Question 1

Which of the following would be of particular interest to a microeconomist?

Accepted Answer

A)  The price of fruit the typical household consumes. 
B)  The nation's inflation rate. 
C)  The nation's rate of unemployment. 
D)  The budget of the national government. 
E)  The growth of the economy. 
A)  The price of fruit the typical household consumes. 
B)  The nation's inflation rate. 
C)  The nation's rate of unemployment. 
D)  The budget of the national government. 
E)  The growth of the economy. A

Question 2

The person who assumes the risks and uncertainties of starting a new business is considered to be:

Accepted Answer

A)  the manager. 
B)  the out-resourcer. 
C)  a sales representative. 
D)  an entrepreneur. 
A)  the manager. 
B)  the out-resourcer. 
C)  a sales representative. 
D)  an entrepreneur. D

Question 3

A review of the performance of the economy during the Bush administration is the concern of:

Accepted Answer

A)  macroeconomics. 
B)  microeconomics. 
C)  both macroeconomics and microeconomics. 
D)  neither macroeconomics nor microeconomics. 
A)  macroeconomics. 
B)  microeconomics. 
C)  both macroeconomics and microeconomics. 
D)  neither macroeconomics nor microeconomics. A

Question 4

Which phrase(s)is (are)associated with normative statements?

Accepted Answer

A) c and e. 
B) Has been shown. 
C) Should be. 
D) Can be. 
E) More than. 
A) c and e. 
B) Has been shown. 
C) Should be. 
D) Can be. 
E) More than.

Question 5

In a congressional debate about agricultural price supports,senators,members of congress,and other experts made the following four statements.Which of these is a normative statement?

Accepted Answer

A)  "Price supports are important because America should preserve the small family farm." 
B)  "Without price supports, the price of wheat and corn will fall by over twenty percent." 
C)  "The decline in commodity prices caused by the removal of price supports will result in fewer, larger farms." 
D)  "The decline in commodity prices caused by the removal of price supports will reduce the number of tractors sold in the United States." 
A)  "Price supports are important because America should preserve the small family farm." 
B)  "Without price supports, the price of wheat and corn will fall by over twenty percent." 
C)  "The decline in commodity prices caused by the removal of price supports will result in fewer, larger farms." 
D)  "The decline in commodity prices caused by the removal of price supports will reduce the number of tractors sold in the United States."

Question 6

The factors of production are which of the following?

Accepted Answer

A)  The outputs generated by the production process of transforming land, labor, and capital into goods and services. 
B)  The land resources, such as natural resources, that are unimproved by human economic activity. 
C)  Land (natural resources), labor (human capital, entrepreneurship), and capital (constructed inputs such as factories). 
D)  Labor and capital in industrialized countries, where natural resources are no longer used to produce goods and services. 
A)  The outputs generated by the production process of transforming land, labor, and capital into goods and services. 
B)  The land resources, such as natural resources, that are unimproved by human economic activity. 
C)  Land (natural resources), labor (human capital, entrepreneurship), and capital (constructed inputs such as factories). 
D)  Labor and capital in industrialized countries, where natural resources are no longer used to produce goods and services.

Question 7

The television network newscaster reports that the national inflation rate the past year equaled 4 percent.This report would be of particular interest to a ____.

Accepted Answer

A)  microeconomist. 
B)  normative economist. 
C)  macroeconomist. 
D)  Ceteris paribus. 
E)  social science economist. 
A)  microeconomist. 
B)  normative economist. 
C)  macroeconomist. 
D)  Ceteris paribus. 
E)  social science economist.

Question 8

Economists most often disagree over positive rather than normative economic issues.

Accepted Answer

A) True 
 B)False

Question 9

People are forced to make choices because of:

Accepted Answer

A)  unlimited wants and unlimited resources. 
B)  limited wants and unlimited resources. 
C)  unlimited wants and limited resources. 
D)  limited wants and limited resources. 
E)  irrational wants and limited resources. 
A)  unlimited wants and unlimited resources. 
B)  limited wants and unlimited resources. 
C)  unlimited wants and limited resources. 
D)  limited wants and limited resources. 
E)  irrational wants and limited resources.

Question 10

The statement "A tax cut would be the fairest way to stimulate the economy" is an example of positive economic analysis.

Accepted Answer

A) True 
 B)False

Question 11

Policies to determine the price of troll dolls are a concern of macroeconomics.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a resource?

Accepted Answer

A)  Land. 
B)  Labor. 
C)  Money. 
D)  Capital. 
A)  Land. 
B)  Labor. 
C)  Money. 
D)  Capital.

Question 13

Which of the following is not an example of a factor of production?

Accepted Answer

A)  A forest. 
B)  A computer program. 
C)  A labor leader. 
D)  Dollars. 
A)  A forest. 
B)  A computer program. 
C)  A labor leader. 
D)  Dollars.

