Question 1

Which of the following is the best definition of economics?

Accepted Answer

A) An investigation of the quantities and prices of the various goods produced by the nations of the world 
B) A study of why inflation and unemployment periodically plague the U.S.economy 
C) An analysis of how individuals and societies deal with the problem of scarcity 
D) An examination of the role that money plays in the economy 
E) A study of how goods and services are distributed throughout the world 
A) An investigation of the quantities and prices of the various goods produced by the nations of the world 
B) A study of why inflation and unemployment periodically plague the U.S.economy 
C) An analysis of how individuals and societies deal with the problem of scarcity 
D) An examination of the role that money plays in the economy 
E) A study of how goods and services are distributed throughout the world

Question 2

Sara is considering the purchase of a new car.Rational self-interest demands that she do an exhaustive research study to acquire every bit of information possible about her potential options.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following sentences is the best example of scarcity of time?

Accepted Answer

A) Peter buys a hamburger. 
B) John-Michael wants to spend his money on a new hover board. 
C) Alexander is doing homework instead of going to the movies with his friends. 
D) Amanda,a geography teacher,is retired. 
E) Bill is unemployed. 
A) Peter buys a hamburger. 
B) John-Michael wants to spend his money on a new hover board. 
C) Alexander is doing homework instead of going to the movies with his friends. 
D) Amanda,a geography teacher,is retired. 
E) Bill is unemployed.

Question 4

A good theory seeks to:​

Accepted Answer

A) distort reality in order to improve forecasting ability. 
B) predict phenomena without explaining them. 
C) explain phenomena without predicting them. 
D) confront reality in all its complexity by focusing on the unique aspects of each phenomenon. 
E) simplify a complex reality. 
A) distort reality in order to improve forecasting ability. 
B) predict phenomena without explaining them. 
C) explain phenomena without predicting them. 
D) confront reality in all its complexity by focusing on the unique aspects of each phenomenon. 
E) simplify a complex reality.

Question 5

Patrick decided to go to class today instead of going to the movies.He made this decision because:

Accepted Answer

A) Patrick's additional benefit of going to class exceeds the additional cost of going to class. 
B) Patrick's additional benefit of going to the movies exceeds the additional cost of going to class. 
C) Patrick's additional benefit of going to class exceeds the additional cost of going to the movies. 
D) Patrick's additional benefit of going to the movies exceeds the additional cost of going to the movies. 
E) Patrick's additional benefit of going to class equals the additional cost of going to the movies. 
A) Patrick's additional benefit of going to class exceeds the additional cost of going to class. 
B) Patrick's additional benefit of going to the movies exceeds the additional cost of going to class. 
C) Patrick's additional benefit of going to class exceeds the additional cost of going to the movies. 
D) Patrick's additional benefit of going to the movies exceeds the additional cost of going to the movies. 
E) Patrick's additional benefit of going to class equals the additional cost of going to the movies.

Question 6

An entrepreneur:

Accepted Answer

A) always makes a profit. 
B) generally avoids risky situations. 
C) claims the profit after other resource suppliers are compensated. 
D) is a parasite that benefits by not paying other resources for their services. 
E) is the manager who runs an enterprise and keeps the customers happy. 
A) always makes a profit. 
B) generally avoids risky situations. 
C) claims the profit after other resource suppliers are compensated. 
D) is a parasite that benefits by not paying other resources for their services. 
E) is the manager who runs an enterprise and keeps the customers happy.

Question 7

Economists tell stories:

Accepted Answer

A) in order to breathe life into economic theory and personalize abstract ideas. 
B) because economics is an art,not a science. 
C) as a way of rigorously testing economic theory. 
D) because doing so is a required part of the scientific method. 
E) to show how their theory can predict at least one real-world situation. 
A) in order to breathe life into economic theory and personalize abstract ideas. 
B) because economics is an art,not a science. 
C) as a way of rigorously testing economic theory. 
D) because doing so is a required part of the scientific method. 
E) to show how their theory can predict at least one real-world situation.

Question 8

"There should be less discrimination against the elderly." This is an example of a:

Accepted Answer

A) normative statement. 
B) positive statement. 
C) forecast. 
D) theory. 
E) prediction. 
A) normative statement. 
B) positive statement. 
C) forecast. 
D) theory. 
E) prediction.

Question 9

An economic model that sometimes makes incorrect predictions may be used by economic decision makers:

Accepted Answer

A) under no circumstances. 
B) only if its assumptions are detailed and realistic. 
C) if it is mathematical and computerized. 
D) if it is simple enough for a child to understand. 
E) until a better model is developed. 
A) under no circumstances. 
B) only if its assumptions are detailed and realistic. 
C) if it is mathematical and computerized. 
D) if it is simple enough for a child to understand. 
E) until a better model is developed.

Question 10

Considering both product markets and resource markets,most economic decision makers participate in the economy as both buyers and sellers.

Accepted Answer

A) True 
 B)False

Question 11

Because people's wants are unlimited but resources are scarce,_____:

Accepted Answer

A) only the rich get everything they want. 
B) choices must be made. 
C) there will be more services produced than goods. 
D) people search for spiritual fulfillment rather than material fulfillment. 
E) poor people never get anything they want. 
A) only the rich get everything they want. 
B) choices must be made. 
C) there will be more services produced than goods. 
D) people search for spiritual fulfillment rather than material fulfillment. 
E) poor people never get anything they want.

Question 12

Natural resources:

Accepted Answer

A) include bodies of water,trees,oil reserves,and minerals. 
B) are not scarce. 
C) are exhaustible as long as they are managed properly. 
D) are the result of human effort. 
E) are machines used in the production process. 
A) include bodies of water,trees,oil reserves,and minerals. 
B) are not scarce. 
C) are exhaustible as long as they are managed properly. 
D) are the result of human effort. 
E) are machines used in the production process.

Question 13

Goods and services are scarce because:

Accepted Answer

A) people are greedy. 
B) they are produced using scarce resources. 
C) firms keep production low in order to earn higher profits. 
D) they are produced by firms that seek profits. 
E) the government wants to maintain its power over the economy. 
A) people are greedy. 
B) they are produced using scarce resources. 
C) firms keep production low in order to earn higher profits. 
D) they are produced by firms that seek profits. 
E) the government wants to maintain its power over the economy.

Question 14

An economic model is useful if it:

Accepted Answer

A) includes every detail of reality. 
B) involves no unproven assumptions. 
C) is expressed in equations. 
D) makes accurate predictions. 
E) is simple enough to be understood by a child. 
A) includes every detail of reality. 
B) involves no unproven assumptions. 
C) is expressed in equations. 
D) makes accurate predictions. 
E) is simple enough to be understood by a child.

Question 15

The difference between a good and a service is that:

Accepted Answer

A) a good helps satisfy unlimited wants,but a service does not. 
B) a service helps satisfy unlimited wants,but a good does not. 
C) a service is available in unlimited quantities,but a good is not. 
D) a good is available in unlimited quantities,but a service is not. 
E) a good is tangible,but a service is not. 
A) a good helps satisfy unlimited wants,but a service does not. 
B) a service helps satisfy unlimited wants,but a good does not. 
C) a service is available in unlimited quantities,but a good is not. 
D) a good is available in unlimited quantities,but a service is not. 
E) a good is tangible,but a service is not.

Question 16

Your best friend buys you lunch on your birthday.You think this was not a free lunch because:

Accepted Answer

A) even if you didn't pay dollars for it,you paid for it in extra calories. 
B) the resources used to produce the lunch were not available to satisfy other wants. 
C) you disagree with the expression "The best things in life are free." 
D) you can eat only if you work out first. 
E) neither sea water nor air is free. 
A) even if you didn't pay dollars for it,you paid for it in extra calories. 
B) the resources used to produce the lunch were not available to satisfy other wants. 
C) you disagree with the expression "The best things in life are free." 
D) you can eat only if you work out first. 
E) neither sea water nor air is free.

Question 17

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

Accepted Answer

A) If the money supply falls,interest rates will rise. 
B) Teenage unemployment would be lower if there were no minimum wage. 
C) The quantity of shirts sold increases as the price of shirts decreases. 
D) The federal government's total spending should be reduced. 
E) If interest rates go up,then construction activity will fall. 
A) If the money supply falls,interest rates will rise. 
B) Teenage unemployment would be lower if there were no minimum wage. 
C) The quantity of shirts sold increases as the price of shirts decreases. 
D) The federal government's total spending should be reduced. 
E) If interest rates go up,then construction activity will fall.

Question 18

The payments in return for labor and capital are _____,respectively.

Accepted Answer

A) profit and rent 
B) interest and profit 
C) rent and wages 
D) profit and wages 
E) wages and interest 
A) profit and rent 
B) interest and profit 
C) rent and wages 
D) profit and wages 
E) wages and interest

Question 19

A hypothesis is:

Accepted Answer

A) an assumption about behavior. 
B) a prediction of what will occur given certain assumptions. 
C) a prediction of what will occur regardless of assumptions. 
D) a forecast of future events. 
E) useful only if the assumptions are realistic. 
A) an assumption about behavior. 
B) a prediction of what will occur given certain assumptions. 
C) a prediction of what will occur regardless of assumptions. 
D) a forecast of future events. 
E) useful only if the assumptions are realistic.

Question 20

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

Accepted Answer

A) True 
 B)False

Which of the following is the best definition of economics?

Sara is considering the purchase of a new car.Rational self-interest demands that she do an exhaustive research study to acquire every bit of information possible about her potential options.

Which of the following sentences is the best example of scarcity of time?

A good theory seeks to:

Patrick decided to go to class today instead of going to the movies.He made this decision because:

An entrepreneur:

Economists tell stories:

"There should be less discrimination against the elderly." This is an example of a:

An economic model that sometimes makes incorrect predictions may be used by economic decision makers:

Considering both product markets and resource markets,most economic decision makers participate in the economy as both buyers and sellers.

Because people's wants are unlimited but resources are scarce,_____:

Natural resources:

Goods and services are scarce because:

An economic model is useful if it:

The difference between a good and a service is that:

Your best friend buys you lunch on your birthday.You think this was not a free lunch because:

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

The payments in return for labor and capital are _____,respectively.

A hypothesis is:

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

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

Which of the following is the best definition of economics?

Sara is considering the purchase of a new car.Rational self-interest demands that she do an exhaustive research study to acquire every bit of information possible about her potential options.

Which of the following sentences is the best example of scarcity of time?

A good theory seeks to:​

Patrick decided to go to class today instead of going to the movies.He made this decision because:

An entrepreneur:

Economists tell stories:

"There should be less discrimination against the elderly." This is an example of a:

An economic model that sometimes makes incorrect predictions may be used by economic decision makers:

Considering both product markets and resource markets,most economic decision makers participate in the economy as both buyers and sellers.

Because people's wants are unlimited but resources are scarce,_____:

Natural resources:

Goods and services are scarce because:

An economic model is useful if it:

The difference between a good and a service is that:

Your best friend buys you lunch on your birthday.You think this was not a free lunch because:

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

The payments in return for labor and capital are _____,respectively.

A hypothesis is:

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

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

A good theory seeks to: