Question 1

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 A

Question 2

Environmentalists continually argue for the use of alternatives to fossil fuels for generating energy. For example, harnessing wind by creating wind farms has been one alternative proposed and implemented. When it is found that these wind farms lead to the slicing and dicing of migratory birds and the decimation of local bat populations, we could say that environmentalists have committed the

Accepted Answer

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

Question 3

The assumption that individuals act rationally implies that

Accepted Answer

A) people think only of themselves and disregard the well-being of others 
B) people undertake all those activities that yield benefits to themselves 
C) people only consider the costs of an activity to decide whether it is worthwhile 
D) the greater the cost of a charitable deed to a benefactor, the more likely he or she is to perform that deed 
E) people implicitly calculate the costs and benefits of an activity to decide if it is worthwhile 
A) people think only of themselves and disregard the well-being of others 
B) people undertake all those activities that yield benefits to themselves 
C) people only consider the costs of an activity to decide whether it is worthwhile 
D) the greater the cost of a charitable deed to a benefactor, the more likely he or she is to perform that deed 
E) people implicitly calculate the costs and benefits of an activity to decide if it is worthwhile E

Question 4

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 5

An entrepreneur is a(n)

Accepted Answer

A) individual who has much education 
B) organizer who seeks profitable opportunities and is willing to accept risks 
C) business organization that uses inputs to produce output 
D) administrator who runs an enterprise without accepting any risk of financial loss 
E) depot or storehouse for commercial products 
A) individual who has much education 
B) organizer who seeks profitable opportunities and is willing to accept risks 
C) business organization that uses inputs to produce output 
D) administrator who runs an enterprise without accepting any risk of financial loss 
E) depot or storehouse for commercial products

Question 6

Alicia makes the statement that everytime she eats chocolate, it gives her 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 commiting 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 7

The respective payments for the resources of natural resources, labor, capital, and entrepreneurial ability are

Accepted Answer

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

Question 8

Profit is the payment received by resource owners for the use of their capital.

Accepted Answer

A) True 
 B)False

Question 9

Consumers need information to make good choices. Which of the following is correct regarding this information?

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 10

Economic theories are

Accepted Answer

A) useful because they are as exact as theories in the physical sciences 
B) useless because they are based on abstractions 
C) useful because they allow us to make predictions 
D) too complex to understand because they include all of reality 
E) useful in predicting events only if their assumptions are realistic 
A) useful because they are as exact as theories in the physical sciences 
B) useless because they are based on abstractions 
C) useful because they allow us to make predictions 
D) too complex to understand because they include all of reality 
E) useful in predicting events only if their assumptions are realistic

Question 11

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 12

A 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 13

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 14

In economics, marginal means

Accepted Answer

A) incremental or decremental 
B) unimportant 
C) level or size 
D) a border-line situation 
E) a bad alternative 
A) incremental or decremental 
B) unimportant 
C) level or size 
D) a border-line situation 
E) a bad alternative

Question 15

In economics, "capital" refers to

Accepted Answer

A) money 
B) stocks, bonds, and other financial assets 
C) the seat of government 
D) machines, buildings, tools, and knowledge 
E) net worth (assets minus liabilities) 
A) money 
B) stocks, bonds, and other financial assets 
C) the seat of government 
D) machines, buildings, tools, and knowledge 
E) net worth (assets minus liabilities)

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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 18

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

Question 19

A marginal adjustment only refers to a minor change.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following would an economist classify as capital?

Accepted Answer

A) 100 shares of Microsoft stock 
B) a $50 bill 
C) a credit card 
D) a lawyer's personal computer 
E) a bauxite mine in Jamaica 
A) 100 shares of Microsoft stock 
B) a $50 bill 
C) a credit card 
D) a lawyer's personal computer 
E) a bauxite mine in Jamaica

The fact that people have unlimited wants means that

The assumption that individuals act rationally implies that

Behavioral assumptions

An entrepreneur is a(n)

Alicia makes the statement that everytime she eats chocolate, it gives her 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 commiting the

The respective payments for the resources of natural resources, labor, capital, and entrepreneurial ability are

Profit is the payment received by resource owners for the use of their capital.

Consumers need information to make good choices. Which of the following is correct regarding this information?

Economic theories are

Economists tell stories

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

Natural resources are

In economics, marginal means

In economics, "capital" refers to

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

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

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

A marginal adjustment only refers to a minor change.

Which of the following would an economist classify as capital?

Understanding Graphs-Appendix

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the Us Economy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Agregate Demand

Aggregate Expenditure and 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

The fact that people have unlimited wants means that

The assumption that individuals act rationally implies that

Behavioral assumptions

An entrepreneur is a(n)

Alicia makes the statement that everytime she eats chocolate, it gives her 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 commiting the

The respective payments for the resources of natural resources, labor, capital, and entrepreneurial ability are

Profit is the payment received by resource owners for the use of their capital.

Consumers need information to make good choices. Which of the following is correct regarding this information?

Economic theories are

Economists tell stories

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

Natural resources are

In economics, marginal means

In economics, "capital" refers to

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

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

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

A marginal adjustment only refers to a minor change.

Which of the following would an economist classify as capital?

Understanding Graphs-Appendix

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the Us Economy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Agregate Demand

Aggregate Expenditure and 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