Question 1

Entrepreneurs can delegate every one of the following tasks to labor except:

Accepted Answer

A)  hiring and training new employees. 
B)  assuming business risk and uncertainty. 
C)  supervision of the production process. 
D)  researching ideas for new products. 
E)  marketing the goods and services produced. 
A)  hiring and training new employees. 
B)  assuming business risk and uncertainty. 
C)  supervision of the production process. 
D)  researching ideas for new products. 
E)  marketing the goods and services produced.

Question 2

Which of the following is a macroeconomics topic?

Accepted Answer

A)  Wages of textile workers in the Northeast. 
B)  The cost of producing 10,000 bookcases. 
C)  The economy's annual growth rate. 
D)  National demand for fish. 
E)  Effects of farm subsidies on food prices. 
A)  Wages of textile workers in the Northeast. 
B)  The cost of producing 10,000 bookcases. 
C)  The economy's annual growth rate. 
D)  National demand for fish. 
E)  Effects of farm subsidies on food prices.

Question 3

Microeconomics and macroeconomics use different types of analysis.

Accepted Answer

A) True 
 B)False

Question 4

Microeconomics approaches the study of economics from the viewpoint of:

Accepted Answer

A)  individual or specific markets. 
B)  the national economy. 
C)  government units. 
D)  economywide markets. 
A)  individual or specific markets. 
B)  the national economy. 
C)  government units. 
D)  economywide markets.

Question 5

The creative ability of persons to combine and direct resources to produce new products is known as:

Accepted Answer

A)  economizing. 
B)  entrepreneurship. 
C)  value judgment. 
D)  product sensitivity. 
A)  economizing. 
B)  entrepreneurship. 
C)  value judgment. 
D)  product sensitivity.

Question 6

Which of the following is a positive statement?

Accepted Answer

A)  I think we should pass a constitutional amendment to reduce the deficit. 
B)  President Clinton's way of dealing with the economy is better than President Bush's. 
C)  I hope interest rates come down soon. 
D)  If taxes are raised, unemployment will drop. 
A)  I think we should pass a constitutional amendment to reduce the deficit. 
B)  President Clinton's way of dealing with the economy is better than President Bush's. 
C)  I hope interest rates come down soon. 
D)  If taxes are raised, unemployment will drop.

Question 7

The statement "American workers are lazy" is an example of positive economic analysis.

Accepted Answer

A) True 
 B)False

Question 8

Abstracting from reality is an important element of all economic models.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is true of resources?

Accepted Answer

A)  Resources are inputs used to produce goods and services. 
B)  Labor is the mental and physical capacity of workers to produce goods and services. 
C)  Entrepreneurship organizes resources to produce goods and services. 
D)  All of the above are true. 
A)  Resources are inputs used to produce goods and services. 
B)  Labor is the mental and physical capacity of workers to produce goods and services. 
C)  Entrepreneurship organizes resources to produce goods and services. 
D)  All of the above are true.

Question 10

"Ceteris paribus" is a Latin expression that essentially means "holding everything else constant."

Accepted Answer

A) True 
 B)False

Question 11

What type of economic analysis is limited to testable,verifiable statements?

Accepted Answer

A)  Macroeconomics. 
B)  Entrepreneurial economics. 
C)  Positive economics. 
D)  Normative economics. 
A)  Macroeconomics. 
B)  Entrepreneurial economics. 
C)  Positive economics. 
D)  Normative economics.

Question 12

A textbook is an example of:

Accepted Answer

A)  capital. 
B)  a natural resource. 
C)  labor. 
D)  all of the above. 
A)  capital. 
B)  a natural resource. 
C)  labor. 
D)  all of the above.

Question 13

Which of the following is a statement of positive economics?

Accepted Answer

A)  I hope unemployment comes down soon. 
B)  President X's way of dealing with unemployment is better than President Y's. 
C)  I think everyone should sacrifice to reduce the deficit. 
D)  If taxes are reduced, unemployment will drop. 
A)  I hope unemployment comes down soon. 
B)  President X's way of dealing with unemployment is better than President Y's. 
C)  I think everyone should sacrifice to reduce the deficit. 
D)  If taxes are reduced, unemployment will drop.

Question 14

Economics could be defined as the study of scarcity.

Accepted Answer

A) True 
 B)False

Question 15

A factor of production is the same as:

Accepted Answer

A)  the amount of a good produced. 
B)  the price of a good. 
C)  a profit of a firm. 
D)  an opportunity cost. 
E)  a resource. 
A)  the amount of a good produced. 
B)  the price of a good. 
C)  a profit of a firm. 
D)  an opportunity cost. 
E)  a resource.

Question 16

The definition of a model is a:

Accepted Answer

A)  description of all variables affecting a situation. 
B)  positive analysis of all variables affecting an event. 
C)  simplified description of reality to understand and predict an economic event. 
D)  data adjusted for rational action. 
A)  description of all variables affecting a situation. 
B)  positive analysis of all variables affecting an event. 
C)  simplified description of reality to understand and predict an economic event. 
D)  data adjusted for rational action.

Question 17

The sun is an example of:

Accepted Answer

A)  a natural resource. 
B)  capital. 
C)  labor. 
D)  none of the above. 
A)  a natural resource. 
B)  capital. 
C)  labor. 
D)  none of the above.

Question 18

Which of the following is included in the study of macroeconomics?

Accepted Answer

A)  Wage rate of college students. 
B)  Prices of automobiles. 
C)  Unemployment in the nation. 
D)  Price of silver and gold. 
A)  Wage rate of college students. 
B)  Prices of automobiles. 
C)  Unemployment in the nation. 
D)  Price of silver and gold.

Question 19

An entrepreneur is:

Accepted Answer

A)  an employee in a factory. 
B)  the manager of a factory. 
C)  the person who conceives and starts a business. 
D)  the person who contracts to work for a specific price. 
E)  the person who does not assume any risk in business. 
A)  an employee in a factory. 
B)  the manager of a factory. 
C)  the person who conceives and starts a business. 
D)  the person who contracts to work for a specific price. 
E)  the person who does not assume any risk in business.

Question 20

Macroeconomics deals with the analysis of all of the following questions except:

Accepted Answer

A)  why do national economies grow. 
B)  what determines a nation's savings and investments. 
C)  how does a central bank influence inflation. 
D)  why does a country experience recessions. 
E)  how does Microsoft price its software packages. 
A)  why do national economies grow. 
B)  what determines a nation's savings and investments. 
C)  how does a central bank influence inflation. 
D)  why does a country experience recessions. 
E)  how does Microsoft price its software packages.

Exam 1: Introducing the Economic Way of Thinking

Entrepreneurs can delegate every one of the following tasks to labor except:

Which of the following is a macroeconomics topic?

Microeconomics and macroeconomics use different types of analysis.

Microeconomics approaches the study of economics from the viewpoint of:

The creative ability of persons to combine and direct resources to produce new products is known as:

Which of the following is a positive statement?

The statement "American workers are lazy" is an example of positive economic analysis.

Abstracting from reality is an important element of all economic models.

Which of the following is true of resources?

"Ceteris paribus" is a Latin expression that essentially means "holding everything else constant."

What type of economic analysis is limited to testable,verifiable statements?

A textbook is an example of:

Which of the following is a statement of positive economics?

Economics could be defined as the study of scarcity.

A factor of production is the same as:

The definition of a model is a:

The sun is an example of:

Which of the following is included in the study of macroeconomics?

An entrepreneur is:

Macroeconomics deals with the analysis of all of the following questions except:

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