Question 1

An entrepreneur is:

Accepted Answer

A) an individual who has an education. 
B) an organizer who seeks profitable opportunities and is willing to accept risks. 
C) a person who is hired by a firm to manage its operations. 
D) a person who earns profit without accepting any risks. 
E) a person who is appointed by the board of directors of a firm for a term of five years. 
A) an individual who has an education. 
B) an organizer who seeks profitable opportunities and is willing to accept risks. 
C) a person who is hired by a firm to manage its operations. 
D) a person who earns profit without accepting any risks. 
E) a person who is appointed by the board of directors of a firm for a term of five years. B

Question 2

In economics,marginal means:

Accepted Answer

A) incremental. 
B) unimportant. 
C) level or size. 
D) a borderline situation. 
E) a bad alternative. 
A) incremental. 
B) unimportant. 
C) level or size. 
D) a borderline situation. 
E) a bad alternative. A

Question 3

The basic purpose of economic models is to:

Accepted Answer

A) construct simplifying assumptions about the real world. 
B) explain reality in all its complexity. 
C) collect empirical data to support the facts. 
D) construct situations where controlled experiments can be carried out. 
E) explain and predict economic events. 
A) construct simplifying assumptions about the real world. 
B) explain reality in all its complexity. 
C) collect empirical data to support the facts. 
D) construct situations where controlled experiments can be carried out. 
E) explain and predict economic events. E

Question 4

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

Accepted Answer

A) Incomes increase when national production increases. 
B) Women should earn the same income as men. 
C) When the price of a good rises,people will buy more of it. 
D) The more time you spend studying,the higher your economics test scores will be. 
E) The more time you spend studying for chemistry,the higher your economics test score will be. 
A) Incomes increase when national production increases. 
B) Women should earn the same income as men. 
C) When the price of a good rises,people will buy more of it. 
D) The more time you spend studying,the higher your economics test scores will be. 
E) The more time you spend studying for chemistry,the higher your economics test score will be.

Question 5

Unlike a service,a good:

Accepted Answer

A) is desirable. 
B) uses resources to satisfy wants. 
C) is physical and tangible. 
D) is abundant and free. 
E) is a resource. 
A) is desirable. 
B) uses resources to satisfy wants. 
C) is physical and tangible. 
D) is abundant and free. 
E) is a resource.

Question 6

A rational decision maker compares the expected marginal cost to the expected marginal benefit of any activity.

Accepted Answer

A) True 
 B)False

Question 7

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 8

The ceteris paribus assumption is the other-things-constant assumption.

Accepted Answer

A) True 
 B)False

Question 9

The expression "There's no such thing as a free lunch" means that:

Accepted Answer

A) services may be free,but goods are never free. 
B) even if it has a price of zero,a good or service has a cost. 
C) charitable organizations should not serve free lunches to the poor. 
D) poor people are really the ones who pay for their allegedly free lunches. 
E) someone has to pay the market price for a good or service. 
A) services may be free,but goods are never free. 
B) even if it has a price of zero,a good or service has a cost. 
C) charitable organizations should not serve free lunches to the poor. 
D) poor people are really the ones who pay for their allegedly free lunches. 
E) someone has to pay the market price for a good or service.

Question 10

When economists refer to capital,they might mean:

Accepted Answer

A) money. 
B) human skills used in production. 
C) stocks. 
D) bonds. 
E) bank loans. 
A) money. 
B) human skills used in production. 
C) stocks. 
D) bonds. 
E) bank loans.

Question 11

Economists believe that people respond in a predictable way to changes in costs and benefits.The term that best describes this phenomenon is:

Accepted Answer

A) opportunity cost. 
B) scarcity. 
C) innovation. 
D) marginal analysis. 
E) other things equal (or ceteris paribus). 
A) opportunity cost. 
B) scarcity. 
C) innovation. 
D) marginal analysis. 
E) other things equal (or ceteris paribus).

