Question 1

Policies to lower the price level of goods in the nation are a concern of:

Accepted Answer

A)  macroeconomics. 
B)  microeconomics. 
C)  both microeconomics and macroeconomics. 
D)  political science. 
A)  macroeconomics. 
B)  microeconomics. 
C)  both microeconomics and macroeconomics. 
D)  political science.

Question 2

Scarcity:

Accepted Answer

A)  is a problem only in the poorer countries of the world. 
B)  can be solved by rapid advances in technology. 
C)  is a problem that exists in every economy. 
D)  is not a problem for the very rich. 
A)  is a problem only in the poorer countries of the world. 
B)  can be solved by rapid advances in technology. 
C)  is a problem that exists in every economy. 
D)  is not a problem for the very rich.

Question 3

The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year.The head of a local labor union states that wage gains should have been higher.The Secretary's statement is a(n)____ economic statement,and the labor head's statement is a(n)____ economic statement.

Accepted Answer

A)  normative; normative 
B)  normative; positive 
C)  positive; normative 
D)  positive; positive 
E)  proper; improper 
A)  normative; normative 
B)  normative; positive 
C)  positive; normative 
D)  positive; positive 
E)  proper; improper

Question 4

A positive economic statement is:

Accepted Answer

A)  an opinion of an action that should be taken. 
B)  an action that will have a positive effect on the economy. 
C)  a statement testable by facts. 
D)  a claim that the speaker is positive will occur. 
E)  always a microeconomic position. 
A)  an opinion of an action that should be taken. 
B)  an action that will have a positive effect on the economy. 
C)  a statement testable by facts. 
D)  a claim that the speaker is positive will occur. 
E)  always a microeconomic position.

Question 5

Scarcity can be eliminated if:

Accepted Answer

A)  people satisfy needs rather than wants. 
B)  sufficient new resources were discovered. 
C)  output of goods and services were increased. 
D)  none of the above. 
A)  people satisfy needs rather than wants. 
B)  sufficient new resources were discovered. 
C)  output of goods and services were increased. 
D)  none of the above.

Question 6

Positive economics is a(n):

Accepted Answer

A)  reflection of a country's values. 
B)  judgment of the correctness of an economic outcome. 
C)  statement of fact. 
D)  analysis of what ought to be. 
E)  analysis of all the good market outcomes. 
A)  reflection of a country's values. 
B)  judgment of the correctness of an economic outcome. 
C)  statement of fact. 
D)  analysis of what ought to be. 
E)  analysis of all the good market outcomes.

Question 7

A positive economic statement simply describes what is.

Accepted Answer

A) True 
 B)False

Question 8

Factors which determine the price of corn would be studied in macroeconomics.

Accepted Answer

A) True 
 B)False

Question 9

The perpetual problem in economics is:

Accepted Answer

A)  our inability to work together effectively. 
B)  our inability to satisfy everyone's wants with the available resources. 
C)  a recognition of continual class differences. 
D)  our inability to utilize resources efficiently. 
E)  likely to be solved in resource-rich countries. 
A)  our inability to work together effectively. 
B)  our inability to satisfy everyone's wants with the available resources. 
C)  a recognition of continual class differences. 
D)  our inability to utilize resources efficiently. 
E)  likely to be solved in resource-rich countries.

Question 10

The study of microeconomics and macroeconomics differ in that:

Accepted Answer

A)  microeconomics is concerned with the domestic economy and macroeconomics is concerned only with the international economy. 
B)  microeconomics examines the individual markets of the economy while macroeconomics studies the whole economy. 
C)  microeconomics studies the actions of households and macroeconomics studies the actions of business firms. 
D)  microeconomics examines the whole economy while macroeconomics studies the individual units of the economy. 
A)  microeconomics is concerned with the domestic economy and macroeconomics is concerned only with the international economy. 
B)  microeconomics examines the individual markets of the economy while macroeconomics studies the whole economy. 
C)  microeconomics studies the actions of households and macroeconomics studies the actions of business firms. 
D)  microeconomics examines the whole economy while macroeconomics studies the individual units of the economy.

Question 11

Normative economics is:

Accepted Answer

A)  usually incorrect. 
B)  a statement of fact. 
C)  the analysis of what is. 
D)  the study of what ought to be. 
E)  free of value judgments. 
A)  usually incorrect. 
B)  a statement of fact. 
C)  the analysis of what is. 
D)  the study of what ought to be. 
E)  free of value judgments.

