

When the market for a commodity is in equilibrium,________.

Accepted Answer

A)  no economic agent will want to change his or her behavior 
B)  there will still be some unsold stock of the commodity 
C)  all buyers of the commodity will want to change their behavior 
D)  all sellers of the commodity will want to change their behavior 
A)  no economic agent will want to change his or her behavior 
B)  there will still be some unsold stock of the commodity 
C)  all buyers of the commodity will want to change their behavior 
D)  all sellers of the commodity will want to change their behavior

Question 18

Suppose the market for pizza slices is in equilibrium at a price of $1 per slice.What conditions are likely to be satisfied in the pizza slice market?

Accepted Answer

The conditions that will be satisfied wh

Question 19

Kevin has a lot of free time,and he decides to pick up a new hobby.He has two options-he can take art classes or sign up for cooking classes.He estimates that the art classes would cost him $70 and would provide him with a benefit of $100.In contrast,the cooking classes would cost him $120 but provide him benefits worth $160.Use cost-benefit analysis to arrive at the optimum choice for Kevin.

Accepted Answer

Kevin's optimal choice depends on the ne

Question 20

Which of the following is a feature of a good theory?

Accepted Answer

A)  A good theory does not rely on data. 
B)  A good theory cannot be tested with data. 
C)  A good theory is free from approximations. 
D)  A good theory closely predicts actual behavior. 
A)  A good theory does not rely on data. 
B)  A good theory cannot be tested with data. 
C)  A good theory is free from approximations. 
D)  A good theory closely predicts actual behavior.

Which of the following statements is true?

Students in a class are discussing how a firm that does not face any competition in a market should decide how many units of output to supply in the market.Would this discussion be considered microeconomic or macroeconomic analysis?

In economics,scarcity refers to the situation of ________.

Feasible options are options that are ________.

Economic reasoning allows economic agents to make decisions ________.

When a market is in equilibrium,both buyers and sellers do not perceive a benefit from changing their behavior.Why?

Which of the following is a topic studied by macroeconomists?

Which of the following statements is true?

A budget constraint represents the ________.

Which of the following statements is true?

Who among the following is an example of a free rider?

Explain the term "free riders."

A consumer has $40 that he wants to spend.He faces four choices: a camera that costs $60,a cell phone that costs $150,a book that costs $10,and a Bluetooth speaker that costs $45.Which of the following is a feasible option for the consumer?

Which of the following statements is true?

Economics is primarily the study of ________.

When the market for a commodity is in equilibrium,________.

Suppose the market for pizza slices is in equilibrium at a price of $1 per slice.What conditions are likely to be satisfied in the pizza slice market?

Which of the following is a feature of a good theory?

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

Which of the following statements is true?

Students in a class are discussing how a firm that does not face any competition in a market should decide how many units of output to supply in the market.Would this discussion be considered microeconomic or macroeconomic analysis?

In economics,scarcity refers to the situation of ________.

Feasible options are options that are ________.

Economic reasoning allows economic agents to make decisions ________.

When a market is in equilibrium,both buyers and sellers do not perceive a benefit from changing their behavior.Why?

Which of the following is a topic studied by macroeconomists?

Which of the following statements is true?

A budget constraint represents the ________.

Which of the following statements is true?

Who among the following is an example of a free rider?

Explain the term "free riders."

A consumer has $40 that he wants to spend.He faces four choices: a camera that costs $60,a cell phone that costs $150,a book that costs $10,and a Bluetooth speaker that costs $45.Which of the following is a feasible option for the consumer?

Which of the following statements is true?

Economics is primarily the study of ________.

When the market for a commodity is in equilibrium,________.

Suppose the market for pizza slices is in equilibrium at a price of $1 per slice.What conditions are likely to be satisfied in the pizza slice market?

Which of the following is a feature of a good theory?

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