Question 1

The ceteris paribus assumption is a behavioral assumption.

Accepted Answer

A) True 
 B)False  False

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 A

Question 3

To tell a compelling story, an economist relies on:​

Accepted Answer

A) case studies and parables. 
B) anecdotes and personal experiences. 
C) irrelevant data. 
D) anecdotes and irrelevant data. 
E) case studies, anecdotes, parables, personal experience, and supporting data. 
A) case studies and parables. 
B) anecdotes and personal experiences. 
C) irrelevant data. 
D) anecdotes and irrelevant data. 
E) case studies, anecdotes, parables, personal experience, and supporting data. E

Question 4

When economic choice involves an adjustment to an existing situation, marginal analysis:​

Accepted Answer

A) has no practical applications or real-world uses. 
B) eliminates incorrect decisions and bad choices. 
C) involves comparing the additional costs and additional benefits of an activity before deciding. 
D) involves examining only the total costs and total benefits of an activity before deciding. 
E) guarantees an incorrect decision. 
A) has no practical applications or real-world uses. 
B) eliminates incorrect decisions and bad choices. 
C) involves comparing the additional costs and additional benefits of an activity before deciding. 
D) involves examining only the total costs and total benefits of an activity before deciding. 
E) guarantees an incorrect decision.

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

Rational self-interest is equivalent to pure selfishness.

Accepted Answer

A) True 
 B)False

Question 7

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 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

Someone who commits the fallacy of composition is likely to assume that:​

Accepted Answer

A) the simplest model is the best predictor. 
B) event B, which followed event A, was caused by event A. 
C) event B, which followed event A, was not necessarily caused by event A. 
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) the simplest model is the best predictor. 
B) event B, which followed event A, was caused by event A. 
C) event B, which followed event A, was not necessarily caused by event A. 
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.

Question 10

A marginal adjustment only refers to a minor change.

Accepted Answer

A) True 
 B)False

Question 11

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 12

​Economics:

Accepted Answer

A) studies human behavior when scarcity exists and choices must be made. 
B) provides the only reasonable explanation of how people make decisions. 
C) can accurately explain all human behavior since it is based on the assumption of rationality. 
D) is better at showing the way things ought to be than the other social sciences. 
E) is the only social science that can explain the existence and behavior of public institutions. 
A) studies human behavior when scarcity exists and choices must be made. 
B) provides the only reasonable explanation of how people make decisions. 
C) can accurately explain all human behavior since it is based on the assumption of rationality. 
D) is better at showing the way things ought to be than the other social sciences. 
E) is the only social science that can explain the existence and behavior of public institutions.

Question 13

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 14

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

Accepted Answer

A) True 
 B)False

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

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

Accepted Answer

A) True 
 B)False

Question 17

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 18

Unlike a service, a good:​

Accepted Answer

A) is desirable. 
B) uses resources to satisfy wants. 
C) is physical and tangible. 
D) is abundant and free. 
E) is a resource. 
A) is desirable. 
B) uses resources to satisfy wants. 
C) is physical and tangible. 
D) is abundant and free. 
E) is a resource.

Question 19

​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 20

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.

Exam 1: The Art and Science of Economic Analysis

The ceteris paribus assumption is a behavioral assumption.

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

To tell a compelling story, an economist relies on:​

When economic choice involves an adjustment to an existing situation, marginal analysis:​

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:​

Rational self-interest is equivalent to pure selfishness.

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:​

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

Someone who commits the fallacy of composition is likely to assume that:​

A marginal adjustment only refers to a minor change.

A good or service is considered scarce if:​

​Economics:

Which of the following is a normative economic statement?​

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

Microeconomics is the study of:​

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

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

Unlike a service, a good:​

​The scientific method is useful:​

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

Economic Tools and Economic Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Consumer Choice and Demand

Production and Cost in the Firm

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, Entrepreneurship, and Corporate Finance

Transaction Costs, Asymmetric Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Poverty and Redistribution

International Trade

International Finance

Economic Development

Filters

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

To tell a compelling story, an economist relies on:

When economic choice involves an adjustment to an existing situation, marginal analysis:

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:

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:

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

Someone who commits the fallacy of composition is likely to assume that:

A good or service is considered scarce if:

Economics:

Which of the following is a normative economic statement?

Microeconomics is the study of:

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

Unlike a service, a good:

The scientific method is useful:

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