Question 12

The silly clothes worn by a circus clown are an example of:

Accepted Answer

A)  a natural resource. 
B)  capital goods. 
C)  labor. 
D)  entrepreneurship. 
A)  a natural resource. 
B)  capital goods. 
C)  labor. 
D)  entrepreneurship.

Question 13

Which of the following would an economist classify as capital?

Accepted Answer

A)  100 shares of Microsoft stock. 
B)  $50 bill. 
C)  credit card. 
D)  lawyer's personal computer. 
A)  100 shares of Microsoft stock. 
B)  $50 bill. 
C)  credit card. 
D)  lawyer's personal computer.

Question 14

The term Ceteris paribus means that:

Accepted Answer

A)  the model includes all important variables occurring in the real world. 
B)  all factors which influence the event are changing at the same time. 
C)  one influence is changing and everything else is being held constant. 
D)  the consumer is king. 
A)  the model includes all important variables occurring in the real world. 
B)  all factors which influence the event are changing at the same time. 
C)  one influence is changing and everything else is being held constant. 
D)  the consumer is king.

Question 15

Economics,according to its definition,studies how people:

Accepted Answer

A)  earn and spend money. 
B)  invest in the stock and bond markets. 
C)  make choices in the face of scarcity. 
D)  supply goods in response to demand. 
A)  earn and spend money. 
B)  invest in the stock and bond markets. 
C)  make choices in the face of scarcity. 
D)  supply goods in response to demand.

Question 16

Economics is the study of people making choices faced with the problem of unlimited wants and limited resources.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)  A rise in gasoline prices will cause gasoline purchases to fall. 
B)  The federal government should spend more on health care. 
C)  Raising the minimum wage will result in greater unemployment. 
D)  If more money is printed, then the economy's price level will rise. 
A)  A rise in gasoline prices will cause gasoline purchases to fall. 
B)  The federal government should spend more on health care. 
C)  Raising the minimum wage will result in greater unemployment. 
D)  If more money is printed, then the economy's price level will rise.

Question 18

A chain saw is an example of which of the following factors of production?

Accepted Answer

A)  Land. 
B)  Labor. 
C)  Capital. 
D)  None of the above. 
A)  Land. 
B)  Labor. 
C)  Capital. 
D)  None of the above.

Question 19

Which of the following markets is closely related to macroeconomics?

Accepted Answer

A)  Cattle futures market. 
B)  Fulton's fish market. 
C)  Skilled labor market. 
D)  Nation's unemployment rate. 
A)  Cattle futures market. 
B)  Fulton's fish market. 
C)  Skilled labor market. 
D)  Nation's unemployment rate.

Question 20

Microeconomics is concerned with:

Accepted Answer

A)  some specific market in the economic system. 
B)  the entire economic system. 
C)  reducing national unemployment and inflation rates. 
D)  what causes changes in the overall level of economic activity. 
A)  some specific market in the economic system. 
B)  the entire economic system. 
C)  reducing national unemployment and inflation rates. 
D)  what causes changes in the overall level of economic activity.

Exam 1: Introducing the Economic Way of Thinking

Policies to lower the price level of goods in the nation are a concern of:

Scarcity:

The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year.The head of a local labor union states that wage gains should have been higher.The Secretary's statement is a(n)____ economic statement,and the labor head's statement is a(n)____ economic statement.

A positive economic statement is:

Scarcity can be eliminated if:

Positive economics is a(n):

A positive economic statement simply describes what is.

Factors which determine the price of corn would be studied in macroeconomics.

The perpetual problem in economics is:

The study of microeconomics and macroeconomics differ in that:

Normative economics is:

The silly clothes worn by a circus clown are an example of:

Which of the following would an economist classify as capital?

The term Ceteris paribus means that:

Economics,according to its definition,studies how people:

Economics is the study of people making choices faced with the problem of unlimited wants and limited resources.

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

A chain saw is an example of which of the following factors of production?

Which of the following markets is closely related to macroeconomics?

Microeconomics is concerned with:

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

The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year.The head of a local labor union states that wage gains should have been higher.The Secretary's statement is a(n) economic statement,and the labor head's statement is a(n) economic statement.