Question 1

Microeconomics is the study of

Accepted Answer

A) marginal or inferior products 
B) the economic behavior of individual decision makers 
C) the behavior of the economy as a whole 
D) how to use the fewest natural resources to produce goods and services 
E) government's role as a producer in the economy 
A) marginal or inferior products 
B) the economic behavior of individual decision makers 
C) the behavior of the economy as a whole 
D) how to use the fewest natural resources to produce goods and services 
E) government's role as a producer in the economy B

Question 2

Accorsing to a 2008 PayScale.com survey, among college majors with 10-20 years of experience, economics ranks second only to computer engineering in terms of the median pay.

Accepted Answer

A) True 
 B)False  True

Question 3

The association-causation fallacy is the error of assuming that what is true for one member of a group must be true for the group.

Accepted Answer

A) True 
 B)False  False

Question 4

A marginal adjustment only refers to a minor change.

Accepted Answer

A) True 
 B)False

Question 5

Ceteris paribus means "other things constant."

Accepted Answer

A) True 
 B)False

Question 6

An economist would classify 100 shares of Apple Computer stock as capital.

Accepted Answer

A) True 
 B)False

Question 7

In economics, money is an example of capital.

Accepted Answer

A) True 
 B)False

Question 8

Michigan has an abundant supply of fresh water. However, an economist would consider it a scarce resource because

Accepted Answer

A) water is necessary for humans' physical survival 
B) pollution will eventually destroy all life in the Great Lakes 
C) water is limited relative to people's unlimited wants 
D) water commands a very high price 
E) nature can destroy water as well as create it 
A) water is necessary for humans' physical survival 
B) pollution will eventually destroy all life in the Great Lakes 
C) water is limited relative to people's unlimited wants 
D) water commands a very high price 
E) nature can destroy water as well as create it

Question 9

Which of the following is true about entrepreneurs?

Accepted Answer

A) They have the talent required to dream up a new product or find a better way to produce an existing one. 
B) They are rewarded by profits. 
C) They sometimes suffer losses. 
D) They benefit from what's left over after paying other resource suppliers. 
E) All of the answers are correct. 
A) They have the talent required to dream up a new product or find a better way to produce an existing one. 
B) They are rewarded by profits. 
C) They sometimes suffer losses. 
D) They benefit from what's left over after paying other resource suppliers. 
E) All of the answers are correct.

Question 10

"Natural resources" refers

Accepted Answer

A) bodies of water 
B) trees 
C) oil reserves 
D) minerals 
E) All of the answers are correct. 
A) bodies of water 
B) trees 
C) oil reserves 
D) minerals 
E) All of the answers are correct.

Question 11

The assumption of rational self-interest does not rule out the possibility of concern for other individuals.

Accepted Answer

A) True 
 B)False

Question 12

As a scientist, an economist's main professional objective is to

Accepted Answer

A) become wealthy 
B) control the government's decision-making processes 
C) understand how the economy works 
D) discover which stock prices will decrease 
E) understand the psychology of participants in markets 
A) become wealthy 
B) control the government's decision-making processes 
C) understand how the economy works 
D) discover which stock prices will decrease 
E) understand the psychology of participants in markets

Question 13

Which of the following is a positive statement?

Accepted Answer

A) An unemployment rate of 7 percent or higher is a national disgrace. 
B) Unemployment is a less important problem than inflation. 
C) When the national unemployment rate is 7 percent, the unemployment rate for inner-city youth is often close to 40 percent. 
D) Unemployment and inflation are equally important problems. 
E) An inflation rate of 7 percent is too high. 
A) An unemployment rate of 7 percent or higher is a national disgrace. 
B) Unemployment is a less important problem than inflation. 
C) When the national unemployment rate is 7 percent, the unemployment rate for inner-city youth is often close to 40 percent. 
D) Unemployment and inflation are equally important problems. 
E) An inflation rate of 7 percent is too high.

