Question 1

Which of the following is a normative economic statement?

Accepted Answer

A) The U.S.rate of unemployment was lower in 2004 than it was in 1994. 
B) Savings accounts earn interest,whereas checking accounts do not. 
C) Congress must recognize that the growing national debt is the most serious problem that the country faces. 
D) The unemployment rate increases when the percentage of the labor force without jobs increases. 
E) The unemployment rate among teenagers is higher than the rate among adults. 
A) The U.S.rate of unemployment was lower in 2004 than it was in 1994. 
B) Savings accounts earn interest,whereas checking accounts do not. 
C) Congress must recognize that the growing national debt is the most serious problem that the country faces. 
D) The unemployment rate increases when the percentage of the labor force without jobs increases. 
E) The unemployment rate among teenagers is higher than the rate among adults.

Question 2

Which of the following would be a topic considered in the field of macroeconomics?

Accepted Answer

A) The study of the amazing recent growth of the Chinese economy 
B) The study of the relocation of U.S.manufacturing firms to China 
C) The study of the differences in wages between men and women in the United States 
D) The study of the effect of rent control on the housing market in New York City 
E) The study of the impact of environmental regulations on the well-being of human populations 
A) The study of the amazing recent growth of the Chinese economy 
B) The study of the relocation of U.S.manufacturing firms to China 
C) The study of the differences in wages between men and women in the United States 
D) The study of the effect of rent control on the housing market in New York City 
E) The study of the impact of environmental regulations on the well-being of human populations

Question 3

The economic behavior of individual decision makers and the determination of price and output in specific markets are both studied in:

Accepted Answer

A) disequilibrium economics. 
B) normative economics. 
C) positive economics. 
D) microeconomics. 
E) macroeconomics. 
A) disequilibrium economics. 
B) normative economics. 
C) positive economics. 
D) microeconomics. 
E) macroeconomics.

Question 4

Alan is a retired economist who enjoys building toy trains for his grandkids.He uses a workbench and tools from his garage,lumber he bought from the lumber store for $10,and varnish and paint he had left over from another project last year.Since a retired economist is always an economist,which of the following statements does he make about building toy trains?

Accepted Answer

A) I'm not paying for any resources,so the toy trains I'm building are a good example of free goods. 
B) I only paid $10 for the lumber,so the toy trains I'm building are a good example of free goods. 
C) I'm using scarce resources to build the toy trains. 
D) The resources I'm using to build the toy trains are not scarce. 
E) If I had used lumber that I cut from the tree in my backyard instead of buying it from the store,then the toy trains I'm building would be a good example of free goods. 
A) I'm not paying for any resources,so the toy trains I'm building are a good example of free goods. 
B) I only paid $10 for the lumber,so the toy trains I'm building are a good example of free goods. 
C) I'm using scarce resources to build the toy trains. 
D) The resources I'm using to build the toy trains are not scarce. 
E) If I had used lumber that I cut from the tree in my backyard instead of buying it from the store,then the toy trains I'm building would be a good example of free goods.

Question 5

A good economic theory brings clarity to chaos.

Accepted Answer

A) True 
 B)False

Question 6

The problem of scarce resources:

Accepted Answer

A) means that there are not enough jobs in some cities. 
B) could be solved if the unemployment rate fell. 
C) is that there are not enough resources to satisfy people's unlimited wants. 
D) is that resources are used inefficiently. 
E) can be solved by lowering taxes. 
A) means that there are not enough jobs in some cities. 
B) could be solved if the unemployment rate fell. 
C) is that there are not enough resources to satisfy people's unlimited wants. 
D) is that resources are used inefficiently. 
E) can be solved by lowering taxes.

Question 7

In economics,the term marginal usually refers to:

Accepted Answer

A) a small change in an economic variable. 
B) a low-quality product or resource. 
C) an unimportant and irrelevant economic variable. 
D) an all-or-nothing economic decision. 
E) a footnote or minor point. 
A) a small change in an economic variable. 
B) a low-quality product or resource. 
C) an unimportant and irrelevant economic variable. 
D) an all-or-nothing economic decision. 
E) a footnote or minor point.

