Exam 1: The Art and Science of Economic Analysis

Economic decision makers will continue to acquire information only as long as the expected additional benefit exceeds the expected additional cost of the information.

Goods and services are exchanged in:

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

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

Someone who commits the fallacy of composition is likely to assume that:​

The difference between a positive economic statement and a normative economic statement is that:

A normative economic statement:

When economic choice involves an adjustment to an existing situation,marginal analysis:

All economic models must involve simplifications because:

Economics is best described as the:

You currently subscribe to two magazines and are trying to decide whether you should subscribe to a third.What should determine your decision if you are economically rational?

The labor market is an example of a:

Which of the following is the fundamental resource that is the basis of labor?

In economics,capital refers to:

Economists often focus on average behavior because it is easier to predict.

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

A rational decision maker will take only those actions for which the expected marginal benefit:

Your friend notices that U.S.auto production and U.S.population growth have moved together over several decades.He reasons that one way to slow population growth is for the government to order the auto makers to cut back on production.You gently point out to him that he:

To say that people make decisions at the margin means that:

Which of the following is a positive statement?