Question 14

Step one in the scientific method is

Accepted Answer

A) formulate a hypothesis 
B) reflect an opinion 
C) specify assumptions 
D) identify the question and define relevant variables 
E) test the hypothesis 
A) formulate a hypothesis 
B) reflect an opinion 
C) specify assumptions 
D) identify the question and define relevant variables 
E) test the hypothesis

Question 15

Natural resources are

Accepted Answer

A) not considered scarce because no one pays for them 
B) only desired for use in producing other goods 
C) included in the category of resources called gifts of nature 
D) available in unlimited quantities 
E) not considered scarce because they are not produced by society 
A) not considered scarce because no one pays for them 
B) only desired for use in producing other goods 
C) included in the category of resources called gifts of nature 
D) available in unlimited quantities 
E) not considered scarce because they are not produced by society

Question 16

Economics is best defined as the study of how individuals decide to use limited resources in an attempt to satisfy unlimited wants.

Accepted Answer

A) True 
 B)False

Question 17

In macroeconomics, we analyze

Accepted Answer

A) all of the following 
B) the overall performance of the economy as a whole 
C) arrangements through which specific products are exchanged 
D) influences on the decision making of particular households 
E) the factors that affect the decisions of individual firms 
A) all of the following 
B) the overall performance of the economy as a whole 
C) arrangements through which specific products are exchanged 
D) influences on the decision making of particular households 
E) the factors that affect the decisions of individual firms

Question 18

In economics, capital is defined as

Accepted Answer

A) natural resources, such as water, oil, and iron ore 
B) the natural, unskilled abilities of people 
C) human creations used in the production process 
D) money and other financial assets 
E) the willingness of business owners to take risks 
A) natural resources, such as water, oil, and iron ore 
B) the natural, unskilled abilities of people 
C) human creations used in the production process 
D) money and other financial assets 
E) the willingness of business owners to take risks

Question 19

Which of the following is not a part of the scientific method in economics?

Accepted Answer

A) normative statements 
B) comparing predictions to evidence 
C) formulating a hypothesis 
D) a hypothesis 
E) behavioral assumptions 
A) normative statements 
B) comparing predictions to evidence 
C) formulating a hypothesis 
D) a hypothesis 
E) behavioral assumptions

Question 20

Secondary effects are consequences of economic actions that develop slowly over time as people react to events.

Accepted Answer

A) True 
 B)False

Exam 1: The Art and Science of Economic Analysis

Microeconomics is the study of

Accorsing to a 2008 PayScale.com survey, among college majors with 10-20 years of experience, economics ranks second only to computer engineering in terms of the median pay.

The association-causation fallacy is the error of assuming that what is true for one member of a group must be true for the group.

A marginal adjustment only refers to a minor change.

Ceteris paribus means "other things constant."

An economist would classify 100 shares of Apple Computer stock as capital.

In economics, money is an example of capital.

Michigan has an abundant supply of fresh water. However, an economist would consider it a scarce resource because

Which of the following is true about entrepreneurs?

"Natural resources" refers

The assumption of rational self-interest does not rule out the possibility of concern for other individuals.

As a scientist, an economist's main professional objective is to

Which of the following is a positive statement?

Step one in the scientific method is

Natural resources are

Economics is best defined as the study of how individuals decide to use limited resources in an attempt to satisfy unlimited wants.

In macroeconomics, we analyze

In economics, capital is defined as

Which of the following is not a part of the scientific method in economics?

Secondary effects are consequences of economic actions that develop slowly over time as people react to events.

Economic Tools and Economics Systems

Economic Decision Makers

Demand Supply and Markets

Introduction to Macroeconomics

Tracking the Us Economy

Unemployment and Inflation

Productivity and Growth

Aggregate Expenditure

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

The Algebra of Income and Expenditure

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

The Algebra of Demand-Side Equilibrium

International Trade

International Finance

Economic Development

National Income Accounts

Understanding Graphs

Variable Net Exports

Variable Net Exports Revisited

Filters