Question 1

An economic model will produce poor predictions if it includes assumptions.

Accepted Answer

A) True 
 B)False

Question 2

Rational self-interest is equivalent to pure selfishness.

Accepted Answer

A) True 
 B)False

Question 3

Economics is best defined as the study of how:

Accepted Answer

A) individuals decide to use scarce resources in an attempt to satisfy their unlimited wants. 
B) individuals can make money. 
C) the government should deal with unemployment and inflation. 
D) to eliminate the problem of scarce resources. 
E) to run a business. 
A) individuals decide to use scarce resources in an attempt to satisfy their unlimited wants. 
B) individuals can make money. 
C) the government should deal with unemployment and inflation. 
D) to eliminate the problem of scarce resources. 
E) to run a business.

Question 4

The assumption of rational self-interest does not rule out the possibility of concern for other individuals.

Accepted Answer

A) True 
 B)False

Question 5

Rational choice by an individual implies:

Accepted Answer

A) the use of a mathematical model when solving a problem. 
B) making decisions aimed at achieving some predetermined goal. 
C) that only monetary costs and benefits are weighed. 
D) that the individual will never regret any action taken. 
E) that scarcity can be eliminated for that individual. 
A) the use of a mathematical model when solving a problem. 
B) making decisions aimed at achieving some predetermined goal. 
C) that only monetary costs and benefits are weighed. 
D) that the individual will never regret any action taken. 
E) that scarcity can be eliminated for that individual.

Question 6

Which of the following is true about the resource market?

Accepted Answer

A) It facilitates the exchange of goods and services between buyers and sellers. 
B) It facilitates the exchange of resources between buyers and sellers. 
C) Firms are sellers in the resource market. 
D) Households are buyers in the resource markets. 
E) There is no flow of money in the resource market. 
A) It facilitates the exchange of goods and services between buyers and sellers. 
B) It facilitates the exchange of resources between buyers and sellers. 
C) Firms are sellers in the resource market. 
D) Households are buyers in the resource markets. 
E) There is no flow of money in the resource market.

Question 7

Benjamin works as an economist for the federal government.Which of the following questions is he trying to answer as part of his job?

Accepted Answer

A) How can I get rich by playing the stock market? 
B) What are the best ways to reduce people's wants,given the scarcity of resources? 
C) How can government officials use scarce resources to become richer? 
D) What is money? 
E) How do people use limited resources to try to satisfy unlimited wants? 
A) How can I get rich by playing the stock market? 
B) What are the best ways to reduce people's wants,given the scarcity of resources? 
C) How can government officials use scarce resources to become richer? 
D) What is money? 
E) How do people use limited resources to try to satisfy unlimited wants?

Question 8

Economic theory allows economists to predict the behavior of a specific person or firm.

Accepted Answer

A) True 
 B)False

Question 9

The association is causation fallacy is the error of assuming that what is true for one member of a group must be true for the group.

Accepted Answer

A) True 
 B)False

Question 10

Most of the disagreement among economists involves normative debates.

Accepted Answer

A) True 
 B)False

Question 11

Economics is as much an art as it is a science.

Accepted Answer

A) True 
 B)False

Question 12

Behavioral assumptions:

Accepted Answer

A) make economic models more complex than if these assumptions were removed. 
B) pertain only to consumers. 
C) hold all other things constant. 
D) are ways to test a hypothesis. 
E) describe how individuals are expected to behave. 
A) make economic models more complex than if these assumptions were removed. 
B) pertain only to consumers. 
C) hold all other things constant. 
D) are ways to test a hypothesis. 
E) describe how individuals are expected to behave.

Question 13

Which of the following is an accurate list,in order,of the steps of the scientific method?

Accepted Answer

A) Define variables; state assumptions; form a hypothesis; test 
B) State assumptions; define variables; form a hypothesis; test 
C) Identify variables; state assumptions; test; form a hypothesis 
D) Identify variables; form a hypothesis; form behavioral assumptions; test 
E) Define assumptions; form behavioral assumptions; form hypothesis; test 
A) Define variables; state assumptions; form a hypothesis; test 
B) State assumptions; define variables; form a hypothesis; test 
C) Identify variables; state assumptions; test; form a hypothesis 
D) Identify variables; form a hypothesis; form behavioral assumptions; test 
E) Define assumptions; form behavioral assumptions; form hypothesis; test

Question 14

Which of the following is not an example of the fallacy of composition?

Accepted Answer

A) If I can get to work fastest by taking the interstate,so can everyone else. 
B) If I can only get away from it all by going to Fairbanks,everyone who needs to get away should go to Fairbanks. 
C) Every time I play with my dog,it rains,so playing with my dog brings rain. 
D) If the best TV reception can be gotten with a Couch Potato antenna,then everyone should have a Couch Potato antenna. 
E) If I can get a better view by standing up at the baseball game,then everyone can get a better view by standing up. 
A) If I can get to work fastest by taking the interstate,so can everyone else. 
B) If I can only get away from it all by going to Fairbanks,everyone who needs to get away should go to Fairbanks. 
C) Every time I play with my dog,it rains,so playing with my dog brings rain. 
D) If the best TV reception can be gotten with a Couch Potato antenna,then everyone should have a Couch Potato antenna. 
E) If I can get a better view by standing up at the baseball game,then everyone can get a better view by standing up.

