Question 1

The price of a good is

Accepted Answer

A)  always equal to the cost of producing the good. 
B)  never affected by the number of buyers and sellers. 
C)  usually determined in a market. 
D)  None of the above 
A)  always equal to the cost of producing the good. 
B)  never affected by the number of buyers and sellers. 
C)  usually determined in a market. 
D)  None of the above

Question 2

The analysis of the competition between Apple and Samsung in the smartphone market is based on

Accepted Answer

A)  microeconomic model. 
B)  educated guessing. 
C)  intuitive reasoning. 
D)  consumer surveys. 
A)  microeconomic model. 
B)  educated guessing. 
C)  intuitive reasoning. 
D)  consumer surveys.

Question 3

The flu vaccination example in Section 1.1 of the textbook is an example of how policy makers may cope with

Accepted Answer

A)  scarcity of medical treatment. 
B)  scarcity of patients. 
C)  scarcity of policy makers. 
D)  answering the question of how to produce. 
A)  scarcity of medical treatment. 
B)  scarcity of patients. 
C)  scarcity of policy makers. 
D)  answering the question of how to produce.

Question 4

"If fines for speeding when driving increase,fewer accidents will occur" is an example of a(n)

Accepted Answer

A)  positive statement. 
B)  normative statement. 
C)  negative statement. 
D)  inverse statement. 
A)  positive statement. 
B)  normative statement. 
C)  negative statement. 
D)  inverse statement.

Question 5

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

Accepted Answer

A)  Since this good is bad for you, you should not consume it. 
B)  This good has bad health effects. 
C)  If you consume this good, you will get sick. 
D)  People usually get sick after consuming this good. 
A)  Since this good is bad for you, you should not consume it. 
B)  This good has bad health effects. 
C)  If you consume this good, you will get sick. 
D)  People usually get sick after consuming this good.

Question 6

Every economic model should include money as a variable.This statement is

Accepted Answer

A)  true, because every transaction in the economy uses money. 
B)  true, because the federal reserve is very important. 
C)  false, because some transactions in the economy are transacted without money. 
D)  false, because a model can get unnecessarily complex if it includes money. 
A)  true, because every transaction in the economy uses money. 
B)  true, because the federal reserve is very important. 
C)  false, because some transactions in the economy are transacted without money. 
D)  false, because a model can get unnecessarily complex if it includes money.

Question 7

For the following, please answer "True" or "False" and explain why.
-If a model fits reality but doesn't generate testable predictions,it is of little value to economists.

Accepted Answer

A) True 
 B)False

Question 8

If a model's predictions are correct,then

Accepted Answer

A)  its assumptions must have been correct. 
B)  it is proven to be correct. 
C)  Both A and B above. 
D)  None of the above. 
A)  its assumptions must have been correct. 
B)  it is proven to be correct. 
C)  Both A and B above. 
D)  None of the above.

Question 9

Economic Policy of the government is often based on

Accepted Answer

A)  microeconomic models. 
B)  educated guessing. 
C)  intuitive reasoning. 
D)  hints. 
A)  microeconomic models. 
B)  educated guessing. 
C)  intuitive reasoning. 
D)  hints.

Question 10

Microeconomics is often called

Accepted Answer

A)  price theory. 
B)  decision science. 
C)  scarcity. 
D)  resource theory. 
A)  price theory. 
B)  decision science. 
C)  scarcity. 
D)  resource theory.

Question 11

Einstein was quoted saying "Everything should be made as simple as possible,but not simpler." When it comes to economic models this means that

Accepted Answer

A)  models shouldn't be too complex. 
B)  models shouldn't be too simple. 
C)  models should have a level of abstraction appropriate to the topic investigated. 
D)  All of the above 
A)  models shouldn't be too complex. 
B)  models shouldn't be too simple. 
C)  models should have a level of abstraction appropriate to the topic investigated. 
D)  All of the above

Question 12

Legislators argue that a minimum wage law is instituted to help poor people.Economists can attack the minimum wage law on two fronts.First,some argue that government should not help the poor.Second,some argue that minimum wage laws actually hurt the poor because it creates unemployment.Which argument is normative and which is positive?

Accepted Answer

An opinion about the role of g

Question 13

Most microeconomic models assume that decision makers wish to

Accepted Answer

A)  make themselves as well off as possible. 
B)  act selfishly. 
C)  make others as well off as possible. 
D)  None of the above. 
A)  make themselves as well off as possible. 
B)  act selfishly. 
C)  make others as well off as possible. 
D)  None of the above.