Question 8

Rent is the payment received by resource owners for the use of their natural resources.

Accepted Answer

A) True 
 B)False

Question 9

You want to sell your old iPad because you no longer use it,and your cousin wants to give you $200 for it.If you decide to sell your iPad to her,you'll have to pay the shipping fee to get the iPad to her.As a rational decision maker,you will sell your old iPad to your cousin when the shipping fee is:

Accepted Answer

A) $350. 
B) $250. 
C) $301. 
D) $299. 
E) $199. 
A) $350. 
B) $250. 
C) $301. 
D) $299. 
E) $199.

Question 10

Elijah,a basketball fan,reasons that because his favorite team has three superstars on it,the team must be a great team and will win the championship.Elijah is committing the:

Accepted Answer

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

Question 11

Which of the following broad categories are resources divided into?

Accepted Answer

A) People,money,and machines 
B) Savings,spending,investment,and capital 
C) Human,technological,and government 
D) Natural resources,labor,capital,and entrepreneurial ability 
E) Free,scarce,abundant,and unlimited 
A) People,money,and machines 
B) Savings,spending,investment,and capital 
C) Human,technological,and government 
D) Natural resources,labor,capital,and entrepreneurial ability 
E) Free,scarce,abundant,and unlimited

Question 12

Which of the following is a service?

Accepted Answer

A) Anything that is scarce and that satisfies unlimited human wants 
B) A thing for which people pay money 
C) An intangible activity that satisfies human wants 
D) Any output produced by a service sector industry,such as fast food 
E) Something less desirable than a good 
A) Anything that is scarce and that satisfies unlimited human wants 
B) A thing for which people pay money 
C) An intangible activity that satisfies human wants 
D) Any output produced by a service sector industry,such as fast food 
E) Something less desirable than a good

Question 13

It is always rational to acquire more information before making a decision.

Accepted Answer

A) True 
 B)False

Question 14

A good or service is considered scarce if:

Accepted Answer

A) any quantity of it can be consumed at a zero price. 
B) the amount people desire exceeds the amount available at a zero price. 
C) the amount people desire exceeds the amount available at any price. 
D) the amount people desire is less than the amount available at any price. 
E) the amount people desire is less than the amount available at a zero price. 
A) any quantity of it can be consumed at a zero price. 
B) the amount people desire exceeds the amount available at a zero price. 
C) the amount people desire exceeds the amount available at any price. 
D) the amount people desire is less than the amount available at any price. 
E) the amount people desire is less than the amount available at a zero price.

Question 15

Microeconomics is the study of:

Accepted Answer

A) marginal or inferior products. 
B) how to use the fewest natural resources to produce goods and services. 
C) the behavior of the economy as a whole. 
D) the economic behavior of individual decision makers. 
E) the government's role as a producer in the economy. 
A) marginal or inferior products. 
B) how to use the fewest natural resources to produce goods and services. 
C) the behavior of the economy as a whole. 
D) the economic behavior of individual decision makers. 
E) the government's role as a producer in the economy.

Question 16

Economists generally believe that:

Accepted Answer

A) buyers and sellers have all the information they can use. 
B) additional information is costly to acquire. 
C) decision makers have complete knowledge of all the alternatives available. 
D) economic decisions result from random behavior. 
E) decision makers never make mistakes. 
A) buyers and sellers have all the information they can use. 
B) additional information is costly to acquire. 
C) decision makers have complete knowledge of all the alternatives available. 
D) economic decisions result from random behavior. 
E) decision makers never make mistakes.

Question 17

Which of the following statements regarding the basic economic problem of scarcity is correct?​

Accepted Answer

A) The problem exists only in countries that are not highly industrialized. 
B) The problem is likely to disappear as production increases. 
C) The problem is sure to disappear as technology improves. 
D) The problem will exist as long as resources are available in limited amounts. 
E) The problem will disappear as a person's income falls. 
A) The problem exists only in countries that are not highly industrialized. 
B) The problem is likely to disappear as production increases. 
C) The problem is sure to disappear as technology improves. 
D) The problem will exist as long as resources are available in limited amounts. 
E) The problem will disappear as a person's income falls.