Question 12

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 human 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 human 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 13

Macroeconomists analyze:

Accepted Answer

A) the labor market. 
B) the arrangements through which specific products are exchanged. 
C) influences on the decision making of particular households. 
D) the impact of unemployment on the economy. 
E) the factors that affect the decisions of individual firms. 
A) the labor market. 
B) the arrangements through which specific products are exchanged. 
C) influences on the decision making of particular households. 
D) the impact of unemployment on the economy. 
E) the factors that affect the decisions of individual firms.

Question 14

The assumption that individuals act rationally implies that:​

Accepted Answer

A) people think only of themselves and disregard the well-being of others. 
B) people undertake all those activities that yield benefits to themselves. 
C) people only consider the costs of an activity to decide whether it is worthwhile. 
D) the greater the cost of a charitable deed to a benefactor,the more likely he or she is to perform that deed. 
E) people implicitly calculate the costs and benefits of an activity to decide if it is worthwhile. 
A) people think only of themselves and disregard the well-being of others. 
B) people undertake all those activities that yield benefits to themselves. 
C) people only consider the costs of an activity to decide whether it is worthwhile. 
D) the greater the cost of a charitable deed to a benefactor,the more likely he or she is to perform that deed. 
E) people implicitly calculate the costs and benefits of an activity to decide if it is worthwhile.

Question 15

Economics studies how decision makers use scarce resources to satisfy unlimited wants.

Accepted Answer

A) True 
 B)False

Question 16

A marginal adjustment only refers to a minor change.​

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is an example of physical capital?​

Accepted Answer

A) The owner of a pizza shop 
B) Bulldozers 
C) A college education 
D) Carpentry skills 
E) Money 
A) The owner of a pizza shop 
B) Bulldozers 
C) A college education 
D) Carpentry skills 
E) Money

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Resources are used only in the production of goods,not services.

Accepted Answer

A) True 
 B)False

Question 20

When constructing an economic model,economists:

Accepted Answer

A) rely mostly on their own value judgments and ignore the far more complex world of facts. 
B) always try to duplicate reality by including all available information. 
C) use assumptions that are true for the individual but never true for the whole economy. 
D) must rely on assumptions for the sake of simplification. 
E) are primarily concerned with making realistic assumptions. 
A) rely mostly on their own value judgments and ignore the far more complex world of facts. 
B) always try to duplicate reality by including all available information. 
C) use assumptions that are true for the individual but never true for the whole economy. 
D) must rely on assumptions for the sake of simplification. 
E) are primarily concerned with making realistic assumptions.

An entrepreneur is:

In economics,marginal means:

The basic purpose of economic models is to:

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

Unlike a service,a good:

A rational decision maker compares the expected marginal cost to the expected marginal benefit of any activity.

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

The ceteris paribus assumption is the other-things-constant assumption.

The expression "There's no such thing as a free lunch" means that:

When economists refer to capital,they might mean:

Economists believe that people respond in a predictable way to changes in costs and benefits.The term that best describes this phenomenon is:

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

Macroeconomists analyze:

The assumption that individuals act rationally implies that:

Economics studies how decision makers use scarce resources to satisfy unlimited wants.

A marginal adjustment only refers to a minor change.

Which of the following is an example of physical capital?

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

Resources are used only in the production of goods,not services.

When constructing an economic model,economists:

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 1: The Art and Science of Economic Analysis

An entrepreneur is:

In economics,marginal means:

The basic purpose of economic models is to:

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

Unlike a service,a good:

A rational decision maker compares the expected marginal cost to the expected marginal benefit of any activity.

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

The ceteris paribus assumption is the other-things-constant assumption.

The expression "There's no such thing as a free lunch" means that:

When economists refer to capital,they might mean:

Economists believe that people respond in a predictable way to changes in costs and benefits.The term that best describes this phenomenon is:

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

Macroeconomists analyze:

The assumption that individuals act rationally implies that:​

Economics studies how decision makers use scarce resources to satisfy unlimited wants.

A marginal adjustment only refers to a minor change.​

Which of the following is an example of physical capital?​

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

Resources are used only in the production of goods,not services.

When constructing an economic model,economists:

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

The assumption that individuals act rationally implies that:

A marginal adjustment only refers to a minor change.

Which of the following is an example of physical capital?