Question 15

Natural resources are:

Accepted Answer

A) not considered scarce because no one pays for them. 
B) only desired for use in producing other goods. 
C) included in the category of resources called gifts of nature. 
D) available in unlimited quantities. 
E) not considered scarce because they are not produced by society. 
A) not considered scarce because no one pays for them. 
B) only desired for use in producing other goods. 
C) included in the category of resources called gifts of nature. 
D) available in unlimited quantities. 
E) not considered scarce because they are not produced by society.

Question 16

Economic theory:

Accepted Answer

A) expresses normative values. 
B) invents imaginative and interesting stories. 
C) predicts the behavior of a specific economic decision maker after an economic change. 
D) predicts the average behavior of a group of similar economic decision makers after an economic change. 
E) uses only perfect and complete information. 
A) expresses normative values. 
B) invents imaginative and interesting stories. 
C) predicts the behavior of a specific economic decision maker after an economic change. 
D) predicts the average behavior of a group of similar economic decision makers after an economic change. 
E) uses only perfect and complete information.

Question 17

In an economic model of consumer behavior,rational self-interest would likely be:

Accepted Answer

A) a key variable. 
B) the hypothesis of the model. 
C) a behavioral assumption. 
D) a prediction of the model. 
E) a method of testing the model. 
A) a key variable. 
B) the hypothesis of the model. 
C) a behavioral assumption. 
D) a prediction of the model. 
E) a method of testing the model.

Question 18

In economics,money is an example of capital.

Accepted Answer

A) True 
 B)False

Question 19

Consumers need information to make good choices.In the context of this information,which of the following is correct?

Accepted Answer

A) Advertising is always harmful to consumers. 
B) Information is scarce and therefore valuable. 
C) Brand names offer no informational content. 
D) Acquiring more information is always rational. 
E) Marginal analysis does not apply to the acquisition of information. 
A) Advertising is always harmful to consumers. 
B) Information is scarce and therefore valuable. 
C) Brand names offer no informational content. 
D) Acquiring more information is always rational. 
E) Marginal analysis does not apply to the acquisition of information.

Question 20

Someone who committed the association is causation fallacy might conclude that:

Accepted Answer

A) event B,which followed event A,was caused by the event A. 
B) event B,which followed event A,was not necessarily caused by event A. 
C) the simplest model is the best predictor. 
D) what is true for the individual is also true for the group. 
E) what is true for the individual is not necessarily true for the group. 
A) event B,which followed event A,was caused by the event A. 
B) event B,which followed event A,was not necessarily caused by event A. 
C) the simplest model is the best predictor. 
D) what is true for the individual is also true for the group. 
E) what is true for the individual is not necessarily true for the group.

An economic model will produce poor predictions if it includes assumptions.

Rational self-interest is equivalent to pure selfishness.

Economics is best defined as the study of how:

The assumption of rational self-interest does not rule out the possibility of concern for other individuals.

Rational choice by an individual implies:

Which of the following is true about the resource market?

Benjamin works as an economist for the federal government.Which of the following questions is he trying to answer as part of his job?

Economic theory allows economists to predict the behavior of a specific person or firm.

The association is causation fallacy is the error of assuming that what is true for one member of a group must be true for the group.

Most of the disagreement among economists involves normative debates.

Economics is as much an art as it is a science.

Behavioral assumptions:

Which of the following is an accurate list,in order,of the steps of the scientific method?

Which of the following is not an example of the fallacy of composition?

Natural resources are:

Economic theory:

In an economic model of consumer behavior,rational self-interest would likely be:

In economics,money is an example of capital.

Consumers need information to make good choices.In the context of this information,which of the following is correct?

Someone who committed the association is causation fallacy might conclude that:

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 economic model will produce poor predictions if it includes assumptions.

Rational self-interest is equivalent to pure selfishness.

Economics is best defined as the study of how:

The assumption of rational self-interest does not rule out the possibility of concern for other individuals.

Rational choice by an individual implies:

Which of the following is true about the resource market?

Benjamin works as an economist for the federal government.Which of the following questions is he trying to answer as part of his job?

Economic theory allows economists to predict the behavior of a specific person or firm.

The association is causation fallacy is the error of assuming that what is true for one member of a group must be true for the group.

Most of the disagreement among economists involves normative debates.

Economics is as much an art as it is a science.

Behavioral assumptions:

Which of the following is an accurate list,in order,of the steps of the scientific method?

Which of the following is not an example of the fallacy of composition?

Natural resources are:

Economic theory:

In an economic model of consumer behavior,rational self-interest would likely be:

In economics,money is an example of capital.

Consumers need information to make good choices.In the context of this information,which of the following is correct?

Someone who committed the association is causation fallacy might conclude that:

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