Question 18

Households:

Accepted Answer

A) own and sell resources. 
B) play a very minor role in the economy. 
C) supply goods and services. 
D) are the largest purchasers of resources. 
E) set the price for goods. 
A) own and sell resources. 
B) play a very minor role in the economy. 
C) supply goods and services. 
D) are the largest purchasers of resources. 
E) set the price for goods.

Question 19

One might commit the fallacy of composition by concluding that:

Accepted Answer

A) statements that are true during prosperity are necessarily true during depression. 
B) what is good for the individual is necessarily good for the group. 
C) an event that precedes another is necessarily the cause of the latter. 
D) intentions need not coincide with actions. 
E) the composition of a complex product is not revealed by its exterior appearance. 
A) statements that are true during prosperity are necessarily true during depression. 
B) what is good for the individual is necessarily good for the group. 
C) an event that precedes another is necessarily the cause of the latter. 
D) intentions need not coincide with actions. 
E) the composition of a complex product is not revealed by its exterior appearance.

Question 20

The simple circular-flow model for households and firms is an economic model that focuses on the interaction between households and firms.Which of the following statements regarding the model is correct?

Accepted Answer

A) The model is missing the interaction between firms and the resource market.Therefore,it cannot predict well. 
B) The model is missing the interaction between households and the product market.Therefore,it cannot predict well. 
C) The model has too many simplifying assumptions,and it cannot be used to make predictions about the real world. 
D) The model is a simplification of the real world,and it can be used to make predictions about the real world. 
E) The model is missing the interaction between firms and the product market.Therefore,it cannot predict well. 
A) The model is missing the interaction between firms and the resource market.Therefore,it cannot predict well. 
B) The model is missing the interaction between households and the product market.Therefore,it cannot predict well. 
C) The model has too many simplifying assumptions,and it cannot be used to make predictions about the real world. 
D) The model is a simplification of the real world,and it can be used to make predictions about the real world. 
E) The model is missing the interaction between firms and the product market.Therefore,it cannot predict well.

Which of the following is a normative economic statement?

Which of the following would be a topic considered in the field of macroeconomics?

The economic behavior of individual decision makers and the determination of price and output in specific markets are both studied in:

A good economic theory brings clarity to chaos.

The problem of scarce resources:

In economics,the term marginal usually refers to:

Rent is the payment received by resource owners for the use of their natural resources.

Elijah,a basketball fan,reasons that because his favorite team has three superstars on it,the team must be a great team and will win the championship.Elijah is committing the:

Which of the following broad categories are resources divided into?

Which of the following is a service?

It is always rational to acquire more information before making a decision.

A good or service is considered scarce if:

Microeconomics is the study of:

Economists generally believe that:

Which of the following statements regarding the basic economic problem of scarcity is correct?

Households:

One might commit the fallacy of composition by concluding that:

The simple circular-flow model for households and firms is an economic model that focuses on the interaction between households and firms.Which of the following statements regarding the model is correct?

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 a normative economic statement?

Which of the following would be a topic considered in the field of macroeconomics?

The economic behavior of individual decision makers and the determination of price and output in specific markets are both studied in:

A good economic theory brings clarity to chaos.

The problem of scarce resources:

In economics,the term marginal usually refers to:

Rent is the payment received by resource owners for the use of their natural resources.

Elijah,a basketball fan,reasons that because his favorite team has three superstars on it,the team must be a great team and will win the championship.Elijah is committing the:

Which of the following broad categories are resources divided into?

Which of the following is a service?

It is always rational to acquire more information before making a decision.

A good or service is considered scarce if:

Microeconomics is the study of:

Economists generally believe that:

Which of the following statements regarding the basic economic problem of scarcity is correct?​

Households:

One might commit the fallacy of composition by concluding that:

The simple circular-flow model for households and firms is an economic model that focuses on the interaction between households and firms.Which of the following statements regarding the model is correct?

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

Which of the following statements regarding the basic economic problem of scarcity is correct?