Question 14

Income tax on the wealthy to finance the welfare for the poor causes income redistribution.This is an example for the trade-off

Accepted Answer

A)  Which goods and services to produce 
B)  How to produce 
C)  Who gets the goods and services 
D)  Who produces the goods and services 
A)  Which goods and services to produce 
B)  How to produce 
C)  Who gets the goods and services 
D)  Who produces the goods and services

Question 15

Microeconomics studies the allocation of

Accepted Answer

A)  decision makers. 
B)  scarce resources. 
C)  models. 
D)  unlimited resources. 
A)  decision makers. 
B)  scarce resources. 
C)  models. 
D)  unlimited resources.

Question 16

Increase in price of a good will increase consumers' demand.This is a(n)

Accepted Answer

A)  positive statement. 
B)  true statement. 
C)  inverse statement. 
D)  normative statement. 
A)  positive statement. 
B)  true statement. 
C)  inverse statement. 
D)  normative statement.

Question 17

A theory stating that individuals make purchasing decisions based on tastes which change randomly at random intervals is not useful because

Accepted Answer

A)  it is not possible to test the predictions of the model. 
B)  tastes are not the only factor influencing behavior. 
C)  the model is too simplistic. 
D)  the predictions of such a model would be incorrect. 
A)  it is not possible to test the predictions of the model. 
B)  tastes are not the only factor influencing behavior. 
C)  the model is too simplistic. 
D)  the predictions of such a model would be incorrect.

Question 18

Explain how a market helps determine which goods and services will be produced,how to produce them,and who gets them.

Accepted Answer

A market promotes interaction

Question 19

One model in economics is the permanent income hypothesis,which basically states that a household's expenditures will not react to a change in income unless that change in income is viewed as being permanent.How would you use this model to predict the expenditure patterns over the course of a year of a real estate agent who only sells homes during the months of April through July?

Accepted Answer

The agent will not consume all of her in

Question 20

"Government should impose stricter regulations on oil drilling" is an example of a

Accepted Answer

A)  normative statement. 
B)  positive statement. 
C)  negative statement. 
D)  normal statement. 
A)  normative statement. 
B)  positive statement. 
C)  negative statement. 
D)  normal statement.

The price of a good is

The analysis of the competition between Apple and Samsung in the smartphone market is based on

The flu vaccination example in Section 1.1 of the textbook is an example of how policy makers may cope with

"If fines for speeding when driving increase,fewer accidents will occur" is an example of a(n)

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

Every economic model should include money as a variable.This statement is

For the following, please answer "True" or "False" and explain why. -If a model fits reality but doesn't generate testable predictions,it is of little value to economists.

If a model's predictions are correct,then

Economic Policy of the government is often based on

Microeconomics is often called

Einstein was quoted saying "Everything should be made as simple as possible,but not simpler." When it comes to economic models this means that

Most microeconomic models assume that decision makers wish to

Income tax on the wealthy to finance the welfare for the poor causes income redistribution.This is an example for the trade-off

Microeconomics studies the allocation of

Increase in price of a good will increase consumers' demand.This is a(n)

A theory stating that individuals make purchasing decisions based on tastes which change randomly at random intervals is not useful because

Explain how a market helps determine which goods and services will be produced,how to produce them,and who gets them.

"Government should impose stricter regulations on oil drilling" is an example of a

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, externalities, rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 1: Introduction

The price of a good is

The analysis of the competition between Apple and Samsung in the smartphone market is based on

The flu vaccination example in Section 1.1 of the textbook is an example of how policy makers may cope with

"If fines for speeding when driving increase,fewer accidents will occur" is an example of a(n)

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

Every economic model should include money as a variable.This statement is

For the following, please answer "True" or "False" and explain why. -If a model fits reality but doesn't generate testable predictions,it is of little value to economists.

If a model's predictions are correct,then

Economic Policy of the government is often based on

Microeconomics is often called

Einstein was quoted saying "Everything should be made as simple as possible,but not simpler." When it comes to economic models this means that

Most microeconomic models assume that decision makers wish to

Income tax on the wealthy to finance the welfare for the poor causes income redistribution.This is an example for the trade-off

Microeconomics studies the allocation of

Increase in price of a good will increase consumers' demand.This is a(n)

A theory stating that individuals make purchasing decisions based on tastes which change randomly at random intervals is not useful because

Explain how a market helps determine which goods and services will be produced,how to produce them,and who gets them.

"Government should impose stricter regulations on oil drilling" is an example of a

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, externalities, rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters