Question 1

Trade can occur only if property rights are

Accepted Answer

A)  not enforced. 
B)  transferable. 
C)  legally binding. 
D)  not transferable. 
A)  not enforced. 
B)  transferable. 
C)  legally binding. 
D)  not transferable. B

Question 2

Positive economic questions

Accepted Answer

A)  involve value judgments. 
B)  address what ought to happen. 
C)  are potentially testable. 
D)  cannot be tested. 
A)  involve value judgments. 
B)  address what ought to happen. 
C)  are potentially testable. 
D)  cannot be tested. C

Question 3

Questions that involve value judgments are

Accepted Answer

A)  Positive questions. 
B)  Normative questions. 
C)  Not relevant to microeconomics. 
D)  Objective. 
A)  Positive questions. 
B)  Normative questions. 
C)  Not relevant to microeconomics. 
D)  Objective. B

Question 4

Microeconomics

Accepted Answer

A)  studies individual decision making. 
B)  studies aggregate behavior. 
C)  cannot be applied too behaviors such as marriage. 
D)  cannot be used to address questions of what ought to be. 
A)  studies individual decision making. 
B)  studies aggregate behavior. 
C)  cannot be applied too behaviors such as marriage. 
D)  cannot be used to address questions of what ought to be.

Question 5

In a situation where a market failure occurs,

Accepted Answer

A)  any government intervention will improve on the market outcome. 
B)  there is nothing that the government can do to improve on the market outcome. 
C)  government intervention might improve on the market outcome. 
D)  it will always be preferable to have the government intervene in the market. 
A)  any government intervention will improve on the market outcome. 
B)  there is nothing that the government can do to improve on the market outcome. 
C)  government intervention might improve on the market outcome. 
D)  it will always be preferable to have the government intervene in the market.

Question 6

In most countries,decisions that affect medical expenditures are

Accepted Answer

A)  centralized. 
B)  decentralized. 
C)  determined by government policy. 
D)  both centralized and decentralized. 
A)  centralized. 
B)  decentralized. 
C)  determined by government policy. 
D)  both centralized and decentralized.

Question 7

Scarcity forces society to confront three critical issues.List those issues and explain how they are related to the problem of scarcity.

Accepted Answer

What to Produce: When we produce more of

Question 8

Which of the following top is NOT studied using microeconomics?

Accepted Answer

A)  Ford's decision to introduce a new car model. 
B)  An individual's decision to get married. 
C)  A person's decision whether or not to commit a crime. 
D)  An individual's moral values. 
A)  Ford's decision to introduce a new car model. 
B)  An individual's decision to get married. 
C)  A person's decision whether or not to commit a crime. 
D)  An individual's moral values.

Question 9

In conducting normative analysis,economists apply

Accepted Answer

A)  the principle of comparative advantage. 
B)  the principle of individual sovereignty. 
C)  the law of one price. 
D)  objective value judgments. 
A)  the principle of comparative advantage. 
B)  the principle of individual sovereignty. 
C)  the law of one price. 
D)  objective value judgments.

Question 10

Which of the follow is NOT an example of a market?

Accepted Answer

A)  Retail trade of chocolate ice cream in Boston. 
B)  The buying and selling of homes in Kansas City. 
C)  The farmer's market in Madison, Wisconsin. 
D)  The buying and selling of used cars. 
A)  Retail trade of chocolate ice cream in Boston. 
B)  The buying and selling of homes in Kansas City. 
C)  The farmer's market in Madison, Wisconsin. 
D)  The buying and selling of used cars.

Question 11

Microeconomists usually assume that people are motivated by

Accepted Answer

A)  selfishness. 
B)  material self-interest. 
C)  altruism. 
D)  property rights. 
A)  selfishness. 
B)  material self-interest. 
C)  altruism. 
D)  property rights.

Question 12

In their study of the effect of legalized abortion on crime rates,Steven Levitt and John Donohue applied

Accepted Answer

A)  positive economic analysis. 
B)  normative economic analysis. 
C)  the principle of individual sovereignty. 
D)  value judgments. 
A)  positive economic analysis. 
B)  normative economic analysis. 
C)  the principle of individual sovereignty. 
D)  value judgments.

Question 13

In a communist economy,

Accepted Answer

A)  the state controls the means of production. 
B)  individuals decide what to produce, how to produce it and who gets it. 
C)  economic decisions are decentralized. 
D)  the market system is used to allocate resources. 
A)  the state controls the means of production. 
B)  individuals decide what to produce, how to produce it and who gets it. 
C)  economic decisions are decentralized. 
D)  the market system is used to allocate resources.

Question 14

Questions that address what did,will or would actually happen are called ________ questions.

Accepted Answer

A)  normative 
B)  positive 
C)  efficiency 
D)  equity 
A)  normative 
B)  positive 
C)  efficiency 
D)  equity

Question 15

A useful theory must

Accepted Answer

A)  apply to every conceivable situation. 
B)  be broadly applicable. 
C)  be agreed upon by all economists. 
D)  not be able to be refined. 
A)  apply to every conceivable situation. 
B)  be broadly applicable. 
C)  be agreed upon by all economists. 
D)  not be able to be refined.

Question 16

Contrast positive and normative economics.How can economists carry out normative analysis?

Accepted Answer

Positive economics involves factual ques

Question 17

In a natural experiment,

Accepted Answer

A)  similar people face very different circumstances. 
B)  the circumstances of otherwise identical people differ entirely by chance. 
C)  the circumstances of one group of people is compared to a "control" group of people. 
D)  similar people face very similar circumstances. 
A)  similar people face very different circumstances. 
B)  the circumstances of otherwise identical people differ entirely by chance. 
C)  the circumstances of one group of people is compared to a "control" group of people. 
D)  similar people face very similar circumstances.

Question 18

In a free market system

Accepted Answer

A)  there is no government involvement in the economy. 
B)  resources are allocated on a first-come first-served basis. 
C)  buyers and sellers make all of the economic decisions. 
D)  government mostly allows markets to operate with little intervention or regulation. 
A)  there is no government involvement in the economy. 
B)  resources are allocated on a first-come first-served basis. 
C)  buyers and sellers make all of the economic decisions. 
D)  government mostly allows markets to operate with little intervention or regulation.

Question 19

Which of the following is NOT a reason why economists usually work with mathematical models?

Accepted Answer

A)  Because most economic choices are quantitative in nature. 
B)  Mathematical models can provide precision, while quantitative models cannot. 
C)  Mathematical modeling imposes intellectual rigor. 
D)  Mathematical models can be used to settle disputes over normative economic questions. 
A)  Because most economic choices are quantitative in nature. 
B)  Mathematical models can provide precision, while quantitative models cannot. 
C)  Mathematical modeling imposes intellectual rigor. 
D)  Mathematical models can be used to settle disputes over normative economic questions.

Question 20

According to the text,which of the following best describes the process the FCC used to allocate spectrum licenses to telecommunications providers?

Accepted Answer

A)  Licenses were auctioned one at a time, to the highest bidder. 
B)  Licenses were first sold to telecommunications providers that already had contracts with the government. 
C)  All licenses were auctioned off at the same time. 
D)  The government charged the same price for each license. 
A)  Licenses were auctioned one at a time, to the highest bidder. 
B)  Licenses were first sold to telecommunications providers that already had contracts with the government. 
C)  All licenses were auctioned off at the same time. 
D)  The government charged the same price for each license.

Exam 1: Introduction

Trade can occur only if property rights are

Positive economic questions

Questions that involve value judgments are

Microeconomics

In a situation where a market failure occurs,

In most countries,decisions that affect medical expenditures are

Scarcity forces society to confront three critical issues.List those issues and explain how they are related to the problem of scarcity.

Which of the following top is NOT studied using microeconomics?

In conducting normative analysis,economists apply

Which of the follow is NOT an example of a market?

Microeconomists usually assume that people are motivated by

In their study of the effect of legalized abortion on crime rates,Steven Levitt and John Donohue applied

In a communist economy,

Questions that address what did,will or would actually happen are called ________ questions.

A useful theory must

Contrast positive and normative economics.How can economists carry out normative analysis?

In a natural experiment,

In a free market system

Which of the following is NOT a reason why economists usually work with mathematical models?

According to the text,which of the following best describes the process the FCC used to allocate spectrum licenses to telecommunications providers?

Supply and Demand

Balancing Benefits and Costs

Consumer Preferences

Constraints, Choices, and Demand

Demand and Welfare

Technology and Production

Cost

Profit Maximization

Choices Involving Time

Choices Involving Risk

Choices Involving Strategy

Behavioral Economics

Equilibrium and Efficiency

Market Intervention

General Equilibrium, Efficiency, and Equity

Monopoly

Pricing Policies

Oligopoly

Externalities and Public Goods

Asymmetric Information

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