Question 14

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

Accepted Answer

A)  The inflation rate in the United States decreased from 4 percent last year to 3 percent this year as a result of lower energy prices. 
B)  The economy grew at an annual rate of 5 percent during the first quarter of this year. 
C)  If two automobile companies merge, it is likely that the price of automobiles will rise. 
D)  An increase in international trade benefits some workers but hurts others. 
E)  The minimum wage should be increased so that low income workers can afford to keep up with the cost of living. 
A)  The inflation rate in the United States decreased from 4 percent last year to 3 percent this year as a result of lower energy prices. 
B)  The economy grew at an annual rate of 5 percent during the first quarter of this year. 
C)  If two automobile companies merge, it is likely that the price of automobiles will rise. 
D)  An increase in international trade benefits some workers but hurts others. 
E)  The minimum wage should be increased so that low income workers can afford to keep up with the cost of living.

Question 15

Which of the following is a normative statement?

Accepted Answer

A)  The deduction for state taxes cost the federal government $100 billion per year. 
B)  Taxpayers in North Carolina pay state taxes which are above the national average. 
C)  Twenty-two states use a lottery to raise state taxes. 
D)  Congress is considering the president's tax plan to increase taxes which is a fair plan. 
A)  The deduction for state taxes cost the federal government $100 billion per year. 
B)  Taxpayers in North Carolina pay state taxes which are above the national average. 
C)  Twenty-two states use a lottery to raise state taxes. 
D)  Congress is considering the president's tax plan to increase taxes which is a fair plan.

Question 16

Positive economics:

Accepted Answer

A)  will usually tell us which policy is best. 
B)  reveals "what ought to be" in economic matters. 
C)  is of little use to policy makers. 
D)  is the scientific study of "what is" among economic relationships. 
A)  will usually tell us which policy is best. 
B)  reveals "what ought to be" in economic matters. 
C)  is of little use to policy makers. 
D)  is the scientific study of "what is" among economic relationships.

Question 17

Economists use models to:

Accepted Answer

A)  abstract from the complexities of the world. 
B)  understand economic behavior. 
C)  explain and help predict human behavior. 
D)  do all of the above. 
A)  abstract from the complexities of the world. 
B)  understand economic behavior. 
C)  explain and help predict human behavior. 
D)  do all of the above.

Question 18

Which of the following is a microeconomics topic?

Accepted Answer

A)  A price of a new home. 
B)  The inflation rate. 
C)  The economy's growth rate. 
D)  The unemployment rate. 
E)  Forecasts of a recession next year. 
A)  A price of a new home. 
B)  The inflation rate. 
C)  The economy's growth rate. 
D)  The unemployment rate. 
E)  Forecasts of a recession next year.

Question 19

An economic model is defined as:

Accepted Answer

A)  a value judgment. 
B)  a presentation of all possible relevant real-world variables. 
C)  a simplified representation of the way in which facts are related. 
D)  data adjusted for irrational actions. 
A)  a value judgment. 
B)  a presentation of all possible relevant real-world variables. 
C)  a simplified representation of the way in which facts are related. 
D)  data adjusted for irrational actions.

Question 20

Which of the following is a normative statement?

Accepted Answer

A)  A decrease in price leads to an increase in quantity consumed. 
B)  Incomes grow more rapidly in high-tax states than low-tax states. 
C)  People would be better off if government expenditures were higher. 
D)  People will buy less butter at $1.50 per pound than they will at $1 per pound. 
A)  A decrease in price leads to an increase in quantity consumed. 
B)  Incomes grow more rapidly in high-tax states than low-tax states. 
C)  People would be better off if government expenditures were higher. 
D)  People will buy less butter at $1.50 per pound than they will at $1 per pound.

Exam 1: Introducing the Economic Way of Thinking

Which of the following would be of particular interest to a microeconomist?

The person who assumes the risks and uncertainties of starting a new business is considered to be:

A review of the performance of the economy during the Bush administration is the concern of:

Which phrase(s)is (are)associated with normative statements?

In a congressional debate about agricultural price supports,senators,members of congress,and other experts made the following four statements.Which of these is a normative statement?

The factors of production are which of the following?

The television network newscaster reports that the national inflation rate the past year equaled 4 percent.This report would be of particular interest to a ____.

Economists most often disagree over positive rather than normative economic issues.

People are forced to make choices because of:

The statement "A tax cut would be the fairest way to stimulate the economy" is an example of positive economic analysis.

Policies to determine the price of troll dolls are a concern of macroeconomics.

Which of the following is not a resource?

Which of the following is not an example of a factor of production?

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

Which of the following is a normative statement?

Positive economics:

Economists use models to:

Which of the following is a microeconomics topic?

An economic model is defined as:

Which of the following is a normative statement?

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters