Question 1

Most real economic choices involve small (or marginal)changes rather than all-or-nothing decisions.

Accepted Answer

A) True 
 B)False

Question 2

The scientific method is useful:

Accepted Answer

A) only in fields of science such as chemistry and physics. 
B) for testing the validity of theoretical predictions. 
C) for testing the validity of a model's assumptions. 
D) when no economic variables can be assumed to be constant. 
E) only if a theory has been proven to be true. 
A) only in fields of science such as chemistry and physics. 
B) for testing the validity of theoretical predictions. 
C) for testing the validity of a model's assumptions. 
D) when no economic variables can be assumed to be constant. 
E) only if a theory has been proven to be true.

Question 3

Economic information:

Accepted Answer

A) is usually scarce and costly to acquire. 
B) is usually available free to any decision maker. 
C) is usually not required for rational decision making. 
D) must be complete before any decision is made. 
E) is usually useful only to governments. 
A) is usually scarce and costly to acquire. 
B) is usually available free to any decision maker. 
C) is usually not required for rational decision making. 
D) must be complete before any decision is made. 
E) is usually useful only to governments.

Question 4

One of the difficulties with an economic policy such as rent control is that:

Accepted Answer

A) policy makers do not consider its secondary effects. 
B) economists disagree about the impacts of the policy. 
C) it is difficult to enforce antidiscrimination laws in the rental market. 
D) it makes landlords wealthy at the expense of renters. 
E) the pressure from landlords has resulted in its repeal in many cities. 
A) policy makers do not consider its secondary effects. 
B) economists disagree about the impacts of the policy. 
C) it is difficult to enforce antidiscrimination laws in the rental market. 
D) it makes landlords wealthy at the expense of renters. 
E) the pressure from landlords has resulted in its repeal in many cities.

Question 5

Alicia makes the statement that every time she eats chocolate,she gets acne.By ignoring the possibility that there may be another factor that causes Alicia to eat chocolate and which also causes her acne,Alicia is committing the:

Accepted Answer

A) fallacy of composition. 
B) fallacy that association is causation. 
C) fallacy of segmentation. 
D) mistake of ignoring secondary effects. 
E) mistake of looking beyond the obvious. 
A) fallacy of composition. 
B) fallacy that association is causation. 
C) fallacy of segmentation. 
D) mistake of ignoring secondary effects. 
E) mistake of looking beyond the obvious.

Question 6

​Economists employ the scientific method.In part,this means that:

Accepted Answer

A) there is a single economic theory accepted by all economists. 
B) economic hypotheses are tested to determine their validity. 
C) all economic laws have been proven true by laboratory tests. 
D) personal values never enter into economic policy recommendations. 
E) assumptions are not necessary in economic science. 
A) there is a single economic theory accepted by all economists. 
B) economic hypotheses are tested to determine their validity. 
C) all economic laws have been proven true by laboratory tests. 
D) personal values never enter into economic policy recommendations. 
E) assumptions are not necessary in economic science.

Question 7

The assumption of rational self-interest means that economic decision makers:

Accepted Answer

A) have no concern for the welfare of others. 
B) make reasonable decisions based on their expectations of results. 
C) know with certainty which choice will have the best result. 
D) consider the welfare of others to be more important than their own happiness. 
E) do not make incorrect decisions or bad choices. 
A) have no concern for the welfare of others. 
B) make reasonable decisions based on their expectations of results. 
C) know with certainty which choice will have the best result. 
D) consider the welfare of others to be more important than their own happiness. 
E) do not make incorrect decisions or bad choices.

Question 8

A resource is something that:

Accepted Answer

A) is used to produce goods and services. 
B) is provided by nature,not produced by society. 
C) exists in unlimited quantities. 
D) must be produced by a firm. 
E) is always available free of cost. 
A) is used to produce goods and services. 
B) is provided by nature,not produced by society. 
C) exists in unlimited quantities. 
D) must be produced by a firm. 
E) is always available free of cost.

Question 9

Normative economic statements refer to what should be.

Accepted Answer

A) True 
 B)False

Question 10

An economic model:​

Accepted Answer

A) omits critical elements. 
B) must be presented in mathematical terms. 
C) simplifies reality in order to focus on its essential elements. 
D) can never be proven wrong if its assumptions are realistic. 
E) produces poor predictions if it includes an unrealistic assumption. 
A) omits critical elements. 
B) must be presented in mathematical terms. 
C) simplifies reality in order to focus on its essential elements. 
D) can never be proven wrong if its assumptions are realistic. 
E) produces poor predictions if it includes an unrealistic assumption.

Question 11

The fact that people have unlimited wants means that:

Accepted Answer

A) they always want more of at least one good. 
B) each person has an unlimited desire for every good. 
C) labor unions demand wage increases. 
D) selfish people are not concerned about others. 
E) people buy goods without regard to what they can afford. 
A) they always want more of at least one good. 
B) each person has an unlimited desire for every good. 
C) labor unions demand wage increases. 
D) selfish people are not concerned about others. 
E) people buy goods without regard to what they can afford.

Question 12

The choices made by economic decision makers:

Accepted Answer

A) are government decisions only. 
B) are the primary focus of economics. 
C) are not important in economic analysis. 
D) occur infrequently. 
E) do not involve ordinary citizens. 
A) are government decisions only. 
B) are the primary focus of economics. 
C) are not important in economic analysis. 
D) occur infrequently. 
E) do not involve ordinary citizens.

Question 13

One problem with rent controls is that policy makers often ignore its secondary effects.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) opportunity cost. 
B) demand. 
C) supply. 
D) scarcity. 
E) rational behavior. 
A) opportunity cost. 
B) demand. 
C) supply. 
D) scarcity. 
E) rational behavior.

Question 15

When economists say that people act as rational decision makers,they mean that:

Accepted Answer

A) people gather all relevant information before making their purchases. 
B) once a pattern of behavior has been established,people tend to become set in their ways. 
C) people respond in predictable ways to changes in costs and benefits. 
D) people rarely make errors when permitted to make transactions. 
E) once made,decisions are never reversed. 
A) people gather all relevant information before making their purchases. 
B) once a pattern of behavior has been established,people tend to become set in their ways. 
C) people respond in predictable ways to changes in costs and benefits. 
D) people rarely make errors when permitted to make transactions. 
E) once made,decisions are never reversed.

Question 16

Macroeconomics is the study of:

Accepted Answer

A) the behavior of large firms in the marketplace. 
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) the government's role as a stabilizing influence on the economy. 
A) the behavior of large firms in the marketplace. 
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) the government's role as a stabilizing influence on the economy.

Question 17

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 18

The difference between positive economic statements and normative economic statements is that:

Accepted Answer

A) positive statements are based on opinion while normative statements are always true. 
B) positive statements are based on opinion while normative statements are based on fact. 
C) positive statements are true and normative statements are often false. 
D) positive statements are often false and normative statements are true. 
E) positive statements are based on fact while normative statements are based on opinion. 
A) positive statements are based on opinion while normative statements are always true. 
B) positive statements are based on opinion while normative statements are based on fact. 
C) positive statements are true and normative statements are often false. 
D) positive statements are often false and normative statements are true. 
E) positive statements are based on fact while normative statements are based on opinion.

Question 19

The fallacy of composition is the error of believing that a cause and effect relationship exists between two events that are associated in time.

Accepted Answer

A) True 
 B)False

Question 20

If a business produces and sells only one unit of a good,its profit would be the:

Accepted Answer

A) price received for the good. 
B) price of the product minus the cost of the resources used to produce the product. 
C) return paid to the firm's bank on its outstanding loans. 
D) price of the product minus the wages paid for the labor used to produce it. 
E) wages paid for the labor used to produce the product minus the price. 
A) price received for the good. 
B) price of the product minus the cost of the resources used to produce the product. 
C) return paid to the firm's bank on its outstanding loans. 
D) price of the product minus the wages paid for the labor used to produce it. 
E) wages paid for the labor used to produce the product minus the price.

Most real economic choices involve small (or marginal)changes rather than all-or-nothing decisions.

The scientific method is useful:

Economic information:

One of the difficulties with an economic policy such as rent control is that:

Alicia makes the statement that every time she eats chocolate,she gets acne.By ignoring the possibility that there may be another factor that causes Alicia to eat chocolate and which also causes her acne,Alicia is committing the:

Economists employ the scientific method.In part,this means that:

The assumption of rational self-interest means that economic decision makers:

A resource is something that:

Normative economic statements refer to what should be.

An economic model:

The fact that people have unlimited wants means that:

The choices made by economic decision makers:

One problem with rent controls is that policy makers often ignore its secondary effects.

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

When economists say that people act as rational decision makers,they mean that:

Macroeconomics is the study of:

In economics,capital is defined as:

The difference between positive economic statements and normative economic statements is that:

The fallacy of composition is the error of believing that a cause and effect relationship exists between two events that are associated in time.

If a business produces and sells only one unit of a good,its profit would be the:

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

Most real economic choices involve small (or marginal)changes rather than all-or-nothing decisions.

The scientific method is useful:

Economic information:

One of the difficulties with an economic policy such as rent control is that:

Alicia makes the statement that every time she eats chocolate,she gets acne.By ignoring the possibility that there may be another factor that causes Alicia to eat chocolate and which also causes her acne,Alicia is committing the:

​Economists employ the scientific method.In part,this means that:

The assumption of rational self-interest means that economic decision makers:

A resource is something that:

Normative economic statements refer to what should be.

An economic model:​

The fact that people have unlimited wants means that:

The choices made by economic decision makers:

One problem with rent controls is that policy makers often ignore its secondary effects.

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

When economists say that people act as rational decision makers,they mean that:

Macroeconomics is the study of:

In economics,capital is defined as:

The difference between positive economic statements and normative economic statements is that:

The fallacy of composition is the error of believing that a cause and effect relationship exists between two events that are associated in time.

If a business produces and sells only one unit of a good,its profit would be the:

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

Economists employ the scientific method.In part,this means that:

An economic model: